Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, "He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. ... He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." Adam Smith continues, "He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. ... By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." And later he adds, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Foxfyre- Normally I would not say this, but I do not want to see you totally destroyed. Do you know who you are butting heads with?
DEBRA L A W!!! She is probably one of the most brilliant legal minds( named LAW) mind you.
There is no escaping her rigorous logic and her immense erudition concerning LAW. Please consider retreating from her incredible logic!
Let's try one more time Cyclop. Please read Walter Williams essay. This is I think the fourth time I've posted either the whole essay with link or at least the link:
http://www.gmu.edu/departments/economics/wew/articles/09/EconomicMiracle.htm
Please focus particularly on this paragraph quoted within the essay:
Quote:Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, "He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. ... He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." Adam Smith continues, "He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. ... By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." And later he adds, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Williams uses the image of the supermarket and the can of tuna as a beautiful illustration of the principle Smith provides here.
And therefore, it is only for their own benefit that "publicly traded companies" have any incentive to care about their shareholders at all. I wonder if there is any possibility I could get you to understand that concept, because it is that simple principle that is behind this whole huge, impossible mess.
Perhaps you never accept gifts or opportunities handed to you and perhaps you are willing to work selflessly for the benefit of others with no expectation or hope of any kind of benefit for yourself. If so, great. But I suspect you are a minority of one.
"The Wall Street compensation system has evolved from the 1970s, when most of the firms were private partnerships, owned by partners who paid out a designated share of the firm's profits to nonpartner employees while dividing up the rest for themselves. The nonpartners had to earn their keep every year, but the partners' percentage ownerships in the firms were also reset every year or two. On the whole, everyone's performance was continuously evaluated and rewarded or penalized. The system provided great incentives to create profits, but also, because the partners' own money was involved, to avoid great risk."
And now folks, as the liberals have all gone nuts and are into their trolling mode again, I'll go find something else to do until they calm down. Boy you can sure tell when you've pulled their chains, can't you?
But oh, I can answer the question. I have actually many times over the course of this thread.
By the mid 19th century, opposition to laissez-faire economics began and governments in all industrialized countries intervened on behalf of workers and general population. Factory laws and consumer protection laws were enacted and growth of monopolies was checked. Early 20th century saw breakup of monopolies in the US and (after Second World War) nationalization of essential industries and services in Europe. Keynesian economics (which advocates government intervention in the national economy) further undermined it, a process spurred by the great depression of 1930s. From 1970's, however, the pendulum swung back to laissez-faire economics (renamed 'market economy' or 'free enterprise') and brought deregulation of business, and progressive removal of trade barriers, which is continuing.
http://www.gmu.edu/departments/economics/wew/articles/09/EconomicMiracle.htm
A MINORITY VIEW
BY WALTER E. WILLIAMS
RELEASE: WEDNESDAY, FEBRUARY 18, 2009 AND THEREAFTER
Economic Miracle
The idea that even the brightest person or group of bright people, much less the U.S. Congress, can wisely manage an economy has to be the height of arrogance and conceit. Why? It is impossible for anyone to possess the knowledge that would be necessary for such an undertaking. At the risk of boring you, let's go through a small example that proves such knowledge is impossible.
Imagine you are trying to understand a system consisting of six elements. That means there would be 30, or n(n-1), possible relationships between these elements. Now suppose each element can be characterized by being either on or off. That means the number of possible relationships among those elements grows to the number 2 raised to the 30th power; that's well over a billion possible relationships among those six elements.
Our economic system consists of billions of different elements that include members of our population, businesses, schools, parcels of land and homes. A list of possible relationships defies imagination and even more so if we include international relationships. Miraculously, there is a tendency for all of these relationships to operate smoothly without congressional meddling. Let's think about it.
The average well-stocked supermarket carries over 60,000 different items. Because those items are so routinely available to us, the fact that it is a near miracle goes unnoticed and unappreciated. Take just one of those items -- canned tuna. Pretend that Congress appoints you tuna czar; that's not totally out of the picture in light of the fact that Congress has recently proposed a car czar for our auto industry. My question to you as tuna czar is: Can you identify and tell us how to organize all of the inputs necessary to get tuna out of the sea and into a supermarket? The most obvious inputs are fishermen, ships, nets, canning factories and trucks. But how do you organize the inputs necessary to build a ship, to provide the fuel, and what about the compass? The trucks need tires, seats and windshields. It is not a stretch of the imagination to suggest that millions of inputs and people cooperate with one another to get canned tuna to your supermarket.
But what is the driving force that explains how millions of people manage to cooperate to get 60,000 different items to your supermarket? Most of them don't give a hoot about you and me, some of them might hate Americans, but they serve us well and they do so voluntarily. The bottom line motivation for the cooperation is people are in it for themselves; they want more profits, wages, interest and rent, or to use today's silly talk -- people are greedy.
Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, "He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. ... He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." Adam Smith continues, "He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. ... By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." And later he adds, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
If you have doubts about Adam Smith's prediction, ask yourself which areas of our lives are we the most satisfied and those with most complaints. Would they be profit motivated arenas such supermarkets, video or clothing stores, or be nonprofit motivated government-operated arenas such as public schools, postal delivery or motor vehicle registration? By the way, how many of you would be in favor of Congress running our supermarkets?
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2009 CREATORS SYNDICATE, INC..
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Thou shalt not covet thy neighbour’s house; thou shall not covet thy neighbour’s wife, nor his man servant, nor his maid-servant, nor his ox, nor his ass, nor anything that is thy neighbour’s.
As per the link you posted earlier, in 1999, the Financial Services Modernization Act repealed Glass-Steagall. Glass-Steagall was a law that had separated the commercial-banking industry from Wall Street, a limitation on free financial markets. Repealing Glass-Steagall therefore was an act of deregulation, allowing for more market freedom.
Would repealing Glass-Steagall therefore constitue an act that "MACs" advocate?
MACs insist that laws that do not conform to the powers granted the federal Government by the Constitution not be passed.
They refuse to acknowledge that a woman has an inalienable right to decide for herself whether to bear and beget children.
MACs believe that the objective of the federal government ought to be to secure the inalienable rights of humans to life, Liberty, and the purpose og government.
When does a fetus become a human? Some MACs say it's when they are conceived. Some say it's when they are fully formed humans in the uterus. Some say it's at the moment birth begins, Others say it's not until the baby's umbilical cord is cut.
They refuse to acknowledge that homosexuals have equal rights under the law.
MACs believe homosexuals have equal rights under the law with the exception of a right to marriage.
They refuse to acknowledge that others have a right to be free of religion in the public sector.
NO ONE has the right to be free of religion in the public sector. Granting them such right deprives others of their right to practice their religion in the public sector....
They refuse to acknowledge that workers have a right to unionize and bargain for better wages and working conditions.
MACs willingly and openly "acknowledge that workers have a right to unionize and bargain for better wages and working conditions."
MACs are opposed to forced unionism, that is, unionism that is establish by YES VOTES obtained by means of coersion. For example, MACs are opposed to non-secret ballots.
The list is endless. Conservatives SAY one thing, they DO the opposite. Their actions speak louder than their meaningless talk.
Please name and quote the conservatives on this thread that you think say one thing and do another.
Quote:Call that greed if you wish, but few of us fail to take free gifts, no strings attached, that are handed to us. And even if we know that there is the possibility that the gift is rotten within, the chance that it might be a good gift makes it difficult to refuse it.
I find these two sentences to be amazing, for they display a fundamental misunderstanding of the situation.
To begin, AIG and the companies who bought their CDswaps knew that it wasn't a free gift; they knew there were strings attached. They just didn't care. They didn't save any money to pay off the insurances they were selling, and they knew that. It led to billions of dollars of quick profit for them and for the companies who did business with them.
Then, when the whole thing went belly-up, the taxpayer was on the hook, and they knew that would happen as well. After all, AIG was 'too big to fail.' So the executives made dozens of millions while dooming the country to a recession. Knowingly.
Foxfyre, I did ask this question here:
old europe wrote:As per the link you posted earlier, in 1999, the Financial Services Modernization Act repealed Glass-Steagall. Glass-Steagall was a law that had separated the commercial-banking industry from Wall Street, a limitation on free financial markets. Repealing Glass-Steagall therefore was an act of deregulation, allowing for more market freedom.
Would repealing Glass-Steagall therefore constitue an act that "MACs" advocate?
I think that's a very reasonable question, as the answer would provide an idea of what you think the "MAC principles" you keep advocating would mean in real life.
If that's not a discussion you want to have, you can simply say so.
However, simply ignoring the question and answering with a barrage counter-questions does not, in my opinion, constitute an answer. That's what I meant by "quid pro quo".
don't see where you've answered
Okay, I've got a couple of minutes left.
My husband and I run a small business out of our home. . . .
That is the whole principle behind laizze-faire economics, a MACean principle that when people are left to work out means of looking to their own interests, benefit to others is incidentally produced and this spiders out to a magnificent and sustainable unseen process by which every person is benefitting everybody else simply by looking to their own interests. If any component of that is sidetracked or compromised or imprudently artifically controlled however, the ripple effect is far reaching and a large chunk or even the whole thing can come crashing down.
The only role that government needs to take is to enact enough laws and regulation to prevent us from doing violence to each other.
Cyclops recent post demonstrated that he is incapable of understanding this. Are you?