Reading at the Crossroads

Reading at the Crossroads is an archive for columns and letters which appeared in the Terre Haute Tribune Star. I also blog here when my patience is exhausted by what I feel is irritating, irrational and/or ironic in life. --gary daily

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Location: Terre Haute, Indiana, United States

The material I post on this blog represents my views and mine alone. The material you post on this blog represents your views and yours alone.

Tuesday, March 09, 2010

Second Stimulus Needed to Make Smith's "Invisible Hand" Visible

Enthusiasts who turn their religions, spiritual or secular, into cults, often find it necessary to cleanse their founding fathers of ideas that do not fit current conditions. So we have market fundamentalists today sweating hard over the idea that the magic market will pull us out of the Bush Depression. Sorry, it’s not to be. Only some form of Keynesian stimulus will do this in a timely manner. Without a second stimulus, and it needs to be a big stimulus, one directed at big and much needed infrastructure projects, we will dwaddle along for a decade, living with misery that could be averted.

Many will suffer needlessly because ideologues grabbed the ear of noodle-spined pols and naive, “give-me-the-easy-answer” citizens.

One of the founding saints of the religion of the magic market was Adam Smith. But don’t look for who this great thinker really was in the way his thoughts and views are twisted and distorted by his followers today.

Here's Andrew B. Busch on some ignored truths about Adam Smith:

“[Adam] Smith never used the phrase ‘laissez-faire’. His association with the idea was an invention in the 19th century and was widely promoted by modern economists from the mid-1950s. About this time Smith was also widely promoted as the author of the notion of there being “an invisible hand” in the market. Both inventions are false.

“There were hundreds of miles of inter-city roads in need of construction and repair; scores of harbours that needed to be built and dredged; thousands of bridges in need of construction; hundreds of towns that need to be paved and have street lighting in place; thousands of ‘little school’ constructed and staffed with state-registered teachers; scores of palliative care hospitals established for those afflicted with ‘loathsome diseases’; scores of depots for stamping clothes with government quality marks; a network of post-offices established and organised; and likewise for all the other activities that Smith envisaged should be funded and managed by the state.”

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