Sergio Leone Does Adam Smith

Before looking at the issue of markets again and how the so-called Free Market has no relation to what Smith was talking about, it is worth looking at the relevance and application of the IH notion of adjusting irregularities as special providence. So far, Smith’s examples as used here may seem a little abstract but his ideas are far more potent for reasons beyond the claims of FM fantasists and hard core Capitalists.

Take look at A Fistful of Dollars. When Eastwood, or the man with no name, pits one rival faction against the other in the nihilistic town he visits, he is only interested in earning money. He amorally and immorally manipulates and shoots his way into earning his coins. But he decides to help the wronged woman kept as a mistress by the villain of the piece (Gian Maria Volonte) and unites her with her son and husband. In the process he kills her captors and even gives all the money he has to help and her family.

As a result Eastwood pays a terrible price; but on the mend from his punishment he invokes a revenge that brings down total destruction on the rival clans. As Smith says, when Eastwood pursues his own interest (mixed up with greed and a trigger happy style) he ironically -- against his own intentions -- ends up helping the woman and her family, starts a chain of events that rids the town of its corruption thereby playing an unwitting balancing force that allows the town to start anew.

It is almost like there is an IH that sweeps through the drama to provide some form adjustment via the irregularity of self interest and selfishness of the Eastwood character. Just as in Kurosawa’s original masterpiece Yojimbo on which Leone based his film, Leone’s “Dollars Trilogy” and the ones that follow it have a moral centre.

The other fascinating instance is in a Leone film called A Fistful of Dynamite, but now in its fully restored version is known as Duck, You Sucker. James Coburn plays a weary Irish Republican Army man running from his past who ends up teaming up with a notorious bandit, played by Rod Steiger, in Mexico. Though each pursues their self interest and in the case of Steiger, his greed: they both despite trying to avoid getting caught up in the Mexican Revolution end up doing just that. In the process they help the revolutionists fight the fascists of their time through set pieces of violence.

Again, in the most unlikely manner a balance is restored as the characters follow their interests and destinies to the end under the Direction of a greater force, as if by an IH.

Also, on a more personal note, I have rarely (in the Smithian sense) managed to persuade someone to a cause by telling them that it is for the good of humanity. But on explaining to them how this would be in their interest to do so, and that of their close ones, have managed to get people involved in good causes. In that process they bring others onboard and before long a virtuous cycle is created of getting done that which, in the medium to long term, benefits the environment, society and/or the underprivileged. This process happens automatically and adjusts itself accordingly almost as if guided, as in most other cases, by an IH.

And Justice For All

Let us come back to the so-called markets. As can be seen Smith was not promoting Capitalism. Neither was he promoting a so-called Free Market. The idea of the FM is not only a contradiction in terms but does not allow any notion of balance and fairness to come into play. By now we can see that Smith was more concerned with a social-economic system that promoted balance and harmony rather than the free-wheeling framework of wildly shifting disequilibriums promulgated by Capitalism and neo-classical economics.

Back to another passage in TMS, where Smith writes in I.I.36 (bold and italics mine):

To see the emotions of their hearts, in every respect, beat time to his own, in the violent and disagreeable passions, constitutes his sole consolation. But he can only hope to obtain this by lowering his passion to that pitch, in which the spectators are capable of going along with him. He must flatten, if I may be allowed to say so, the sharpness of its natural tone, in order to reduce it to harmony and concord with the emotions of those who are about him. What they feel, will, indeed, always be, in some respects, different from what he feels, and compassion can never be exactly the same with original sorrow; because the secret consciousness that the change of situations, from which the sympathetic sentiment arises, is but imaginary, not only lowers it in degree, but, in some measure, varies it in kind, and gives it a quite different modification. These two sentiments, however, may, it is evident, have such a correspondence with one another, as is sufficient for the harmony of society. Though they will never be unisons, they may be concords, and this is all that is wanted or required.

What this passage encapsulates is the sympathetic vibrations of energy people tend to set up in relation to one another in functioning together as a group of people or society. Emotions and thoughts are adjusted through conscious or unconscious effort when collaboration and consensus is being built to move things forward. A strident tone, no matter how justified, tends to lose support, hence, the need to “flatten…the sharpness” to get some form of harmony among people. Consensus building is a good thing.

