You know Adam Smith for his "invisible hand," the mysterious force that steers the selfish economic decisions of individuals toward a result that leaves us all better off. It’s been a hugely influential idea, one that during the last few decades of the 20th century began to take on the trappings of a universal truth.
Lately, though, the invisible hand has been getting slapped. The selfish economic decisions of home buyers, mortgage brokers, investment bankers and institutional investors over the past decade clearly did not leave us all better off. Did Smith have it wrong
No, Smith did not have it wrong. It’s just that some of his self-proclaimed disciples have given us a terribly incomplete picture of what he believed. The man himself used the phrase invisible hand only three times: once in the famous passage from The Wealth of Nations that everybody cites; once in his other big book, The Theory of Moral Sentiments; and once in a posthumously published history of astronomy (in which he was talking about "the invisible hand of Jupiter"--the god, not the planet). For Smith, the invisible hand was but one of an array of interesting social and economic forces worth thinking about.
Why did the invisible, hand emerge as the one idea from Smith’s work that everybody remembers Mainly because it’s so simple and powerful. If the invisible hand of the market really can be relied on at all times and in all places to deliver the most prosperous and just society possible, then we’d be idiots not to get out of the way and let it work its magic. Plus, the supply-meets- demand straightforwardness of the invisible-hand metaphor lends itself to mathematical treatment, and math is the language in which economists communicate with one another.
Hardly anything else in Smith’s work is nearly that simple or consistent. Consider The Theory of Moral Sentiments, his long-neglected other masterpiece, published 17 years before The Wealth of Nations, in 1759. I recently cracked open a new 250th-anniversary edition, complete with a lucid introduction by economist Amartya Sen, in hopes that it would make clearer how we ought to organize our economy.
Fat chance. Most of the book is an account of how we decide whether behavior is good or not. In Smith’s telling, the most important factor is our sympathy for one another." "To restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature," he writes. But he goes on to say that "the commands and laws of the Deity" (he seems to be referring to the Ten Commandments) are crucial guides to conduct too. Then, in what seems to be a strange detour from those earthly and divine parameters, he argues that the invisible hand ensures that the selfish and sometimes profligate spending habits of the rich tend to promote the public good.
There are similar whiplash moments in The Wealth of Nations. The dominant theme running through the book is that self-interest and free, competitive markets can be powerful forces for prosperity and for good. But Smith also calls for regulation of interest rates and laws to protect workers from their employers. He argues that the corporation, the dominant form of economic organization in today’s world, is an abomination.
The point here isn’t that Smith was right in every last one of his prescriptions and proscriptions. He was an 18th century Scottish scholar, not an all-knowing being. Many of his apparent self-contradictions are just that--contradictions that don’t make a lot of sense.
But Smith was also onto something that many free-market fans who pledge allegiance to him miss. The world is a complicated place. Markets don’t exist free of societies and governments and regulators and customs and moral sentiments; they are entwined. Also, while markets often deliver wondrous results, an outcome is not by definition good simply because the market delivers it. Some other standards have to be engaged.
Applying Smith’s teachings to the modern world, then, is a much more complex and doubtful endeavor than it’s usually made out to be. He certainly wouldn’t have been opposed to every government intervention in the market. On financial reform, it’s easy to imagine Smith supporting the creation of a Consumer Financial Protection Agency and crackdowns on giant financial institutions. He might have also favored the just-passed health care reform bill, at least the part that requires states to set up exchanges to ensure retail competition for health insurance. Then again, he might not have. Asking "What would Adam Smith say" is a lot easier than conclusively answering it. It is pretty clear, though, that he wouldn’t just shout, "Don’t interfere with the invisible hand!" and leave it at that.

The majority of the country’s top universities have introduced schemes to give preferential treatment to pupils from poorly performing comprehensives. They range from lower A-level offers to reserving places for them. Supporters of "handicapping" argue that it gives recognition to bright pupils who have been inadequately taught and promotes social mobility. Opponents, however, believe some schemes crudely discriminate against private and grammar school pupils because of political pressure.
Out of the 39 institutions that are members of the Russell Group and 1994 Group of research universities, at least 30 have introduced schemes that give some form of extra recognition to whole categories of applicants from comprehensives or from deprived areas. Gillian Low, head of the Lady Eleanor Holles School in Hampton, west London, and president of the Girls’ Schools association, said: "We are absolutely in favour of social mobility. The issue is how that is achieved, how talented people from disadvantaged backgrounds are identified. Our objection is to anything that is generic by type of school as it does not address the individual pupil, it potentially discriminates against them. "
Low added: "It doesn’t, for example, take account of the person at the low-performing school who is having private tuition--or the fact that many of our pupils are on full bursary support. It’s too crude a tool. " Programmes include one at Manchester introduced for 2011 entry that gives priority consideration to applicants from underachieving schools and deprived areas. Durham is using a similar system.
