Recently I shared an older animated graphic on social media, demonstrating how animal kingdom psychopathic work alike behaviors which seem similar to empathy based behaviors will crush economic growth. Link to article follows.
Got a great response roughly saying, ‘This invalidates Adam Smith’s invisible hand. It can’t be valid.’ Simple but substantive retort, and an awesome opportunity. My response as follows.
Countries and economies collapse! Even the United States founders knew this, hence the second amendment. They just didn’t know why. They only had symptoms.
Smith formulated the invisible hand on the idea that errors(mistakes) were the primary negative effect on markets, not defectors (aka:sabotage). Hence it only applies to non-defectors.
Defectors, driven by growing populations of differently behaved psychopaths, use variations on moral hazard to game people’s consciences against them to set up rewards for bad behavior as pointless consumption gigs for themselves. Bounties(we call them subsidies) for ghosts. People invest in garbage because their market data is intentionally garbage. Calls to authorities to gatekeep information (to control quality and distribution) are erected with graft in mind. The intent to fund a loss leader with an artificially boosted outcome to enslave the consumer to a fabricated risk model, be it capital, information, or any behavior that does not comply with the top down authority that must pervade a psychopaths life.
For example Smith is naive on foreign actors interfering in other countries public schooling (an important topic for him), a regular practice even among allies, for at least 100 years. No fault, but no accommodation. Contrast that with moral sentiments. Describing empathy and it’s human specific behaviors. Like most (all?) great thinkers before 1970 psychopathic defectors are just not on his mind.
Again he does describe grift, but as an error. Not a way to reorganize, game, intentionally topple or otherwise distort a capitalist system. It is not discussed as a tactical or strategic way to wage war. Most importantly for my understanding of the cause of collapse, intelligent actors without any empathy are never considered. Much less breeding more quickly than those with empathy, or being magnetically attracted to the centers of power and public trust.
Few people understand inflation as taxation or the potential logarithmic supernation sized gains from economy of scale on a planet with billions of consumers. These ideas and others are used against them. Further psychopaths as science are only 50 years old. Smith could not have known these things without seeing his creation in action. His massive enhancement to economic science was observation based, but in whole he described a largely new system with it’s own new properties.
Psychopaths operating in growing quantities, in Smith’s system, are externatlities to his time, age and data set.
If this interests you you may enjoy my critique of Marx from the same time period. Smith is discussed as well.