• the rich and wealthy usually are more selfishly inclined than most and could hardly be bothered with the welfare of those less fortunate
• but in order to stay their course they need to let their serfs survive as well and so inadvertently or otherwise ensure their serfs’ survival thereby benefiting the welfare of others
• in making this distribution of things to those lower in the food chain, the rich are led into this by the IH
• man proposes (as in the selfishness of the rich) but providence disposes, as in the balance that ensures some form of fairness to the less well off
• all humans want happiness and all are equal in that respect of wanting peace and solace as well other than the illusory difference produced by status and the master-slave relationship thereof
• with a touch of irony, Smith says even a beggar sunning himself seems to have as much, if not more, peace of mind than kings (who constantly worry about who is about to do them in, etc)
• the balance and seemingly smooth operation of the IH behind the adjustments in society is the same kind of system that when it appears in the general governance of society appeals to a sense of order and artistry which humans have a bias for
• when someone supports the idea of good governance and commerce in his society it is not always out of sympathy for his fellow man
• people tend to be impressed with the smooth automatic functioning of a state and all that takes place within it as it resonates with a sense of balance, harmony and artistry in us
• while we acknowledge that the purpose of government is to ensure citizens’ happiness, we tend to be more appreciative of the well oiled functioning of things rather than whether all of society benefits from this
• a person is not so much concerned with what public policies etc are for the benefit of his fellow citizens as much as realizing the remarkable way his society functions and how it is something that is wondrous and (implicit in this) perhaps worthy of emulation by others: this makes him interested to ensure the well oiled functioning of his society
• if the proper and effective operation of a country can be justified via just, reasonable and practicable ways, people may be inspired to seek the means of seeking the happiness of their society

It is important to note that in TMS Smith seems to be saying four things:

First, that through sympathy with his fellow man and through serving one’s self interest a person tends to serve, often times inadvertently, the interests of society.

Second, the above tends to happen because it is aligned to a force of balance that resonates with the moral centre of the universe which ensures regularity in human affairs. We usually don’t question this but take it as a given, knowingly or otherwise.

Third, and importantly, even if an irregularity occurs such as man serving his own selfish interests as opposed to his self interest, there is an IH that rebalances accordingly to ensure that there is some form of redress and justice in distribution to ensure that those exploited still manage to subsist.

Fourth, that people seem to be caught up more with the artistry and smooth functioning of things (that is, regularity and order) than whether society actually gains from this. And if this mode of smooth operation can be justified in a manner of justice and fairness, then people will buy into it and thereby, against their will at times, end up benefiting society at large.

In many cases, we have experienced situations where people compare one society and economy with another over an excellent transportation system, well maintained public amenities, health and educational facilities that are people friendly, etc. In most instances, we also wonder why we can’t have what works smoothly and well in other countries in our own, and are willing to ask or push for, or work towards manifesting this in our own societies. In this, Smith has given an accurate description of things which resonates with many of us today.

It is clear to me, that Smith has ideas here that both Immanuel Kant and John Rawls would have been fascinated by. More will be said of this, especially of the influence Smith has on Rawls.

The third point on how the IH comes in to readjust seeming irregularity in the general balance of things is consonant with what Oslington claims it does in terms of special providence. But Oslington does not mention clearly enough how the irregularity occurs: it occurs because even selfishness vis-à-vis self interest gets the touch of natural re-balancing to even things out a little. In all this, it appears Smith is far more consistent in his thinking on the IH than many thought him to be.

When it comes to WN, Oslington mentions that special providence also comes in again to ensure that despite greater profits available through trade abroad, the merchant paradoxically keeps capital at home thereby benefiting the home front. But as a close reading of that particular passage in WN shows, Oslington and others are not quite right about thinking that is how the irregularity appears. The irregularity in WN in relation to the IH arises from the ambiguity in what Smith says (we will look at this).