Bristol, Exeter, Nottingham and some departments at Edinburgh advise admissions tutors to consider lowering the standard offer for a course if a successful applicant is from an underperforming school. Research at Bristol released earlier this year justified this approach on the grounds that students who had attended poor schools outperformed those with the same grades who had been better educated.
This autumn, a group of 12 universities led by Newcastle and including Birmingham, Essex, Leeds and York will pilot a scheme for about 300 promising candidates nominated by their comprehensives. They will be given coaching and in most cases will be entitled to offers up to two grades lower than applicants going to university through standard routes. Cambridge gives extra points to candidates from schools with poor average GCSE grades when short listing candidates, while Oxford gives priority to similar applicants when deciding who to interview. Neither university lowers its grade offers for places on this basis, however.
Pressure on universities to increase their numbers of state school pupils was expected to ease with the election of the Conservative-led coalition Instead, however, the government, under pressure from the Liberal Democrats, has pursued a similar approach. This weekend, David Willetts, the universities minister, said: "These are the kinds of initiatives, transparent, based on robust evidence, looking at applicants’ potential, which are a good way of promoting social mobility. "
Steve Smith, vice-chancellor of Exeter and president of Universities UK, said: "Universities make strenuous efforts to seek out potential by looking at a number of factors when selecting students, but they cannot admit people who are not applying. "This is why schemes that provide varied offers and seek out potential, as well as supporting applicants in preparing for higher education, can be so important. "
Only a handful of universities, including the London School of Economics, University College London, Warwick and Queen Mary, London, have held out against favoring whole categories of applicants although all four give extra individual recognition to candidates who have succeeded against the odds. Birmingham, Southampton and the medical school at King’s College London, set aside places for students at comprehensives in their regions. The Access to Birmingham scheme, which this year will admit 193 students--4% of the intake--gives candidate lower offers on condition they complete courses to prepare them for higher education.

If the past couple of weeks are any indication, mainstream media may be primed for a comeback. In July, The Washington Post published its massive "Top Secret America" series, painstakingly detailing the growth of the US intelligence community after 9/11. When it ran, New York Observer editor Kyle Pope crowed (on Twitter, ironically), "Show me the bloggers who could have done this !" The Los Angeles Times recently mobilized a community to action when it broke the news that top city officials in Bell, Caiif. , one of the poorest cities in Los Angeles county, were raking in annual salaries ranging from $100,000 to $ 800,000.
Clearly, if mainstream media is an aging fighter against the ropes, it still has a few punches left to throw. But such make-a-difference journalism requires lots of time and money, something most news outlets don’t have. And it runs counter to the frantic pace of modern, Web-driven newsrooms. So for journalism to survive in the Digital Age, it needs to be simultaneously fast-paced and substantive, snarky and thought-provoking. Or, at the very least, it must find some middle ground where illuminating investigative pieces and Mel Gibson telephone call mash-ups can coexist.
The 24/7 newsroom has become an intractable part of the media landscape, and the Web is the primary battleground news outlets have to win in order to stay competitive. That has forced journalists to become much more mindful of online traffic, which can sap morale. As a recent New York Times piece put it.- "Young journalists who once dreamed of trotting the globe in pursuit of a story are instead shackled to their computers, where they try to eke out a fresh thought or be first to report anything that will impress Google algorithms and draw readers their way. " But the Washington Post and Los Angeles Times pieces demonstrate that, regardless of whether the stories appear in print or online, reporters still need the time and space to be effective watchdogs--to track down sources and slog through financial disclosures, and court documents that often fill the better part of a journalist’s working life.
Right out of college, I spent several years working for a mid-size regional daily newspaper. I covered endless city and county government meetings, reported on crime and education, and learned that reporters should always carry a sensible pair of shoes in their car in case they are sent into the mountains to cover a wildfire. In my relatively short time in the newspaper trenches, I developed a profound respect for the people who do the decidedly unglamorous work of keeping government honest for little pay and even less job security.
The Pew Research Center’s State of the News Media 2010 report found that, while reported journalism is contracting and commentary and analysis is growing, 99 percent of the links on blogs circle back to the mainstream press. (Just four outlets--BBC, CNN, The New York Times, and The Washington Post--account for 80 percent of all links. ) The report concludes that new media are largely filled with debate that is dependent on the shrinking base of reporting coming from old media. The same report included polling data showing that 72 percent of Americans feel that most news sources are biased in their coverage, feel overwhelmed rather than informed by the amount of news and information they’re taking in.
