Hi people:

A few months ago someone here recommended that I read Adam Smith’s “Wealth of Nations” to improve my unserstanding of Economics.  I have bought the book but haven’t gotten down to reading it as yet.  But based upon what I did learn of Smith’s theory in Economics 101 and reading Samuelson’s text book (required reading for the course) I believe the following article from the July 14th Economist may point out a significant flaw in Smith’s arguement for unregulated capitalism.

http://www.economist.com/node/21558584

garythehuman - 16 July 2012 02:26 PM

Hi people:

A few months ago someone here recommended that I read Adam Smith’s “Wealth of Nations” to improve my unserstanding of Economics.  I have bought the book but haven’t gotten down to reading it as yet.  But based upon what I did learn of Smith’s theory in Economics 101 and reading Samuelson’s text book (required reading for the course) I believe the following article from the July 14th Economist may point out a significant flaw in Smith’s arguement for unregulated capitalism.

http://www.economist.com/node/21558584

Interesting article. 
Money is not a product except to a Bank. The more money they make, the greater the false reputation of solidity. But in reality this reputation hangs by a fragile balloon. The recent crash bears witness.

A bank is not a market place, it is a safe place to keep your money, that’s all. If this basic function becomes corrupted the causal parties should be prosecuted for criminal conduct.

There is also the problem of our not dealing with 1776 technology any more.

Planned Obsolescence is a 20th century phenomenon and did not exist before 1900.  So Marx had nothing to say about it either.  Although it was discussed in Keynes’ day I am not aware of his commenting on it.

So try finding an economist discussing how much Americans have lost on the depreciation of automobiles since July 20th, 1969.  And economists of no persuasion suggest that double-entry accounting be mandatory in the schools either.  Double-entry accounting is only 700 years old.

Can’t our smartphones handle it?  Aren’t our smartphones more powerful than what we sent to the Moon 43 years ago?

psik

psikeyhackr - 16 July 2012 06:29 PM

There is also the problem of our not dealing with 1776 technology any more.

Planned Obsolescence is a 20th century phenomenon and did not exist before 1900.  So Marx had nothing to say about it either.  Although it was discussed in Keynes’ day I am not aware of his commenting on it.

So try finding an economist discussing how much Americans have lost on the depreciation of automobiles since July 20th, 1969.  And economists of no persuasion suggest that double-entry accounting be mandatory in the schools either.  Double-entry accounting is only 700 years old.

Can’t our smartphones handle it?  Aren’t our smartphones more powerful than what we sent to the Moon 43 years ago?

psik

Yes it is (invented by a monk no less), but it is the simplest and most accurate method of recordkeeping. At every entry of profit or expense the books are updated in their entirety. It perfect beauty lies in the zero state balance maintained by the double entry system. I was a bookkeeper for many years and always admired its elegant beauty of function.

I have read excerpts of many economists, including Smith; Keynes and many others including all three volumes of Das Capital (does that establish my geekiness even before computers?  )  One thing I have noticed is that not many economists have given much serious consideration to what I call ‘pinch points’ in an economy.  Some attention has been paid to monopolies but not much to other things that can restrict or pervert the supposed “free market” that is the basis of Adam Smith’s theories.