Be sure to see this, by Peter L.P. Simpson, which includes the following:
There is, one might even suppose, a reverse invisible hand at work. The free market is said to produce order and success as the unintended result of many producers and sellers and buyers independently pursuing their goals. So the controlled market seems to produce chaos and failure as the unintended result of many voters and politicians and bureaucrats independently pursuing their goals. Unlike the invisible hand of the free market, the reverse invisible hand is not benevolent. It is malign. It is the chief cause of economic booms and busts and of the accompanying delirium and distress where outrageous profits jostle alongside outrageous losses.
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Education and Ethics
Friday, March 6, 2009
The Evil Twin Of The Laissez-Faire Invisible Hand.
Peter L. P. Simpson calls it the ‘reverse invisible hand.’
It is definitely obvious by the general ignorance of the public that what the ego-driven interventionists are doing is invisible to most. So indeed there appears to be two invisible hands!
One invisible hand is the one referred to as laissez-faire and it describes the forces of equilibrium that work to bring balance to the economy by the market processes inherent in this God-given institution – the economy.
The other invisible hand is really a sleight of hand, like the prestidigitation of a magician or the skillful removal of your wallet by a pickpocket! At best it is an illusion, at worst it is theft.
Both of these invisible hands become visible with education. As people are educated about classical liberalism they will see clearly how the economy works through the subjective valuations of individuals and the protection of those individual subjective values.
Also, as people are educated about classical liberalism the filthy hands of the ego-driven interventionists will be easily noticed and the corruption they cause will be obvious. The reverse invisible hand will need to be either cleaned or cut off!
In the meantime hold on to your wallets!
very nice, succinct paper. but is this is a lvmi paper, and who is simpson? more info, please.
Laissez-Faire Capitalism is the only form of Economic system that leaves the power in the hands of the individuals and places it’s faith of decision making in the community at large, the free market.
All other forms of economic system either have no faith in the community or any body (anarchy) or sequester the power to decide for the community at large in the hands a a few privileged individuals, be they bureaucrats, heads of state, or kings.
The invisible hand at work in the free market is the collective mind of all the individuals acting with their own reason and will. I for one would rather trust in the larger mind of the free market, than the much smaller mind of any state, bureaucracy or king. I would rather retain my power to decide for myself, and keep faith in my fellow individuals to make similar choices using their own similar powers.
To delegate my power to a central authority, is to place shackles on my self and to hand the leash to my elected master. And when my chain jerks me to my knees, I will know the mistake I made in trusting in the smaller mind of government.
I certainly understand the emotional satisfaction involved in labelling the interventionists as malicious. But malice is not the source of their error except in some cases. The enemy is ignorance and the drive to spread the scientific (Austrian) understanding of economic phenomena is not extended either by demonizing opponents (whom we actually wish to convert) or by closing our own sense of relationship to others who may seek similar goals but who are presently under the spell of false doctrine.
It is true (as Mises observed) that every socialist is, in his own mind, an infallible dictator who simply supports a particular government or candidate in the belief that its policies will mirror those of his own desire. But Mises never asserted nor maintained that such men were motivated, in the main, by malice or hatred. In the main, they are full of lofty purposes and goals which should be available to all but from which realization is prevented by their opponents. In seeking to despoil such opponents, they are certainly driven by envy and resentment but it is directed at those “enemies” specifically. It is a mistake to assume that all (or even most) of such men are driven by some manaical urge to tyrannize
their fellow men in general (although some of them undoubtedly harbor such inclinations.
Politics may be a blood sport. But economic education is not and never will be.
to gene berman:
i think if you read the whole paper, you’ll see it’s faithful to the title “je m’accuse”. the brief excerpt doesn’t really do justice to the rest of the work.
@ deefburger
“Laissez-Faire Capitalism is the only form of Economic system that leaves the power in the hands of the individuals and places it’s faith of decision making in the community at large, the free market.
All other forms of economic system either have no faith in the community or any body (anarchy) or sequester the power to decide for the community at large in the hands a a few privileged individuals, be they bureaucrats, heads of state, or kings.”
Did you compose this? Mind if I use it? It’s awesome
@filc: Yes, those are my words. Feel free to quote me if you will.
@Gene Bergman: I agree with you whole heartedly. My personal motto is: Most people are mostly good, most of the time. It’s true, that most of the evil done is unintended as evil per se. This is precisely why it is better to trust in the greater mind of the free-market than a lesser authoritative few. The odds are better!
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