Remember when? Safety and Laissez-faire Capitalism

You don't get handwashing by restaurant staff from the magical waving of the 'invisible hand'.

Remember when, in K-12 (closer to the 12) and perhaps in college, you learned about Laissez-faire capitalism, and Adam Smith's 18th century concept of 'an (not 'the') invisible hand of the market' where unintentionally even the worst, most selfish tendencies of human beings would magically benefit society BETTER?

From Smith's "The Theory of Moral Sentiments" (vol. 1):

The rich … consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements.

Yes, Adam Smith gave us BOTH the failed Trickle down Economics AND the even more epic failed INVISIBLE HAND OF THE MARKET PLACE, not one but two failed concepts embraced by conservatives regardless of extremely poor outcomes and bad results. It's sometimes called laissez-faire capitalism. Laissez-faire translates loosely as let you do what you want.

That was an idea back in the mid 18th century. Adam Smith also posited one of the first appearances of trickle down economics, specifically that the gluttony of the rich man would cause the leftovers to 'trickle down' to those who were the workers, and that those leftovers would be very small, but magically should be enough. Or at least, the less wealthy should just shut up and be content with less, and then we'd all somehow MAGICALLY be better off.

"By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it."

Since then, for some reason completely devoid from any observation or even casual connection to reality, conservatives have decided to expand on the very limited concept of Adam Smith's 'invisible hand' to the notion that some form of magic or stupidity will regulate EVERY aspect of the economy, both macro and micro.

Perhaps the greatest irony here is that Adam Smith originally advanced this thinking to argue that businessmen would somehow MAGICALLY focus on domestic investment even when they made more money investing in foreign economies -- you know, like outsourcing jobs or stashing their capital overseas, or that thing Medtronic just did where they bought a VERY small company in Ireland and then relocated their headquarters there for a tax dodge called a tax inversion.

Wikipedia provides an excellent definition of tax inversions. What Wikipedia does NOT mention in this definition is that by availing themselves of a tax haven, or tax dodge where they avoid paying their fair share of the tax burden, which in turn provides the necessities of business like infrastructure -- roads, utilities, law enforcement, advances like the internet, etc. -- is that the burden of providing and maintaining those necessities, taxes as a legitimate expense of doing business THEY SHOULD PAY, that burden is then shifted to the rest of us who live here. It is a way of 'socializing' the expense of business which should be part of fairly and honestly come out of the profits of doing business, while privatizing profits -- putting the money they save by sticking us with their share of taxation, into the pockets of those who make money doing business. It is an additional expense to all of us to benefit a few people, an expense we incur without consultation, approval or agreement. From Wikipedia:

Tax inversion, or corporate inversion, is a largely American term for the relocation of a corporation's headquarters to a lower-tax nation, or corporate haven, usually while retaining its material operations in its higher-tax country of origin.

Remember when, as a child, you first heard or read the Hans Christian Anderson story, The Emperor's New Clothes, written back in the early 19th century? It appeared in the book, "Fairy Tales Told to Children" in 1837. The premise:

... two weavers who promise an Emperor a new suit of clothes that is invisible to those who are unfit for their positions, stupid, or incompetent. When the Emperor parades before his subjects in his new clothes, no one dares to say that he doesn't see any suit of clothes until a child cries out, "But he isn't wearing anything at all!" The tale has been translated into over a hundred languages.

Remember when some six or seven years ago, under conservative POLITICAL ECONOMY POLICIES, we had the big economic crash? A lot of people lost their shirts. That was because regulation, put in place back in the early to mid 1930s after the last economic crash, put in place to prevent another economic crash, had largely been dismantled under the steady onslaught of conservatives who insisted regulation stifled business. It had not - business did well under those regulations. But free market capitalism creates greater wealth and income inequality, it shifts costs of doing business to others, to society, socializing those costs, while promoting the greatest greedy privatizing of profits to a few people.

One of the most prominent advocates for this avoidance of regulation, the economist Milton Friedman (a BIG fan of Ayn Rand, who shared this economic and philosophical view), asserted that a version of the invisible hand would keep us safe from another such crash. From Friedman's own words, from the Library of Economics and Liberty.

I know of no other piece of literature that so succinctly, persuasively, and effectively illustrates the meaning of both Adam Smith's invisible hand—the possibility of cooperation without coercion—and Friedrich Hayek's emphasis on the importance of dispersed knowledge and the role of the price system in communicating information that "will make the individuals do the desirable things without anyone having to tell them what to do."

That did not work out so well. In point of fact, it was an epic failure, not just domestically but globally. By any and every measure, IT DID NOT WORK. The whole world was put at risk. People were badly hurt by this.

It is worth noting that both Milton Friedman and Joseph E. Stiglitz are Nobel prize winning Economists (as is Friedrich von Hayek). Conservatives LOVE LOVE LOVE Friedman and Hayek (he dropped the von).

