It only takes a "W" to prove Adam Smith wrong, but was he ever right? Yes, we are talking about the so-called 'invisible hand' of the market.
Some of our readers might disagree with our assertion (in the title), however, many others will be more inclined to agree looking at the current happenings in the world financial sector.
You ask Warren Buffet or Bill Gates or Gorge Soros, they will be much more ambivalent as far as their publicly expressed opinion is concerned. However, there are others who would be more straightforward in expressing what they think. One such personality is off course our own Muhammad Yunus. He has every right to asserts that
'Capitalism Has Degenerated into a Casino'!
In the same interview, he opines "There has to be regulation, but governments should not be allowed to steer the market. On the other hand, it has become clear that Adam Smith's "invisible hand" which supposedly solves all the market's problems doesn't exist. This "invisible hand" has completely disappeared in the last few days. What we are experiencing is a dramatic failure of the markets".
Is these dramatic failures of the markets? Or a more suitable question will be to ask "which markets"? I know, like us, many of you might not be so sure. It is hard to point finger towards the current happenings in the world financial markets and then assert that Adam Smith was wrong. We would rather argue that he never was right. Or I could also make an argument that if Adam Smith were right then, he still is.
Some would argue that government aren't letting the invisible hand to work. If it is a good thing when success trickles down, what is wrong when failure trickles down? In an politically charged environment, coupled with election politics, this viewpoint might be a popular one, but might not be a suitable one if you are looking for solution.
Adam Smith's market never existed in USA. People presume that it existed. If it ever did, how could there be a Freddie or a Fannie? Does the definition of Adam Smith's market allow for Freddie or Fannie? Or did we actually created few proxy 'invisible hands' and named two of them as Freddie or Fannie? There will be few more such proxy invisible hands, we are sure you will find if you look hard.
How do we plan to connect all these with the 'W'?
Well, if you accept the premise that proxies for invisible hands were created and all the stakeholder decided to act as if it was not an artificial creation (i.e. treat the highly visible hand as invisible), then you should be very careful to make sure that all your important stakeholders / players within the system understand the role of the proxy invisible hand within the serious game (which we call economy) and they are mature enough to play it by the rule set.
In other words, you never allow a creature like 'W' to ever become a central figure in the game. If you do, everything will fall apart, as it is happening now!
BTW, do you see the next 'W's in the horizon? What do you do about it? If you love Adam Smith too much and want to save him, then off course, you know what to do. If you have voting right in USA, then vote for Barack Obama - then may be he will restore game with some proxy invisible hands, again. At least, he seems to know the basic rules of the game. It will also serve your love for the invisible hand in the short run.
However, if you do not have an infatuation for the invisible hand of Adam Smith, then, off course, you may want to consider to vote for the other 'W', just to see what happens without the proxy invisible hands.
If you thought some of the ideas are worth of your reading time, please forward it to others. If you have an ear to the columnists in regular traditional media, please forward it to them. If you have an ear to the journalists and news editors of the electronic media, discuss it with them. Hope they would look at the suggestions and give due diligence.
Thanks for your time,
Innovation Line
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Note: This is a freelance column, published mainly in different internet based forums. This column is open for contribution by the members of new generation, sometimes referred to as Gen 71. If you identify yourself as someone from that age-group and want to contribute to this column, please feel free to contact. Thanks to the group moderator for publishing the article as Creative Commons contents.
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