No, I’m saying that the existence of minority exceptions and partial application of modern concepts in history isn’t a counter-argument against the idea that “ancient economics” was not Capitalism and wouldn’t produce Adam Smith’s invisible hand. Even within Capitalism, with a full understanding of the apparatus of the invisible hand, you still have to fiddle with things – breaking up monopolies, insuring truth in advertising, etc. – to create the effect.
The invention of the battery in ancient Baghdad is interesting, but it doesn’t mean that ancient Baghdad had an electric infrastructure. Parts and pieces, or even the whole deal if it only existed for a few years in an isolated place, doesn’t really count. Overwhelmingly, the ideas of economic right and wrong in Europe came from Aristotle and Jesus and lasted until the mid-16th century, and Greece as a historic entity only even exists for that same period of time. I’ll admit that I know very little about anything previous to 500BC or thereabouts, but I don’t have any particular reason to think that Ancient Sumeria of 13,000 BC had stocks, bonds, and central banking.
If Athens had something like a modern corporation, that’s great. Maybe they had abolished classes, had central banking, interest-based loans, stock markets, and everything else, but unless that actually had any lasting historical effect, it’s not particularly relevant. And even then I’d really want to look at the specifics before agreeing that their version of these things is really comparable to the sorts of organizations and systems that we have in modern day and that we mean when we talk about the invisible hand.
Rome was a “republic” for centuries, and yet I wouldn’t particularly say that it was comparable to a modern republican government. If someone was to tell me that a republic is a useless form of government for making the world a better place, because Rome never did anything but conquer foreign nations, I’d have to vote that the example isn’t really applicable. The word “republic” might be the same between them, but it’s not really what’s intended when you’re talking about how and why the sorts of modern government that started to form after the 18th century have (arguably) produced greater social tolerance, equality, and freedom than other forms of government that came before.
But now you’re twisting the argument. Your initial quote
stated that the invisible hand didn’t exist until after Adam Smith coined the term (a statement which by itself should raise doubt in the mind of any sceptic by it’s assumption that Smith theorised something so profound without ever seeing a real world example - something truly rare). That statement doesn’t have anything to do with Capitalism, for while the invisible hand is the essential component of capitalism it can be seen (so to speak :)) at any time when market forces have redirected the path of society. And to deny market forces existed before the 18th century is naive to the extreme. The same applies to loans, banking and meritocracy. These are core compionents of capitalism, but are not required for the invisible hand.
I can even come up with an example from English history (from the top of my head, so the details my be a touch vague) that to me suggests the operation of the invisible hand:
The first step towards of the end of serfdom. The huge labour demand created by the deaths of the plague in England meant that lords found that they didn’t have enough local peasants to gather harvest, and so were forced to pay additional labourers to tend their land. This led to an increase in the market price for labour and eventually to increased rights for tennant farmers to earn money for labour (both for their lord and other lords). Everyone acted in their own self-interest and it led to an improvement in society, pretty much the definition of the invisible hand.
So while the invisible hand has never operated to the extent that it does in modern Western society it certainly has exerted it’s influence before. It can influence society any time there is mutually benefitial trade. Free trade is an advantage, but not a requirement.
And in resonse to your recently posted arguments, perhaps one reason why ancient states weren’t more like the modern world is that it is the invisible hand itself which has gradually directed the evolution to our current state? This eveolution would natuarally have been very slow given the technological barriers. I don’t necessary believe this, but it seems reasonable.
So is this “Invisible Hand” that of God, or the greater god of “Capitalism”? Did this Invisible Hand (I’m tempted to write “Invisible Sky Father”) create the plagues that killed millions just to right the wrongs of medieval society? Did it create environmental disasters just to show us the error of our modern environmental laws and corporate safety procedures?
Just what is this “Invisible Hand” and how is it different from the idea that God Did It?
I’m glad we agree that ancient economies were not capital-c capitalism. That’s super.