This is radically opposed to the rampant egoistic obsessions that many ideas of Capitalism and the FM tend to promote. Smith’s ideas have to do with people getting along not through compromising of values, but by consensus building. Which also means it eschews insistence of things through the barrel of a gun (and the ideologies that go with it).

Smith, in always trying to keep things real, makes it clear that the process of consensus building and cooperative ventures do not create unisons so much as concords and that, indeed, is as good as it gets. It is analogous, in a way, to unity in diversity, or vice versa. Individual identities and ideas are kept but they are adjusted to see what in common can get things working. This somehow resonates with most people’s idea of democracy.

This does not imply being able to suddenly propose revolutionary ideas that can shift paradigms to a new level, but on a closer look this paradigm shift may be achieved through the use of persuasion, and convincing others of how it benefits them individually etc that result in ideas for the good of all.

This contrasts with the jaded and predictable manner that extremists and hard core Capitalists do things. It always has the use of force underlying it or overlaying it or pointed at you in the form a gun. Apparently, that’s a sign of freedom and the way to keep it going. Naturally, when you rob others’ land, property, livelihoods, families, life blood and consciences for the sake of selfishness and blind capital accumulation you have to do it through force and keep it via domestic and international violence.

But as Smith says, even such irregularities from what can be seen as regular peaceable behaviour between peoples is given balance and readjustment which sees a reordering of society. Hence, the current economic crisis sweeping the world which while causing so much problems for us, is the cleansing process which will bring down the old, corrupt, violence drenched past that will get us to work together inevitably to issue in a new age of peace, harmony and prosperity which may also have existed in other times not subject to the ‘officially’ promulgated history of the world.

This process of building ideas up to principles that can be used or applied throughout a society is a process of social constructivism that in a way is in concord with that of the moral constructivism of Kant and, almost without doubt, the political constructivism of Rawls. Smith’s social constructivism allows his economic constructivism to take place. The IH as a function of Divine teleology allows for social processes to be generated thereby creating situations for economic practices to be in concordance with them. Economic ideas come forward for the good of the individual and society, and are balanced, fair and just for all.

A more detailed look at this can be found in Justice as Fairness Revisited and The Awakened Eco-nomy. In the end this post too is just a blog, like any other, and it is hoped that those with sharper minds and a more intense passion will develop things from here to see where it can go.

End of the Reign of the Magicists

So where does this leave those Nobel prize winning ideas for economics and all other dandy econometric models and stuff taught at universities to churn out more intellectually misguided people (having partially suffered from this, I know whereof I speak)?

Hey, what about those Laws or Demand and Supply (DS), Say’s Law, Taylor Rules, NAIRUs (non-accelerating interest rate of unemployment) and those of the sublime perfect market which talk about Pareto optimatlity curves, (false) equilibriums where everyone has to use cost-benefit analysis to fight for scare resources to maximize utility. Everything else outside of this is that inconvenient thing called an ‘externality’.

Milton Friedman delusionally described the difference between ‘good’ and ‘bad’ externalities where being charitable would be a ‘good’ thing but aiming for so-called corporate social responsibility (another contradiction in terms) is a ‘bad’ thing which bucks (no pun intended) econometric models because it could undermine the sole reason for corporations existing which is, of course, profit making while the world goes to hell.

What this means is that if you ask a corporation or a capitalist to factor in human decency and fairness into a ‘law’ of neo-classical economics or its profit taking model, you are talking ‘externality’, man.

But my friends, what is this so-called Law of DS or equilibrium? Let’s go against what our schools and many tertiary institutions teach you not to do, let’s actually think a little and try a bit of common sense (no certificates awarded for this). Apparently there are these kind of push and pull factors which seem to be observed when wants for commodities are met with a flow producing them that intersect at the right price. What are these forces that create such wants and flows and intersections and push and pull like the tide of the sea?

What is optimum growth and equilibrium? Are these points of description of the most suitable or desired or needed form of growth in given circumstances as decided by curves, governments, societies or people’s feedback? Or are they what economists claim they should be? What is this idea of balance, and rising and falling of forces that produce new forms of things and energies? You have nothing but economic and social theories and models to explain this.

