LOONY TUNES no. 181
Jeffrey Snider posts (16 October) on Seeking Alpah HERE
In 1953, Milton Friedman wrote out what have been the guiding principles of modern, orthodox economics that were necessary should it wish to join the ranks of serious science. In his Methodology of Positive Economics, Friedman recognized economics unlike harder sciences proceeds from an enormous disadvantage, meaning that for the most part, all of it is unobservable. We know that an economy happens and that there are observable conditions that relate to the immense and complicated interactions that make up any economic system, but to figure out exactly how A becomes B is all but impossible. You and I may arrive at the same place, economically or financially speaking, but the way in which we did might be extremely different and that might be important.
This was, of course, Adam Smith's "invisible hand" of free market economies where social progress was a product of mutual interdependence. But economists of the post-Great Depression era were concerned that because so much was invisible, leaving it up to markets alone was too messy and far too often violent. Many, like Friedman, were actually concerned that without a more central role for someone (it was only human that economists saw themselves in that role) that free markets altogether would be subsumed by raw statism, as so many other places had already experienced. To them, to save it was to corrupt it.
Kathlen Hartnett White posts (18 October) in WRT Here
Kathleen Hartnett White, distinguished senior fellow-in-residence and director of the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation and former chairman of the Texas Commission on Environmental Quality. Also co-author of the new book Fueling Freedom: Exposing the Mad War on Energy (Regnery, 2016).
“Determined, free, creative, courageous men and women -- exemplified throughout the Midland community -- have achieved what seven presidents promised but failed to achieve: energy independence as an option. The shale revolution is a result of the Permian rock and the people making thousands of individual decisions in pursuit of profit within a competitive market. It looks like Adam Smith’s “invisible hand” -- the free market -- has also replaced the autocratic bullies of OPEC without so much as a single skirmish. “
Alt_driver (17 October) posts HERE
“It's like watching a giant invisible hand crush an empty soda can”
“Some economists point to Adam Smith’s long-held theory that the invisible hand of the global market place should allow labor and raw materials to move wherever they will be used to maximum benefit. In short, open borders and free trade. That’s the theory.
But in the United States, Smith’s invisible hand is smacking labor upside the head.”
I have a long standing commitment on Lost Legacy to only comment on the politics of the country I vote in (Scotland) and the above quote is from a political column in a USA newspaper. Nothing I assert may be taken as an endorsement or criticism of the politics of Betsy McCaughey or the New York Post. I am solely interested in the demonstrated economic illiteracy regarding Adam Smith’s legacy.
Maitreesh Ghatak posts (20 October) in The Business-Standard HERE
“Oliver Hart and Bengt Holmström, who won the Nobel Prize in Economics (or to be precise, The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) this year for their work on Contract Theory are part of an important line of research in microeconomics that has patiently tried to open up the black-box of how the economic institutions that underpin that grand abstraction called the “invisible hand of the market” actually works.”