Quite frankly, I don’t think that ancient merchants knew that their widespread and complex trade schemes were just partial applications of modern concepts. This would definitely come as a surprise to them. They would no doubt argue that credit, lending, markets, and the principles of supply and demand were quite sensible and dare they say ancient concepts. After all, they talk about them all the time in the documents.
You have in fact convinced me so well that I am not even sure if what passes for our modern political economy is the One True Capitalism.
I can see why you might think that. But it would be wrong. There was considerable disconnect between the arguments of the theologians and observed economic behavior. This disconnect became unsustainably large in the late middle ages so, as Le Goff argues, theologians invented the doctrine of Purgatory just to accommodate the salvation of people who practiced contemporary commerce. Your Money Or Your Life is an excellent book, interesting and short.
Actually, financial institutions in Mesopotamia are incredibly interesting and well-documented. I’m not a near east person so I can’t give you any good details, just that a great deal of evidence was found recently that suggests that Mesopotamian traders relied on a grain futures market and speculated heavily on future prices. There is a forthcoming book on this subject. A friend of mine works on inflows and outflows of silver around Mesopotamia and it is really phenomenal stuff. I was shocked at how well-developed some of their financial institutions were.
I still don’t really understand why you presume that ancient institutions must have just been flashes in the pan. Much of the information we have on ancient economics is actually contained in literary sources, which up until very recently, educated people used to read. People really used to know Pliny, Columella, Xenophon, Demosthenes, etc and it certainly influenced them. I am not hearkening back to those old days of pith hats and skin & dick privileges so much as pointing out that your view lacks historicism.
I think that the record of governments produced after the 18th century to generate the benefits that you attribute to them is mixed, to say the least. I am not really sure what your point is.
I probably agree with the OP on a bunch of things, but you are addressing way to many points and being much too aggressive in your posting. Tone it back a bit. People can honestly disagree with you, and trying to convince us of your brilliance by showing us your bibliography is completely ineffective.
As someone who probably sits pretty close to you in the big hall of political beliefs, I think you need to hear this from me: I identify as a libertarian. While my reasoning to arrive at this political/economic theory is sound (at least to me :p), I recognize that it is not a perfect system, as we don’t live in a perfect world. In my view, it fails for the same reasons as communism - people cannot be perfected. This doesn’t mean that a more libertarian society would not be a better thing, and it is in fact something I agitate for. I can agree with most of the libertarian agenda - a free market, less government spending, no nation building, freedom of personal choices in the bedroom or in my pipe - yet still support OSHA, limited social services, and the Civil Rights Act.
Bottom line: you’re doing a disservice to the argument by your presentation.
The same year that Hayek won the Nobel Prize, it was co-awarded to Gunnar Myrdal who (quoting Wikipedia) “was early in supporting the theses of John Maynard Keynes.” Are you planning to take back your complaints about Keynesian economics since it also has the blessings of the Nobel Prize committee?
Here here! Pretty much every political ideology has some excellent ideas that could improve the human condition and Libertarianism is no different. But ideological purity (of any persuasion) is never going to a be good idea in the real world - people just don’t work that way.
Discussing and pushing ‘pure’ ideologies should simply be a means of determining the best bits that are applicable to the real world and incorporating them into the compromise that is (and always will be) our political consensus. Failing to realise this will mark you out as an extremist that cannot be reasoned with and few people will take you seriously for that reason.
I think we can all agree that while trade with prices set by supply and demand flourished early in history, the modern battery powered movable goal post was not developed until recently.
You completely misunderstand. The ‘invisible hand’ is simply the shorthand name given to emergent trends of a system driven by independant agents (humans) acting in their own economic self-interest. There is no relation to acts of god or any implication of a path to a specific destiny.
It’s like air in a balloon: each invidiual particle moves almost randomly according to a set of rules, but millions of them together cause the balloon to stay inflated by exerting a net outward force on it’s rubber.
