Superphysics
The Invisible Hand of Dharma or the Tao
11 minutes • 2237 words
Table of contents
The invisible hand concept by Adam Smith is one of the most important ideas of Supereconomics, making up the Third Law of Value .
This Third Law leads to the effort theory of value which then replaces marginal utility. Without marginal utility, the arbitrary marginal pricing and profit maximization of Neoclassical Economics cease to be logical as they necessarily violate the Second Law of Value which is the concept of Natural Price.
Unfortunately, such a fundamental concept has been thoroughly corrupted by Paul Samuelson in order to advance his selfish “neoclassical synthesis”. Since then, it has been unjustly blamed for bad things about the economy and has even been denounced:
We bring back the original invisible hand by separating it from corrupted hand from Paul Samuelson:
Of course, that is ABSOLUTELY FALSE, since Smith pointed to sympathy and benevolence (the direct opposite of selfishness), as the substance that keeps the machine called society running smoothly.
Samuelson merely cherry-picked Smith’s views on self-interest, which to Smith was a ‘praise-worthy’ positive quality, and then corrupted it into selfishness which is a negative quality:
Regard to our own private happiness and interest often appear as very laudable principles of action. The habits of oeconomy, industry, discretion, attention, and application of thought, are cultivated from self-interested motives. These habits are seen as very praise-worthy qualities..
Our instinct for self-preservation instructs us to take proper care of our health, life, or fortune. A person who fails in this would be pitied. Carelessness and want of economy are universally disapproved of because it shows a lack of attention to the objects of self-interest and not because of the lack of benevolence.
Human creatures should be more careful and attentive (have attention to the self). This does not mean that they should be selfish.
Humans should be more careful and attentive, not selfish.
The cause of the corruption of “self-interest” into “selfishness” is the word “self” that is present in both ideas*.
Update: Dec 2020 (click to expand
*A recent example is the wrong use of the word ‘social distancing’ to mean a physical separation to avoid virus transmission. This is because ‘society’ represents an abstract perception. Social distancing would therefore mean being a loner or not minding others even if one is in a jampacked bus or train.
The proper term is ‘physical distancing’.
Mistakes like these can be avoided if Metaphysics or Dialectics were put back as a field of study instead of the rubbish nonsense called Epistemology (which, by following Smith’s logic, merely replaced the earlier rubbish nonsense called Ontology. Socrates would call modern epistemologists as pseudo-philosophers who just argue for the sake of arguing).
To solve this, we will instead use ‘personal interest’, using the Latin word ‘person’, meaning mask, instead of the English ‘self’ which means ‘I’. In this way:
- Samuelson’s invisible hand leads to selfishness
- Smith’s implies personal preferences or choice
If a man orders burgers instead of fries, we never say that he is selfish for burgers. We would only say that he is selfish for burgers if his entire self revolves around burgers as to eat it for breakfast, lunch, and dinner 365 days in a year.
The Original Invisible Hand: By Design
Now that we have flushed Samuelson’s invisible hand down the toilet, we can move to the one described by Smith.
Its best description is in The Theory of Moral Sentiments, wherein he describes the innate human desire for things to work as they were meant to:
Humans have an innate desire for things to work as they were designed. This natural desire applies even to human systems such as resource allocation:
The proud and unfeeling landlord views his fields, and without a thought for his brethren, imagines to eat its whole harvest.. The capacity of his stomach is far less than the immensity of his desires and receives no more than that of the peasant.
The rest of the food he is obliged to distribute among his servants.. The rich.. divide with the poor the produce of all their improvements despite their selfishness.
They are led by an invisible hand to make nearly the same distribution of life’s necessities which would have been made, had the earth been divided equally. Thus, without intending it, they advance the interest of the society..
When Providence divided the earth.. it [did not forget] those who were left out. In the real happiness of human life, [the poor] are not inferior to those who seem above them. In ease of body and peace of mind, all are nearly on a level. The beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.
