A Discourse Between Two Futures

An exhange of Correspondence, which may be missed if confined to the 'Comments' section of Thursday's post on 'Socialism' by Richard A. Smith (no relation):

From Ryan Lanham:

It is tempting to dismiss your blog post as nonsense or as a glancing apology for a naive libertarianism.

Since no one is advocating state bureaucratic socialism with central planning, so far as I can tell, your tilt at windmills is at least as silly as (Richard) Smith's.

Like Marx, (Adam) Smith has never been implemented as written--that moralism/public good piece always seems to be forgotten! But there aren't even many advocates for an accurate Marx, so far as I can tell.

I think rather than looking backward in your critique to failed nostrums, you would be wise to look forward to impending crises.

How will unintended consequences and externalities get solved by (Adam) Smith's invisible hand? Divine intervention? Efficient government? Corporations? Please...

Ryan Lanham
www.ryanlanham.wordpress.com

My Reply:

Hi Ryan

Thank you for your comments. We are coming at Richard Smith’s idealistic contribution from different directions, and thereby talking past each other.

My disagreement with Richard’s post was mainly in regards to his mythical Adam Smith (‘number 1’ mentality, etc.,) and only en passant in regard to his prescriptions for achieving unanimity between millions, billions even, on what should be done about his catastrophe vision of the immediate future.

In so far as ‘socialism’ was an intended component of the future response, I considered him to be naïve, and for added measure, to be utopian and unhistorical, given the experience of ‘socialist’ governments of the 19th century (all versions; none of them pleasant, or even workable).

To Richard’s naïve error of Smith’s mythical ‘number 1’ mentality (see his Theory of Moral Sentiments’), your question: ‘How will unintended consequences and externalities get solved by (Adam) Smith's invisible hand?’ adds a further myth about Adam Smith’s use of the famous metaphor, which was made famous not by his use of it only three times in a million words, or by readers of the first through ten or twelve editions (it was not mentioned at all in the 19th century), but by neoclassical economists, originally based in Chicago University, who re-discovered the metaphor and used it to ‘bless’, or give credibility to their general equilibrium theories in the mid-20th century. From thence it became a universal and obligatory, but not Smithian idea, that had nothing to do with Smith’s use of it.

I have spent many contributions here trying to expose the misuse of the so-called invisible hand among the economics discipline. You may scroll through the Lost Legacy archives for further details.

So the answer to your question of ‘how will unintended consequences and externalities get solved by (Adam) Smith's invisible hand’ quite simply is: a metaphor will not solve anything; it does not have a relevance in the real world; it does not exist, not does it represent anything that does exist.

It is a rhetorical metaphor used by Smith once in ‘Moral Sentiments’ and once in ‘Wealth Of Nations’ after he had explained the consequence of feudal warlords having to feed their retainers, serfs and slaves at least to subsistence level, and the response of merchants to their risk aversion to sending their capitals abroad compared to applying them locally where they could watch over them.

His clear explanations of what happened and why on each occasion did not require ‘an invisible hand’ or a ‘black box’ process for the consequence to occur. He had no ‘theory’ or ‘concept’ or need for ‘providence’ to be present to effect the consequences he alluded to.

It would, therefore be in vain for anybody to await ‘an invisible hand’ solution to future problems that arise from ‘climate change’, if such is about to happen outside in the real world and not just in computer modelling. If climate change occurs, as well it might at some time, any time, in the future, as it has in the past (Antarctica was once a hot rain forest; Europe, including Scotland, where I live, was under 2-3 miles of ice, etc.,), humans will have to make pretty severe changes to their modes of subsistence.

In the last ice age, 20,000 years ago, humans either walked south with whatever they could carry from their primitive stone technologies, or perished where they stayed or en route towards the sunnier climes (when competing with 'stay-at-homes' who had not gone further south).

Somehow I believe the changes required this next time would be better responded to by modern economies and highly developed technology than by reverting to nature, undoing knowledge and technology, and expecting universal harmony from well-meaning ideas.

I have no idea if this will be enough – I will not be alive – and from my knowledge of the history of humanity, I am not optimistic of the outcome brought about by the necessities of such changes (consider not just left, right politics, but also religious fundamentalism among Judaeo-Christian sects and Islam's sects as in Gaza this week, plus the array of the other ‘isms’, plus whatever lunacies arise at such a time).

Meanwhile, Lost Legacy is about correcting the mythologies about Adam Smith’s life and work. Richard Smith and your good self stated false notions about Adam Smith. I have attempted to correct them.

Thank you for your comments; they made me think over what you said.
As to the future: que sera sera.