Why People Don’t Crash Into Each Other All The Time: Adam Smith’s ‘Wealth of Nations’ and the “Invisible Hand”

The Invisible Hand, Why People Don’t Crash Into Each Other With Their Cars

To me, there is no question.  But the Biden administration and the Obama administration before it was all about Keynesian economics, which was a disaster from the outset of the Red Decade when the socialist John Maynard Keynes implemented it in England.  When you hear Biden or any Davos billionaire talk up Keynesian economics, what you are hearing is utter destruction by macroeconomic socialists and students of Karl Marx intending to give government entirely too much power, which is why the most power-hungry of our society like it so much.  Billionaires want this system because they can always control politicians with their money, which ultimately lets them rule the world from the shadows.  It was a disaster from day one.  When Keynes first spoke about it, failure was already percolating, and it is even more so today.  The only reason people don’t have a stronger opinion about Keynesian economics is that it’s the only kind of economics they teach in college, really, and all the colleges of the world, for that matter. It’s the only thing Joe Biden knows, and when he says the world’s top minds all agree with is infrastructure plan, he’s essentially saying they all studied Keynesian economics at the same schools by the same loser teachers, for all the same reasons.  And they never figured it out, and they continue to stand by their Keynesian economics in the way that they promote vaccines for Covid when we all know that they do nothing for treatment.  Only methods like hydroxychloroquine and ivermectin effectively treat Covid.  Yet, the government insists on failed methods to cover up their sheer stupidity from the outset.  The government never wants to admit that they were wrong on economics or disease control.  That is why they can’t be trusted and must be heavily managed by the public.  Because government always tends to go astray. 

Of course, my position is not one that I reject everything.  But I reject much of what the progressive era has produced, including the work of Sigmond Freud, Carl Jung, the positions of the media and politics over that span, and most of what people have been taught in university.  It’s not all garbage, but we used to know better.  And the answers are there. The progressive era was essentially the creation of Karl Marks and Edward Bellamy, where they made a global move to micromanage people with centralized control, and it’s been a disaster.  To this day, many still cling to it, but that’s because they are stupid and have forgotten how things really work in the world. When it comes to economics, and America was essentially its creation, the book I most treasure and have read countless times is The Wealth of Nations by Adam Smith.  It’s what all economic theories should be based on. We can see the benefits of American culture as it relates to the rest of the world. It has been the undisputed champion of the great economic theories of our times, including Greek, Roman, and Egyptian societies.  Never did something work so well as the ideas of Adam Smith’s Wealth of Nations.  Progressives didn’t like it because they wanted central control. Smith’s invisible hand is a repulsive concept to those who want to micromanage others for all kinds of psychologically wrong reasons. 

When I explain The Wealth of Nations to people and the concept of the “invisible hand,” I often talk about America’s car culture.  I tell the story in the video above of me driving my family through the Smokey Mountains with our RV in the fast lane of I-40.  Next to us is a logging truck.  In front of us was a dump truck.  All around them are numerous cars and trucks of all shapes and sizes winding through the mountains and tunnels at 70 MPH.

In many cases, there are only a few feet between us and the next car.  Next to us on the left side is a concrete wall, and beyond that is the opposite lane of traffic going the other way at the same speed.  The whole journey is perilous if looking at how the government looks at things or the Keynesian economic theory.  If anyone person makes the slightest mistake, there could be a 50 car pile up and hundreds of people killed.  But truly, seldom do crashes ever happen, and statistically, we might go through our whole lives with many hours of opportunity for errors to occur and only have a few crashes.  As a society, we have accepted the risk and enjoy the rewards.  If you leave in the morning with your car, you are most of the time going to come home safe and sound at the end of the day because it is in everyone’s self-interest to preserve their property.  So crashes seldom occur—that is the nature of the “Invisible Hand.” Self-interest governs behavior for the benefit of all—the key to understanding The Wealth of Nations and the general success of America as a global superpower. 

Keynesian economics is like the subway, public bus, or the public toilet with people making a mess and never cleaning it up.  When people don’t own the property, they don’t take care of it because it replaces self-interest with shared benefit.  And that means that the lowest value always wins.  If the person dressed in a nice suit is sitting next to some barely surviving bum who hasn’t washed their clothes in weeks, the nicely dressed person has everything to lose in the investment while the bum loses nothing.  They can only gain from such an exchange.  So the net result is that public transportation is dirty, uncomfortable, too expensive, and it never gets you where you want to go because other people determine your travel route.  Everything is centrally planned, so the net result is that everyone is just a bit unhappy with the shared experience.  It’s not by accident that liberals like public transportation for the same reasons, and conservatives love their cars.  They want independence to decide where they want to go and when they will get there.  And they don’t like to share their space with people who aren’t equally invested in their appearance. 

When people are free to come and go as they please and have a stake in getting there, they tend not to run into each other, which might damage their property or their life.  When you look at a highway at 3 AM and wonder where all those people are going at all hours of the day, all days of the week, no central government could provide instruction for all those little details.  Only self-interest could drive such ambition, and out of that activity comes a tremendous economic benefit. I’ve driven all over the United States at all hours of the day, and seldom, even in the most remote section of the country, was I ever alone on the road for long.   That is the essence of Adam Smith’s Wealth of Nations.  It is the economic means of American life, it should be studied exclusively in high school, starting in the fifth grade, and nothing else matters.  I will never say that Adam Smith was the final word on economic theory. I’m sure future improvements will be made as necessity dictates.  But Keynesian economics was not that improvement.  It was an attack on the free market by centralized planners who wanted an administrative state.  Not people who wish to support or understand why any country is better when people are turned loose to act on behalf of their own self-interest freely.  But we see the magic every day, in our cars, on our roads, anywhere where people travel freely with an extension of themselves with private transportation.  Any trace of Keynesian economics in American society or any society for that matter should be eradicated from our minds forever and remembered for its stupidity and malice for which it was constructed.  We need to stick with what works and has worked.  Not what only gives power to the most insecure and unintelligent among us, the modern progressives. 

Rich Hoffman

Click to buy The Gunfighter’s Guide to Business

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