A Quote From George Carlin On "The Invisible Hand"

[Orwellian_Ghost]

"The invisible hand of Adam Smith seems to offer an extended middle finger to an awful lot of people"---George Carlin

[Louisiana1976]

1. K&R

:kick:

[unblock]

2. adam smith wouldn't recognize today's system as capitalism.

adam smith believed in meaningful competition as the source of pretty much all of the good that comes from capitalism.

today, power relationships dominate fair decision-making processes.

microsoft has too much control over software (monopoly -- consumers have little choice)
wal-mart has too much control over retailing (monopsony -- suppliers have little choice)
the vast majority of industries are dominated by half a dozen or fewer choices that generally differ from each other only at the margins, meaning the real choice is even less.

adam smith would say that the excess profits such companies enjoy would lead the invisible hand to introduce more competition, as entrepreneurs try to break in and cash in on that gold mine. but there are too many barriers to entry. how can anyone possibly compete with behemoths like wal-mart these days? any supplier will be at a huge disadvantage if they can't get it on wal-mart's shelves and their competition can.

even banking is really hard to break into. once upon a time, all you needed was enough money from investors, to serve the local community. now you need a huge network of atms or you or your customers will have to pay ridiculous fees for the use of other banks' atms. meaning a local bank starts off rather far behind the behemoths.


with big barriers to entry, incumbent vendors are free to do things that adam smith would say should earn them unfair excess profits short term but eventually go away or put them out of business long term. as long as they can maintain their behemoth status and maintain the barriers to entry, they can continue to earn excess profits for a very long time.

and, of course, the behemoths can get favorable legislation and loopholes through congress, put pressure on regulators, or settle their way out of illegal or unfair practices -- among them, unfairly putting competition out of business.


this is not adam smith's world, and i don't care to call it capitalism.
"economic feudalism" would be closer to the truth.

[hvn_nbr_2]

3. Exactly.

People who glorify Smith's invisible hand assume that gigantic multinational corporations are subject to the same natural restraints as medieval village shoemakers were. It's complete bullshit to conclude anything whatsoever about how an economy based on giant corporations works by comparing it to village shoemakers three centuries ago.

[barbiegeek]

4. That is the Best explanation ever!!

[redqueen]

5. Bravo.

Precisely and excellently stated. :thumbsup: