the fed dole: hartford insurance, come on down!

Spotlighting Wall Street's Welfare companies

I've been loving the Occupy Wall Street group. And their newly published newspaper, the Occupy Wall Street Journal. So far it is only four pages. I'd suggest that the paper feature spotlights - easily assembled bits of new analysis about the entities on Wall Street that the Federal Reserve helped out, in a friendly way, with its 16 tril. in emergency loans.

So, without further ado, let's go on to one of them: Hartford Financial Services, which is of course more famous as Hartford Insurance. The Hartford took a heady flyer in the 00s, and alas, due to its CDS biz with AIG and its role in the sub-prime market biz, it was gonna have to go bankrupt when AIG had to go bankrupt. But luckily, Uncle Sam arrived! According to the Inspector General’s report on TARP:

“The Hartford Financial Services Group, Inc, which received 3.4 billion, reported that it invested 3.2 billion (94 percent) in high quality short-term investments or money market funds. This allowed the company to issue additional insurance policies. Hartford also provided $195 million (6 percent) in TARP funds to Federal Trust Bank…”

Now you might think, gee, isn’t it just sweet of Uncle Sam to loan out money to businesses who can then “invest’ them in short term money markets, i.e. put a couple billion down on a crap table? Why it is sweet. In fact, perhaps you should write your congressman suggesting that Uncle Sam loan you 3.4 billion dollars to invest in short term money markets. You can assure Uncle that you, too, will do something ultra virtuous with the profits.

But then, you might not have the pull Hartford has. Let’s look at their stellar CEOs!

The CEO in 2008, when Hartford needed just that pinch of help from Uncle, was a guy named Ramani Ayer. Now, you might think a CEO who steered the company near bankruptcy would be suffering at least a bit of a salary cut. You’d be right! According to Forbes, Ayer went from being the 76th on the list of CEO salaries all the way down to 151st. His total compensation was only 9.8 million, and that plummeted the figure for his five year compensation down to a mere 77.86 million. A man can barely buy a good cheeseburger (and a small town in Maine) for such a paltry sum.

Well, Ayer had generally a good run. The usual bumlicking profiles were issued about him in the 00s. He had the touch! He superbly managed the company - and how about that stock price. All the way up to when everything blew up on him. When he received criticism like this:

“The company and its stock price have taken such a battering that a retiree of The Hartford asked Ayer at the annual meeting when he would resign.

"Congratulations on driving The Hartford into the ground," Justin Winthrop, 88, of West Hartford, told Ayer. "You've destroyed the image, reputation and the name of The Hartford. When may we expect your resignation?"

Winthrop said he has been a stockholder since the 1940s, retired from The Hartford in 1982 after more than 30 years, and had been a secretary of the company — an officer level below vice president. He told Ayer if he didn't step down, the company's directors, who have "had their heads in the sand," should consider firing him.

Ayer, in response at the shareholder meeting, said nothing about resigning but said he understood it has been a traumatic time for shareholders and that he and the company are trying hard to restore its image.

In the interview, he added, "I feel we are in a very good place now with all the actions we have taken, the strategic thinking we have done. I really for now am focused on making sure we just continue that work."

In Connecticut, where the company had 12,500 employees at year-end, Ayer said the life and annuity operations "will certainly be impacted" by layoffs — the variable annuity business is being scaled back — and he expects property-casualty operations "would not be impacted anywhere near the same extent."

Now, to be fair, in response to the crisis and getting a little allowance from the Fed, Ayer’s compensation, as we pointed out, did go way down. And in due course he was canned, and the new CEO came in with an inflation adjusted salary – times are tough, and we can’t blame the new CEO, Liam McGee, for taking a bit more – he was given a mere 4. 8 million in cash and 7.26 million in stock.

He is not, of course, the only millionaire working in the upper management of Hartford. The Courier ran a nice article about the upper management compensation of Hartford last year, that should make us all proud that we helped these guys out:

"By any measure, 2010 was a significant turn-around year for The Hartford," said company spokeswoman Shannon Lapierre. "We reported $1.7 billion in net income versus a net loss of more than $888 million in the prior year."

Chief Financial Officer Christopher Swift received $2.1 million last year in salary, incentive pay, change in pension value, stocks vested and other compensation. Additionally, he received stock awards valued at $1.79 million when they were granted which will vest at a later date.

Swift, a former AIG life insurance executive, took over as chief financial officer in February 2010.

Lizabeth Zlatkus, the former chief financial officer and current chief risk officer, received $4.89 million in salary, incentive pay, change in pension value, stocks vested and other compensation. She also received stock awards valued at $2.67 million when they were granted and will vest later.

David Levenson, president of the company's wealth management division, was compensated $3.2 million, not including $1.3 million in stock awards that vest later.

Gregory McGreevey, chief investment officer and president of Hartford Investment Management Co., was compensated $2.55 million, not including $1.2 million in stock awards that vest later.

Andrew Pinkes, executive vice president of claims and head of commercial markets, was compensated $2.26 million, not including $782,617 in stock awards that vest later.

