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The Unmaking of the Market
In the most famous passage in "The Wealth of Nations", grandfather of capitalism Adam Smith wrote:
Every individual... 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.
In other words, Smith argued, that which is selfish also serves the greater good. A few years after the fall of Enron and a few months into the sub-prime mortgage crisis and ensuing recession, it should now be fairly obvious that the invisible hand is, in fact, a visible fist -- a greedy few organizing the economy to their own benefit with the rest of us reeling, not benefiting, from the consequences.
Of course, this shouldn't come as a surprise. During the Gilded Age, robber barons like Carnegie and Rockefeller made their fortunes on the backs of steelworkers and miners. Throughout colonialism and continuing today, Western empires have grown their coffers at the expense of natural resources and communities in the Global South. Milton Friedman, the midwife of capitalism in its present form, once wrote that the "social responsibility of business is to increase profits." There may be a few occasions in which corporate profit motives and the public good are aligned but from public housing to AIDS drugs in Africa to military contracting, it's altogether too easy to think of instances where the private sector's bottom line comes at the cost of the public interest.
Once upon a time, we had a healthy and robust government -- public structures to look out for the public good. From roads to water systems to schools to emergency management, we used our shared tax dollars to pay for our shared needs. Then, around the 1980s, corporations looking for the next business opportunity figured that attacking government could open up a whole new industry, making money off the things that make America work. Sanitation, transportation, healthcare -- we took good public programs and turned them over to private profit. The idea was that business would do it better. But the aftermath of Hurricane Katrina, with private contractors filling the role of the once robust Federal Emergency Management Agency, proved a stark illustration of Milton Friedman's point: Left to its own devices, the market will put profit ahead of everything, even human life.
It's a funny twist on history, really. Time and time again we see the market fail to look after the public interest. And time and time again we rush to privatize public services, or spend tax dollars not on public programs but exorbitant subsidies for private business. Why, with Wall Street collapsing around us, do we continue to privatizing everything that isn't nailed down?
In a fantastic new book entitled "Keeping the Promise?", Leigh Dingerson and colleagues from Rethinking Schools and the Center for Community Change explore the debate over charter schools and the privatization of public education. And in a very provocative pamphlet entitled "Just Another Emperor? The Myths and Realities of Philanthrocapitalism", Michael Edwards examines how venture capitalism and other for-profit principles have invaded and affected philanthropy and whether profit-driven means can achieve the ends of social justice. Both pieces push us to examine scenarios when Adam Smith's invisible hand is playing puppet master with the public interest, to gain private profits but not really help the greater good.
Maybe, with the limits of privatization confronting us from the classroom to the emergency room and everywhere in between, it's time we start investing in the very visible hands of all of us, public structures that protect the common good and community values, and not just profit.
Sally Kohn is the Director of the Movement Vision Lab at the Center for Community Change.
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51 Comments so far
Show All..and don't forget that "contractors" the likes of Blackwater are now providing "national security".
Gee, and all along I thought that's what the armed forces were for.
And sometimes, even the biggest promoters of this happy "invisible hand" horseshit like the NYTs Billionaire-pundit Tom Friedman, let their masks slip off and write things like this:
"America can't be afraid to act like the almighty superpower that it is ... The hidden hand of the market will never work without a hidden fist - McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps."
- Tom Friedman, 1999
Every large government sponsered private industry calls it healthy profit, when actually they all want to be is their own empire. Greed is an overwhelming process, that most can't resist. Love of Family and Community is the only thing that WILL separate greed from reality.
This reminds me of an Einstein quote: "Two things are infinite:the universe and human stupidity; and I'm not sure about the universe."
No matter how many times the stock market crashes, or inflation wipes out savings, or corporate scandals are exposed, people continuely clammer for investment portfolio's or real estate speculation so that they can become rich beyond their wildest dreams. Greed is rampant but no one sees it in themselves, only in those with more than they have. Avarice (greed for those who don't know what avarice means) is one of the seven deadly sins for a reason. Unfortunately, like too many other things it gets glossed over or ignored completely. The blame for the situation we find ourselves in goes all around, how many people supported de-regulation in order to get 'government off our backs'? How many people agreed that all government agencies should be run like businesses?
