Sunday, March 09, 2008

Silly Sunday Stories

In RA Republican American (8 March) (here):
we get:

Consistency will permit innovation

Adam Smith's "invisible hand" is hard at work in America's energy economy, asking only that Congress and hyperactive state attorneys general let it perform its inevitable magic.

Mr. Smith, an 18th-century Scottish economist and philosopher, believed social good came from people pursuing their self-interest in a free market. The history of the United States and other Western nations with free-market traditions, compared with that of countries that have imposed central economic planning, goes a long way toward proving the truth of his theories.”

What is at work in energy markets are, er, markets. There is a ‘lot of ruin’ in markets (to paraphrase Adam Smith in another context) and though they are interfered with, imposed upon by government regulations, monopolistic players, criminality and fraudsters, natural disasters and events, they still show signs of continuing to do their job.

Adam Smith was keenly interested in allowing markets to work and he never saw a need for an ‘invisible hand’ to guide them to work. That is a myth, a wholly post-Smithian construction developed in the 20th century, not the 18th.


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