But in case there is still some doubt as to the moral core and Divine Order spiralling through Smith’s work, this brilliant passage with its take on capital punishment must be looked at in TMS Book 2.II.19-III.27 (bold and italics mine). It also reiterates with consistency the idea running through TMS and WN in relation to special providence acting through irregularities in the world as in the case of the IH:

Upon some occasions, indeed, we both punish and approve of punishment, merely from a view to the general interest of society, which, we imagine, cannot otherwise be secured. Of this kind are all the punishments inflicted for breaches of what is called either civil police, or military discipline. Such crimes do not immediately or directly hurt any particular person; but their remote consequences, it is supposed, do produce, or might produce, either a considerable inconveniency, or a great disorder in the society. A centinel, for example, who falls asleep upon his watch, suffers death by the laws of war, because such carelessness might endanger the whole army. This severity may, upon many occasions, appear necessary, and, for that reason, just and proper. When the preservation of an individual is inconsistent with the safety of a multitude, nothing can be more just than that the many should be preferred to the one. Yet this punishment, how necessary soever, always appears to be excessively severe. The natural atrocity of the crime seems to be so little, and the punishment so great, that it is with great difficulty that our heart can reconcile itself to it. Though such carelessness appears very blamable, yet the thought of this crime does not naturally excite any such resentment, as would prompt us to take such dreadful revenge. A man of humanity must recollect himself, must make an effort, and exert his whole firmness and resolution, before he can bring himself either to inflict it, or to go along with it when it is inflicted by others. It is not, however, in this manner, that he looks upon the just punishment of an ungrateful murderer or parricide. His heart, in this case, applauds with ardour, and even with transport, the just retaliation which seems due to such detestable crimes, and which, if, by any accident, they should happen to escape, he would be highly enraged and disappointed. The very different sentiments with which the spectator views those different punishments, is a proof that his approbation of the one is far from being founded upon the same principles with that of the other. He looks upon the centinel as an unfortunate victim, who, indeed, must, and ought to be, devoted to the safety of numbers, but whom still, in his heart, he would be glad to save; and he is only sorry, that the interest of the many should oppose it. But if the murderer should escape from punishment, it would excite his highest indignation, and he would call upon God to avenge, in another world, that crime which the injustice of mankind had neglected to chastise upon earth.

For it well deserves to be taken notice of, that we are so far from imagining that injustice ought to be punished in this life, merely on account of the order of society, which cannot otherwise be maintained, that Nature teaches us to hope, and religion, we suppose, authorises us to expect, that it will be punished, even in a life to come. Our sense of its ill desert pursues it, if I may say so, even beyond the grave, though the example of its punishment there cannot serve to deter the rest of mankind, who see it not, who know it not, from being guilty of the like practices here. The justice of God, however, we think, still requires, that he should hereafter avenge the injuries of the widow and the fatherless, who are here so often insulted with impunity. In every religion, and in every superstition that the world has ever beheld, accordingly, there has been a Tartarus as well as an Elysium; a place provided for the punishment of the wicked, as well as one for the reward of the just.

Nature, however, when she implanted the seeds of this irregularity in the human breast, seems, as upon all other occasions, to have intended the happiness and perfection of the species. If the hurtfulness of the design, if the malevolence of the affection, were alone the causes which excited our resentment, we should feel all the furies of that passion against any person in whose breast we suspected or believed such designs or affections were harboured, though they had never broke out into any action. Sentiments, thoughts, intentions, would become the objects of punishment; and if the indignation of mankind run as high against them as against actions; if the baseness of the thought which had given birth to no action, seemed in the eyes of the world as much to call aloud for vengeance as the baseness of the action, every court of judicature would become a real inquisition. There would be no safety for the most innocent and circumspect conduct. Bad wishes, bad views, bad designs, might still be suspected; and while these excited the same indignation with bad conduct, while bad intentions were as much resented as bad actions, they would equally expose the person to punishment and resentment. Actions, therefore, which either produce actual evil, or attempt to produce it, and thereby put us in the immediate fear of it, are by the Author of nature rendered the only proper and approved objects of human punishment and resentment. Sentiments, designs, affections, though it is from these that according to cool reason human actions derive their whole merit or demerit, are placed by the great Judge of hearts beyond the limits of every human jurisdiction, and are reserved for the cognizance of his own unerring tribunal. That necessary rule of justice, therefore, that men in this life are liable to punishment for their actions only, not for their designs and intentions, is founded upon this salutary and useful irregularity in human sentiments concerning merit or demerit, which at first sight appears so absurd and unaccountable. But every part of nature, when attentively surveyed, equally demonstrates the providential care of its Author, and we may admire the wisdom and goodness of God even in the weakness and folly of man.