Until we recognize our own culpability in all of this, nothing will change. One of the 'family values' that so many people embrace should be sharing and caring without judgement and teaching our children that greed is dangerous to all.
Naomi Klein pointed out in "Disaster Captalism" just how profitable government can be, if you really screw it up. "Mssion Accomplished!"
I might be able to still "swallow" Adam Smith's idea that every individual person working legally in his own economic self-interest is contributing to the "invisible hand" that guides our collective economic betterment.
IF, however, individual "persons" are expanded (as they have been in America) to mean corporations too, then the argument goes in the ditch. There are simply too many examples to the contrary. Some that come to mind are slot machine makers, payday lenders, subprime lenders, trans-fat makers, pseudoephidrine makers (used in Meth), and the producers of all shades from 'Girls Gone Wild' to porn called up on the screens of your kids' cellphones. Corporations are out of control, and Adam Smith would be first to tell you so if he was walking around with us today.
Capitalism that holds the reigns of government is FASCISM!
There are multiple revolving doors between government, industry and the intelligence services.
Therefore, there are multiple avenues for evil men to come to power, and many of them are corrupt beyond the concept.
A new study was recently released that stated that sociopathic behavior was becoming the accepted norm.
Given the polluted society (North America) that was examined, it's no surprise. All you have to do is listen on the street corners to hear the youth of today brag about how often they are arrested and jailed. How women and girls are degraded sexually by their male peer and the fashion industry. And take into account how utterly pervasive technology that separates you from daily human contact has become. Cars, cellphones,i-Pods. All DESIGNED to ISOLATE you from your fellow human being.
If you do not know who your fellows are, you care nothing about them, and therefore can feel no empathy for them. This allows you to behave in ways unthinkably barbaric to them. QED.
This present form of capitalist consumerism masquerading as government and society is the ultimate expression of greed and inhumanity. we have become, LITERALLY, nothing more than cogs and gears in a vast money machine that runs on blood.
Good international manners provides far more "national security" than too many bombs and bullets.
Adam Smith also said(paraphrase folks) " It is but equity that those who farm and clothes us also be properly clothed and fed."
The scope of corporatization in his days was on several scales below today. Also the ability of imperial powers to easily reach and control the other ends of the earth.
Econ 100 (Macro): Failure of the marketplace.
Import substitution. The multiplier effect and its benefits for local economies. Just 3 key issues.
The Friedman neocon cultists need some remedial economics. Some deserve lengthy jail time.
Galen and Daniel David: "Right on!" Much as I continue to be an advocate of gradual and non-violent change, the GreedMeisters have become so brazen and open about their control of humanity (even masquerading as Communist Nations, like China), that it will take a series of cataclysmic social and economic upheavals to prevent them from sinking the Planet. Brace yourself for food, water and natural resources wars, with the poor, non-white, and women everywhere as the first-line victims.
Sometimes I really get scared for my kids. What an awful world we are leaving for them to survive in.
"Capitalism that holds the reigns of government is FASCISM!"
There hasn't been a country in the world since the birth of capitalism where capitalists didn't hold the reigns of government. The monetary system (how money is created) alone allows small groups of financial giants to absolutely control all governments, this has been the place for at least the last few centuries. We socialize the costs of the monetary system by paying debt to private banks, so I guess we (always have) lived in a "fascist" country. The only thing that keeps people from realizing this is their lack of knowledge about monetary policy and the financial markets. Socialism is the only logical way of getting around this problem and this country has no socialist culture what so ever. Socialism allows people to look past nationalism and to see that single countries by themselves cannot take on the financial giants; if they tried capital would simply go to whatever countries aren't going after the stolen wealth in the monetary system and financial markets and the country's economy would crash. That's why there used to be something called the Socialist Internationale, people then realized that if those who produce for the world, not one class monopolizing the benefits of what is produced by another class, don't work together and get pass short sighted nationalism there was no chance of anything other than savage capitalism. I think the same is true of today and, as of now, I'm not optimistic on the chances of the left in the face of this, at least in the near future. The only hope is for the left to learn and then to educate others on how the economic system REALLY works. If they can do that the left has a chance, it'll just take a while.
"The truth is, Wall St is not really collapsing at all."
