By host Tom Ashbrook:

The father of modern economics, Adam Smith, wrote more than 200 years ago about the all-powerful “invisible hand” of the market. It was tough, he said, but good for all.

The late Nobel Prize-winning economist Milton Friedman was the great champion of the invisible hand and free markets. Governments, he said, should just let markets do their work.

Economist Duncan Foley, in his new book “Adam’s Fallacy,” says wait a minute. This is free market theology, he says, and it’s producing a value-free society, an unequal society, an immoral society.

This hour On Point: the author of “Adam’s Fallacy” meets the defenders of Adam Smith.

“Ultimately, material productivity comes because people are working hard. It doesn’t come because they are following a particular value system or correctly playing the market.” Duncan K. Foley

“I am not against markets.” Duncan K. Foley

“We tend to neglect the fact that markets exist in a context created by other institutions.” Duncan K. Foley

“Adam Smith also wrote a book on morals.” Allan Meltzer

“To make a whole person, we don’t have to do it all in the economics classroom.” Allan Meltzer

Guests:

Duncan K. Foley, Professor of Economics at the New School for Social Research and author of “Adam’s Fallacy: A Guide to Economic Theology.”;
Allan Meltzer, Professor of Political Economy and Public Policy at Carnegie Mellon University. He was an advisor to Ronald Reagan and served briefly in the US Treasury under JFK.