It is even of considerable importance, that the evil which is done without design should be regarded as a misfortune to the doer as well as to the sufferer. Man is thereby taught to reverence the happiness of his brethren, to tremble lest he should, even unknowingly, do any thing that can hurt them, and to dread that animal resentment which, he feels, is ready to burst out against him, if he should, without design, be the unhappy instrument of their calamity. As, in the ancient heathen religion, that holy ground which had been consecrated to some god, was not to be trod upon but upon solemn and necessary occasions, and the man who had even ignorantly violated it, became piacular from that moment, and, until proper atonement should be made, incurred the vengeance of that powerful and invisible being to whom it had been set apart; so, by the wisdom of Nature, the happiness of every innocent man is, in the same manner, rendered holy, consecrated, and hedged round against the approach of every other man; not to be wantonly trod upon, not even to be, in any respect, ignorantly and involuntarily violated, without requiring some expiation, some atonement in proportion to the greatness of such undesigned violation. A man of humanity, who accidentally, and without the smallest degree of blamable negligence, has been the cause of the death of another man, feels himself piacular, though not guilty. During his whole life he considers this accident as one of the greatest misfortunes that could have befallen him. If the family of the slain is poor, and he himself in tolerable circumstances, he immediately takes them under his protection, and, without any other merit, thinks them entitled to every degree of favour and kindness. If they are in better circumstances, he endeavours by every submission, by every expression of sorrow, by rendering them every good office which he can devise or they accept of, to atone for what has happened, and to propitiate, as much as possible, their, perhaps natural, though no doubt most unjust resentment, for the great, though involuntary, offence which he has given them.

What Smith in essence is saying here is that most people while understanding why capital punishment was meted out to the sentry who falls asleep at his post, would still see it as an extreme measure. The same people would have a sense of outrage that would support a capital sentence on someone who commits a heinous crime like parricide, and in our time, mass murder. People can be so enraged that they may also believe such punishment to go beyond mortal realms to punishment in the after life as some form of universal retribution.

But Smith says that this apparent inconsistency or irregularity in views of people as to who deserves punishment is something that should be determined not from their thoughts but by their actions. He believes that if people were to judge others based on their thoughts and potential for thinking evil as opposed to someone caught in the act of enacting the thought, then there would be no end to inquisitions throughout society. (This would be equivalent to a type of ‘thought crime’ in Orwell’s great Nineteen Eighty Four).

Judgment of what happens in the human heart is not for man to make as it is in the province of the Divine. Humans can look at actions and determine the nature of them thereby making judgments on that. We can judge on actions, but not on thoughts or we will want accounting for every negative human thought even when it doesn’t result in any harm to anyone. The sentry, though his intentions were not based on malice, is judged based on the fact that his lack of alertness could have dire consequences for all.

If there appears any irregularity in this aspect of human judgment and thinking as to how people react to punishment, it is a good thing which prevents ‘witch hunts’ and allows for some semblance of order in society. To Smith this falling into place of things naturally despite the irregularity in response to, for instance, capital punishment, is due to the special providential adjustment of Divinity.

Smith is not proposing here a system of legal justice and how a judiciary should work. He is commenting on the moral and social nature of man in relation to the Divine and how we operate in our daily lives.

Then as is typical of Smith, he provides a countervailing view to show that there are instances of intention in humans that must be considered as in the case of someone who did not have intent to cause suffering to others but does so as in accidentally causing someone’s death. There is atonement that is necessary though he is not culpable for what happened. The sanctity of a human being and his innocence cannot be infringed upon under any circumstances especially via some form of revenge.

