Adam Smith for the win once again

There are those who think that the mere existence of billionaires is, as the cool kids say these days, problematic. There are those who say that it doesn’t matter very much. We’re in that second camp:

The three-day wedding itself — which begins on Friday evening with the traditional Hindu ceremony, followed by the shubh aashirwad or blessings ceremony on Saturday, and a reception on Sunday — would make an extravagant maharajah blush. While the cost of the months-long wedding celebrations has not been confirmed, analysts have estimated that they may have cost up to 50 billion rupees (£462 million). This would still represent a small fraction of Ambani’s net worth of $123 billion (£94 billion), according to Forbes.

An extravagant display indeed. And yet, as Britannica has Adam Smith saying:

….that the self-seeking rich are often “led by an invisible hand…without knowing it, without intending it, [to] advance the interest of the society.”

The point being made is not that someone having $94 billion is either good or bad, this is a comment upon a different part of the action. Those self-seeking rich, through their extravagant display, are moving £462 million from their pockets to the pockets of all those others supplying that wedding.

That initial argument is that billionaires should not have so much. They now have less than they started with and others now have more. That’s that very initial argument - that the Ambanis should have less, others more. So, it’s happening - good, eh?

This mention of “invisible hand” in Theory of Moral Sentiments is not saying that wealth, billionaires, are good. Nor that free markets are the very tops, the Colisseum, the Louvre Museum. Rather, just the obvious note that rich people spend their money which means that other people end up with it.

Which, you know, seems obvious despite all the vitriol directed at the idea.

Tim Worstall