If you ask what gravity is, well it’s this force that’s composed of gravitons. How did this come to be? Well these are natural forces, just like DS or equilibrium or optimum growth that are codified by professors in academic ‘disciplines’ and don’t need anything else to explain them. If you ask what is behind gravity or equilibrium you are told that is not necessary to ask because the current theories are borne out by empirical observations and that sufficiently explain things.

So is there a giant squid at the centre of the earth whose suction causes gravity? Sure, possibly, but why do you need that when you have a law of gravity? The latter is a sufficient explanation so the squid can be left to Captain Nemo and his like. Is economic ‘equilibrium’ a sign of the IH, yes, in so far as it describes ‘economic forces’ and any notion of some other elements behind the IH is mysticism and irrelevant (‘economic forces’ being sufficient to let us sleep soundly each night). It is not scientific or modern nor a reflection of ‘enlightened’ reasoning to go beyond a ‘satisfying’ set of theoretical explanations.

But all these explanations are circular at worst or question begging at best for each time you ask what causes these phenomena like equilibrium, they are ‘economic’ forces and what are these forces….these are theoretical constructs to explain this that and the other…what is the basis of these constructs…observations backed by hypotheses or vice versa as tested against the world….that show that these forces are indeed at work…ah ha…back to square one with stunning clarity.

When pressed as to why they do not go beyond such silliness in their theoretical reasoning -- it’s to avoid mysticism. So what we are offered in effect is this: there are mysterious forces at work, just at Klein describes the IH and other things in Smith in a manner that would make Agatha Christie proud, but we have some ‘explanations’ that should do the trick. Aren’t you impressed by our intellectual sleight-of-hand; see how clever we are; we are the smartest of the species coming up with all kinds of reasons to explain and make more things convoluted and complicated so that we can progress onwards in a civilized manner devoid of mysticism.

The illusional, delusional, tricks-of-academia and intellectual-do-it-with-mirrors is just that – magic. In place of the genuinely mysterious, the mystical, and the miraculous we have Magicism. Magicists, like many economists and scientists, believe that things just happen to be. These are natural forces which coincidentally are what they, well, are! There is no reason why the whole universe, solar system with its bodies moving around without crashing into one another, and sudden life that evolves with spectacular biodiversity cannot be explained away by theories and constructs as one massive coincidence. In other words, magic. It all happens to be there, presto! Just like that.

This Magicism has no bearing on what we use to describe an extraordinarily beautiful sunset or a special moment with a loved one: that kind of magic is an analogue of the miraculous and has an alignment with a moral centre and Divine Order.

Magicists also denigrate religious or spiritual experiences as purely personal ones peculiar to an individual or if shared then part of mass delusion. There are countless theories to explain this…why all this supposedly occurs and why life, the world and humanity is the way it is…meaning, it is what it is: abracadabra. You just explain away anything that’s greater than the human ego and its obsession with itself and excessive sensual indulgence by theories and magic.

So the IH and market forces happen as a result of magic. If you want a spiritual explanation to things then you have to rely on mysticism. Smith as a FM proponent and glorifier of Capitalism cannot simply be subscribing to that, now, can he? Notice the circularity as to how Smith has been appropriated? If you want only reason and scientism to show you the way forward solely through ‘hard’ facts and math etc, then you have Magicism.

Not that you cannot have theories balanced by the spiritual and a moral centre to the world and the universe (e.g., Newton, perhaps Einstein, Kant, Smith and Rawls – though the latter would prefer not to bring in the spiritual overtly). But to do that is to slide into mysticism. Why do that when you can be inaugurated as high priest in Magicism and be a Magicisit cum laude at an accredited Institution of Learning, or be called an Expert and win International Prizes?

Then you have philosophers who are Magicists. They will talk about a metaphysical basis to things and when pressed beyond that will tell you either what they say is sufficient, or that they cannot or don’t see why they have to say what exactly it is behind the Metaphysics. This is a metaphysical smoke screen to hide their ill concealed Magicism.

Those that have a metaphysics and believe there is Absolute Mind behind it like Hegel or the World as Will and Idea as Schopenhauer, are partial Magicists. There is an Absolute but it is devoid of love, compassion and the miraculous. Such ideas sadly get misappropriated by ignorant and rascally elements who then turn them into an excuse for totalitarian ideas or mind bogglingly self defeating pessimism. So partial Magicism has its dangers too.

