Friday, December 19, 2014

Eric De Groot, posts on his newsletter HERE

Oh Dear! Another commercial financial advisor mystifies market processes by calling on an invented illusory entity that only the said advisor understands but potential clients do not. 
Hence punters are willing to pay said advisor to share his claimed insights into said mysterious processes.
However, stock prices are VISIBLE
All prices are VISIBLE.
The so-called invisible hand is, well, invisible because it does not exist.  
It was Adam Smith’s metaphor for how people’s SELF-INTERESTED motivations leads them to ACTIONS in pursuit of INTENDED CONSEQUENCES.
Sometimes such actions benefit others as well as themselves. Sometimes they don’t and sometimes its a bit of each. (Markets and legislation can be messy).
Moreover, and separately, following Cardinal du Retz (and Cromwell), people’s motivated actions also can have UNINTENDED CONSEQUENCES both positive and negative.

‘The road to hell is paved with good intentions’ (anon).


Blogger airth10 said...

Hi Gavin,

Season's Greetings.

I don't know if you have come across such articles but I'm thinking it would be interesting to discuss 'sanctions and the invisible hand'.

There are two sanction stories in the news today, the sanctions against Russian and President Obama wanting to lift sanctions against Cuba. What is driving what? Are sanctions driving the invisible hand or is the invisible hand driving sanctions?

Smith's invisible hand is predicated on a bias. What influence or effect does this bias have on sanctions?

Another question might be, are sanctions having a negative effect on the invisible hand?

5:03 pm  
Blogger AB said...

You've noted in previous posts that "the invisible hand" metaphor was mostly used by theologians prior to Smith. Can you cite some examples? Do you think that Smith was referring to "the invisible hand of God" guiding the worker's self-interest in inadvertently creating a better society?

2:38 am  

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