Lefties Don’t Understand the Market, And They Never Did

by Christopher Chantrill

Our educated class is the class that lives furthest from the market economy.

Last week I had some fun here with the economic nonsense of our DSA kiddies. For instance, DSA Wunderkind Mamdani proposed for New York City:

Free and fast city buses
Rent freeze
Free universal child care
Public groceries
Taxing the wealthy

Today I propose that Adam Smith’s notion of the “invisible hand” is the economic equivalent of Albert Einstein’s E = mc². Because Smith changed our understanding of the world in the same way that Einstein did.

The idea that the point of prices and markets is to transmit information from and to millions of actors in the market economy and coordinate their actions is a mind-blowing human discovery. To understand why, let’s ask Grok to “describe the understanding of markets before adam smith.” Its brief summary is:

Pre-Smithian understanding typically:

Embedded exchange in moral or political order rather than treating markets as a coordinating mechanism
Viewed trade as zero-sum (between persons or nations)
Identified wealth with gold, land, or the prince’s treasure
Expected the state, church, or custom to set or correct prices
Distrusted merchants, interest, and unlimited profit-seeking

See, back in the day nobody had Any Idea. Just like our lefty friends today. But today lefties still know that:

The market should be subject to political control.
The employer makes his profit at the expense of the worker.
Wealth is the “accumulation” of riches.
Government should control rents and wages.
Businessmen, tech lords, financiers are all “oligarchs”.

What does it take for educated people to hang onto such a magical belief system? Shamans?

It all makes sense when you grasp the fact that our educated class is the class that lives furthest from the market economy. They spend their childhood in government or fancy private schools. They spend their youth in academic cloisters that carefully segregate them from the real world of the market. Then they work in academia, or in government bureaucracy, or in NGO fantasyland. Their only experience of prices is at Trader Joe’s.

The other thing to understand is that ‘twas ever thus. Except for Trader Joe’s.

Every education that ever was is education in the received wisdom, in our society’s creation myth, in the glorious tale of our ruler’s wars and victories.