Or, there will be thinkers, writers or philosophers, eminently talented too, who opine that there is some ‘centre of life’ which, well, is a centre of like, all that is, etc…doesn’t necessarily mean Divinity, but there’s something out there…Magicism bordering on the occult or vice versa. At best one can ascribe partial Magicism to them.

In fact, if you take the trouble to look closely at the ideas of full blown Magicists, you will find that they are inadvertently (or otherwise) occultists. They will tell you that the truth (if it can be known and to what extent it can be know, etc, etc) comes via their full blown or partial Magicism, the ‘clarity’ of academic jargon, econometric models, theories that are constantly outdated/replaced, and formulas of politically correct commonality by the self serving media or politicized hype to show you why you ought to remain disempowered and beholden to their incantations and…Occultism.

Where does life come from, what happens at death, why do people believe in Divine Order/God/Supreme Being…well, here are the theories, degrees, and career paths to sort that out, and a whole lot of magic and occultism to boot. Why? Because, the spiritual like all else that matters in life like justice, fairness, and compassion are externalities.

When you bring in externalities into academia, science, the workplace or the corporation you ruffle feathers because it gets in the way of ego, material grasping, profits and whatnot. Magicists and occultists do indulge in a quick mention that there ought to be a balance between being reasonable and ‘getting the job done’ (because apparently being unreasonable is the way to really professionally effectively get things done). But here again, where does the notion of balance come from…magic.

We have reached that point when all that defines existence and human decency and social and planetary responsibility are externalities that are the adjunct of mysticism, while all else like profit margins, banksters (gangster bankers), big bonus freaks and greed and perpetual war are at least theoretically explained as part of the reality of life…a.k.a magic: because it just happens, that’s the way it is. Things being the way they are without much to explain for them (beyond egocentric opinions and selfishness or endless theories) are just an unsubtle code for: yes, you guessed it, Magicism.

But we are now at long last on the path to seeing the end of the reign of the Magicists and Occultists. People are finally, after being led to near global bankruptcy using useless paper fiat currency backed by printing presses and endless war, starting to wake up and say enough is enough. That there is a moral centre to life, to the world and to the universe and that we are not going to take this violence and ignorance and nonsense anymore.

The Fair Market

There are indeed natural forces at work in the Universe that govern all life on earth as well. This must be the truism of the millennium. All life is part of a natural force. As Dylan Thomas wrote “the force that through the green fuse drives the flower Drives my green age”, and “Time held me green and dying Though I sang in my chains like the sea”.

The only externalities are the Magicists promoting their Magicism. But like all else in nature that has had its time, the Magicist structures and mechanisms are starting to decay, fall apart, and will eventually be reabsorbed into the world as part of the cycle of things guided by forces more powerful than egomania, celebrity cultism, media manipulation et al.

Contrary to the dying exhortations of FM fantasists and hard core Capitalists, freedom doesn’t guarantee fairness. The well worn adage that your freedom to swing your arm ends where the other person’s nose begins still rings true. There is simply no unbridled freedom to do as you please because we live in society and have a responsibility; and if we want things to go well for ourselves, to also see that things go well for others. There are limits to freedom. Try jumping off a skyscraper to show that you can do anything you want with impunity and you will discover the parameters imposed by what we call gravity.

As part of all natural forces in the universe and our planet, everything is subject to parameters. That’s why there’s life in the first place. Given the conjunction of conditions at the right time and place the synchronous and miraculous happens. There are indeed natural laws that affect us all as there are moral laws that affect us all which help us to maintain sanity and balance in our lives thereby allowing us to create the society we dream of living in, if we so choose.

What is this moral centre? Just look into the human heart: there is a sense of right and good there. The mystery is how it came to be there and why virtually everyone resonates with it. But there is no befuddled mystery, as Smith would say, if we recognize the Divine Architect behind things. What we need to do is concentrate on doing what is right for ourselves and thereby others which is fulfilling that part of the plan on Earth.

But the human ego gets in the way. It gets in the way to cut off that Light and enhance the Darkness, and from that shadow world comes fear, doubt, scarcity, greed, envy, anger, hatred and resentment. From that sense of Darkness comes fear that unless you can be free to do whatever you want irrespective of the consequences you -- your ego -- will be harmed. Speak to anyone who claims to believe you can be free to do anything you want and to hell with everything else and/or who are hardcore Capitalists and they will show you the obverse side of Fear.