EXACTLY. Once (financial) wealth is created it doesn't dissapear, it just changes hands.
Grant- 99% of the monetary wealth in the world, as currency, does not exist in a physical form.
It is 1's and 0's on computers.
If electrons are being counted as wealth, then the economies of the world are being based on stuff as thin as dreams...
RichM April 16th, 2008 1:10 pm
"...Today, it's [Dow Jones] UP about 200 points, for mostly fabricated reasons. If the stock market had the slightest connection to economic reality, it would be down [below 10,000], given what's happened in [recent years]..."
Absolutely spot on... I'm sitting here looking at $1.595 US dollars buying one Euro..Reconstructed Money Supply M3 expanding at plus 15% per annum...$3 Plus Trillion willfully wasted on Middle East misadventures...$9 Trillion Govt debt...$50 Plus Trillion private debt..the fastest slowdown in housing starts in a generation...etc etc etc....So Morgan Stanely does some creative accounting to announce increased profit...The stock market goes up...go figure
THe Dow and S&P etal should be collapsing...the underlying collective intrinsic valuations are bloody woeful period...ahh but that capitalist efficiency at work in a free market economy[sic]
Galen, of course. The financial markets have grown to at least 6 to 7 times their former size in the last few decades. That's debt, not paper money. Most of the wealth created, adjusted for inflation, all really, has gone to the elite investor class. Everyone else has seen their standard of living stagnate or decline. Even in the countries where per capita income (which doesn't say all that much by itself anyway) is increasing thanks to "free trade" the benefits have been highly concentrated and have caused ecological destruction that is ignored in orthodox economics but will eventually turn around and turn into economic costs. Venezuela and similar countries are trying to buck this trend, moderately, and you see how the capitalist powers here are reacting to that. The only reason Venezuela can attempt to fight capitalists as much as they have is because they have a resource that is guaranteed a high demand, whose value will always increase (if it doesn't it will be consumed more, which will further destroy the environment, and it is finite in amount) and which the government has a controlling share. Without the oil they'd have no chance to do what they're doing as isolated as they are, or at least were before the recent elections in the last few years in the region.
Something else that contributes to the extreme fragility of our system:
Scientists find secret ingredient for making (and losing) lots of money - testosterone
· Study links male hormone with earning power
· But too much can lead to irrational risk-taking
James Randerson, science correspondent
http://www.guardian.co.uk/science/2008/apr/15/medicalresearch.gender
In the film Wall Street, which symbolised the excess of the 1980s, the most successful traders were odious alpha-males with aggression seeping from every pore.
But stereotypes often have a kernel of truth, and researchers from Cambridge University have concluded what everyone outside the City has always suspected.
Money doesn't make the world go round: it's testosterone. The more that traders have, the richer they'll become - up to a point.
...(but) for every boom it creates, testosterone is most likely behind every bust too. Coates pointed to the irrational way some people reacted to the slump eight years ago....
He believes the traders, who are almost all young men, were profoundly influenced by the testosterone hit they get from the job. But, he said, primeval brain mechanisms activated by the hormone can also lead them to irrational risk-taking. "I think this molecule is partly responsible for financial instability."...
(And the obvious conclusion is that women and older people generally would run things better. Not something our "yoof" obsessed culture would welcome any more than the conclusion that the market works for the good of the few, not the many.
Hi my name is insanity,
I work on Wall Street where I do things that no sane person would ever do based off of false hope and shoddy logic. By the way do you want to invest a billion in my elitist hedge fund that has never lost a single cent and made billions for all your yachting friends? You see I want to go gamble away, err, make a few more sound investments in the Ponzi, errr, financial sector before the next collapse (I.E. tomorrow morning), whoops did I just say "collapse", I meant before the next market adjustment on a temporary downward trend that, I assure you, will be extremely shallow and self-correcting to the upside (and besides, this tiny, shallow recession will really just the "cheap buying opportunity of a lifetime"!!!) just as soon as we find the bottom which I assure you is imminent with the overall outlook being bullish in the extreme which my friend, is a personal "you'll never get your money back" GUARAN-FUCKIN-TEE-MOTHER-F-ER! So buy in now before this market takes off to the upside like a bat out of hell!
