Monday, November 4, 2013

Economics - The Invisible Hand

Adam Smith famously stated that in economics prices were set by the invisible hand of supply and demand. Now what if in the 21st century, we were to automate that hand.

Watch the price of a scholarly treatise on fruit flies go to $23,000,000 with no human intervention at all, beyond the initial price setting algorithm.


Stolen Comments said...

There's a similar issue with Adam Smith's Wealth of Nations. He is considered the father of capitalism - but difference between today's rhetoric of "capitalism this, capitalism that" versus what he actually pronounced in the book is worlds apart.

I wouldn't be surprised if some right wingers would call Adam Smith socialist in these current times.

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I can't blame people for not reading On the Origin of Species, Wealth of Nations, The Divine Comedy, The Leviathan, On War or any of the other old books I've tried, and usually failed, to read. It's a real grind trying to read a book for an audience that spoke and thought differently than we do now. That's part of the reason for reading them in the first place, but it just consumes so much mental energy.

I can't blame them unless they name an institute after the author that the author himself would think was full of crap. I'm looking at you Adam Smith Institute. Them I can blame. Heartily.

Click Here said...

In Edinburgh I just posed for pictures next to one statue of Hume and then in front of Adam Smith, the founder of liberal economics.

(Oh the handsome scotsman posing with me? Edinburgh science fiction legend Ken MacLeod. Look up his fine novels, such as The Corporation Wars.)

Back to Adam Smith; it’s clear where he would be writing, were he alive today -- at the website that mentions his name most-often. Evonomics is the fast-rising site where liberals and moderates in the commercial and academic worlds of economics offer spirited resistance to fanaticism.

While the far-left and the entire-right seem hell-bent on betraying the system that brought us all this vast wealth and opportunity, moderates are rediscovering Smith, who knew that creative-competitive markets can only work when they are regulated to keep them flat-open and fair.

6000 years of cheaters have showed us that vast disparities of wealth do not lead to healthy market enterprise, but stifle it. (Try running a competitive sports league without "regulation." Alas, leftists reflexively despise the word "competition" and rightists despise "regulation" when it is only the combination that works.) See my posting on Competition and Regulation.

If our parents in the Greatest Generation could stymie oligarchic cheaters, spurring lively market competition by keeping things relatively flat and fair, then can't we? These re-sets have to be made about once per U.S. generation, and the plantation lords - desperate to prevent it - know that feudalism might be prevented permanently, if we perform just one more.