In The Wealth of Nations (1776) Adam Smith told us that competition can lead to the best possible outcome for everyone. He believed that by rationally pursuing their own selfish ends producers and merchants, in the pursuit of profit, could enhance both production and quality in the market place. This much is true.
Unfortunately, many of the people who like to focus on this aspect of Adam Smith completely ignore - or never learn - what he had to say about maintaining the laws of justice (equality of opportunity is key here), the impact of unrestrained market greed (not good), and why we really needed to keep government away from the market (it's not what free market conservatives claim). Rather than developing these arguments here, I'll selfishly (and rationally) say read my book for more on this.
Still, the governing dynamics of John Nash help us understand why the assumptions modern conservatives make about competition and rationality in the modern era are incomplete, and need revision ...
- Mark
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