THE RECORD

July 28, 1999

Fiat Lux

by Ed Deak

In my last column I quoted the original version of Adam Smith's description of the "invisible hand" and "self interest" theory and how it is being distorted by today's neo-classical economists, like Milton Friedman.

There isn't much wrong with Smith's theory in that when a person works diligently to increase the value of the industry he or she is engaged in the effort will also benefit society as a whole. As he put it: "As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestick industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can." This is true, as it describes an economic system based on the recognition and fulfillment of personal responsibilities which in turn benefit all.

By describing how self interest creates an invisible hand that brings overall benefits and also in many of Smith's other quotations and expressions, what Smith described was not the legalization of unbridled greed, but the recognition of personal responsibilities. Therefore, what is being taught as economics in our universities, based on the justification of greed, is not only wrong, but a deliberate falsification to justify legalized expropriation of the rights and properties of others. The "greatest value of an industry" refers to responsible behaviour and accountability and not the use of that industry to exploit and impoverish others or to ruin the ecology.

Smith lived in a different world, with about one fifth of the present world population and endless, virtually untouched natural resources. People lived and died within a few miles from where they were born. Most laws were based on and enforced by strong religious beliefs and caste systems ordained by divine will. Properties were owned by people and not faceless corporations and even the worst and most brutal lords, business people and rulers had to toe certain rules to pay lip service to religious tenets. When most work was still done by human hands at least minimum living standards had to be observed, as skeletons are not much use for the production of anything.

Most of these circumstances and conditions have disappeared by now. A cruel lord, or employer, who oppressed his serfs and workers could be hated and often called to task by his peers, or by the Churches. Today greed is being taught as the ultimate purpose of human life and the corporations that guide and force economic decisions, the impoverishment and destitution of millions are nothing but faceless, artificial entities, owned by mythical shares.

In Smith's time money was solid gold that could be touched and had physical existence and value. Today's money, the artificially created licence to control the world, doesn't even exist as pieces of paper, only as fleeting electronic figures in computers.

Neo-classical economists keep on quoting the distorted versions of Smith's few sentences. There's an Adam Smith Institute in London on the same mental level as our Fraser and C.D. Howe Institutes. Then there are a hundred or more outfits like Heritage and Cato Institutes in the USA, supported and financed by big business. They are all pushing the benefits of globalized corporate dictatorship, but they carefully avoid many of other Smith quotations that prove where he really stood on human rights and sound economics.

For example: "The authority of riches .... is perhaps the greatest in the rudest age of society which admits of any considerable inequality of fortune." Then "In reality high profits tend much more to raise the price of work, than high wages." Also "Money is neither a material to work upon, nor a tool to work with"-- yet the same economists who keep on quoting the righteousness of greed and expropriation rights sanctified by Smith's "invisible hand" also maintain that our non-existing fiduciary concept money is a "tradable commodity" and it's controllers have the right to search and destroy everything in their quest for unlimited profits.

Why and how? Let's end up with the words of the Italian dictator Benito Mussolini who ended his earthly journey hanging by his legs from a lamp post on a street corner in Milan: "The crowd doesn't have to know. It must believe. If only we can give them faith that mountains can be moved, they will accept the illusion that mountains are movable and thus an illusion may become a reality."

Yes, globalized capitalism may indeed become a reality. On the other hand, it may also end up hanging by it's heels from a lamp post and it's prophets pushing brooms. I'd bet on the second option. The human race can put up with a lot of crime and garbage, but there's always a limit when ruling classes go one single step too far .... as all empires of the past have found out.

Copyright (c) 1999, West's International