Where is this supposed invisible hand gone? Did it ever exist?
The invisible hand is a term coined by economist Adam Smith in his 1776 book “An Inquiry into the Nature and Causes of the Wealth of Nations”. In his book he states:
“Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it … He intends only his own gain, and 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. Nor is it always the worse for society that it 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. I have never known much good done by those who affected to trade for the public good.”
Supposedly, this invisible hand will miraculously turn business which is based on self-interest into some public good. What has happened to our free market system in which this hand seems to have diasppeared? What happened to the economists and politicians in Greece some years ago when cooking the books in order to get into the eurozone? What happened to our bankers who used our money to speculate using systems they didn’t understand and lose not only our money but our trust? What happened to our major corporations who use people in order to improve share prices?
Where has it gone? I believe that this is Gods Spirit. We are all made in th image of God and it is only the presence of the Spirit of God on this earth which prevent us all from descending into complete disaster. God never has to punish us. He only has to leave us alone and we can do that job quite nicely. We need to rediscover the role of Gods Spirit in turning self-interest into public good. Only God can do that …!
Jim Wallis wrote a great opening to an article in the Sojourners magazine, “Our life together can be better. Ours is a shallow and selfish age, and we are in need of conversion—from looking out just for ourselves to also looking out for one another. It’s time to hear and heed a call to a different way of life, to reclaim a very old idea called the common good. Jesus issued that call and announced the kingdom of God—a new order of living in sharp contrast to all the political and religious kingdoms of the world. That better way of life was meant to benefit not only his followers but everybody else too.”
Four major pillars on which our current economic system is built are: Free markets; Growth; Debt &Consumption. Churchill’s famous quote o democracy can also be applied to our current capitalistic economy. “It is the worst form of economics except for all others.” But, it needs Smith’s invisible hand.
1. The `Free Market’ has taken on almost godly attributes and is worshipped all round the globe at the banks and shopping malls – ‘temples of mammon’ as someone has called them. Gods Spirit urges us to be responsible stewards of all we are entrusted with. We are not absolutely free and neither are markets. We are only free to work within certain boundaries which do not violate public good.
2. Growth is the focus of our economic system which goes together with profit maximisation, which leads to unnecessary risks with our assets and manipulation of people. The period 2008-2014 show how flawed this is. We are still balking at the bonuses for managers who failed. Gods Spirit asks us to answer the question “How Much Is Enough” to be satisfied with that and give any surplus to those who do not have enough.
3. The third pillar is Debt. National debt has risen to uncontrollable nights, personal debt has enslaved millions! The worst is – it was done deliberately! Both nationally and privately, the Bible proverb (22:7) has been proven true “As the rich rule over the poor, so the borrower becomes slave to the lender!” The Spirit of God sets people free.
4. Consumption is the motor of our economy and partly determines our identity – to paraphrase Descartes, “I buy, therefore I am”. It has become a goal in itself. The Spirit of God promotes sharing, giving and responsible purchasing.
So, where is this invisible hand? It is to be found in the Spirit of God. As Jesus said, “When the Spirit of truth comes, he will guide you into all the truth, for he will not speak on his own authority, but whatever he hears he will speak, and he will declare to you the things that are to come.” (John 16:13)
Learn to live and work in God’s economy!