Saturday, July 05, 2008
“This House would prefer to be led by the invisible Hand”
Every individual...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.This was the title of a lecture on Thursday organised by the Adam Smith Institute in Edinburgh for the day before the unveiling of the Adam Smith statue in the Royal Mile. The statue is shown above & though I haven't seen it in life yet it looks a bit overpowering for my taste.
The Wealth of Nations, Book IV Chapter II
Anyway the debate was proposed by Michael Forsyth, Madsen Pirie (Adam Smith Inst) and Andy Hume and opposed by Brian Wilson, Alex Neil and Kenny Fleming & chaired by BBC Scottish Political Editor Brian Taylor. Since it was being run by the ASI there was no doubt which way the vote was going to go but everybody enjoyed themselves (free beer & wine too).
Most fun speech was by Alex Neil, though it didn't really advance the socialist case much. Best serious speech was from Andy Hume who went into detail on how India's decision to end its 5 year plans & import substitution & let the "hidden hand" work had, as we can all see, worked so very well. Strangest misunderstanding was from Brian Wilson who used this quote
In every great monarchy of Europe the sale of the crown lands would produce a very large sum of money, which, if applied to the payment of the public debts, would deliver from mortgage a much greater revenue than any which those lands have ever afforded to the crown...When the crown lands had become private property, they would, in the course of a few years, become well-improved and well-cultivated...the revenue which the crown derives from the duties of customs and excise, would necessarily increase with the revenue and consumption of the people.and ended it by saying "See Adam Smith supported nationalisation". He completely misread it when it is quite clearly giving exactly the justification for privatisation that Thatcher (& Forsyth) made - not primarily for the sale money but that they would be more profitable & thus ultimately pay more taxes in the private sector. How Brian Wilson, who is by no means an unthinking Labourist could so misunderstand the remark is difficult to understand. It suggests how completely the blinkers are on most politicians that they cannot see beyond the idea that dispossessing the monarch could be anything but a leftist policy. The fact that Brian gave the quote in full proves that this was an honest misunderstanding of plain English & not a politician trying to be slippery. Best point from the floor came from Neil Craig (in his opinion) when I expanded on Andy's point to say
I don't see how there is really much room to debate on this. The statistical evidence is overwhelming. For example 60 years ago Hong Kong, Korea, Taiwan, Singapore were poor countries as were Burma, most of Africa & Cuba. Indeed of them all Hong Kong was not only probably poorest but had just been landed with 2 million refugees while Cuba was the richest of them. Now Hong Kong is one of the richest places in the world while North Korea, Burma, Africa & Cuba are still desperately poor.This was lifted from the pdf described here & I acknowledged to David Farrer, standing beside me, that he had uncovered this gem first.
Temperamentally my sympathy in the cold war between the US & Cuba is fully with Cuba but the fact is that free enterprise works better & it is no service to the world's poor, or indeed ourselves, to say otherwise.
I think the best controlled experiments are China & Russia going from solidly planned economies to free ones & stagnation to high growth & India, Ireland, New Zealand etc loosening up. However the examples I gave are the longest running & thus compound growth has made them spectacularly clear.
I also consider Germany, the EU & Zimbabwe as examples of movement in the opposite direction over at least the last couple of desades with concomittent economic results.
The fact that countries do still, despite the evidence, move in a statist direction supports the conclusion in your last paragraph. Certainly most Greens do actively want to impoverish people.