In fact I'll give you the tip of your lifetime for free right here and now, all you need to do is just look for the next bad news is good news to come out shortly, preferably from one of our many fine financial institutions like well, you know, another insolvent bank announcing it ONLY lost $5 billion the last quarter instead of the $5.1 billion those silly analysis had "expected" and jump in with both feet, Bitch!
Oh hell, just "invest" that billion with my hedge fund and I'll turn it into nothing in no time, whoops there I go again, I mean I'll leverage that billion into a trillion take 20% off the top as commission for myself (of course) and then "temporarily" freeze any withdraws from my Ponzi…err Hedge Fund. So how about it my little preferred investor to my hedge fund? Please, pretty, pretty please? I don't want to have to go back to selling used cars, I mean that business is so deceptive and frankly immoral that it makes my stomach turn just thinking about it!
Hooray for propaganda and suckers (and today's close at $115 for a barrel of oil)
Sincerely,
Insanity, err, the powers that be on Wall Street
DOW
212.34
+1.72%
12,574.81
NASDAQ
59.71
+2.61%
2,345.75
S&P 500
25.32
+1.90%
1,359.75
OIL
1.21
+1.06%
$115.00
US $
0.0067
-0.0105%
1 EUR = $1.5954
captn72 April 16th, 2008 2:55 pm
Hi my name is insanity,
LOL's... great name insanity...but after working in the finance sector it's lucky you're not in the asylum on meds...
I don't know how many people who quote Adam Smith have actually read the whole (pretty tedious) Wealth of Nations, but clearly damn few free-market types have. He argued, in addition to the invisible hand guiding things, that businessmen meet socially and before long the conversation turns to finding a way to collude in pricing and otherwise undo the common good. Moreover, he argued that laws are needed to ensure that that doesn't happen. Adam Smith -- lousy commie pinko rat bastard.
Roughly twenty years ago, Americans crowed about the superiority of capitalism and free enterprise while watching the old Soviet Union crumble under it own weight.
I imagine that there are quite a few Russians enjoying their own laughs today.
jj
Galen April 16th, 2008 12:04 pm
Capitalism that holds the reigns of government is FASCISM!
I was going to say something similar.
Galen and Grant seem to have the discourse well in hand. I hope they write more.
How can I put this politely...
You ever lived with a cokehead? Had one in the family, in a study group, in a band, at the office, on your team? Arrogant, big-talking, liquidate everything they can get their hands on to propel their rocket-ride to glory? And resistant to no idea more than the idea that they might have a problem?
Rumor has it that Wall Street has been taken over by genuine, out-of-control cokeheads. They worked their way up to the top, the way anyone has to, albeit much more quickly. And they are rumored to have ransacked the nation's finances like a live-in boyfriend (and cokehead) who signs up for every credit card the household is offered, with absolute certainty that their greatness could only ever grow.
Oops! I didn't put that politely...
Adam Smith favored the market as a means of freedom to overcome the 'dead hand' of the government restrictions that benefited the few and the powerful. He saw competition as the disciplining force that would pit the self-interest of sellers vs. buyers as checks and balances on each other. He knew well the folly of greed and market power, whether that power derived from corporate market power in the form of monopolies or oligopolies or a government monopoly. Smith never worshiped at the 'unregulated free market altar' like those who use his words to justify corporate power.
If Smith came back today, he'd be fighting the corporate greed that has no balancing force. After all, he was a professor of moral philosophy.
As for now, he's just spinning in his grave every time somebody says, 'according to Adam Smith.'
Galen
Excellent posts.
I don't know much about the world markets but does anybody? I believe humanity is taking it play by play. Trial and error, mostly error and paranoia, but seriously I was raised by a Milton Friedman apostle and I never bought an ounce of that horseshit! My dad tried to teach me that the most honest human quality was greed! I argued with him, saying that my Sunday school teacher taught me that greed was against the Bible, but daddy said, "There is nothing in the Bible against getting rich." Of course dada was caca wrong on this too.
The free market exists in theory only. So long as the UN Security Council has 5 permannent members who supply 85% of the world's weapons and huge intelligence agencies, there can be no such thing as a free world market.
We've seen America's charitable contributions to Africa always coming with strings attached. China, for all of its faults, gives more aid to Africa and attaches fewer strings. But I have firsthand info that China acts like an environmental wrecking ball in resource rich Africa.
