Invisible Hands

            Adam Smith first linked to markets the idea of the invisible hand in his work The Wealth of Nations which came out in 1776, the year 13 American colonies declared independence. He had introduced the concept in an earlier work The Theory of Moral Sentiments (1759), but markets and capitalism had not been discussed in the earlier work. The idea, which has renewed currency today, is that in a free market greater good is achieved by free exchange of goods and services because prices are driven lower by competition and products are improved in the process. Therefore, society as a whole benefits from the pursuit of selfish interests by individuals.

            What Adam Smith never dreamed of was that competition would become something to be eliminated. Increasing market share by any means would undermine competition. By the early twentieth century John D. Rockefeller, Chairman of Standard Oil, is accused of saying: “Competition is a sin.”

            Furthermore, the sophistication of finance and advertising in addition to the development of large scale industry would reduce competition considerably. Corporations on a large scale, especially multi-national ones, would shed all pretense of competition and strive to command a market share so significant that their annual budgets would rival those of many noteworthy countries. Today, these gigantic corporations have a life of their own and declare allegiance to the country with the lowest taxes.

            Finally, these huge corporate entities have been blessed with "personhood" and subsequently given their own veil of secrecy in the form of a Citizens United ruling by the U.S. Supreme Court. This ruling gives them the capacity to spend their astronomical resources on disinformation campaigns against American political candidates they dislike and for candidates they support without ever disclosing who they are. It is, in effect, another invisible hand, not one intended by Adam Smith.

            The election of 2012 is in danger of being decided by the latter invisible hand in honor of the preservation of the first. The second hand serves the trickle-down notion of the greater good by funding candidates that favor laissez-faire capitalism and therefore believe in the first invisible hand. What a neat trick. I can hear it now: the sound of two invisible hands clapping across two centuries. I guess Machiavelli would approve, but would Adam Smith?