GREED IS NOT GOOD

UTPAL KUMAR write in Daily O (23 June) HERE

“Dharma of business: The roots of commerce in India”

“Donald R Davis Jr's book holds the key to moral economy, something the world has been eagerly looking for.

Morality has been another constant phenomenon. Here, Davis reminds that Adam Smith, whose "hidden hand" theory is often put forward to justify the greed-is-good argument, believed in moral economy and his initial juxtaposition on economy and morality has been distorted. …

… “There emerged a series of economists in the US in the 20th century who mystified the economy and believed that it was an autonomous entity. They said there was no need to worry about morality because the market magically converted greed into good,” he says. “I think Smith would have been shocked to see his idea being distorted so much.”

Also, unlike the Western model, all businesses in India are personal. “We are often told in the professional arena that it’s not personal. But the Dharmashastras tell us that the business will flourish more if there’s a personal touch and a sense of belonging involved.”

Davis blames the West for creating this sense of distrust among Indians for their indigenous way of doing business, and instead blindly aping the US. “My colonial predecessors inculcated a sense of stigma among Indians about their local laws, languages and customs. This also explains why Sanskrit finds so little support and patronage in the country of its birth.”

COMMENT

Another addition to the growing pile of daily evidence that the world is gradually waking-up to the wholly made-up, mid-20th century misreading, of Adam Smith’s singular usage of the “invisible hand” metaphor in Wealth of Nations. The great error was initiated by Paul Samuelson (1948) and promoted by Milton Friedman from the 1950s. They both carried immense prestige among economists with their Nobel Prizes. 

Whatever else they were justly respected for they were both wrong about ‘greed is good’ economics. It is time to call them out.

We owe it Adam Smith and his legacy.