Thursday, August 03, 2017


Matthew Paris posts (5 August) in The Spectator HERE
Why we need ideology in politics
Because some things might work in practice but not in theory
“What, after all, is religious faith but a grand, over-arching theory of what things mean, how to read the world, how to handle human motivation, and (sometimes) how (and why) to change the culture of a nation? Chris is a convinced Catholic, albeit not a dogmatic one. To search for God moving unseen beneath the surface of events — to surmise that there is more to human affairs than the apparent — is (I suggest) in the same category of outlook and explanation as to look for Adam Smith’s invisible hand as a way of making sense of man as an economic being. …
… For instance: as a mild but steady believer in the free market, I would tend to give weight to self–interest as a reliable motivator of human beings. I would see the role of state regulation as ideally to guide and inform and occasionally modify or restrain, rather than to force, block, ban or confound.”
Problem for the student debating approach to real issues is that it is clever for a debating performance - appaluse all round - but not so good for understanding.
Belief in a fairy story and act accordingly is unsafe as a guide to action.
Adam Smith’s invisible hand is a modern myth. 
It does not “work” in practice and never existed as his “theory”. It was a metaphor for what happened at the aggregate level in an economy - it described the sum of all the individual actions of merchants and manufacturers in an economy.
Each local investment in a economy summed to total domestic investment. A simple arithmetic  truism. Nothing more.
So obvious it attracted no comment from Adam Smith’s contemporaries while he was alive nor any comments well into the 19th Century and barely any from 1874 until mid-20th century (Paul Samuelson, 1948 onwards).
Matthew Paris, a big-name conteporary journalist, gets a column talking nonsense about Adam Smith and three-cheers all round (plus of course his big fee). 

Its a living I suppose, but it does Adam Smith’s reputation no favours.


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