A Natural Economy Based on Skill Instead of Welfare
This perfection of the distribution of resources is thus done by employing specific people, just as the parts of a watch work together to tell the time accurately.
More resources are given to productive people just as a better watch costs more. And so the natural system encourages productivity.
But to be productive, one must focus his entire time and effort towards his craft. But to spend so much time in something, a person must first be passionate about it.
Therefore passion in one’s craft is the key in the natural economic system. This is our third law of value
To spend so much time in something, a person must first be passionate about it
Liberals and selfish people corrupt this personal passion to mean selfish-interest. That is why we had to totally flush out the “selfish-interest hand” of Samuelson to bring back the “personal passion hand” of Smith. This is in line with the economic system of Socrates:
Fair Exchange
With everyone finding their passion in life, a nation’s products and services becomes of higher quality and quantity. This is then exchanged for those of other countries. This makes up our Fourth Law of value
Therefore, a natural economy, following the invisible hand:
- raises and encourages skill
- supports personal passions
- produces a lot of high quality products and services
- distributes those products and services through fair exchange
Every individual necessarily works to render the society’s annual revenue as great as he can. He generally does not:
- intend to promote the public interest, or
- know how much he is promoting it
By directing that industry to produce the greatest value, he intends only his own gain. In this case, as in many other cases, he is led by an invisible hand to promote an end which he did not intend.
No to External Micromanagement, Nor Internal Selfishness
Since we replaced selfish-interest with personal passion, we can safely edit the phrase below:
It is very important to note that personal interests should always be in line with the common interest:
Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage which he has in view [svadharma or personal interest], and not that of the society. But the study of his own advantage naturally leads him to prefer that employment which is most advantageous to society [human dharma or common interest].
That wisdom which contrived the system of human affections and that of every other part of nature, seems to have judged that the interest of the great society of mankind [human dharma or common interest] would be best promoted by directing the principal attention of each individual to what was most within the sphere of his abilities and understanding [svadharma or personal interest].
Personal interests should be in line with the common interest
People passionate in singing should pursue singing just as people passionate about money-trading should pursue money-trading. However, it does not mean that society should be ruled by songs or by money.
The natural economic system creates wealth but also should guard against it through the visible hand of institutions:
Wealth and Poverty are two causes of the deterioration of the arts. When a potter becomes rich he will:
- not think of you as much as before,
- grow more and more indolent and careless, becoming a worse potter.
But, on the other hand, if he has no money, he cannot provide himself with tools or instruments nor teach his sons or apprentices to work equally well.
So under either poverty or wealth, workers can degenerate. Here, then, is a discovery of new evils of wealth and poverty, against which the guardians will have to watch, or they will creep into the city unobserved.
When a person finds the chairs [disordered in his bedroom], he takes the trouble to set them all in their proper places. This arises from the superior convenience of having the floor clear. To attain this convenience, he voluntarily puts himself to more trouble than all he could have suffered from its inconvenience.
Therefore, he wanted more of the arrangement of things which promotes the convenience, than the convenience itself..
Those institutions which promote the public welfare have the same principle, the same love of system, and the same regard to the beauty of order and art.
Human institutions should stamp out the dangers of both poverty and wealth, such as inequality, environmental destruction,
If the invisible hand is a natural phenomena, then other societies should have noticed it as to describe it. Fortunately, Ancient India and Greece have such words:
- In Greek, the invisible hand is called δίκαιος
- In Sanskrit, it is called dharma
Both the Indians and Greeks define dharma as being a part or aspect of the Supreme Entity, exactly as Adam Smith described the invisible hand.
In all Polytheistic religions.. only the irregular events of nature are ascribed to.. their gods. By.. their own nature: fire burns, water refreshes, heavy bodies descend, lighter substances fly upwards.
The invisible hand of Jupiter was never perceived in those matters. But the more irregular events were ascribed to Jupiter’s favour or anger: storms and sunshine, thunder and lightning. Savages only knew the designing power of man.
This dharma is further explained here