In doing this, as he does in many instances, Smith does his best to explore the complexities in human affairs and tries to show that they are consistently taken care of via a kind of natural balance, harmony and adjustment that takes place in the universe, world, and society which is the underlying Divine Order for the good of all.

In using this approach, Smith seems to be allowing for the rationalisation of how we act and react to things in line with the greater architectonic of Divine Order.

All apparent irregularities are Divine ways of adjusting the seemingly imperfect into perfection. That is principally the phenomenon of the IH. There is hardly a coincidence in Smith using the phrase “as upon all other occasions” relating to irregularity above from TMS with the mention of “as in many other cases” together with the operation of the IH in WN – as in the passage below.

In both cases, the occurrence of the IH as special providence making adjustments for the good of all is a regular and natural phenomenon.

Now take a detailed look at the passage where perhaps the most famous term in economics finally appears in WN Book 4 chapter 2 (bold and italics are mine):

IV.2.1

By restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favourable to the woollen manufacturers. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufacturer have, in the same manner, obtained in Great Britain, either altogether or very nearly, a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely, or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs.

IV.2.2

That this monopoly of the home-market frequently gives great encouragement to that particular species of industry which enjoys it, and frequently turns towards that employment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be doubted. But whether it tends either to increase the general industry of the society, or to give it the most advantageous direction, is not, perhaps, altogether so evident.

IV.2.3

The general industry of the society never can exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of that society, and never can exceed that proportion. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society than that into which it would have gone of its own accord.

IV.2.4

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society.

IV.2.5

First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry; provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock.

IV.2.6

Thus, upon equal or nearly equal profits, every wholesale merchant naturally prefers the home-trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home-trade his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. He can know better the character and situation of the persons whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress. In the carrying trade, the capital of the merchant is, as it were, divided between two foreign countries, and no part of it is ever necessarily brought home, or placed under his own immediate view and command. The capital which an Amsterdam merchant employs in carrying corn from Konigsberg to Lisbon, and fruit and wine from Lisbon to Konigsberg, must generally be the one half of it at Konigsberg and the other half at Lisbon. No part of it need ever come to Amsterdam. The natural residence of such a merchant should either be at Konigsberg or Lisbon, and it can only be some very particular circumstances which can make him prefer the residence of Amsterdam. The uneasiness, however, which he feels at being separated so far from his capital generally determines him to bring part both of the Konigsberg goods which he destines for the market of Lisbon, and of the Lisbon goods which he destines for that of Konigsberg, to Amsterdam: and though this necessarily subjects him to a double charge of loading and unloading, as well as to the payment of some duties and customs, yet for the sake of having some part of his capital always under his own view and command, he willingly submits to this extraordinary charge; and it is in this manner that every country which has any considerable share of the carrying trade becomes always the emporium, or general market, for the goods of all the different countries whose trade it carries on. The merchant, in order to save a second loading and unloading, endeavours always to sell in the home-market as much of the goods of all those different countries as he can, and thus, so far as he can, to convert his carrying trade into a foreign trade of consumption. A merchant, in the same manner, who is engaged in the foreign trade of consumption, when he collects goods for foreign markets, will always be glad, upon equal or nearly equal profits, to sell as great a part of them at home as he can. He saves himself the risk and trouble of exportation, when, so far as he can, he thus converts his foreign trade of consumption into a home-trade. Home is in this manner the centre, if I may say so, round which the capitals of the inhabitants of every country are continually circulating, and towards which they are always tending, though by particular causes they may sometimes be driven off and repelled from it towards more distant employments. But a capital employed in the home-trade, it has already been shown, necessarily puts into motion a greater quantity of domestic industry, and gives revenue and employment to a greater number of the inhabitants of the country, than an equal capital employed in the foreign trade of consumption: and one employed in the foreign trade of consumption has the same advantage over an equal capital employed in the carrying trade. Upon equal, or only nearly equal profits, therefore, every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry, and to give revenue and employment to the greatest number of people of his own country.

IV.2.7

Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry that its produce may be of the greatest possible value.

