Men Should Be Free, Markets Should Be Competitive

Men Should be Free, Markets Should be Competitive

Is it a coincidence that one of the most powerful discovery's for peace and prosperity the world has inherited would be harvested in a decades long study of "Moral Philosophy"?  (Adam Smith was a professor of Moral Philosophy before writing "The Wealth of Nations.")  Adam Smith's often quoted, "It is not from the benevolence of the baker...but from their self interest that we expect our dinner.." is not an endorsement of selfishness, but as he saw it an application of the Golden Rule.  Once we give what someone else wants, we get what we want.  In context, it is seen that in order to elicit the exchanges that would benefit ourselves, we must first think of benefiting others.

Our goal should be free, competitive, and just markets not just "free" markets.

Smith would reject Ayn Rand's now popular idea in business that selfishness is a virtue, he saw selfishness and greed as a vice.  Imagine that.  As lust is to marriage, so greed is to capitalism, while lust and greed are bad, it cannot be rooted out of men.  We are both evil and benevolent, so we should be aware of this and make policies appropriate to encourage the later and discourage the former, not have a free-for-all, elite-dominated market just because the elite can dominate.

"Das Smith Problem"

The Germans saw a contradiction between Smith's earlier work, "The Theory of Moral Sentiments," which relied on mens' small town benevolence for a good society, and, "The Wealth of Nations'" big city reliance on self interest.  Actually there was no conflict.  Smith combined the two in Wealth and thought that men still had a basic desire to be accepted in a just society which would balance his self interest and enable exchanges which treated people with justice.  But what happens when the society itself encourages greed as a virtue?  We get volatile markets, spooked investors, abuse of personal and public credit and the list goes on.

It is time to stop the ideological ignorance and bring some balance back to our economic and political system.

Below is a continuum of economic thought that might be useful to put this discussion in some context.  It was not until the mid to late 20th century that the Chicago School and other venomous epistemologies used the ideas of "efficient markets" and "selfishness as a virtue" to gut competition and justice from our political and economic systems.

The continuum of faith in free markets:

• Marxist-no faith
• Keynesian-some faith
• Smithian-good faith....I advocate
• Chicago School-great faith
• Austrian School-complete faith
  

I am "post-Chicago," so perhaps "good faith," or an original Smithian, Classical School of economics.  Our goal should be, as Smith laid it out; free, competitive, and just markets not solely free markets.

Sincerely,
Lawrence Feriozzi