Whose hand it it, anyway?
(Please forgive how much of this diary is repetitive and over-explanatory to anyone who knows anything about the financial crisis. I simply wrote it in such a way as to provide the foundations for my critique of the free market all in one place, rather than assuming much knowledge on the part of the reader.)
The great delusion of economic libertarians is that the optimal force to control a market is the action of the free market itself. They believe in the invisible hand, the collective action of the community, and its unerring ability to correct the excesses of the markets and restore equilibrium. The collective actions of individuals, each working in his or her own self-interest, leads to the best possible outcome for society, as society is nothing more than the sum of all these individuals who are seeking the best possible outcome for themselves.
The delusion is not in believing the invisible hand exists--of course it does. The question is what does that invisible hand represent, and what actions will it take?
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