Wednesday, April 05, 2006

A 'Peace Journalist' on Adam Smith is Right

If a ‘peace journalist’ can get it right about Adam Smith and markets – that individual motives can have, collectively, either benign or malign consequences – why can’t some high-powered economists, who keep repeating the avoidable error that Adam Smith asserted that the ‘so-called invisible hand’ ensured that the actions of profit-seeking individuals always lead to benign consequences?

That is not what he wrote, meant or expected anyone to misinterpret. By putting it this way, they suggest falsely that Adam Smith provided an alibi for just about anything corporate managers do, including pollution, fraud, monopoly and rigged ‘markets’.

What a great pleasure it was to read John G. Scherb (of whom I know nothing else) in a ‘peace’ publication (a source of which I would normally be sceptical) writing about Adam Smith and markets correctly.

John G. Scherb writes: ‘Trading Blocs, Global Interdependencies and Wars’ in Peace Journalism: independent emagazine, New Jersey, USA (issue 17 – April):

"In the last twenty years or so there have been many interesting trends and developments in the world. Perhaps none more so than the two mega-shifts concerning the huge growth in worldwide goods and services and the growing, some say virtually complete, interdependencies of the world's largest economies.

By and large, these two phenomena have resulted in much good for many people. The first of these, the explosive growth in international trade in goods and services is a well-documented phenomenon and is largely an outgrowth of post World War Two internationalism, now commonly referred to as "globalism". The theory is a simple one: In the search for profits following Adam Smith and successor's market theories, the greatest good for the greatest number will, over time, occur if market forces are honored."

Read the whole article (interesting in itself):


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