Former Chief Operating Officer John Walters received $5.37 million in salary, stocks vested, severance and other compensation, which doesn't include $1.77 million in stock awards that vest later. Walters left in July to "pursue other opportunities."

I particularly liked the fact that Hartford could cough up so many bucks for Walters when, apparently, he only worked at the company half a year. Good job! I'm sure that the money bought very valuable intangible good will from Walters, whereever his other opportunities lead him.

Among the comments to thsi Hartford Courier article, we especially like this one:

“Been with this company since coming out of college about 10 yrs ago. I do have a degree and several certifications. Upper mgmt lowered most employess tiers (demotion) because they wanted to restructure our career paths. Pay is low for someone who starts at the bottom and a typical annual increase is 2.5% of your salary. Work here only out of desperation.”

Well, times change, and Hartford changes with the times, too! After the Fed bailouts, Congress, pretending to care, passed a package of regulatory changes that especially impacted on systematically important financial players. Now, one definition of that is a player who is an insurance company who gets 3.2 billion dollars to ‘invest’ in the short term money markets from Uncle Sam. But apparently, it is no longer going to do that stuff, no sir! According to a recent NYT article, with which I’ll end this spotlight:

“A few big insurers have sheared off businesses that would land them under the Federal Reserve’s thumb.
In May, the Hartford Financial Services Group sold off a thrift it bought in 2009 to secure billions of dollars of bailout funds designated for banks. In February, the Allstate Corporation sold a similar bank that had made it eligible for aid, though it decided not to accept the cash.
Now, both Hartford and Allstate are arguing that they should not be deemed systemically important — a claim raising eyebrows in financial policymaking circles.
“You would want to be particularly attentive to firms that got themselves into trouble during the crisis, needed government assistance, and now that they are subject to real supervision at the federal level, are hoping to escape additional regulation,” said Michael S. Barr, who recently stepped down as the assistant Treasury secretary for financial institutions to return to the University of Michigan law school.
A Hartford Financial spokesman, David Snowden, said the sale was part of a broader strategy of “focusing our resources on our core business and insurance operations.” Allstate, in a statement, said its decision was partly due to concerns that the new financial legislation would impose rules that the company “did not consider beneficial given the limited role of the Allstate Bank in our overall strategic plans.”

be realistic, demand the impossible

Another note for Occupy Wall Street.
One of the problems with the rhetoric of populism is that it has a tendency to lead one to the individual malfactor - which has its uses, but often masks the larger structure that normalized malfeasance. And so it is with the charge that the bankers are greedy. Well, they are. However, it has two bad side effects: it can be used to trivialize the protest, and it displaces the real focus, which should be on the banks themselves. I don't really care whether individual bankers are greedy - I care that the system in which they operate doesn't constrain their greed, as it should. Thus, greed becomes not a personal trait, but a standard operating procedure incorporated impersonally into the way business has to be conducted.

Long ago, at the very beginning of the capitalist mentality, Mandeville wrote about the fact that private vices can be public virtues. Greed and envy can very well motivate moneymaking as well as the sense of justice among individual players. But their effects are secondary to the systems in which these passions are allowed to operate. Or, in less muckity muck wording, greed and envy can operate for the general good, as long as constraints are in place to keep them from becoming perverse incentives. It is the general good that counts, and that fills the charge of greed with a political content.

It is the systematic will to power of the investor class - however motivated - that needs to be counter-acted. It is impossible to predict whether a protest movement will actually generate a real and successful antidote to our general ills. Most protests do fail. Some succeed. I doubt that the roots of success or failure can be predicted outside of the particular situation of the protest. But one of the things we can do is use the protest and the attention space it takes up to propose the most radical changes to the system possible.
There as a slogan in 1968, be realistic, demand the impossible. I think that slogan may once again come into play in the current situation.

Defund Wall Street!

The Occupy Wall Street people are definitely making me feel high on solidarity this morning. The press keeps telling us that the aims of the group are ‘uncertain’ or ‘unrealistic’ – and this is what one would expect from a press that has been supine for the last decade, and still has not lifted a finger to examine the 16 trillion dollars in ‘emergency loans’ that the Fed made available to the banks in the last three years. The GAO report has still not even been mentioned in the NYT, as far as I can tell.

Uncertain and unrealistic are the hallmarks of the great task that lies ahead. The model, here, should be the French revolution, when the whole country made their complaints known in a survey that had quasi-governmental approval. Now we have bloggers instead of peasants and clerks. Here’s one bloggers suggestion:
Defund Wall Street.

In the 70s and 80s, we took the first step towards the domination by the financial sector in this country. We took it via a bi-partisan program to get the populace to invest in the stock market. The government made such investments, by IRA and latter the 401k, attractive by giving them special tax status.