IV.2.8

The produce of industry is what it adds to the subject or materials upon which it is employed. In proportion as the value of this produce is great or small, so will likewise be the profits of the employer. But it is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore, endeavour to employ it in the support of that industry of which the produce is likely to be of the greatest value, or to exchange for the greatest quantity either of money or of other goods.

IV.2.9

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

What in essence does the passage say:

1. domestic industries can be protected by trade tariffs on imports


2. that domestic monopolies may result due to this but government may be in cahoots with local industries in doing so to the disadvantage of citizens


3. that this tendency to profit taking via monopoly tends to reallocate resources to serve monopolistic interests and the benefit of which, to the country, is ambiguous


4. some form of interference can see to the reallocation of capital away from monopolistic tendencies but it is uncertain as to the benefit that arises from such moves


5. individuals who seem to pursue self interest in the way they allocate their capital may, in effect, actually be benefiting society without their knowing


6. merchants would on the whole prefer to keep capital at home because they can monitor its progress and gains better that way


7. this results in the home country of a merchant engaged in export trade to also having a variety of that produce sold there as long as some form of profit taking can be managed in the process


8. since most gain seems to arise from deploying capital within the home country there is a tendency for capital to be kept home which results in industry and employment growing and revenues rising


9. those who adopt this strategy will want to see that the produce of such industries be of the greatest value


10. in such a deployment of capital the merchant intends to gain the maximum profit he can


11. through such moves of maximizing profit the revenue in a country is increased and the motivation behind this is not related to society’s benefitting consciously or otherwise


12. by supporting domestic industry in this manner over foreign ones the merchant is only pursuing his own interest


13. via this mode of operation he seems to be led by an IH to promote an end which was by no means his original intention


14. he ends up promoting society’s interests more than he would have if his intention was to serve mainly society’s interests


15. not much good arises from commercial transactions that are solely for society’s good

It would be hard to prove that Smith does not here advocate keeping capital at home as opposed to investing it overseas. But there is more in all this than just that. This passage is one of many that are ambiguous in WN. Yet within the ambiguity lies the special providence that accounts for the irregularity that accompanies the use of the IH. How does this ambiguity work?

From (1) – (3) we see that merchants are quite happy to exploit cornering the domestic market to set up some form of monopoly aided by government tariffs on imports. This is consistent with the reading of selfishness (as opposed to self interest) of those tending toward monopolies. There is no doubt that Smith is against the selfishness that stems from monopoly and greed as shown earlier with the quote on the critical clash of interests in Book I.

But with (4) the transition to ambiguity begins as Smith says interference to regulate some of this monopoly is not always advantages. In (5) the ambiguity comes full circle as Smith implies that even with monopolistic ambition allocation of capital may be for everyone’s good. This is the ambiguous merger of selfishness and self interest which can sometimes describe what does happen in reality. The rest of the passage shows how the tendency to maximize profits through favouring domestic to foreign industries leads to greater produce, labour and revenue for the home country.

So even if the merchant is driven by selfishness or a mixture of self interest and selfishness -- hence the irregularity -- the special providence of the IH steps in to adjust things such that society gains even when the intention of such societal good wasn’t there in the first place. This is consistent with the irregularity of selfishness in the TMS that also sees the IH adjust things such that everyone gains all round.

Not much good arises from commercial ventures that work consciously to solely benefit everyone as an end in itself. So it becomes clear that there is a kind of teleology to Smith and a natural order to things in a Divinely guided universe with a moral center: that while self interest ensures smooth functioning of things in a society, the imbalance of selfishness is also readjusted into a kind of balance that is in the end for the good of all.

This does not imply that overtly destructive activities like rampant monopolies and the ills of capitalism as we know through hindsight, and still live through today, will have the IH come in and rescue everyone. There will be consequences for bad actions and they are inescapable just as the consequences of war result in unimaginable human suffering.

Yet under Smith’s scheme of things, the broad architecture of the universe with its Divine Order and moral center will still see a balance come into play, as life does go on albeit sometimes on quite a different paradigm.

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.