Invisible Hand-Challenged

The Obama administration has fairly consistently shown deafness to the concept of the invisible hand in economics, but that lack of comprehension extends beyond.

The invisible hand principle, introduced by Adam Smith in The Wealth of Nations, indicates that the optimal social result comes from each individual seeking their own self-interest. The public good arises out of this as by 'an invisible hand'. The main reason for this is that, as each individual seeks to gain a share of the market, they must produce things that satisfy the needs of others in society. If they don't, they don't get their own needs met.

Statists like Barack Obama believe exactly the opposite. They believe that only paternalistic elites, using government force, can assure 'equal' public prosperity. Their belief is that, left to themselves in freedom, people will divide into the 'greedy rich' and the oppressed poor, with the rich milking the labor of vast numbers of the poor to accumulate their wealth (ironically this is what happens under government force, not free markets--see Venezuela).

This same myopia with respect to the role of self-interest infects Obama's foreign policy. Obama and his ministers seem relatively oblivious to the simple fact that the self interest of nations drives their behavior. Witness the silly 'reset button' moment, where the sunshine and lollipops naivete of this view was on full display. If only we are friendly to people they will like us and we will have peace. We will charm and understand them into submission. No, it doesn't work that way. All nations pursue their self-interest, and those who have statist governments, such as Russia, pursue their self interest with far more brutality and deception than those who have more free societies.

Those self-interested regimes are only too glad to support the self-deception of fools who don't recognize the core reality of self interest. This is no different in the economy. Those who can take advantage for their self interest almost always do. In a free market economy, they are limited by the fact that what they produce has to be desired. If they become supreme satisfiers of others (e.g. Michael Dell), they can accumulate vast fortunes. However, these fortunes are built on vast satisfaction.

It is only in the warped, force infiltrated environment of government intervention that the more corrupt can satisfy their self interest in large scale ways without providing large-scale value. In this environment, a government representative can collect a large amount of other peoples' money without offering significant value, and funnel an earmark to create an unnecessary structure (such as a bridge to nowhere), which happens to improve the value of a property that they own or which pays contract money to a relative.

In both the economy and foreign affairs, the primacy of self interest is as real as gravity. When recognized and used for mutual respect and value production, the invisible hand rewards all (well, except those who want to freeload or dictate). When force and naive belief in the suspension of the laws of self interest replace the invisible hand, self interest, with its natural inhibitors removed, metastasizes into an acquisitive and self aggrandizing power lust that leads inevitably to war and destruction (WWII).

The Obama administration has shown little understanding of the role of self interest in the machinery of the world, despite a few statements to the contrary. If they decided they could ignore gravity, you could imagine the consequences. Ignoring the fundamental force of self interest and the invisible hand will yield disastrous results just as real as jumping off a bridge thinking you can fly.

Why 72 Virgins is Important

I know it seems like a sad joke to westerners, but I think the 72 virgins thing may be far more important than we, with our culture, can comprehend.

Muslim men in repressive societies are not allowed to interact normally with women.
This creates enormous pent-up sexual demand in these men.
They are taught that in death they will be rewarded with 72 virgins (one old prostitute would probably be enough for them) .
They have little happiness in their current lives and are taught that their enemies are responsible for this.
Therefore, they are propelled to “martyrdom” in large part by one of the most powerful forces in nature, sex, with very few impediments in the form of other positive life experiences.

This is all the more reason why reforming Islamic cultures, in part to normalize relations between men and women (particularly by granting women equal rights), is critical to defeating terrorism. Much of the terrorism we are facing is rooted in repressed sexuality. Remember that the 9/11 hijacker’s last nights were spent carousing with prostitutes.