Adam Smith's Invisible Hand Concept Considered - Modern Day Dialogue

ByLance Winslow

The other day, I was talking to an acquaintance about economic theory, namely Adam Smith's "invisible hand" concept, which he felt was elegant and revolutionary thinking. Indeed, when you hear it for the first time, it really is, isn't it? Okay so let's talk about this shall we?

Sometimes I think that if anyone participates in free-market capitalism they will see it right away, the economies of scale, synergies, and efficiency, run all by itself, even more efficiently the less it is regulated and interfered with. In fact, it is usually the very people who interfere with it, who then later complain it isn't working, sure enough they are right, mostly because they screwed with it and/or attempted to hijack its flows of labor, capital, money, or production. You should read: "How Capitalism Saved America" by DiLorenzo.

When it came to Ayn Rand and "Francisco's Money Speech" my acquaintance said it was a real eye-opener. Indeed, I would say there is much validity to that. Further, I'd say that what people should understand is that what someone might call wrong with capitalism - is really what's wrong with man. And capitalism takes into consideration human nature and the whole is better served for it, everyone wins. In fact, I guess Gordon Gecko in the movie Wall Street had a few monologues which made us think too.

When governments move to micro-manage our "right to free contract" in the free-market, they restrict the natural flow of goods and services, money and resources, which slows the need for labor and capital, and acts like pesky beavers blocking off the river flow on its way to a hydro-electric plant you see. Adam Smith was right, and we should have listened.

There is no way any government can better guess the needs and desires of buyers and sellers better than those very transactions which dictate intrinsic value and price, and to attempt to do so, and actually believe it is possible is ludicrous and utterly naïve, in fact it shows a complete lack of understanding of free-markets and gives away the regulator, bureaucrat, or politician and less than intellectually endowed or corrupt, not to see the obvious.

Sure, it's a hard concept for anyone who hasn't participated in free-markets, but once one has, they get it instantly, and it is an inherently simple concept at hand. Please consider all this and think on it, better yet, enjoy the fruits of abundance in a capitalistic society.

Lance Winslow has launched a new provocative series of eBooks on Future Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net

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News and Society: Economics
Lance Winslow

Email Address:SubscribeEconomics Article FeedFind More ArticlesSearchRecent ArticlesHow To Solve The Homeless SituationProgressivism Isn't Progress, VIIIHow Secure Is Your "Secure" Job?A True Comparison Of Increasing Debt Between Bush And Obama AdministrationsHow To Compete With ChinaWould Einstein Think Us Insane?What Will Happen If Greece Defaults?A Cluster of (Minor) ErrorsThe US Recovery Is Producing SurprisesA Sigh Of Relief For The Economic Status Of The USSubmitted On January 16, 2012. Viewed 23 times. Word count: 413.

MLA Style Citation:
Winslow, Lance".".16 Jan. 2012EzineArticles.com.26 Jan. 2012 .APA Style Citation:
Winslow, L. (2012, January 16). . Retrieved January 26, 2012, from http://ezinearticles.com/?Adam-­Smiths-­Invisible-­Hand-­Concept-­Considered-­-­-­Modern-­Day-­Dialogue&id=6819160Chicago Style Citation:
Winslow, Lance "." EzineArticles.com. http://ezinearticles.com/?Adam-­Smiths-­Invisible-­Hand-­Concept-­Considered-­-­-­Modern-­Day-­Dialogue&id=6819160EzineArticles.com© 2012 EzineArticles.com
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Standard and Poor's Lowers National Debt Rating on Many Eurozone Nations

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The History Of Money

ByTom Genot

Currency - The Beginning

The first currency ever used, was in coin form and dates back to 600 B.C. by then King Croesus of Lydia in Asia Minor. At that time Lydia was located in what is now present day Turkey. These coins were minted from a naturally occurring alloy of gold and silver called electrum. And each coin had a specific weight of 4.7 grams. These coins functioned as a medium of exchange, unit of payment and were capable of preserving value.

In 400 B.C. it was the Great Aristotle that defined what characteristics should make up a sound currency. Here wrote that a currency should meet the following criteria.

• Scarcity
• Durability
• Homogeneity
• Divisibility
• Transportability
• Be easy to store
• Be difficult to falsify

Gold and silver meet all of the above requirements that Aristotle defined so many years ago.

Paper Currency - Sound Money

A paper currency is one that has mechanisms in place to control it from debasement. This is accomplished by pegging the currency against a specific amount of tangible assets such as gold.

An example; In 1944 shortly after World War II America and other major countries were experiencing inflation due to the economic strains from funding the war. All the Major Central Banks at the time had a meeting at Bretton Woods in New Hampshire for 3 days. During that meeting the attendees all agreed that the US dollar would be attached to 10% gold. And the other respective countries could hold US dollars in their Central Banks to insure the stability of their own currencies. This became known as the Bretton Woods Agreement.

This is when the US dollar became the World's Reserve Currency. That meant the amount of money that could be printed by the US. Federal Reserve was limited to 90 percent. They had to maintain the additional 10% in actual gold bullion which acted like a check valve against inflation.

From the time the Bretton Woods Agreement was enacted through 1971 inflation was kept in check within the United States and many other countries because gold protected the value of paper currency. During these times The US dollar was considered sound money due to the gold that was backing it.

Fiat Currency - Paper Money

Paper money also referred to as Fiat currency alone, can never hold any value by itself. Paper money can only become valuable when a government decrees it is to be used as a medium of payment and exchange. Another requirement is that the society as a whole must accept it as such. Basically faith in the paper money is met by both the government and its people. At this point paper money is classified as a Fiat currency. Fiat currencies are not backed by any tangible assets such as gold or silver nor any kind of merchandise. Therefore it is very easy to debase or devalue this type of currency by simply printing excess amounts of it. This through time creates inflation in a society.

