The Hidden Elbow

Jeremy Williams shares an interesting analogy in his blog today derived from Michael Jacobs’ book The Green Economy.  The notion of ‘the hidden hand’  was Adam Smith’s metaphor for the way that market forces guide economic life, usually interpreted as for the general good. Extending the metaphor: every hand is guided by an elbow and elbows are often the cause of unintended clumsiness, as well as sometimes being used to gain an advantage over one’s rivals! Economic external costs (externalities) that are not factored into the ‘story’ of the ‘hidden hand’ can be seen as an invisible but damaging ‘hidden elbow’.  This helps to explain why there is still almost universal acceptance of measures of economic growth (such as the envy of China’s recently announced 7% per annum goal = doubling current GNP in  the next 10 years) that fail to factor in costs to the environment and debts passed on to future generations.

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