It seems that Smith used it specifically to refer to the positive outcomes from the system but given that negative outcomes are also possible this usage is a bit biased IMO.
My question was almost rhetorical, because I don’t misunderstand it. My problem is that some Market Worshippers unfortunately tend to treat it as a GOD, as if it “acts in mysterious ways” for the benefit of mankind, when this is clearly not the case. So I tend to be a bit cynical and irritated when people throw around “Invisible Hand” talk.
Your further point, which I didn’t quote, it too well spot on in regards to Libertarians. It’s the same pollyanna-think that somehow everything will work out for the best, rather than seeing the dark side of the truly Darwinian fashion their philosophy would actually work in.
Don’t like your boss requiring you to have sex with him? Simple! Get another job or start your own company! Don’t like your bottled water to contain toxic chemicals and botulism spores? Simple! Don’t buy it! Want your children to get a good education? Simple! Put them in a privately funded school at your own expense! See how easy things are when you completely ignore logical consequences and the reasonability of your suggestions? Because of course, everyone is absolutely free to invent as much money as they need to do all of these things and every single person on Earth is completely free of worry and need and circumstance, right?
And therein lies the problem. There’s no particular proof that an invisible hand will necessarily guide a society to a positive outcome.
I’ve never heard of a solution to the tragedy of the commons that doesn’t require outside intervention, and thus, a restriction on absolute property rights.
The fact is that any time two or more people try to coexist, there will be a necessary infringement on their absolute right to do whatever the hell they want. As a society, we set up a government to codify solutions when my absolute right conflicts with your absolute right.
We can argue around the edges all we want, but the fact remains, if you’re a part of society, you can’t do whatever you damn well please without regard to what effect it has on everyone else.
Yes. Libertarianism makes the assumption that humans value freedom above all else at all times. This is empirically false. But Liberterianism on one end, and Communism on the other end do give us a sliding scale as to where we think we should operate. A family might want to operate on a purely Communist basis. A small community might want to operate on less of a Libertarian basis than a nation of 300M people might want. It has to be situational and practical.
I posted my lengthy “essay” here for two reasons. The first is just to get that off my chest. I DO want an intelligent discussion on the issues, but I am more comfortable articulating my entire message in one continuous thought so everyone can see where I am coming from.
You have a point about Rand Paul going on Rachael Maddow. It was a poor decision. I think it was quite a shock, because the liberal media has been extremely fair to Ron Paul and his son when they are fighting with the Republican Establishment. But when they have a chance at higher office and begin to challenge a democratic candidate they switch on a dime. Not to mention the fact that Rand Paul is now the spokesman for the Tea Party movement in many ways so there even more of an effort to make sure this movement fails to elect any candidates.
It was a rookie mistake. If it was his father, I wouldn’t mind him going on any show at any time, because he has demonstrated an ability to outsmart any opponent and deflect smear tactics beautifully. His son is not ready for that kind of “gotcha” journalism.
As far as me promoting “unproven” economic ideas that you feel are counter intuitive, how do you arrive at that conclusion? I assume you mean the notion that segregation could not have been eliminated without the government infringing on property rights. That is not an economics argument, it is a property rights and Constitutional argument. But it is a very poor argument. Business can discriminate already, except certain privileged groups. Any home can discriminate against anyone from entering.
The question you have to ask yourself is this: If the Klu Klux Clan opened a business and they were truly in their hearts racists to the core, say the government forced them to serve African Americans, Jews and any other group they truly despised. This information is hidden from the public. Black people would continually give their money to racist assholes who hate their guts. I’m sure they would much rather support the business owner who was tolerant and not racist, but they don’t have that information. Plus, the overwhelming economic pressures would be to serve everybody, because automatically refusing service to, say 25% of the population would instantly put them at such as huge competitive disadvantage that they would fail sooner or later. A Klansman could not sustain a business by selling products only to other Klansman.
