Posted on 03/11/2009 7:05:48 PM PDT by LikeLight
If Adam Smith were here today to witness our economic debacle, this “Great O-pression” which seems to be consuming our wealth with an unprecedented fury, would he support the idea of massive government intervention to “fix” the problems we face?
Adam Smith is, of course, the father of free market economic thinking, the great initial intellectual force behind capitalism, the author of our seminal text, The Wealth of Nations, the man behind the proverbial “invisible hand” that mysteriously and relentlessly drives our individual economic activity toward the efficient allocation of scarce resources and the achievement of the greatest possible good for the largest possible portion of humanity.
Smith lived from 1723 to 1790, so we might be tempted to dismiss his wisdom as a relic of a simpler day, the quaint thoughts of someone too limited by the restrictions of his archaic time and place, the naïve musings of someone who could never imagine the cruelly complex schemes and heartless deceit of the 21st century marketplace.
But to dismiss or underestimate Adam Smith at such a time as this would be a dangerous mistake. Because Smith – although he was a Deist, rather than an orthodox Christian – clearly understood exactly the nature of our menace: The fallen, sinful, self-centered, and hopelessly self-interested human heart; “the imperfect propriety,” as he called it, of our own conduct. And the general economic system Smith articulated in the illumination of that understanding has been the only one ever devised, before or since, to effectively and consistently harness the power of our horrible human greed and transform it for our common good
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk of our necessities but of their advantages,” Smith explains. Would Smith recognize with familiarity our self-focused, materialistically infatuated, culture of greed? Yes! He knows us all too well!
And while Smith knew the economy he envisioned would work best “in a well-governed society,” he saw the necessary role of government as quite limited, recognizing the folly of too much government intervention, warning against the audacious political leader who “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the chess-board of human society, every single piece has a principle of motion of its own.”
“I have never known much good done by those who affected to trade for the public good,” Smith observed. While free market capitalism can certainly benefit from the virtue of its participants – and suffer from their failings - other alternative economic systems are the ones that actually depend, naively, upon the goodness or nobility of human hearts for their success. And throughout history we’ve seen the folly and tragedy that inevitably arises when we entrust our fate in reliance on the presumed goodness of our fellow man.
Moral hazard, the rewarding of bad behavior and the penalizing of good, is inherent in practically every bail-out scheme and stimulus proposal the government is offering as a “solution” to our crisis. But is a bail-out really helpful if it reinforces immoral and inefficient behaviors? Should poor judgment and inefficiency be rewarded, at the expense of those who exercised sound judgment and prudence? What are the future consequences of such perverse and confusing incentives? What good are noble intentions if they enable dependency instead of independence?
In this season of economic crisis, Adam Smith’s wisdom and thorough, realistic grasp of human nature are needed more than ever before, not less! Increasing free market competition is the only lasting economic solution – and it won’t be a perfect solution, just the best alternative, the only one with a real chance for a long-term positive impact.
In an unprecedented economic storm, we need to seek shelter in the only system inherently capable of harnessing moral weaknesses of humanity for the greater good. Government intervention can never succeed in doing that. Now, more than ever, is the time to appreciate the true genius of Adam Smith and the power of the free market.
(Stephen L. Bloom is a Christian lawyer serving clients throughout Pennsylvania. He wrote “The Believer's Guide to Legal Issues” (Living Ink Books) and is a frequent media guest and speaker on Christianity and law. For information, visit his website www.IsThereALawyerInTheChurch.com. Please note: This column contains generalized information only and is not intended as a substitute for the specific legal advice of your own attorney.)
This article comes from Good News Daily
http://www.goodnewsdaily.net
The URL for this story is:
http://www.goodnewsdaily.net/modules/news/article.php?storyid=10942
Steve (LikeLight)
Excellent article and website. Thanks.
You’re welcome.
Remember the new acronym:
O ne
B ig
A ss
M istake
A merica!
bump for tomorrow
bttt
Unfortunately, for far too many people — and perhaps it’s a majority of people — freedom isn’t all that important.
The verdict of history is clear: centrally planned economies fail.
Thanks.
An unpleasant tipping point to contemplate. Hopefully there are still enough of us who treasure our freedom.
I don’t know HOW many times we have to PROVE that, before that lesson is LEARNED!
The ridiculous notion that smart people can run an economy better than the invisible hand is so irresistibly intoxicating to humankind. It's a never-ending battle.
Particularly when today's "smart" people AND a couple of generations of American "humankind" have been turned into absolute morons by education in the government schools. (Morons cranking out ever more morons)
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