Even if or when humanity could possibly get rid of violent geopolitical conquests (war) long enough to establish "free markets" there will still be insiders and social issues such as welfare, education, and environmentalism that greed can only hurt.
Humans keep doing the same stupid shit over and over again with the same results, don;t we?
I've read some of Adam Smith (admittedly a hard thing to do in some spots) and I don't think he foresaw massive manipulation of the financial systems and markets, mostly because he had NO idea that computers and high-priced lobbyists were coming. I also don't think he could foresee the massive power of the modern media to sway entire countries. The corruption he feared (rightly so) has merely changed tactics and tools. The objective is the same.
We don't and haven't really had a free market since the Civil War. The railroad and banking barons took over and have never let go of the reins of power. They have been joined by other powerful interests, of course. This BS the Banana Republicans spout about the magic of the free market may be true - but is moot because our markets aren't free.
I don't think Adam Smith gets a whole lot of traction in the Bushco crowd. On the other hand Dick Cheney has said that he admires Niccolo Machiaveli's 'The Prince'.
Says a lot right there.
And yes, I HAVE READ Machiaveli's work. The man was a fascist before the word was invented...
Well now we now where the "grandfather of capitalism" went wrong. Poor Adam Smith, what a naive fellow you must be. The worth of your entire argument is apparently based on the assumption that "every individual" in "intend(ing) only his own security" would of course "prefer.. the support of domestic to that of foreign industry".
But, my dear Mr. Smith, if no one "intends to support the public interest" and "intends only his own gain" why would he necessarily "prefer the support of domestic to that of foreign industry"? Is it because in your day a person clearly understood that if he "intend(ed) only his own security" then he must, perforce, support domestic over foreign industry?
If that is so, then perhaps it is not your naivete but our stupidity that has landed us in this fine fix. We traded our ability to make decent livings in domestic industry for the pleasure of buying the cheap products of foreign industry. And now it seems we can't do either. Tch, tch, tch.
So what is to be done? Perhaps the first thing is to understand that intending our own security does indeed mean preferring domestic industry. And to prefer it, unfortunately at this time, means we must rebuild it. And rebuilding it requires, as it did when we spent most of the past 200 years building it in the first place, that we must protect it. Protectionism is not a four letter word. It is what every developing country, including our own at one time, has understood it must employ if it is to survive, let alone thrive. Seriously, folks, how secure can a country be that doesn't even make its own underwear anymore!
This is NOT an argument for isolationism. As a matter of fact, the peoples of every country on the planet would not only be, but would feel, more secure if they could produce for themselves at least the basics of what they need and not HAVE to trade for them. This country's greatest contribution to the world could well be the human, technical and financial assistance we rendered in a stated goal of helping all peoples, including ourselves, to be as self-sustaining as possible, meaning less, not more, dependent on trade.
I know very well who convinced us that "free trade" was a good idea and why they did it. But now that it is clear to an ever larger number of folks around the globe that it really is a pretty lousy idea, we need to discuss how to fix the problem and do it lickety-split.
A suggested template could look something like this:
Dear Business;
Here's the deal. We are setting the rules such that If you want to sell your product to our people, you will make it in our country using our people, obeying our rules, and reinvesting the majority of your profits here. You will not be allowed to plunder our resources. If you do well by us, in the long run, you will do well.
Obviously there are some things in each country that could not be made in that country. If these are things that could not be done without and could not be substituted for then exceptions could be made, but I think that we might find it surprising how few items would actually fall in this category. And of course it would not mean that every country would be making its own airplanes, for example.
But I think it would be a very useful, and I suspect, increasingly necessary exercise to actually sit down and work out the details.
As they say, we can pay now, or we can pay later but pay we will, and the longer we wait to play our own "hand", visible or not, the more we will have to pay. So let us begin.
If there really were a free market the world would be nothing like it is. Ditto decmocracy. And if Adam Smith were alive today, and could see the things that are happening that are being justified in his name, he would turn in his grave.
"....a greedy few organizing the economy to their own benefit with the rest of us reeling, not benefiting, from the consequences."
We certainly are not benefiting, in fact, we are $$paying dearly as a result of this greed!
