Tuesday, April 28, 2009

Great Correspondents in Our Time no. 1

Two interesting letters to the Wall Street Journal (HERE):

The Moral Hazards of Managing Other People's Money"

“John C. Bogle in "A Crisis of Ethic Proportions" (op-ed, April 21) proposes that we try harder to be more moral, and in that misses the point of Adam Smith. Mr. Bogle cites Adam Smith's statement, "[M]anagers of other people's money [rarely] watch over it with the same anxious vigilance with which . . . [they] watch over their own" which is an indictment of human nature. Smith's position is that man's essential nature is a given, not something which can be altered. It is from this base that the invisible hand is derived. Setting up structures which rely on what man ought to be, compared to what he is, is like building a house on sand
.” Adam Freund, Oak Park, Mich.

Mr. Bogle cites Adam Smith's prescient words about the frailty and the faults of managers who manage other people's money. But this tension between the owners and the overseers of commercial activities goes back much further. Consider these words from John 10:11-13 ". . . the good shepherd giveth his life for the sheep. But he that is an hireling, and not the shepherd, whose own the sheep are not, seeth the wolf coming, and leaveth the sheep, and fleeth: and the wolf catcheth them, and scattereth the sheep. The hireling fleeth, because he is an hireling, and careth not for the sheep." Paul O. Gaddis, Franklin, Tenn.

What intelligent and informed correspondents write to the Wall Street Journal!
I have no time just yet for a comment - will try later.

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Blogger F. said...


I wrote that comment in the WSJ and thank you very much for your comment.

Also I have started a blog and would appreciate any comments you may have.

10:03 am  
Blogger Gavin Kennedy said...


I read some of your blog.
Unfortunately I cannot place what a 'new liberal democrat' stands for or against.

Is there a summary on your Blog?

7:25 pm  
Blogger F. said...

Mr. Kennedy,

Thanks for taking a look. The basic idea is pseudo libertarianism but with a pragmatic twist. I think liberalism (not in the classic sense) is morally corrupt but is unfortunately becoming more popular. I think the only way to stop the state from devolving into arbritrary government is to make a deal with the welfare state. Charles Murray first advocated this and I think it is a fantastic idea. What we need to do is to expose the hypocrisy of liberalism by offering the same benefits they offer but relinquishing the control. School vouchers are an example of this idea; government provides the funding but doesn't dictate how the funds are used. Another example would be for government to provide vouchers to pay for health care/insurance but to let individuals decide how to spend it.

That's the basic idea. Thanks for taking the time to read my blog and I appreciate the recognition of my WSJ comment. It means a lot to me.

12:14 am  
Blogger Gavin Kennedy said...


I think the problem is one of nomenclature on this side of the Atlantic.

Classic Liberalism is what many understand as Adam Smith, Ricardo, Mill (though for some reason some people lump in Marx, which to my mind is unhelpful - he was in favour of state control, dressed up as workers freedom).

As I understand American politcs, Liberalism is both leftwing and for some rightwing, as in Liberal Progressives (Left) and Laissez-faire capitalism.

Then there is Libertarianism - anti-state as of the left and the Right.

I live in what Europe calls a Welfare State (Left) or Nanny State (Right).

I have to say that my experience of treatments and investigative monitoring on the Scottish NHS is all good - press highlights of occasional emergency services in NHS hospitals are misleading of the general level of efficient, effective, and considerate services by NHS staff.

I certainly agree with vouchers (a classic test of real liberalism) for schools and universities. Also relaxing the central control of spending, recruitment of students and provision of subject areas.

So, to the extent that we have common ground here, I am probably sympathetic to your aims.


5:24 am  

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