David C. Korten

For your consideration:

Adam Smith was as acutely aware of issues of power and class as he was of the dynamics of competitive markets. However, the neoclassical economists and the neo-Marxist economists bifurcated his holistic perspective on the political economy, one taking those portions of the analysis that favored the owners of property, and the other taking those that favored the sellers of labor. Thus, the neoclassical economists left out Smith’s considerations of the destructive role of power and class, and the neo-Marxists left out the beneficial functions of the market. Both advanced extremist social experiments on a massive scale that embodied a partial vision of society, with disastrous consequences.

Keep on reading. This is from a book called When Corporations Rule the World, which explains how deeply Smith’s putative followers misunderstand him.



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3 responses to “David C. Korten

  1. This is good. And it is also clear that the “hand” of god is presumed by many to be working in a totally free market — nominally, “the invisible hand of the market”.

    Somehow this concept (a superstitious feeling maybe?) is elevated to the level of naturalistic justice. Which recalls Nietzsche’s dictum that we need not just to remove religion from its pride of place in our world but also its “shadow”:

    After Buddha was dead, his shadow was still shown for centuries in a cave-a tremendous, gruesome shadow. God is dead; but given the way of man, there may still be caves for thousands of years in which his shadow will be shown.-And we-we still have to vanquish his shadow, too. – Friedrich Nietzsche

  2. I may be one of the few people who had read both volumes of the Wealths of Nations, and I’m consistently pestering people with “Well, actually, what he said was…” when they start to quote what they think it meant. His invisible hand comment, for example, is contextualized in a discussion about a very specific market circumstance, not every market circumstance.

    Anyhoodily, I confused by this writer’s use of the word neo-Marxist here. I don’t know of any neo-Marxist who draws on Smith at all for political economy reasons.

  3. C – Hmmm… I see the point. He is attributing too much to them. I think he just means neo-Marxists are anti-market. Traditional lefties say that even very small private businesses are bad.

    Side note: one of the degrees I would love to do is Near Eastern Studies, but another is Economics.

    (Actually I think I should have gotten a B.S. in Economics and then a J.D., but I figured the B.S. out when I was almost finished with another Ph.D. and the J.D. when I was already in my second tenure track job. But still.)

    J – yes, invisible hand of the market elevated to this universal / omnipotent status. And why do people think religion has to mean slavish worship of an absolute, authoritarian authority?

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