This link tells it all!: http://www.financialsense.com/fsu/editorials/willie/2008/0416.html
The Invisible Hand
Who would have thought it really possible
Except Adam in his wildest dreams
That the smith of apples has turned the world it seams,
for the invisible hand is truly ruling all the land.
No, It ain't the groper or the demon roper,
It's just a hand that's ruling all the land.
The hand of markets,
The hand of marks
Is the hand that ruling all the land.
Invisible except to greed,
Invisible except to need,
a non-entity indeed.
Adam's hand is truly ruling all the land.
Puppet leaders revel in the magic of the hand
And boast it raises all the boats.
While inequity between us marks
gives the hand to haves who favor status
While inequity between us marks
gives the hand to haves who favor status quo.
The hand of markets,
The hand of marks
Is the hand that ruling all the land.
It's the hand that swell's the MIC
It's the hand that sells our spaceship home.
For Gaia is worth more dead than it is alive.
The hand of markets,
The hand of marks
Is the hand that ruling all the land.
Wall Street is the house and the house always wins.
"Milton Friedman's point: Left to its own devices, the market will put profit ahead of everything, even human life."
That's monopolies, not the market. By killing competition, monopolies destroy the free market. One big difference between free market and monopoly is that in a free market, one has choices as to cost, quality, safety, etc. In a monopoly one does not.
Article: "Smith argued, that which is selfish also serves the greater good."
Its time to drive home the point that wanting a well-financed government that actively promotes the common good IS SELFISH.
I SELFISHLY WANT TO LIVE IN THAT KIND OF SOCIETY!!! instead of the predatious, debt-ridden cesspool 'supply-siders' have gifted America over the last 30 years.
RichM said: "The article is not bad, but is a bit sloppy with assertions. For instance, Ms Kohn writes, "Once upon a time, we had a healthy and robust government " "
You're right, of course. We were never saints, and always allowed egregious business decisions to taint life. But, the hard edge was off us in those days Kohn writes about. Even if our capitalism could be raw and uncaring, we had a government that at least tried to care. Now, we have one that is too busy paying rich folks back for loaning us the money to cover the national debt to help us out. These are dark times for Americans.
Article: "[we had] public structures to look out for the public good. From roads to water systems to schools to emergency management, we used our shared tax dollars to pay for our shared needs. Then, around the 1980s, corporations looking for the next business opportunity figured that attacking government could open up a whole new industry"
I might add in support that the Am Soc of Civil Engineers recently completed a review of American civil infrastructure: they gave it a grade of D- and estimate it'll take $1.6 trillion in IMMEDIATE spending just to bring our roads, bridges, power grids, dams, sewers, etc UP TO CODE!!!
$1.6 trillion!!! Say, isn't that the projected cost of the Iraq War??
Oh well...
this is the discussion i would love to see the candidates engage in, since this really does matter as opposed to so many of the issues the media aristocracy bring up
Adam Smith has his faults, but he despised titled aristocrats, power insiders, and the "...monstrous captains of ill-gotten wealth." In his Theory of Moral Sentiments, he takes pains to distinguish 'base selfishness' from 'self-interest which follows by Natural Law,' and bases his measurement of moral action within Natural Law on "...avoiding harm to others such as you would not counsel or want put by another upon yourself."
No Christian, he neverhteless believed in a secular form of Jesus's "...Do Unto Others...;" compulsory, state-sponsored education for all, and a judicial system in which harms done by one to another in the name of commerce "...shall be set aright."
Granted that Smith's [nobler] vision of Capitalism may have been hopelessly idealistic from the start, it is clear from thorough reading his major works that he wanted to empower and uplift "...the miserable condition of the broad, aching mass of humanity." He did not want to create a plutocracy!
While alive, his thoughts and value systems became increasingly turned upside down by people he always despised, and whom he would have hated even more, if he were alive to see their kind today.
Probably, he should have known better .....?
I suppose you could say that about any well-meaning idealist.
Rich M
"We're now facing an economic situation potentially worse than the Great Depression, yet the stock market is only about 14% off its all-time highs. "
You're not taking the devalued dollar, which is now in free fall, into account. If you had your money in Euros you wouldn't be off %14; you'd be up a whopping %40+. The stock market is tanking along with everything else. The Dow Jones can no longer even keep pace with devaluation. Of course, this hyperinflation will be ignored by the MSM until you need a wheelbarrow full of dollars to go down to the corner store and buy a beer.
