NO SUBSTITUTE FOR READING ADAM SMITH'S ACTUAL IDEAS

Dr. Robert J. Bunker, an Adjunct Research Professor, Strategic Studies Institute, US Army War College and Adjunct Faculty, Division of Politics and Economics, Claremont Graduate University, and Pamela Ligouri Bunker posts on Small Wars Journal HERE

“Plutocratic Insurgency Note No. 1: Eight Individuals are Now as Wealthy as the Poorest Half of the World”

“It challenges Adam Smith’s “Invisible Hand” metaphor, that pertains to the operations of a free market economy, by showing that some sort of sovereign economic regulation is indeed required in order to protect the public good. “

COMMENT

Robert and Pamela Bunker write an interesting essay on a contemporary economic fact, echo’s of which have recently been trailed in public discourse. I do not have time to discuss the hypothesis at present.

I simply want to observe that there is widespread misunderstanding, based mostly on widespread ignorance of Adam Smith’s actual use of the ‘invisible hand” metaphor. Such misleading pesentations were themselves a creation of modern economic theory, invented by the brilliant Pauld Samuelson in his 1948 textbook (19 editions to 2010), which dominated university economics departments from the 1960s to the new century. It was the set Economics 101 book when I was an undergraduate - then one day I read Wealth of Nations while on a 5-week vacation in France...

Adam Smith said many times that the anti-competitive actions of some “merchants and manufacturers” needed to be curbed where they intruded on competitive production and distribution. These people were the biggest campaigners for “fixed” non-competitive markets, with import tariffs, outright prohibitions, and the curbing by punitive legal sanctions against employees exercising their rights to bargain.

Indeed, Smith was so often critical of the anti-competitive behaviours of dominant class of players in the economy that those very few readers who study his Works, rather than just read quotations or other people’s selective reports of his ideas, must wonder about Smith’s public image as a free-market, anything goes campaigner. Smith had a balanced view of the powers of competitive markets within an appropriate legal system.

However, read Adam Smith and understand his actual ideas. In the meantime, I shall not hold my breath awaiting the penny or cent to drop about the authentic Adam Smith.