Profit Incentives and Social Welfare

One of the most profound fallacies of Western Capitalism is the notion that firms and industries can via market competition self regulate themselves. In his ‘Wealth of Nations’, and perhaps without full recognition of all of it’s dimensions, Adam Smith assumed stated fallacy in 1776, and shortly was proved wrong. It is fact that the industrial revolution that transpired in Western Europe in the 1800s after the penning of Wealth of Nations was laced with strife between owners of capital, workers, and governments. Some of the events were good, some not so good.

While it relates to a man who was so caught up with ruling the world, a man who eventually crashed and burned, during the winter of 1806–07, Napoleon Bonaparte, Emperor of France (after the revolution no less), loaned manufacturers in France 6,000,000 francs at a maximum interest rate of 2% so they would not have to lay off workers. One wonders why Napoleon, imbued with such wisdom, would rather go fighting on the battlefield so he could rule over all of Europe. With Russia so far off, and having conquered everyone else but Britain, what exactly was Napoleon after still? The decision to invade Russia in reality was Napoleon’s Waterloo. When your military strength is reduced to 100,000 soldiers from a height of 600,000, remaining invincible on the battlefield eminently is difficult.