VinLander, you are absolutely right when you assert that most people who quote Smith have never read his work. As someone who HAS (including the Theory of Moral Sentiments), I can tell you that Smith would probably view the crony-faux-capitalism of the United States (which has infested the rest of the West) as a far cry from competitive markets.
It annoys the beJeebus out of me when people blame the Market for recent stuff - from Enron through to subprime and the housing debacle.
In truth, the overwhelming majority of the driver of these debacles has been the efforts of a group of government-appointed lackeys (Greenspan chief among them) to try to set - a la the Soviet Union - the 'right' price of money at the short end of the yield curve.
For some reason, these soi-disant uber-capitalists think that the price of short term money must be controlled by a pack of bureaucrats ... and then pretends that the system which appends to their shenanigans is at fault when the actors in that system behave in accordance with the signals generated therein.
And let's not forget - if you support the existence of government as a supposed solution to supposed failures of markets (assuming that markets fail despite, not as a result of government intervention) then you also permit the birthing of a creature which inexorably does things to its own favour - the most delicious of which (for governments) is WAR... the killing and maiming of the Other, to no purpose other than the entrenchment of the powerful.
Private enterprise would NEVER try and use war to gather resources unless they knew that the price of the war was to be borne by taxpayers; if you're the one paying the bill, war is a massively inefficient way to garner control over resources. Private enterprise is not wasteful enough to build a battleship - only a government could ever pursue such a wasteful exercise in hubris (which is why most battleships are named after ... politicians).
But if you're a capitalist and someone shows themselves ready to subsudise the rapine of a far flung land, then you have an incentive to ride along and fill your pockets. And of course if you already OWN the polticians in question, then you get to declare a priori which far flung land is targeted.
But don't blame capitalism until you've actually seen it - and you sure as hell have not seen it in the United States... the US is as crony-capitalist as the Philippines under Marcos.
Cheerio
GT
France (but I'm an Aussie, so please please PLEASE send me some pies)
http://marketrant.blogspot.com
Run your family like a business. Chidren are a cost center (expense) rather than a profit center. Increase profit by downsizing. Send children offshore or to private industry.
Privatize Army, Navy, Marines, Air force, they can be self supporting thru pillage, plunder, and rape as per the good old days (Genghis Khan). Army to commandeer the Iraq oil industry.
I believe that there is a benign "invisible hand" that is looking out for our best interests. I believe that there is a gray bearded old white guy that cares about me, especially about my sex life and beer drinking. I believe that markets are infallible and automatically operate without human intervention to provide the gratest good for the greatest number. Perfect optimization without fail. Amen
The consumer as I understand it, is about 70% of GDP. So, with that kind of power,we the average American with a little effort,could bring Wallstreet to it's knees.
I am willing to feel alittle pain,just to see the boys and girls on Wallstreet suffer. After all, like parasites they have been living off the backs of hard working Americans, forever. And in some cases,making more money in one day then 99% of working Americans make in their lives.
So, the next time you are thinking of buying something that you really don't need. Don't!
Here is a question that needs to be asked of our elected officials..
Why is it that people our working longer hours for less money, then they were 25 years ago?
Of couse the answer is inflation.. Where does inflation the hidden tax come from?
The Federal Reserve and it's fiat currency.
Abolish the Fed!
Bottomline it is class warfare!
ubrew12,
Good point about selfishness in your 4/16 9:51 p.m. comment:
"Its time to drive home the point that wanting a well-financed government that actively promotes the common good IS SELFISH.
"I SELFISHLY WANT TO LIVE IN THAT KIND OF SOCIETY!!! instead of the predatious, debt-ridden cesspool 'supply-siders' have gifted America over the last 30 years."
That reminds me how so much of propaganda involves mind games and framing. The corporate kleptocracy employs its sophists to convince the hoi polloi that it is human nature (in part, "selfishness") that requires the implementation of a greed-based corporate capitalist system (corrupt crony capitalist system in the US) where the few prosper greatly and the many suffer. "Can't change it, human nature, case closed!" And when they dumb down the education system sufficiently, most of the public buys such nonsense.
