Let loose invisible hand of self-interest

Bob Jack, North Las Vegas

Thursday, June 9, 2011 | 2:04 a.m.

With the debt ceiling looming, Congress and the Obama administration are laboring to reach a deal on reducing federal expenditures. There is much debate over the best way to cut back on expenditures, with Republicans proposing to slash more than $6 trillion across a multiyear period under the Ryan plan. Rep. Paul Ryan’s budget proposal would literally dump the existing Medicare program, opting instead to use a voucher system to be phased in later. No existing Medicare recipients would be affected. This is a most controversial proposal, which the Democrats oppose, and one that may prove to be very unpopular with the American public.

What none of the members of Congress or the Obama administration appear to be counting on is help from Adam Smith, the father of capitalism, who attributed great power to the “invisible hand of self-interest” in leading to that which is best for society. Americans could stand all the help they can get in cleaning up the fiscal disaster that many would blame on an unchecked and unregulated financial and banking system that ran wildly out of control.

Nevertheless, the pinnacle of American economic greatness has for more than 200 years been rescued by the market principles set forth in Smith’s 1776 book “The Wealth of Nations,” in which the foundation for market capitalism and free enterprise was expressed with great intelligence and wisdom. In our frenzied attempts to reach a consensus on these matters, let’s not forget that there is an invisible hand of self-interest that, if allowed to pursue its greatness, may just be the formula that will work.