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The cry of the neo-liberal: "The market will sort this out!", usually in response to an event demonstrating the exact opposite.

by 1_2__4 9y ago

wpietri 9y ago
Definitely. I love markets; they can do amazing stuff. But we're talking an invisible hand, not an invisible magic sparkle unicorn. I look at a market as a machine that we can deploy. It does a specific thing, but only with the right inputs and working conditions. Here, we are not Equifax's customers. Harm to us is a negative externality, which is a classic kind of market failure: http://www.economicsonline.co.uk/Market_failures/Types_of_market_failure.html http://www.economicsonline.co.uk/Market_failures/Types_of_ma... So markets don't fix this even in theory. Personally, I'd like to see this problem turned over to an institution something like the Smithsonian: not a regular part of government, but a trust with a specific purpose. I'd be even happier with it if it had directly elected privacy commissioners, so that it was more accountable to the people whose data it safeguards. We're only going to end up with more data that's about people, even if it's not generated or held by those people. Having a home for that data, one with a public purpose and public accountability, seems way better to me than leaving it for a private, profit-making corporation to exploit.
- dredmorbius 9y ago
  NB, but the "invisible hand" rhetoric is a gross misrepresentation of Smith's intent. Economic historian Gavin Kennedy has made something of a career debunking this fallacy. Among his many writings: The sorry invisible hand myth owes more to imagination and hope than it does to economics from Adam Smith. Its modern form really began its take off with Paul Samuelson’s successful textbook, “Economics: an analytical introduction”, McGraw-Hill 1948, and continued through to edition 20 in 2010. It had an earlier oral presence at Chicago (where Samuelson was an undergraduate) and Cambridge, England (A. C. Pigou). Even Oscar Lange postulated (1938 and 1947) a rival and “better” invisible-hand role by socialist planners. The Soviet planned economy challenged capitalism from the 1930s and in Cold War rivalry, with large communist parties and social-democratic in Western Europe, the myth asserted the innate superiority of capitalism with its “invisible hand”. Since the current recession, increasing questions appeared about its existence. Warren Samuel’s last book, “Erasing the Invisible Hand, essays on a elusive and misused concept in economics”, 2011 (Cambridge) exposes the modern history of the mythical “invisible hand” since its heyday from the 1960s through to the late 1990s http://adamsmithslostlegacy.blogspot.com/2012/04/political-scientist-most-right-in.html http://adamsmithslostlegacy.blogspot.com/2012/04/political-s...

The cry of the neo-liberal: "The market will sort this out!", usually in response to an event demonstrating the exact opposite.

by 1_2__4 9y ago

The cry of the neo-liberal: "The market will sort this out!", usually in response to an event demonstrating the exact opposite.

wpietri 9y ago

Definitely. I love markets; they can do amazing stuff. But we're talking an invisible hand, not an invisible magic sparkle unicorn. I look at a market as a machine that we can deploy. It does a specific thing, but only with the right inputs and working conditions. Here, we are not Equifax's customers. Harm to us is a negative externality, which is a classic kind of market failure: http://www.economicsonline.co.uk/Market_failures/Types_of_market_failure.html http://www.economicsonline.co.uk/Market_failures/Types_of_ma... So markets don't fix this even in theory. Personally, I'd like to see this problem turned over to an institution something like the Smithsonian: not a regular part of government, but a trust with a specific purpose. I'd be even happier with it if it had directly elected privacy commissioners, so that it was more accountable to the people whose data it safeguards. We're only going to end up with more data that's about people, even if it's not generated or held by those people. Having a home for that data, one with a public purpose and public accountability, seems way better to me than leaving it for a private, profit-making corporation to exploit.

dredmorbius 9y ago
NB, but the "invisible hand" rhetoric is a gross misrepresentation of Smith's intent. Economic historian Gavin Kennedy has made something of a career debunking this fallacy. Among his many writings: The sorry invisible hand myth owes more to imagination and hope than it does to economics from Adam Smith. Its modern form really began its take off with Paul Samuelson’s successful textbook, “Economics: an analytical introduction”, McGraw-Hill 1948, and continued through to edition 20 in 2010. It had an earlier oral presence at Chicago (where Samuelson was an undergraduate) and Cambridge, England (A. C. Pigou). Even Oscar Lange postulated (1938 and 1947) a rival and “better” invisible-hand role by socialist planners. The Soviet planned economy challenged capitalism from the 1930s and in Cold War rivalry, with large communist parties and social-democratic in Western Europe, the myth asserted the innate superiority of capitalism with its “invisible hand”. Since the current recession, increasing questions appeared about its existence. Warren Samuel’s last book, “Erasing the Invisible Hand, essays on a elusive and misused concept in economics”, 2011 (Cambridge) exposes the modern history of the mythical “invisible hand” since its heyday from the 1960s through to the late 1990s http://adamsmithslostlegacy.blogspot.com/2012/04/political-scientist-most-right-in.html http://adamsmithslostlegacy.blogspot.com/2012/04/political-s...