Invisible Hands Analysis

1515 Words 7 Pages
‘Invisible Hands’ provides a narrative of the reality faced by individuals in the Global South within the context of a neoliberal economic paradigm. The concept of the invisible hand refers to the logic of the free-market, espoused by Adam Smith, which posits that there is an invisible hand in a free market framework that ensures the most effective and socially optimal allocation of resources. Despite the widespread acceptance of this economic theory, the reality faced by individuals especially in developing countries, does not necessarily reflect a fair allocation of resources. The book ‘Invisible Hands’ discusses this departure between free market theory and reality, through a vivid narrative of the issues faced by people in the Global South. …show more content…
In each of the fifteen cases discussed, the narratives highlight the role played by both institutions in creating and exacerbating socio-economic problems. For instance, the case study example of garment factories in the Teuhacan Valley in Mexico demonstrates the role played by multinational corporations is primarily explained by the profit motive. That is, the persistence of unsafe working environment is a cost cutting mechanism because rents are low while profits remain comparably high. Similarly, the case study of Hanshal shows that small scale farmers were driven out of business because of the agribusiness corporation’s profit motive. The traditional practice of recycling seeds reduced the market share for Bt seeds, which would have meant low sales and profits. In both instances, the economic imperatives of multinational corporations facilitate the chain of events leading to catastrophic and heartbreaking outcomes for the individuals …show more content…
The fifteen primary accounts of individuals affected by free market tenets demonstrates evidence of human rights violations, environmental degradation, low wages and unsafe working conditions. The book provides evidence of the role played by multinational corporations and local business interests in facilitating these outcomes. The premise that governments should share some of the responsibility is not entirely accurate because of the nature on the global economic system and the power dynamics between Global South governments on the one hand, and multinational corporations and international economic institutions on the other. The reader is left with the impression that multinational corporations are mostly to blame for the plight of many individuals illustrated in the narratives, especially because of the relatively low bargaining power wielded by governments and the presence of labour oriented civil rights organizations in many developing countries. Although the book does not explicitly offer solutions to the problems identified and discussed, one can infer tentative solutions from the narratives

Related Documents