I’m not advocating a return to some supposed halcyon period before the Internet. I’m still a product of my generation. I like the alacrity of the Web and admire its ability to connect people around the world, and to aggregate and spread information at lightning speed. It s warming glow gives me probably 90 percent of the news I consume, and I enjoy commenting on articles that friends post on Facebook.
But I hope it won’t make me sound prematurely aged to say that sometimes the Internet exhausts me. That I’m troubled by how frequently I find myself sucked into the blogging vortex of endless linkage, circuitous kvetching, and petty media infighting. I often emerge from these binges hours later, bleary-eyed and less informed than when I started.
The media need to be quick and smart. They should tell us something new, rather than simply recycle outrage. Some of the watchdog role has been shouldered by nonprofit outfits like the Pulitzer Prize-winning ProPublica--which has recruited a number of top investigative reporters with a mission of producing journalism in the public interest--as well as smaller nonprofit ventures springing up around the country.
Many old-school media outlets are moving, toward a primarily Web-focused model. The "Top Secret America" series may be the best example to date of a deeply reported piece that probably could not have been achieved without the resources and support of a major news operation, but which is also packaged appealingly for the Web. All of this seems to indicate that, despite reported journalism’s painful contractions, a few small inroads are being made toward creating a new model for news. Solid reporting and thoughtful analysis shouldn’t be the sole province of a dying medium.

There is no more fashionable answer to woes of the global recession than "green jobs. " Some state leaders are pinning their hopes for future growth and new jobs on creating clean-technology industries, like wind and solar power, or recycling saw grass as fuel. It all sounds like the ultimate win-win deal: beat the worst recession in decades and save the planet from global warming, all in one spending plan. So who cares how much it costs And since the financial crisis and recession began, governments, environmental nonprofits, and even labor unions have been busy spinning out reports on just how many new jobs might be created from these new industries--estimates that range from the thousands to the millions.
The problem is that history doesn’t bear out the optimism. As a new study from McKinsey consulting points out, clean energy is less like old manufacturing industries that required a lot of workers than it is like new manufacturing and service industries that don’t. The best parallel is the semiconductor industry, which was expected to create a boom in high-paid high-tech jobs but today employs mainly robots. Clean-technology workers now make up only 0. 6 percent of the American workforce. The McKinsey study, which examined how countries should compete in the post-crisis world, figures that clean energy won’t command much more of the total job market in the years ahead. "The bottom line is that these ’clean’ industries are too small to create the millions of jobs that are needed right away," says James Manylka, a director at the McKinsey Global Institute.
They might not create those jobs--hut they could help other industries do just that. Here, too, the story of the computer chip is instructive. Today the big chip makers employ only 0.4 percent of the total American workforce, down from a peak of 0.6 percent in 2000. But they did create a lot of jobs, indirectly, by making other industries more efficient: throughout the 1990s, American companies saw massive gains in labor productivity and efficiency from new technologies incorporating the semiconductor. Companies in retail, manufacturing, and many other areas got faster and stronger, and millions of new jobs were created.
McKinsey and others say that the same could be true today if governments focus not on building a "green economy," but on greening every part of the economy using cutting-edge green products and services. That’s where policies like U. S. efforts to promote corn-based ethanol, and giant German subsidies for the solar industry fall down. In both cases the state is creating bloated, unproductive sectors, with jobs that are not likely to last. A better start would be encouraging business and consumers to do the basics, such is improve building insulation and replace obsolete heating and cooling equipment. In places like California, 30 percent of the summer energy load comes from air conditioning, which has prompted government to offer low-interest loans to consumers to replace old units with more efficient ones. The energy efficiency is an indirect job creator, just as IT productivity had been, not only because of the cost savings but also because of the new disposable income that is created. The stimulus effect of not driving is particularly impressive. "If you can get people out of cars, or at least get them to drive less, you can typically save between $1,000 and $ 8,000 per household per year," says Lisa Margonelli at the New America Foundation.
Indeed, energy and efficiency savings have been behind the major green efforts of the world’s biggest corporations, like Walmart, which remains the world’s biggest retailer and added 22,000 jobs in the U.S. alone in 2009. In 2008, when oil hit $148 a barrel, Walmart insisted that its top 1,000 suppliers in China retool their factories and their products, cutting back on excess packaging to make shipping cheaper. It’s no accident that Walmart, a company that looks for savings wherever it can find them, is one of the only American firms that continued growing robustly throughout the recession.
