‘Self-interest’, Free economy and Crisis.
Companies should be service oriented rather than having selfish-motives. Selfish motif works only when their demand in market. If purchasing capacity getting down and nobody, even Govt. and Banks, doing nothing while people are suffering as market is full of products. Here we can blame businessmen for not properly channelising the wealth into society by proper managerial practices which resulting in decrease in buying capacity, fostering inequality, finally leading to economic crises. Which mean something went against the view of Adam smith by who followed the free-market principle of him. His theoretical interpretation and expectations of self-interest in free economy will promote sufficient advancement in products and services for society through “Invisible” hand, which leads to prosperity. But even after following free-market principles and facing economic crises is something that everybody should look at. Who will be culprits if something went wrong and led lacks of people went jobless and in desperate need of products and services and not having money to buy. It’s difficult to held “invisible hand”. Then how?
As termed to Smith: Self-interested competition in the free market, he argued, would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and argued against the formation of monopolies.
( The Wealth of Nations (1776)
The Businessmen (Banks/Organizations), as suspected by Smith, who followed and supported/promoted capital for the free-market principle yet could not produced and distributed the wealth created equally among people (customers) should be held responsible and the government should see that at least “Victimized” poor (customers) should be helped through the banks who are in a position to lend of peoples money.
If buyers are not in a position to buy even sellers are in a position to sell, banks should provide some loan (not gift or free contribution) through which they (workers, employees or entrepreneur) can do business/work and repay while sustaining themselves also contributing to the society at large. Means making capable of buying first, which is a basis for market than just producing.
Here "provide some loan " is not only a function of bank, but also to "fulfill its duty" while getting guarantee both getting money back while fulfilling its duty in particular and sustaining, helping the society through lending which is mean for business not for personal. Just imagine if they were NO “buyers” as said above, in a society, and then for whom the entire Companies would produce? Run by “few” compares to a large society/world, If so, then where is the question of “Self-interest”?
Here, self-interest, works well only when there is market (buyers) that has appropriate money with buyers. If there is equality between buyers and sellers capable of buying any product or service. Finally leads to a stage where the entire wealth is distributes equally to all for the best interest of whole society.
Here, economic crises took place because the Buyers (customers) are not in a position to “buy” the Products and Services produced by “few” producers. It means that Buyers (customers) are not in a position to Buy, because, lack of money at their hand. Still “few” are capable of “Producing”.
Smith opposed any form of economic concentration because it distorts the market's natural ability to establish a price that provides a fair return on land, labor, and capital. He advanced the idea that a market economy would produce a satisfactory outcome for both buyers and sellers, and would optimally allocate society's resources.
( The Wealth of Nations ;1776)
Economic concentration results in terms of unfair return on land,labor,and capital to buyers which leads to create gap between Buyers and Sellers and to crisis.It means there was no proper distribution of wealth in society for all.economic crises are the symptoms of inequal distribution of wealth due to unprofessional managerial practices by ineligible businessmen,as Smith was wary of businessmen,in this regard to follow free economic principle.
As reconciliation to this, if buyers are not in a position to buy even sellers are in a position to sell. Then banks should provide some loan (not gift or free contribution) through which they (workers, employees or entrepreneur) can do business/work and repay while sustaining themselves also contributing to the society at large. This reason can be seen justifiable to the Producers and even Banks for providing loan (Capital) to the deserved in a crisis period, as reconciliation to earlier practice, by which decreasing the unemployment and creating opportunities for employment which increases the “Buying” capacity of customers, while boosting the market towards equal distribution of wealth in society. If any bank looking at repaying capacity during the crises, it cannot be justifiable. Because they (customers) have lost everything at cost of life, unconsciously, by providing labor and “Buying” for companies sake in society by working in any one of the organizations. At least considering to provide loan to deserved as a sign of justice to them of their “dexterousness” in production process by “few”, may also take as one of an “Invisible hand” (banks providing capital for “Few”). Before concluding here I want to quote Adam Smith:
"In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently only one or two. ...The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. ...His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. ...this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it." (Wealth of Nations;1776)
By
Narsing.G.Rao
Reference:
http://en.wikipedia.org/wiki/Adam_Smith
Companies should be service oriented rather than having selfish-motives. Selfish motif works only when their demand in market. If purchasing capacity getting down and nobody, even Govt. and Banks, doing nothing while people are suffering as market is full of products. Here we can blame businessmen for not properly channelising the wealth into society by proper managerial practices which resulting in decrease in buying capacity, fostering inequality, finally leading to economic crises. Which mean something went against the view of Adam smith by who followed the free-market principle of him. His theoretical interpretation and expectations of self-interest in free economy will promote sufficient advancement in products and services for society through “Invisible” hand, which leads to prosperity. But even after following free-market principles and facing economic crises is something that everybody should look at. Who will be culprits if something went wrong and led lacks of people went jobless and in desperate need of products and services and not having money to buy. It’s difficult to held “invisible hand”. Then how?
