I AGREE: THE INVISIBLE HAND DOES NOT EXIST

Sylvain Guyoton, Senior Vice-President Research EcoVadis posts om 12 April on Huffington Post (US EDITION) HERE 

“Globalization: Between ultra-liberalism and protectionism, there is a third way”

“Yet, both protectionism and ultra-liberalism are blind.

One systematically favors a single nation at the risk of promoting companies that offer more expensive or lower quality products, yet not being necessarily themselves socially responsible. The other ignores the ravages caused by work conditions that sometimes seem like they’re straight out of the middle ages, as well as the conditions inflicted upon nature. This approach counts on the intervention of the “invisible hand” of the market, even though we know –for those who still doubt– that it does not exist, as was bitterly illustrated by the 2013 Rana Plaza tragedy in which 1,100 textile workers perished in a building in Dacca, Bangladesh.”

COMMENT

Well, the sentence highlighted is a good place to start, though I am not so confident that businesses will comply with the proposed changes in their procedures.

However, my doubts are not decisive. Given that there is no mystical “invisible hand” in markets and that all markets do not work without VISIBLE prices, beliefs in “an invisible hand” - a notion purloined from Adam Smith’s totally innocent use of a literary metaphor - are beside the point.

Sylvain Guyoton is starting from the right spot, so all strength to his public journalism