Conservatives overwhelmingly tend to hate Stiglitz. Stiglitz observed:

"the reason that the invisible hand often seems invisible is that it is often not there."

LIKE THE EMPERORS NEW CLOTHES WERE NOT THERE. The damned invisible hand is a fantasy, a lie, a con, and Adam Smith is a false prophet of profit. Greed does NOT lead to the greater good.

Stiglitz further wrote, elaborating on why the whole notion that some 'coercion' -- aka GOVERNMENT is necessary:

Adam Smith, the father of modern economics, is often cited as arguing for the "invisible hand" and free markets: firms, in the pursuit of profits, are led, as if by an invisible hand, to do what is best for the world. But unlike his followers, Adam Smith was aware of some of the limitations of free markets, and research since then has further clarified why free markets, by themselves, often do not lead to what is best. As I put it in my new book, Making Globalization Work, the reason that the invisible hand often seems invisible is that it is often not there. Whenever there are "externalities"—where the actions of an individual have impacts on others for which they do not pay, or for which they are not compensated—markets will not work well. Some of the important instances have long understood environmental externalities. Markets, by themselves, produce too much pollution. Markets, by themselves, also produce too little basic research. (The government was responsible for financing most of the important scientific breakthroughs, including the internet and the first telegraph line, and many bio-tech advances.) But recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets—that is always. Government plays an important role in banking and securities regulation, and a host of other areas: some regulation is required to make markets work. Government is needed, almost all would agree, at a minimum to enforce contracts and property rights. The real debate today is about finding the right balance between the market and government (and the third "sector" – governmental non-profit organizations.) Both are needed. They can each complement each other. (bold and underlined emphasis is mine - DG)

Ya think?

Economics aka Political Economy is a social science. REAL Science requires dealing with honest observations of reality, not making up stuff or blindly believing in things that are not demonstrably there.

And we see obvious evidence that conservatives discard science any time it fails to fit how they want the world to be, regardless of how they want the world to be diverges from how it really IS. We have seen this not only in the denial of anthropogenic climate change, or the denial of evolution, the denial that lead in prodicts caused health problems, the denial that cigarettes cause cancer and are unhealthy or that second-hand smoke causes illness, to name just a few examples from the 20th century.

So WHAT COULD GO WRONG, when Senator Thom Tillis of North Carolina, darling of the GOP and the Tea Party, wants us to rely on the invisible hand aka the market to ensure our safety, in an era of measles outbreaks, flu outbreaks, ebola outbreaks, and other public health problems with disease? You know: that great mid-18th century idea that has failed so badly, WHAT COULD POSSIBLY GO WRONG WITH THAT?

From MSN news:

A freshman GOP senator argued this week that the government should not require food workers to wash their hands after using the toilet, saying "the market will take care of that."

Sen. Thom Tillis (R-N.C.) called routine hygiene rules an example of government overreach at an event hosted by the Bipartisan Policy Center on Monday.

"I don't have any problem with Starbucks if they choose to opt out of this policy as long as they post a sign that says, 'We don't require our employees to wash their hands after leaving the restroom,' " Tillis said to audience laughter in a clip captured by C-SPAN.

"That's probably one where every business that did that would go out of business," he conceded, "but I think it's good to illustrate the point, that that's the kind of mentality we need to have to reduce the regulatory burden on this country."

The most OBVIOUS epic failure of this suggestion, apart from the problem with the invisible hand of the market, aka just "the market" will take care of this is that simply requiring a business to post such a sign, without enforcement --- that coercion that Friedman and von Hayek so oppose, that conservatives fight against unreasonably and unrealistically --- won't work. The business, unless REQUIRED to do so, by measures with real teeth in them, won't comply with such signage OR with a hand-washing requirement. Tillis, like Milton Friedman before him, wants to rely on the honor system, and on the blind belief that the worst tendencies of human beings like greed and selfishness and the willingness to screw others for a dime are really all going to work out just fine.

I'm pretty sure that the idiot senator Tillis from North Carolina has never read the writings of Smith, or von Hayek, or Friedman, and CLEARLY he has not read the much more successful writing of Joseph Stiglitz. But someone really ought to sit him down and read him the Hans Christian Anderson fairy tale "The Emperor's New Clothes", and explain to him in language a six year old can understand what naked greed and naked failure looks like in language and concepts suitable for a child to understand. Because like the naked Emperor in the story, the nation is having a good laugh at Tillis for being ridiculous. We should be laughing -- and getting angry, and opposing all the other bad efforts by the right to deregulate on this same false market premise too. The hand washing deregulation is not the only iteration of a bad idea, a failed concept.

Then, just maybe, he might get the idea, and stop being such a bare-naked fool. And then maybe HE can explain it to the other rapacious, gluttonous, greedy and desperately foolish conservatives who have failed to learn the lessons of history, and are stuck back in the 18th century. Unless someone separates conservatives from this nonsense, we're all going to be looking at a lot more naked greed, and be less safe.