Great Article in FORBES today - a must read!
From Forbes today - sorry, I lost the exact reference accidentally! When I find it I'll post details. Appologies to Forbes and the author.
The Most Exciting Period Of Human History Is Yet To Come
While complexity mathematics and information theory may be relatively new, the general concepts contained in them were well known to previous generations of economists dating back to Adam Smith.
Matt Ridley, who you’ve met before, is one of my favorite economic writers. He authored the powerhouse books The Rational Optimist: How Prosperity Evolves and The Evolution of Everything.
I have literally scores of pages underlined in The Evolution of Everything and am especially enamored with Ridley’s chapter on the evolution of economics.
What we see is not the result of human design
This decentralized emergence of order and complexity is the essence of the evolutionary idea that Adam Smith crystallized in 1776.
Yet, when Smith wrote his Wealth of Nations, there was little good evidence for his central idea that free exchange of goods and services would produce general prosperity.
Adam Smith is no paragon. He got plenty wrong, including his clumsy labor theory of value, and he missed David Ricardo’s insight about comparative advantage, which explains why even a country (or person) that is worse than its trading partner at making everything will still be asked to supply something, the thing it or he is least bad at making. But the core insight that he had, that most of what we see in society is (in Adam Ferguson’s words) the result of human action but not of human design, remains true to this day and under-appreciated.
Looks like the basis for an interesting line of thought, similar to a theme in my new book about Adam Smith.
I am glad to see we are not imposed upon by that school of ‘thought’ that describes Adam Smith as the ‘father’/grandfather of capitaism’, which is a sure sign that those who use the expression know little about Adam Smith or his predecessors and contemporaries in the UK or in the wider Europe, and, sadly, about the history of capitalism.
That Smith got some things wrong is correct. Realistically he and every other pioneer in any discipline gets things wrong that 200 years later can be shown to include many errors and ommisions, which are put right by subsequent scientific knowledge.
However, as I show in my new book on the authentic Adam Smith, much of what he got right or pioneered and which today’s scholars seem to have missed, includes the germ of significant elements of modern science.
Moreover, the alarming fact must also be recognised that key elements of how today’s economics, preached (a deliberately chosen word ) by most modern economists (Nobel Prize winners and all) became spectacularly wrong by a silly error enunciated by Paul Samuelson from 1948. Nobel Prize winner, Samuelson, misdescribed Adam Smith’s use of the commmon 17th-18th century metaphor of ‘an invisible hand’ to describe a simple arithmetic truth that had nothing to do with what it is alleged today to contribute to an economy, as allegedly ‘proven’ by advanced modern mathematics.
Well, less Blog commenting for now. Its time to get back to the manuscript of my new book …