Racism, as Ron Paul said, is a sin of the heart. No legislation will change that fact. It would be better if it was out in the open so all people of conscience could know who to support and who not to support.
I think the economics arguments about this issue are very intuitive if you only think them through.
“Liberal media” is a right wing slur with no basis in reality.
Nonsense; segregated business survived just fine for decades. You also presume that there would in fact BE competing non-segregationist businesses. Instead of as happened in the good old days, where literally every business in town might well be white only.
This is a common problem with “let the free market solve everything” people; they say that competition will solve the problem, without acknowledging that there might well not be any competition.
Do you think it is possible for others to think these arguments through, understand them, and still disagree with them? If not, then there is no reason for you to continue posting them.
You are definitely entitled to that opinion. Yet, I have to say that from my experience many on here don’t really understand a lot of libertarian ideas and solutions, only that it is “fringe” and “dangerous”. You know we have been following policies for forty-fifty years now that involve increased regulation, government expansion, ballooning deficits, endless wars and attacks on civil liberties. The actual, tangible policies of the Democrats and Republicans have been very much the same.
The point being these policies have led to a major mess in this country. The only thing liberals are suggesting is more of the same, essentially.
I think you fear the unknown. Tangible libertarian policies haven’t been tried in this country in decades. Why would you not be willing to try true sweeping change given the current state of our nation? Balanced budgets, reduced spending, ending overseas wars, respect for personal liberty and restrained monetary policy don’t seem crazy to me.
I like Rachael Maddow too. Like I said it see has been very fair to Ron Paul and his son many times previously. Too me it was out of character for her to hound Rand Paul on this issue. Remember, this was a small remark he made on a lengthy interview that very few people saw. He NEVER made it part of his campaign. And, given how smart you think Rachael Maddow is, the notion that she is not familiar with the consistent argument against violations of Property Rights and government overreach, a position taken by numerous ADVOCATES for civil rights is inexcusable.
You say that Rand Paul supports a position that enables racists to use our government to further their agenda? Where did you get that from? The position is: government can and should banish all discrimination of public property and end institutional racism and oppressive laws. Private property is off limits constitutionally for the Federal Government. In that aspect of it, the people must organize boycotts, marches (as many did) to enact private change. Economic factors would eliminate stores that chose only to serve whites. It is abhorrent and indefensible behavior. In fact, as was pointed out, many businesses did continue to segregate even after the 1964 law was passed. And boycotts, shunning and social pressures changed that. It worked.
Labeling something as “fringe” or “unpopular” is a very poor debate tool to dismiss the merits of a philosophy or belief. Many minority positions have been correct throughout history. In fact, libertarianism did not use to be so “fringe”.
So, we all agree that no business should discriminate based on race and even should enact laws to prevent that. We agree that is a noble goal. But where does it end? Don’t you see that if you give in on the principle the government basically owns your property and can infringe on your rights for any reason whatsoever?
The benefits of us having resolved this in a peaceful manner consistent with property rights would have been immense. This is a very reasonable position to take. Rachael Maddow went beyond simply asking tough questions into directly implying that Rand Paul was a racist, or him condoning violence. That is completely ridiculous. Again I like Rachael, but I thought she was way out of bounds during this interview.
You’d vote for a libertarian in the House but against one in the Senate? Whats the difference? By the way Rand Paul and Jim Bunning are quite different in their beliefs. Don’t conflate the two.
The fact that you can’t stand 1/100th of the Senate being a libertarian voice implies that you resent intellectual debate in government. A voice for fiscal sanity, balanced budgets, transparency, the Constitution, and against wars in 1% of the Senate is too much for you.
We are marching over the cliff as we speak. The path our government is on is suicidal. We need grassroots candidates and populist, common sense voices of all stripes to be elected to office if we have a chance to turn things around. Liberal populists and Independent minded candidates are good as well.
