Monday, April 03, 2006

What Are They Teaching at Harvard?

Greg Mankiw’s Blog: Random Observations for Students of Economics
29 March: ‘Kinsley on Billionaires and Adam Smith’.

The first exchange of one caveman's dinosaur meat for another's rather attractive decorative rock started a process that, after millions of years, leads to DVD players at Wal-Mart that cost less than DVDs. Or something like that.”

“Even in its most primitive form, the invisible hand is a brilliant explanation of what motivates most of us, and how our efforts serve the common good.We work to produce things that can be traded for things we want. That trade makes us better off than we would be if we made everything we consume ourselves.”

From Michael Kinsley: ‘Why Be a Billionaire? Deconstructing Forbes’ annual list’ (see also my Blog for 24 March 2006: ‘No Alibi for Selfish Greed’).

This is an example of a complete confusion of the history of the human species. The dinosaurs and associated species died out 60 million years before the speciation of the Common Ancestor into what became ‘Hominids’ and Chimpanzees (4 to 6 million years ago). Humans evolved as a separate hominid species about 200,000 years ago. Stone-age hominids (Habilus, Erectus) made the first stone tools about 1 million years ago. Hominids used stone tools to cut through carcasses they scavenged while other members of their small bands fended off rival predators with clubs, stones and noise in the earliest division of labours. It was the evolution of the division of labour from that time to this that we arrived at DVDs, not 65 million years. An even better achievement than mythically chasing lomg-extinct dinosaurs for dinner as credited to them by misreading of the use by Smith of Shakespeare’s ‘bloody and invisible hand’ (MacBeth, 3:2) to describe the consequences of human motivations, which sometimes had benign, and other times, malign consequences for their societies.

As to the second paragraph, the so-called theory of ‘the invisible hand’, it was not a theory and had nothing to do with the benefits of the division of labour and trade. Conflating a metaphor with the grandeur of a theory is poor teaching.

Greg informs readers that Kinsley was an Economics Major at Harvard, which means that nonsense about the invisible hand is passed on to succeeding generations of Harvard students who receive advice from their tutors to read Kinsley on Dinosaurs. They should spend time reading Adam Smith, not reading what an alumnus says he wrote, and should ask why their tutors are promoting such poor history of economics.


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