Tuesday, June 28, 2016


Hal O’Leary posts (15 May) on the Intelligencer (Wheeling News Register) HERE 
Harold G. "Hal" O'Leary of Wheeling has been prominent in the arts community for many years. He was the founder of Oglebay Institute's Towngate Theatre. In 2008 he was inducted into the Wheeling Hall of Fame.
“Success in Capitalism Can Be Failure in Humanity”            
Having set out with this article to show that capitalism does not work, I found, after delving further into the writings of Adam Smith and Milton Friedman, that indeed it does work. I must admit that there is little doubt that in terms of efficiency in the allocation of resources and in the creation of societal as well as personal wealth, there is no system that can match capitalism. As Adam Smith writes in "The Wealth of Nations":
"As every individual, therefore, endeavors as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”

Ah, yes, "an invisible hand" that works its magic in a manner unrecognized. He further remarks:
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."
However, in the same book, Smith acknowledges that some problems may be found in his system. He states, for example:
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
He speaks also of the need of the "master" to suppress the wages of his laborers as much as possible, making laborers nothing more than commodities.
While Adam Smith may make such admissions of problems with the unfortunate realities that must ensue from his system, I could find nothing in Milton Friedman that would support them. Friedman's position is clearly stated thus:
"So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.
Adam Smith did not ‘invent’ capitalism. He described what he observed around him and showed how commercial society had evolved over hundreds of years in Europe. In fact, he had never heard of, or used, or invented the word ‘capitalism’; a word first used in 1854 by Thackeray the 19th-century novelist (The Newcomes).
Smith defined wealth as the produciton material goods, not the accumulations of money, gold or precious metals. The world of the religious Saints was a very poor one for most ordinary people; they preached against sin but not much was or could be done about raising the daily income from the equivalent of $3 a day for millennia. Life times were short for most people - reaching aged 30+ was unusual for most generations - and poverty was the norm for almost everybody, as was disease, discomforts and early child mortality. 
Harold G. "Hal" O’Leary dismisses concerns about living on the equivalent of $3 a day or less - perhaps he should try it sometime. His quoting of the views of religious sages whose message was of a ‘better life to come’ in a heaven. What nobody had seen or could see is an empty option. I am sure that raising daily per capita incomes is not one of his goals in life but for the millions of people living before 1800 and those trying to live on £3 a day had/'have no choice but to endure their privation and misery. Neither was there a great deal of humanity in the conduct of people in those sixty millennia before 1800,  when per capita incomes equivalent rose slowly in excess of over £350+ a day , and rising markedy for the last three centuries. He misses the point about commercial market societies. Of course, he has the choice to leave the rich portion of the world that the lives in and find what real poverty means.

Co-operation is the norm, not the exception in post 1800 societies. Read Adam Smith closely; he linked co-operation intimately to commercial societies. Read what he had to say about the manufacture of the common labourer’s coat and count how many people had to willingly co-operate to produce it - no slavery involved! (Wealth of Nations, book 1).


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