The policy implications of it all are clear: stop betting government money on particular green technologies that may or may not pan out, and start thinking more broadly. As McKinsey makes clear, countries don’t become more competitive by tweaking their "mix" of industries but by outperforming in each individual sector. Green thinking can be a part of that. The U. S. could conceivably export much more to Europe, for example, if America’s environmental standards for products were higher. Taking care of the environment at the broadest levels is often portrayed as a political red herring that will undercut competitiveness in the global economy. In fact, the future of growth and job creation may depend on it.

Questions 16 to 20 are based on the following talk.

Questions 11 to 15 are based on the following interview.

If the past couple of weeks are any indication, mainstream media may be primed for a comeback. In July, The Washington Post published its massive "Top Secret America" series, painstakingly detailing the growth of the US intelligence community after 9/11. When it ran, New York Observer editor Kyle Pope crowed (on Twitter, ironically), "Show me the bloggers who could have done this !" The Los Angeles Times recently mobilized a community to action when it broke the news that top city officials in Bell, Caiif. , one of the poorest cities in Los Angeles county, were raking in annual salaries ranging from $100,000 to $ 800,000.
Clearly, if mainstream media is an aging fighter against the ropes, it still has a few punches left to throw. But such make-a-difference journalism requires lots of time and money, something most news outlets don’t have. And it runs counter to the frantic pace of modern, Web-driven newsrooms. So for journalism to survive in the Digital Age, it needs to be simultaneously fast-paced and substantive, snarky and thought-provoking. Or, at the very least, it must find some middle ground where illuminating investigative pieces and Mel Gibson telephone call mash-ups can coexist.
The 24/7 newsroom has become an intractable part of the media landscape, and the Web is the primary battleground news outlets have to win in order to stay competitive. That has forced journalists to become much more mindful of online traffic, which can sap morale. As a recent New York Times piece put it.- "Young journalists who once dreamed of trotting the globe in pursuit of a story are instead shackled to their computers, where they try to eke out a fresh thought or be first to report anything that will impress Google algorithms and draw readers their way. " But the Washington Post and Los Angeles Times pieces demonstrate that, regardless of whether the stories appear in print or online, reporters still need the time and space to be effective watchdogs--to track down sources and slog through financial disclosures, and court documents that often fill the better part of a journalist’s working life.
Right out of college, I spent several years working for a mid-size regional daily newspaper. I covered endless city and county government meetings, reported on crime and education, and learned that reporters should always carry a sensible pair of shoes in their car in case they are sent into the mountains to cover a wildfire. In my relatively short time in the newspaper trenches, I developed a profound respect for the people who do the decidedly unglamorous work of keeping government honest for little pay and even less job security.
The Pew Research Center’s State of the News Media 2010 report found that, while reported journalism is contracting and commentary and analysis is growing, 99 percent of the links on blogs circle back to the mainstream press. (Just four outlets--BBC, CNN, The New York Times, and The Washington Post--account for 80 percent of all links. ) The report concludes that new media are largely filled with debate that is dependent on the shrinking base of reporting coming from old media. The same report included polling data showing that 72 percent of Americans feel that most news sources are biased in their coverage, feel overwhelmed rather than informed by the amount of news and information they’re taking in.
I’m not advocating a return to some supposed halcyon period before the Internet. I’m still a product of my generation. I like the alacrity of the Web and admire its ability to connect people around the world, and to aggregate and spread information at lightning speed. It s warming glow gives me probably 90 percent of the news I consume, and I enjoy commenting on articles that friends post on Facebook.
But I hope it won’t make me sound prematurely aged to say that sometimes the Internet exhausts me. That I’m troubled by how frequently I find myself sucked into the blogging vortex of endless linkage, circuitous kvetching, and petty media infighting. I often emerge from these binges hours later, bleary-eyed and less informed than when I started.
The media need to be quick and smart. They should tell us something new, rather than simply recycle outrage. Some of the watchdog role has been shouldered by nonprofit outfits like the Pulitzer Prize-winning ProPublica--which has recruited a number of top investigative reporters with a mission of producing journalism in the public interest--as well as smaller nonprofit ventures springing up around the country.
Many old-school media outlets are moving, toward a primarily Web-focused model. The "Top Secret America" series may be the best example to date of a deeply reported piece that probably could not have been achieved without the resources and support of a major news operation, but which is also packaged appealingly for the Web. All of this seems to indicate that, despite reported journalism’s painful contractions, a few small inroads are being made toward creating a new model for news. Solid reporting and thoughtful analysis shouldn’t be the sole province of a dying medium.