As termed to Smith: Self-interested competition in the free market, he argued, would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and argued against the formation of monopolies.
( The Wealth of Nations (1776)
The Businessmen (Banks/Organizations), as suspected by Smith, who followed and supported/promoted capital for the free-market principle yet could not produced and distributed the wealth created equally among people (customers) should be held responsible and the government should see that at least “Victimized” poor (customers) should be helped through the banks who are in a position to lend of peoples money.
If buyers are not in a position to buy even sellers are in a position to sell, banks should provide some loan (not gift or free contribution) through which they (workers, employees or entrepreneur) can do business/work and repay while sustaining themselves also contributing to the society at large. Means making capable of buying first, which is a basis for market than just producing.
Here "provide some loan " is not only a function of bank, but also to "fulfill its duty" while getting guarantee both getting money back while fulfilling its duty in particular and sustaining, helping the society through lending which is mean for business not for personal. Just imagine if they were NO “buyers” as said above, in a society, and then for whom the entire Companies would produce? Run by “few” compares to a large society/world, If so, then where is the question of “Self-interest”?
Here, self-interest, works well only when there is market (buyers) that has appropriate money with buyers. If there is equality between buyers and sellers capable of buying any product or service. Finally leads to a stage where the entire wealth is distributes equally to all for the best interest of whole society.
Here, economic crises took place because the Buyers (customers) are not in a position to “buy” the Products and Services produced by “few” producers. It means that Buyers (customers) are not in a position to Buy, because, lack of money at their hand. Still “few” are capable of “Producing”.
Smith opposed any form of economic concentration because it distorts the market's natural ability to establish a price that provides a fair return on land, labor, and capital. He advanced the idea that a market economy would produce a satisfactory outcome for both buyers and sellers, and would optimally allocate society's resources.
( The Wealth of Nations ;1776)
Economic concentration results in terms of unfair return on land,labor,and capital to buyers which leads to create gap between Buyers and Sellers and to crisis.It means there was no proper distribution of wealth in society for all.economic crises are the symptoms of inequal distribution of wealth due to unprofessional managerial practices by ineligible businessmen,as Smith was wary of businessmen,in this regard to follow free economic principle.
As reconciliation to this, if buyers are not in a position to buy even sellers are in a position to sell. Then banks should provide some loan (not gift or free contribution) through which they (workers, employees or entrepreneur) can do business/work and repay while sustaining themselves also contributing to the society at large. This reason can be seen justifiable to the Producers and even Banks for providing loan (Capital) to the deserved in a crisis period, as reconciliation to earlier practice, by which decreasing the unemployment and creating opportunities for employment which increases the “Buying” capacity of customers, while boosting the market towards equal distribution of wealth in society. If any bank looking at repaying capacity during the crises, it cannot be justifiable. Because they (customers) have lost everything at cost of life, unconsciously, by providing labor and “Buying” for companies sake in society by working in any one of the organizations. At least considering to provide loan to deserved as a sign of justice to them of their “dexterousness” in production process by “few”, may also take as one of an “Invisible hand” (banks providing capital for “Few”). Before concluding here I want to quote Adam Smith:
"In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently only one or two. ...The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. ...His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. ...this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it." (Wealth of Nations;1776)
By
Narsing.G.Rao
Reference:
http://en.wikipedia.org/wiki/Adam_Smith
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