Wednesday, March 09, 2011

Misusing a Strawman

Dr. E. Ann Clark, of the University of Guelph, writes (8 March) in the Counter Currents Blog (HERE):

The Future Is Organic: But It's More Than Organic!”

“Is this all the result of Adam Smith’s invisible hand - an inevitable and inescapable result of the unfettered free market or other universal principle in action - or is there more to it?”

The obvious question is seldom asked by most modern economists and, therefore, entrenching the mystical nonsense of a ‘magical’ invisible hand of no known actual content, hence no term for it in the most sophisticated of mathematical modeling known to our so-called, hard- science pretenders currently at the top of our top universities with their monopoly grip on our top journals –these same people also act as our top referees of the same journals.

(Incidentally, I read yesterday somewhere on Blog land that a leading physicist after a meeting with leading lights of the same top economists had remarked that he had ‘thought top physicists were arrogant until met these leading economists’. Having not met any top physicists - though I have met many top economists - I cannot comment on the veracity of his statement.)

How markets work is perfectly visible. Its called prices. This was all explained by Richard Cantillon and Adam Smith, and many others before and after.

Of course, top economists will respond that what makes people react to visible prices is their ‘self interests’, of which they will suggest you look over an Economics 101 textbook and – only if you can cope – read up on General Equilibrium theory to see why this answers your ‘101-level’ naivety (and if you can’t read the equations, they probably mutter under their breath, ‘flaming ignoramus’).

The problem with their certainties and their arrogant dismissal of your objections, it that the evidence that self-interest is not the whole picture of what makes people act in the multiple ways they do.

Far too much reliance is put on the catch all, simple same self-interest explanation for it to be credible. People, as Adam Smith, insisted, are not wooden pieces on a chessboard subject to the momentum imparted to them by a ‘man of system’ – people act on their own volition, and many people make for many individual motivating volitions (unlike the wooden chess pieces or the uniform reaction of individual atoms, here and elsewhere in the universe).

This sort of thinking leads to the obvious error of postulating that the self-interest of individuals, whether based on purer or selfish self-interests, somehow and miraculously works for the betterment of all. This is the crass consequence of some misinterpretations of the properties of the invisible hand.

Dr. E. Ann Clark’s assertion about the invisible-hand metaphor as the “unfettered free market or other universal principle in action” is based on a misinterpretation of what Adam Smith meant when he used the metaphor only once in Wealth of Nations in Book IV, and not in connection with markets. In fact that chapter in Book IV was about a context anything but an ‘unfettered free market’ (this was about the 18th-century mercantile protectionist Britain!).

Whatever the case that Dr Clark makes for changes in food production they do not need the phony straw man of modern economists. There is no invisible man of the market, unfettered or otherwise.



Post a Comment

<< Home