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Nov 13, 2009

The Invisible Hand in Economy

Posted by PutraDinar




Last few days I read back my old notes given by Mr. Halim and I feel like sharing it. This article is written by Omar Javaid, Sr. Editor from Critic Magazine. Please read it with an open mind..... and it is not about gold or other precious metal, its just a food for your brain.

Do you have an urge to understand Economics? If not then you better should think otherwise, as this guarantees an insight into the modern Pandora box of problems, even related to your personal life. Study of economics can help you understand and do something about the issues which leave you wondering or clueless, such as: why satisfaction is gradually being drained out of your life? Why you have started to feel more insecure for yourself and for your family? Why our lives are gradually being filled with items offering temporary pleasures, from video games, to iPods, or even sex, but are getting increasingly void of anything offering a more lasting effect? Why threat of being laid off has increased many folds today? Etc... comprehension of the problem and its actual root cause means half of it has solved; understanding the forces driving the economics engine today ensures just this.

THE INVISIBLE HAND

Think about it … present day economic practices i.e. free market philosophy more commonly known as capitalism with laissez fair characteristics, with interventions of "cooperate sponsored government" acting as a catalyst in the process; has gone too free, astray I would say, with no reins to guide or tame, rather driven by a crazy lust to have more over most of what is earned, and has made "invisible hand" (term from Adam Smith), an invisible hand of devil instead; the soul driving force behind the contemporary economic engine, indeed.

Invisible it is for those, who are frantically immersed in routines, working for corporations, earning their living and paying their debts, and spending the remaining time to release the stress accumulated, by even more distraction of glamorous facade of ever higher standard of living, a plethora of material pleasures, sex at best? Doesn’t this make almost all of us? And most marvel it openly, but also subconsciously suppress the void it leaves behind … but some don't as for them the opportunity cost of this void, this gap, this gasp, this empty feeling, makes the contemporary proposition of so called materialistic modernity, truly unfeasible.

Humans are different from Animals. A part from higher of IQs, ability to communicate, and freedom to make a choice, "Lust" (with a capital L) is another notorious differentiator. Animals, ironic it may seem, has a natural tendency to create a harmony with their surroundings, they consume only what they need, thus creates a balance with the ecosystem keeping its sustainability intact. The ecosystem encompassing the entire world has been surviving and thriving since millions of years just because all elements has kept this balance in place, by only consuming what is needed. There has been events of "Creative Destructions" (a term more related with capitalistic system) when one sub-ecosystem gets destroyed through earth quakes, storms, floods, hurricanes but this infect serves the very purpose of maintaining the balance, the equilibrium at the macro level. Humans can chose to maintain this balance with nature also, only if they consume and do what’s needed for survival and healthy growth of their body, minds and souls, however that’s seldom the case, lust to have more of what’s needed is the underline motivating factor of most human actions today, sufficient to disturb the balance maintained in the ecosystem.


Adam Smith’s theory of “Self Interest” being the driving force of lassie fare, as he called it, actually turned out to be “Lust”; when his theories were put into practice. More commonly it’s called as “Wants” by marketers, whose satisfaction has become the motto of everyone’s life today. All the efforts of higher standard of living, at least, and higher level of power, without considering the social and economic consequences, at most, prove just this.

Think about what’s causing global warming? Think about $14 cents / Kg paid to the coffee bean farmer in Uganda against $26.4 price tag in the market with a FAMOUS brand name?

Think about what has caused the world experience two world wars already? Think about Income disparity leading to a hike in crime rate?

Think about exponential increase of suicides particularly farmers who takes loan from a bank?

Think about hundreds of billions of dollars spent of cosmetics, cigarettes, health care of animal pets, alcoholic drinks, and pornographic material (totaling $350 billion) but cannot extract around $80 billion to alleviate poverty?

If it’s not Lust then what is it?

Please think about it.......

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