The ‘Invisible Hand’

The term ‘invisible hand’ describes the theoretical self-righting mechanism that the original political economists thought to be a characteristic of genuinely competitive markets. But the one thing that can surely now be seen is that this hypothetical hand has been more than usually invisible in recent years or else, of course, we do not have properly competitive markets.
In fact both of these things are true in my view. Hidden hands are not only invisible but also insubstantial and in fact totally incredible. Many so-called ‘markets’ in these benighted days of globalisation are rigged and operate as cartels comprising companies owing no loyalties save to themselves and mammon.
These outfits and their rich owners profit excessively from ordinary people by taking advantage both of them and of their timid and credulous governments and politicians who witter on, textbooks in hand, about the equally non-existent ‘level playing fields’ (about as likely to exist as the Elysian Fields) for international competition.
All this and the obsession with so-called ‘free’ trade and it’s claimed virtues - while some other countries are allowed to get away with cheating 365 / 24 / 7 with, amongst many other things, blatant trade restrictions, industrial espionage and fiddled exchange rates, plundering our once proud industries as they go. What fools we were to allow self-interested corporate management to hand over our assets to them, what fools some of our leaders still continue to be and what fools we are to keep returning them to power.
The only ‘invisible hands’ in evidence have been digging deep into the public purse and less than invisible tills fishing out quantities of the nation’s money that would make a spectre blanche. This along with the disgraceful and shameless industrial-strength tax avoidance widely practised by international companies.
What we need of course are very visible hands, not only bringing the discipline of regulation (and a sizeable stick) and perhaps some genuine competition but the helping hand of direct intervention in the real economy resourced by taxes that are actually paid by corporations and wealthy individuals. We either save what industry we’ve still got left or we shall lose that as well.
I have argued in other postings on this site for the adoption of pro-active Keynesian policies including taking advantage of the balanced budget multiplier effect and focusing on the economic benefits from direct investment in physical assets.
These measures should be taken by the Government as soon as possible but we are unlikely to detect much trace of these in the Chancellor’s upcoming Autumn statement. Alongside these measures should be the establishment of ‘exemplar’ companies - such as municipal banks - in co-operative or public ownership and management. Complaints that such organisations would ‘disrupt the market’ miss the point - that is exactly what they need to do.
There is no ‘invisible hand’ and one thing at least is abundantly clear, either we take our future into our own hands with pro-active public involvement or we will have very little that is visible to hand on to future generations.