Bring out cooperation, collaboration, justice, fairness, compassion and decency and those who live in Fear will tell you why something might happen that leaves them at the mercy of others whom they despise and want to lord over because they judge that everyone else is like them. Naturally, in that case, the only option is to fight tooth and nail to support ego based desires, wants, fantasies and Fear.

Fairness, however, does allow for freedom. As Rawls points out, in order to be fair you would have to have these basic principles of liberty of allowing as much freedom to others as you allow yourself, fair and equal opportunities for all, and look after the interests of the least advantaged and certainly those of the disadvantaged. A mature democratic society would also be based on overlapping consensus and through ground up working of self interest creating the principles by which your society should be governed. There is a moral centre for Rawls because people intuitively have a sense of what is good and fair.

Smith goes beyond Rawls in believing there is a Divine force behind the moral centre. And in doing so, and has been discussed, believes not in a so-called FM or Capitalist way of doing things but in a Fair Market. All the ideas of Smith and those that resonate with him (and in his own way this would include Marx) are proponents of a Fair Market. A system where when most things are carried out in a fair and reasonable manner and aligned to a moral centre, will ensure balance and harmony not just for the individual but everyone.

Market corrections are the realigning of things as if by an IH, to be in resonance with a moral centre (which we intuitively are aware of when we are open to Divinity and the fact that God does exist). This is about balance and harmony.

What are termed ‘market corrections’ today is within the heartless framework that treats compassion as an externality thereby promoting the notion of punishment to set things right. The market or FM of today is a blind godless unforgiving system of punishment for what ‘delivers’ and what doesn’t because it is based on Fear. In new ways of doing business and having a natural flow of a community based nature of running society (as discussed in more detail in The Awakened Eco-nomy) we move away from Fear and all its concomitant horrors.

There is freedom for all human beings as we have been given the gift of free will and choice. But this is choice with an understanding of the reality that there are always parameters to everything: free will means the ability to choose between aligning oneself to the moral centre of Divinity or choosing not to align to it. The consequences are obvious and all around us as we can see the choices made which have resulted in a collective consciousness in the world which largely chose Magicism and the Fear, destruction and suffering it brings.

Fortunately, more of us are slowly coming to realize that we can choose the Fair Market, which allows for all of us being able to fulfill our positive potential to the highest.

In his own way Smith is in good ancient company, he is in effect promulgating a Tao of Economics: Yin-Yang balance that is the expression of the Creator in a Universe and world whose physicality we seem to experience most of the time without always being conscious of that beyond the immediate perception of our limited senses.

But when you open your heart, your mind will follow it to the moral centre within and align everything to the Source where all life comes from. When Fear drops away and the veil is lifted, a re-visioning of the world takes place and you can actually see that the Invisible Hand has been visible all along.

                                              THIS IS A SHARED PATH
                                         Cyclists, dog walkers and pedestrians
                                               please show consideration to
                                               those using the path with you

Rawls's ideas are for a well ordered state that is generally a developed society with democratic traditions. There are three main ideas that a society that subscribes to justice as fairness will incorporate:

The two principles of justice, overlapping consensus, and public reason.

Many of these ideas, it must be stated, have been revised by Rawls over the many years of his fruitful work.

One of the assumptions Rawls makes is that people are capable of a sense of right and wrong, as well as a sense of justice.

And in a well ordered society these two principles of justice will be generated:

a. Each person has an equal claim to an adequate scheme of basic liberties, and fair political value.

b. That there are fair and equal economic opportunites for all. And that social and economic inequalities are to be arranged to the greatest benefit of the least advantaged members of society, which leads to the difference principle:

c. that is, arrangements in society that look after the interest of the least advantaged in society.

(There is also the Just Savings principle in which each generation adds to the wealth of a society to pass on to the next generation, and so forth)

This provides the basis for a society to balance freedom, opportunity and duties. The principles are also to take a lexical priority in their enactment meaning that there must be a satisfaction of the principle of liberty first, before it can lead to a proper satisfaction of free and fair economic opportunites and access to public/official posts, and before proper attention can be given to those whose interests need attention as the most disdadvantaged in society.

