Some instructive quotations regarding the free market and Adam Smith’s “invisible hand:”
From The Wealth of Nations:
- [the individual] generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.
From the New York Times today in an article on Enron and power sales to California :
- The tapes provide new details of market manipulation during the California energy crisis that produced blackouts and billions of dollars of surcharges to homes and businesses on the West Coast in 2000 and 2001.
- In one January 2001 telephone tape of an Enron trader the public utility identified as Bill Williams and a Las Vegas energy official identified only as Rich, an agreement was made to shut down a power plant providing energy to California. The shutdown was set for an afternoon of peak energy demand.
Remember Vice President Dick Cheney’s remarks during that period: some blather about how we must allow the “free market” to do its work?
From Adam Smith again:
- People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
Maybe these “conservatives” should study their heroes a little bit more.
- …the capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers who neither are, nor ought to be, the rulers of mankind.
Adam Smith, father of capitalism. Pretty smart guy, eh?