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"Wealth of Nations" doesn't really mention regulation at all. In fact, the "invisible hand" from the book requires that participants be able to choose for themselves what they consider to be in their best interest. Strict regulation is the opposite of letting people choose for themselves.
The entirety of Book V covers the role of government, and limits its role to providing defense, justice, and public goods. It also covers tax collection and public debt. No where does it say the government should regulate industry and limit choice.
I'll also point out that "Wealth of Nations" was written over 230 years ago. The "state of the art" in economics has advanced a bit since then, and most modern economists would agree that regulation hurts markets far more than it helps.
As evidence that "Super Capitalism" does work, certainly better than USSR style socialism, notice that there's almost a direct correlation between the economic freedom in a country and the standard of living in that country. Countries with high economic freedom, such as Hong Kong or the United States rate significantly higher than the few USSR-like socialist/communist countries that haven't completely imploded.
I'll admit there's a small role for government in any economy, but limiting people's choice isn't part of it.
Edited 2008-10-31 01:01 UTC
The entirety of Book V covers the role of government, and limits its role to providing defense, justice, and public goods. It also covers tax collection and public debt. No where does it say the government should regulate industry and limit choice.
I agree with you on that and if you re-read my post you'll notice I never said that Adam Smith thought otherwise.
Again, I'm more than in agreement with you as far as the age of "Wealth of Nations" goes and that modern economics has moved on from their but that is as far as my agreement goes. Most modern economies realize that to leave a mark totally unregulated is to invite profiteering and corruption, something I think you'll find the current credit crunch does more to validate than any argument I could post here.
Your standard of living examples display an alarming amount of naivety. Hong Kong is governed by a totalitarian regime where kleptocratic oligarchs embezzle the working mans wages and the United States has bankrupted itself over the past 8 years by paying private concerns in an unregulated industry to fight a war it cannot win.
Now take for example Luxembourg, the country I'm currently living and working in. Luxembourg uses a combination of market and planned economics, mostly codified by the Cristian Socialist party (a conservative party) and whatever other party has currently enough of the house to form a coalition with. Luxembourg is weathering the credit crunch remarkably well manly due to it's heavy regulation of it most important sector, banking.
These examples are not bland statistics or theoretical situation extrapolated from obscure mathematical formulas. These are concrete, real situation that demonstrate the fallacy that none regulation is good for the economy.
American style capitalism, the replacement of the jungle with markets wrapped up in a strange form of neo-Darwinist metaphysics, has shown itself to be non sustainable and has lost so much credit over the past decade that I would venture to say it's time is over.




Member since:
2006-12-28
That is a gross oversimplification and not actually the truth.
Capitalism, as originally codified by Adam Smith in his seminal work on the subject "Wealth of Nations", makes no mention of regulation as being wrong or undesirable. It does argue that too much taxation and intervention by governments should be curtailed as the market is the only truly free and impartial means of the distribution of wealth and produce, but it does not mention the regulation of those markets.
What you are repeating is the BS that American super capitalists want you to believe. As long as there is no regulation of industry and market, these greedy swine can have they're way with you and your money.
Most modern economies recognize this and have put in place regulations to help keep the playing field even. Therefore, a more appropriate name for the economical systems we live with today would be mixed economies, as even the small amount of government intervention that people like Adam Smith where willing to allow for is not enough to protect Joe Sixpack against the predations of robber barons.
The fact is, Super Capitalism does not and cannot work. All it becomes is a means by witch Oligarchs get richer while they walk all over the poor. It is in no way better, in fact in many ways worse, than a state owned capitalism, i.e. the USSR and just like the Soviet Union, the system would eventually implode taking everything and all else with it.