In Chris Tilly’s “Shaking the Invisible Hand” Tilly delves in to disprove the claim that markets do in fact yield economic efficiency. In a combination of all of the readings, it is explained and proven that to economists, the modern theory of the free market can be viewed as an “utopian claim about the market” considering its promise to reduction in wasteful use of economic resources while unequal income distribution is prevalent. Tilly states that the invisible hand in fact preserves inequality because if someone is to start off with nothing, their participation in the free market would in no way allow both parties to be better off.
Moreover, competition leads to waste in multiple aspects, be it lower product quality, unsafe working conditions for workers, and/or unreasonable working hours forced upon employees. For that reason it is important to note that real economies don't match assumptions made in the invisible hand theory. As could be easily seen in the Ford Pinto case, excessive competition against Volkswagen led ford to manufacture a car in a short amount of time, resulting in a car catching on fire and the driver losing their life. Even when flagged by engineers in pre-production, Ford’s main focus was competing and surpassing their rival. In their manual of product objectives, otherwise known as their “green book,” the topic of safety is not mentioned even once. Employees within the company recognize that the company’s culture does not instill any concern in regards to safety of its products, but more so the metrics of how many can be sold, as represented by an anonymous comment made by a ford engineer citing that the “company is run by salesmen, not engineers.”
Another Ford engineer claims that “safety isn’t the issue, trunk space is”; as can be seen by these two accounts and other numerous accounts by Ford’s employees, the final product outcome is a result of envisioning sales, completely disregarding what’s at stake for the consumers purchasing their products. This case alone addresses one of the innumerable contradictions presented by Smith’s theory for the economy. Without regulations in place, the free market only takes profit into consideration.
All this, of course, is without the mention of large corporations that hold monopolies over their respective sectors, of which Kuttner claims the only solution to is a mixed economy. Without a doubt, those who own the means of productive are at a systemic advantage, and while both an argument and counterargument can be made about the efficiency or lack thereof that the free market holds, because the essence of liberalism is equality, capitalism does not provide a means of allowing people equal moral worth.
