JR'S Free Thought Pages
The Invisible Hand
by Johnny Reb
Q: The Invisible hand of
the market and The invisible man in the sky. What do they have in common?
It was the great Scottish moral philosopher Adam Smith (1723-1790) who conceived the notion of the "invisible hand of the market" in his magnum opus "The Wealth of Nations". What has been lost over the years since Smith was adopted by and became the darling of free market ideologues is why markets needed to be freed? Freed from what?
As it is today, the problem of Smith's era was monopoly; there was no level playing field. Today's extreme concentration of wealth and ownership and the misconceptions of the oft-confused "invisible hand" is what is diminishing our democracy and sense of commonwealth and sharing. Those extreme concentrations of wealth have contributed to the monstrous monopolies of mega-corporations, with the highest levels of global inequality in history being recently recorded. Additionally, markets are manipulated and cornered with supply of key commodities kept below demand to drive price. The stock markets are being superficially driven by the printing of billions of dollars of phantom money and summarily handed over to Wall Street robber barons to drive them to such unrealistic and unsustainably lofty levels. The frequent collusion of several large corporations such as the big oil companies set prices at whatever the market will bear. The $1.50 per liter at the gas pump is the direct result of manipulation and extortion.
Extreme profits are a characteristic of monopoly where healthy competition is suppressed and there's no level playing field. Exxon has had world record profits for years and now BP has recently being granted once again the right by the Obama administration to continue drilling in the Gulf of Mexico since it permanently contaminated huge swaths of the Gulf four years ago when BP's Deepwater Horizon disaster began malfunctioning in the Gulf of Mexico, killing 11 workers and setting off an 87-day gusher that dumped an estimated 200 million gallons of oil into the coastal ecosystem.
Corporations like Exxon, BP and GE pay very little or no taxes to their countries of origin, register their corporate charters in offshore tax havens thus abdicating any legal or moral obligation toward the common good. To add insult to injury, they receive taxpayer funded corporate welfare and offload collateral damage and "externalities" to the public while reaping huge profits. Monopoly is monopoly by any other name and so is extortion as monopoly is once again a problem of the times as it was during the Gilded Age during the last half of the 19th and early part of the 20th centuries. The crash of 2007-09 would have been an ideal time to redistribute wealth as was done following the debacle of the Great Depression. But the conservative elites who have always owned just about everything, including their phony client politicians in our bogus democracies, had other ideas. Obama, following the disastrous Bush years of war, plunder and deficits, was granted the bully pulpit in 2008 and a once in a lifetime opportunity to act and make much needed changes to a corrupt venal system. Despite his rhetoric during the election campaign, he did nothing but maintain the status quo; in fact he has made conditions even worse than they were under Bush. But Obama, like every other President both Republican and Democrat, is beholden to his masters on Wall Street who had underwritten his election campaign. Ditto for Bush's pal Stephen Harper in Canada which is facing the same neo-conservative nightmare.
These conditions are of course untenable and unsustainable and we are likely heading for a far greater financial meltdown than what occurred in 2007-09. It's noteworthy that the "invisible hand" miraculously disappeared in lieu of a very "visible" government that bailed out the criminal banks and other financial risk takers who had come very close to demolishing the entire global economy. But the same crooks are back in business and we are not only continuing to kill civility, democracy and community, but the delicate ecosystems and biodiversity of the planet.
Ironically, if you read Adam Smith closely, especially in his "The Theory of Moral Sentiments", you will discover the context in which he really used the phrase "the invisible hand". One of the uses of the phrase, other than a metaphysical concept attempting to account for the "natural" urge to self-interest, occurs when he discusses what might happen in the primarily agrarian society in which he lived. If landlords control almost all of the land, what would happen, asks Smith? He explains, in concert with his philosophical colleague and great friend David Hume that, out of their natural sympathy and concern for other people, they would distribute the wealth, so, as if by an "invisible hand", society would end up being democratic, egalitarian, compassionate and just. That's the uplifting version of the invisible hand metaphor concocted by Adam Smith.
My own sense of optimism in this discussion is that people like Adam Smith and David Hume were basically right, that there is a natural caring and sympathy for others. We are not mere psychopathic automatons who only serve what many deem our natural propensity to greed and self-interest. I think the acquisitive rich and powerful understand that only too well. And I think it's one of the reasons why there's such a massive effort by the interests of wealth and power, the corporations and neo-conservative right wing to destroy the institutions in society that are based on community , solidarity and notions of the common good such as social security, public health care, education and pensions. Why should we pay taxes they argue, especially those like themselves who have benefited the most from our society and its laws? We pay taxes so that the poor kid down the street will be able to go to a decent school and have adequate medical care - because you care about other people.
But according to our hypocritical and heartless neo-conservative politicians such as Stephen Harper, Christy Clark and many others who continually evoke opaque slogans such as "family values", that "socialist" idea of caring about others has to be driven out of people's heads. Our society and politics is so dominated by destructive neo-liberal (aka neo-conservative) doctrine that we allow people in our own country to live in destitution on the streets or in grinding poverty in their homes. In a world of plenty we allow 20,000 children to die every day of starvation and poverty related illnesses, and millions more to live unfulfilled stunted lives without access to education, health care, clean water, basic sanitation and shelter.