It must be noted that in the case of the difference principle, Rawls is appealing to working citizens who are in the most disadvantaged positions. It is taken as a given that the interest of those who are handicapped and have special needs etc, will be taken care of by societies in their own manner in accordance with a sense of justice. Rawls in his political conception of justice is looking to basically establish a political framework for a just and fair society which will, naturally, have to be tweaked to suit the society in question.

Rawls makes it quite clear that his ideas are NOT an ideology, they are a set of guidelines and principles that will be adapted accordingly by different societies. That it why he introduces the idea of reflective equilibrium and political constructivism.

Reflective equilibrium essentially refers to an individual or society reaching a point of understanding and balance for all its differing views which can be translated into a social contract with the government of the day on how a country should be run. Based on one's/society's reaction on the ground to issues and different views of people, the set of one's principles are adjusted to accommodate these ground realities. In fact, new ways to interpret and enact one's ideas come into play because of such readjustments and fine tuning of ideas in practice.

Political constructivism would follow from this in the sense that the political institutions of a state and in particular the leaders concerned help construct the political framework of a society based on adjustments made with action and reaction from the body politic.

This makes it impossible for an ideological approach to anything to take hold for long.

The process in which this occurs is via Overlapping Consensus which applies in particular to multicultural democracies (which is increasingly the trend of most democracies). The consensus comes about through the reaction of different people bringing in political judgments based on their upbringing, values, cultural and religious influences which shape their perceptions. But in the political construct in which the consensus occurs the sense of justice and political actuality shapes the views that a society can accept in reality.

We need to bear in mind that this has nothing to do with expedience, but rather in doing what is right in a fair and just manner.

People can bring in arguments as to why a certain policy must be issued or interpreted in a certain way based on, for eg, religious grounds but with the Proviso that its justification when brought in is discussed in a manner that can satisfy all concerned in a multifaceted society.

This process of interaction to ascertain such ideas and policies and ways to enact them as described above is also known as the process of public reason.

An example: abortion in many societies is a controversial issue. In a multicultural democracy the way a just and fair political decision is made (and the ensuing laws put into motion) would be done in the context of public reason and the consensus that allowed for it.

So there will be many who are pro or anti abortion based on their cultural, religious and personal views of the matter (of course many may just be indifferent for various reasons as well) known as burdens of judgment. But the decision made on the matter, while reflecting all these views and been tested against the principles of justice, must be one that also allows for mutual respect and reciprocity.

Rawls is really big on being reasonable. That is the trait of civilised societies, at any rate.

Therefore, those who are against abortion do not have to undergo it, can call for proper measures to ensure that the practice is not taken lightly, and would want to exercise their claim to protest against it.

But just as they want to be able to do the above, they must realise on this shared path of democracy they are on, that those who want to have access to legalised methods of abortion for their own reasons are entitled to do so. And the pro abortionists would also make claims to being able to state their views, campaign etc.

Naturally, this is far too complex an issue to be dealt with summarily but it should, hopefully, make clearer some of the ideas expressed here.

At any time, when people insist on one point of view without proper regard for that of others and aim to stifle it because they believe they have a monopoly of the truth, then they are not only making it difficult for justice as fairness to operate, but will be making it difficult for general principles of democracy, as most of us understand them, to operate as well.

The bottom line for Rawls is really balance.

A true ecology in politics of avoiding extremes and trying to find that point of equilibrium which, naturally, is always shifting to reflect the dynamics of a society.

To some it is like the Aristotelian golden mean, to others it is like mentioning the old Edwardian family table-saying, "I have reached an elegant sufficiency and anything additional would be superfluous."

So often, people's ideas of justice mean what they say goes, and fairness means things going according to their interests. Unfairness, is when others have things go their own way instead.

But if we drop our obssession with our egos and learn to conquer inner foes and look towards balance, fairness and a sense of right and wrong, we will realise that first, after looking to our own faults which may be in dire need of cleansing, we should look to living in peace, balance and harmony with everyone else as far as that is humanly possible.

Needless to say, Rawls's ideas have not been popular among hate and fear mongers.

Arrogance has never gotten anyone or any society very far without generating equally severe enemies.

Unsurprisingly, Rawls himself was man of great humility.

Some starting points for discovering more about Rawls:

Guardian Obituary

London Review of Books

New York Review of Books

Stanford Encyclopedia of Philosophy