Thursday, July 26, 2012

Is Nobody Ashamed?

“7 reasons Wall Street bankers’ brains act bizarre” Insatiable Gorilla,  Invisible Hand and fear of death
Paul B. Farrell reports iin MarketWatch HERE 
Our Insatiable Gorilla is actually a metaphor for something far more profound, that Gorilla is the all-almighty Invisible Hand of capitalism that Adam Smith deified in his works on “The Theory of Moral Sentiments” and “The Wealth of Nations.”
Yes, the Insatiable Gorilla we all know is the mysteriously cryptic Invisible Hand guiding capitalism in the new century:”
This particular piece of nonsense was destined for the next group of Loony Tunes to be posted, until I read further and found it referred to a speech by the President at a Morgan Stanley get together, where apparently the theme of the President’s speech was how “Working at Morgan Stanley” is like making love to a gorilla,” He was I assume only half joking.
The rest is too tiresome to repeat.  What a state modern economics is in when it leads to such silly comments from a major banking institution, presumably in charge of billions of dollars of investment upon which millions of jobs rely.  Let along the overall prosperity of US capitalism.
And this nonsense is laid at the door of Adam Smith, encouraged by my colleagues giving it intellectual respectability!  Are none of them ashamed even just a little at what they have done since 1948 to spread this direct falsification of Adam Smith’s life work?  And not just the neoclassical school is culpable, but also Hayek, et al, and assorted Austrians too.  Even Heterodox economists join the consensus spread the nonsense as well.


Blogger airth10 said...

"Are none of them ashamed even just a little at what they have done since 1948 to spread this direct falsification of Adam Smith’s life work?"

I thought of asking you if you thought the world and economics is worse off because of the alleged distortion you think was perpetrated against a metaphor in 1948. Now I know you feel that way with the comment you made above.

I think it is pretty flimsy to think that the economy has gone sour just because a 'metaphor' was sort of distorted. The world is bigger and more complex than that. Metaphors help us navigate the world. But just because one metaphor, a major one at that, was supposedly misinterpreted and manipulated doesn't mean the world is hanging by a thread as you seem to think.

It hasn't been the misuse of a metaphor that put the economy into such a prediction or got bankers to utter stupid things. It is the natural proclivity of human beings that does that.

5:05 pm  
Blogger Gavin Kennedy said...

You miss my point. I do not consider that capitalism is “hanging by a thread”. That would be a ridiculous notion. There are several versions of capitalism already in the world economy. There may well be more in future. It is the credibility of economics that is damaged by such ridiculous notions, that is all.
“Metaphors help us navigate the world”, you write, and you are right. There are many competing metaphors for the economy. Some favour world revolution for various ends: proletarian revolution, middle-class restlessness of privileged youth; some favour religious revivals and forced conversions for belief in God or Allah in various murderous guises; others for varying utopias, all of them inevitably totalitarian.
You miss what I am getting at.
I do not believe we are all ‘doomed’. But economics as a discipline is about clear thinking, and we need it for that role.
Hence, my disgust at such a prominent player among prominent players and their spouses espousing an odious doctrine that damages the economy when applied and personal integrity when its effects become apparent.
Those economists who serve such masters, and educate their children, usually for large cash sums, are complicit in a disgusting trade in justifying selfish, irresponsible and unaccountable behaviours that is my point,

5:49 pm  
Blogger Blue Aurora said...

I agree that it is shameful that a number of economists of all stripes (orthodox or non-orthodox) propagate a flaweed understanding of Adam Smith.

Out of curiosity though, Gavin Kennedy, would you say that Adam Smith is still the greatest economist the world has ever produced?

Apparently, a leading Post Keynesian economist, Steve Keen, believes that Francois Quesnay deserves that honour, not Adam Smith. Why? Because Quesnay dealt with dynamics.

1:25 pm  
Blogger Blue Aurora said...

Indeed Gavin Kennedy, it is embarrassing to see economists of all stripes demonstrate a faulty knowledge of Adam Smith.

Out of curiosity Gavin Kennedy, do you think that Smith is still the greatest of all economists, despite what faults he may have?

The reason I ask is because the leading Post Keynesian economist, Steve Keen, thinks that honour goes to Francois Quesnay - apparently because Quesnay engaged in economic dynamics and Adam Smith did not. Do you agree or disagree with Steve Keen?

1:28 pm  
Blogger airth10 said...

" Because Quesnay dealt with dynamics."

Well, Blue, Smith's 'invisible hand' is about a hidden dynamics.

3:08 pm  

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