Poor Adam Smith

Neoconservatives like to claim Adam Smith's Wealth of Nations proves the "invisible hand" of markets works, if government gets out of its way. In fact he only uses that term once in 600 pages. Even the Adam Smith Institute's abridged and editorializes version of the book admits (page 49) the reference is "rather elliptical". Smith actually focuses on the "natural price", using that term over 60 times to explain what would happen if monopolies (now read big business) get out of the way.

The newspeak of neocons ignores the historical context in which Smith wrote. He railed against mercantilism, where economics is a zero-sum game with just so much gold; only gold matters; and a nation can only get more when it earns or takes it from another. State-backed monopolies and oligopolies work best in such a system. Such cozy government-business arrangements are essentially Trump's view of business, and hence everything.

Leaving aside the reversal of positive-sum gaming Smith envisioned, what must really make him roll in his grave is how this newspeak denigrates his other major work, The Theory of Moral Sentiments, packaged with Wealth of Nations by the Adam Smith Institute. It begins, "how selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it." His invisible hand is guided by that modest form of self-interest, not some automaton called markets. And that is what I think must revive with decentralized, market-oriented decision-making. More on that on the way.