In modern times Fiat currency was born into America and in many major countries throughout the world when in 1971 US. President Richard Nixon was forced to temporally end the Bretton Woods Agreement. When this happened it removed the last obstacle from money printing as there now was nothing to back the US dollar and nothing requiring it to be printed with any kind of accountability.

From 1971 until now, inflation has eaten away at the dollar losing more than 90% of its purchasing power. Sadly over all these years no US. President has ever tried to re-establish the Bretton Woods Agreement that Nixon temporally removed. Fiat currencies throughout history have always failed. Failing in Roman times, Greek times and soon history will repeat itself once again in modern times.

Tom Genot -

For information, news, articles and videos to invest in gold and silver and where the best places are to buy it. You will also find information for preparing and protecting you, your family and your assets from the pending economic crises and destruction of the US. Dollar. Author Tom Genot provides information and resources helpful to everyone. Insure your prepared beforehand, check us out at www.coinbullion.net.

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Tom Genot

Email Address:SubscribeEconomics Article FeedFind More ArticlesSearchRecent ArticlesHow To Solve The Homeless SituationProgressivism Isn't Progress, VIIIHow Secure Is Your "Secure" Job?A True Comparison Of Increasing Debt Between Bush And Obama AdministrationsHow To Compete With ChinaWould Einstein Think Us Insane?What Will Happen If Greece Defaults?A Cluster of (Minor) ErrorsThe US Recovery Is Producing SurprisesA Sigh Of Relief For The Economic Status Of The USSubmitted On January 13, 2012. Viewed 7 times. Word count: 634.

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Jobs, the Economy and Unemployment

ByBill A. Collins

The other evening I watched a contemporary film that I'm positive was meant by its writers and producers to be a modern day story depicting five well-to-do company executives who like many of us, become victims of our country's financial meltdown, or as the news media calls it - the Recession. These unfortunate souls were forced to go from multi-million dollar homes, corporate jets, vacation houses in the Bahamas, first-class country club memberships... you get the story - right?

As the reels unwind, one of the newly pink-slipped executives is forced to work for his brother-in-law's contracting company, installing drywall and so-forth. Still, the bills continue to mount as he remains in denial thinking that another big corner office is waiting just around the corner. His wife however gives him a little push into reality by selling his classic Porsche. Another one of our ex-execs goes so far as to commit suicide. No longer could he go on playing real-life charades by pretending to continue his family's once lavish lifestyle. Sadly without sympathy or understanding from his spouse, this poor soul stays out at the bar until evening then arrives home as in the past with his briefcase and Wall Street Journal under his arm so the neighbors don't get suspicious. The script attempts to put the darkest hue of doom above the ex-vice-president who must now find a way to live off of his one-hundred million in stock options while maintaining his pride, dignity, and sexual liaison with his ex-corporation's head of human resources.

I sat patiently waiting for the killer plot twist or story-stunner; but what happened at the end (spoiler warning) they all had to start over with new jobs and careers. SERIOUSLY! They had jobs! But lowering themselves to a significantly lessor pay-scale was equivalent to being unemployed in their eyes. There was a scene where one of the major characters had to sit on the back steps with his young teenage son (teary eyed) and explain that he lost his job; not mentioning that there was a construction job waiting for him if he wanted it (but that was not a real job). Someone wrote and produced this major motion picture with a minimum of six major actors portraying down and out executives who once had it all and now must live off of their stock options and lower-middle-class salaries. Honest! This was not a comedy... it was meant to make me sad and concerned for the characters.

I did a little investigating myself and found that a large portion of individuals collecting unemployment for the um-teenth month feel that lower paying jobs with less benefits and options than their previous jobs are considered as unacceptable, therefore they remain on unemployment. Oh, if I could be so lucky!

This is a twisted society we live in - honestly!

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News and Society: Economics
Bill A. Collins

Email Address:SubscribeEconomics Article FeedFind More ArticlesSearchSimilar ArticlesPaying People Not To WorkAdditional Relief For Your Social Security Disability Clients From an Employment Law StandpointHiring a Senior Caregiver - Agency Or Hire-Direct Independent Contractor?Limit Your Legal Exposure During LayoffsAnd the Rich Just Keep - on Getting RicherWhat Money is and is Not - Part 2A House Divided Is UnwealthyThe Government GIP!Political Discourse and Participatory Democracy: From Feed Mills and Barbershops to Attack AdsNet Effect, Taxes Have Been Reduced Over 10%Recent ArticlesHow To Solve The Homeless SituationProgressivism Isn't Progress, VIIIHow Secure Is Your "Secure" Job?A True Comparison Of Increasing Debt Between Bush And Obama AdministrationsHow To Compete With ChinaWould Einstein Think Us Insane?What Will Happen If Greece Defaults?A Cluster of (Minor) ErrorsThe US Recovery Is Producing SurprisesA Sigh Of Relief For The Economic Status Of The USSubmitted On January 14, 2012. Viewed 16 times. Word count: 473.

MLA Style Citation:
Collins, Bill A.".".14 Jan. 2012EzineArticles.com.26 Jan. 2012 .APA Style Citation:
Collins, B. A. (2012, January 14). . Retrieved January 26, 2012, from http://ezinearticles.com/?Jobs,-­the-­Economy-­and-­Unemployment&id=6817152Chicago Style Citation:
Collins, Bill A. "." EzineArticles.com. http://ezinearticles.com/?Jobs,-­the-­Economy-­and-­Unemployment&id=6817152EzineArticles.com© 2012 EzineArticles.com
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