I would think that to anyone with a decent university education, with a minimum of training in philosophy, social science, and mathematics, the sophists' arguments appear preposterous. There are an infinite number of possible social organizations that highly adaptive group animals like humans could form, and it is impossible to prove that any such organization of activity is optimal with regard to achieving any specified set of goals.
And, as you point out, even accepting the notions regarding "selfishness," one can argue that the utilitarian nature of a government working for the common good maximizes the expectation of satisfaction of the individual, and so the selfish position could be to promote an interventionist or even totalitarian government that capably pursues the common good.
pundit,
Yea, I believe in that "invisible hand" too. That is because I felt it once, in my back pocket, and when I turned around there was nothing there, and my wallet was gone too. I think the "invisible hand" is that which we can never see which robs us repeatedly in broad daylight.
"Capitalism that holds the reigns of government is FASCISM!
There are multiple revolving doors between government, industry and the intelligence services.
Therefore, there are multiple avenues for evil men to come to power, and many of them are corrupt beyond the concept.
A new study was recently released that stated that sociopathic behavior was becoming the accepted norm.
Given the polluted society (North America) that was examined, it's no surprise. All you have to do is listen on the street corners to hear the youth of today brag about how often they are arrested and jailed. How women and girls are degraded sexually by their male peer and the fashion industry. And take into account how utterly pervasive technology that separates you from daily human contact has become. Cars, cellphones,i-Pods. All DESIGNED to ISOLATE you from your fellow human being.
If you do not know who your fellows are, you care nothing about them, and therefore can feel no empathy for them. This allows you to behave in ways unthinkably barbaric to them. QED.
This present form of capitalist consumerism masquerading as government and society is the ultimate expression of greed and inhumanity. we have become, LITERALLY, nothing more than cogs and gears in a vast money machine that runs on blood."
Come on now Galen. The world is good. My television just told me so!
the invisible hand has long been giving the world a visible finger...
at a time when all environments - social and natural, really the same - are threatened as never before, maybe more americans can see what some south american nations and middle eastern movements have awakened to:
(allegedly) free market capitalism is the problem...and if we don't solve it, we're gone.
fs
Merril Lynch just announced the loss of 2 BILLION dollars last QUARTER and will be laying off 4000 brokers and support staff.
And what did Adam Smith have to say about fascism? I G Farben loved it. Hitler, Goebbels, Keitel, and the rest of the henchmen loved it. That 'invisible hand' was working full-time back then - and everyone was employed, if not paid, picking up body parts, feeding furnaces, or rummaging through garbage for food. Great times, huh? That's why everyone so loved fascism! And Americans were ga-ga over fascism - our local 'hero' Charles Lindburgh thought it was great too. How do you feel about fascism? Is it all you thought it would be? Do you really want more? Well, you're going to get your fondest wish granted - and soon.
Hi, great discussion. A lot of knowledgeable people here ie. people who have actually read Adam Smith! About facism's links with Capitalism. As nasty as capitalist economics can be, with it's proneness to resource wars, and exploitation of the uneducated and powerless, I don't think you can equate the two. They are not synonymous.
Sure, capitalism will often support fascist regimes when it suits ie. US support for brutal dictatorships such as Mussolini's in the 20s and 30s, Hitler's in the 30s, and for Cuba's Batista in the 50s. But many people who otherwise support that terrible euphemism, "the free-market" would be horrified of the idea of a ultra-nationalist government which subverted any semblence of an independent judiciary, and used the race-card as a means of rallying support to it.
Fascism is an end-product of uncertain times, economic turmoil, entrenched poverty, and weak institutions. It has a brutality and lack of democracy that would make crony-capitalism look like the a light-hearted Sunday picnic.
The whole "market" thing has been a ruse all along. Nothing can really be free in a system which is predicated on:
(a) Non-free access to natural resources. The modern hereditary caste system, militarized crime (warfare), etc. It all seamlessly blends into their centuries-old historical precedents.
(b) This non-free ownership system is defended forcibly by violence: law enforcement, military, prison system, evictions and foreclosures, etc.
What would capitalism be without violence at the back-end?
Nothing.