As Jim Mosquera in ‘Escaping Oz’ puts it: “At the last major stock market bottom in 1982, American households were not that interested in owning stocks. The growth of the stock industry was aided by the creation of IRA accounts (1974) and 401(k) plans (1980). IRA accounts came during the stock market bottom of 1974 and 401k plans arrived just before the major stock market bottom of 1982. Stock ownership comprised barely 12 percent of all household financial assets in 1982, where not 2/3 of investors have half their financial assets in mutual funds. Stocks litter IRA and 401k accounts, the most precious of saving vehicles. Fifty-four percent (54%) of households own stock mutual funds and 37% own individual stocks in their IRA accounts.”

Stock mutual funds currently amount to some 5 trillion dollars in assets.

It is time to reverse the flow. This can happen in two easy steps. Step one is to make available government savings vehicles that guarantee a 3 percent return per year, as has been outlined by Teresa Ghilarducci in her book, When I’m sixty four – the plot against pensions… The great experiment in getting the population to invest in its own immiseration has finally reached the logical point of no return. Unfortunately, that logical point is also an existential trap – millions cannot afford to cut off Wall Street. When the trillions went into the banks, the snake oil merchants (the Larry Summers type) would fan out to assure all and sundry that in saving the banks, we were saving ourselves. In reality, ‘banks’ named all the wealthy investor class, for that is the sum total of what our political elite represents. However, it is also true that, as housing values crashed, the mass of middle americans had to hope that their mutual funds survived. Thus, the protest against the grotesque misallocation of government funds was muted. And as the welfare was disguised as “loans” [a disguise that wore perilously thin as the interest on loans went down in many cases to .01 percent], the pretense was maintained that the government wasn’t doing what it was doing: putting out the dole for the wealthiest.

It is necessary to de-fund the whole machinery that makes it impossible for the wage class to actually find a politics that reflects its advantage. And the way to do that is simple. The same government that loaned its 16 trillion could, well, do it again to a much larger spectrum of people – the vast majority of the U.S. population. We could, in effect, liquidate the loans people have – from student loans to credit card debt to mortgages – by a policy using a government modality like the post office (which one had a bank capability) and simply make loans at much lower interest available to all citizens. We could use the interest from those loans to capitalize a government savings program that would be tax free, and phase in taxes on the other savings programs which, besides being designed to sluice money to wall street, have not served their purpose – they have not provided anything like the advantage conferred by the old system of pensions.

Defund Wall Street. Shrink em all, and let God sort em out.

instructions pour gens d'affaires 1

The double change brought about under capitalism – the creation of wage labor under the regime of industrialization and the introduction of a revamped and quantitatively huge sphere of circulation under the regime of consumerism – is one that particularly effects the place of the clerk. The fictional commodities of land and labor, and the international trade in everyday household and psychoactive commodities – sugar, chocolate, alcohol, coffee - that underlay the great transformation required a new system of description and calculation that opened up a new vocational form – and into that form came the clerk. When Marx speaks of the way the bourgeois economists invert the processes that constitute the nature of the commodity so that it seems like the commodity comes first and constitutes the unsurpassable horizon of the world, what he is really talking about is the codification of the economy from the point of view of its managers in the sphere of circulation – for them, gazing at the world through their maps, spread sheets, instructions, and sales, the exterior world really does seem to be a price-driven market system, a great dualism between demand and supply.

In 1770, a Bordeaux lawyer named Joseph Rousselle published a how to book on management: “Instructions pour les seigneurs et leurs gens d'affaires”. The book divides into what the seigneur should look for in a manager – a gen d’affair – and what the manager should do. Among the latter, listed in the table of contents, is: “state of the domestics, properties and officials on the lands; archives of the seigneur and the state of his property; debts and charges; general knowledge of the lands; archives of the lands; active and passive transfers concerning the fiefs”; etc.
Rousselle begins the book by sounding a note of urgency: “Prudence demands that they [the seigneurs] found their principle existence on their patrimonial properties; yet the greater part of these properties are so badly guided, so badly administered, there reigns such abuses, that the Seigneurs lose considerably, be it by infidelity, be it by the incapacity of their agents.” (3)
What Rousselle is complaining about here has a long reach: we see this among the reformers in England and the novelists in Russia in the 19th century. Eventually, this story is about the end of the ancien regime – but as Thomas Mann puts it in Doctor Faustus, that regime didn’t wholly end until 1917 – until World War I.

In Rousselle’s time, certain among the corps of gens d’affaires were philosophes – including perhaps the most influential, Rousseau.

...
One can too easily make it seem that production and circulation are spheres that do not intersect because they are spheres that must be separated analytically and have different structures. In reality, these spheres interpenetrate: from the factory to the fashion show, production and circulation are interlocking parts of one whole. It is that interpenetration which gives to class its everyday value as something performed in routines – while everyday class differences are then registered in income differentials, and social positioning. In effect, one of the narratives Marx unfolds, in the Grundrisse and then in Capital, concerns the production of different forms of rationality that correspond to class strategies that dominate in the sphere of circulation and in the sphere of production.

There’s a striking passage in Plutarch’s essay on the Fortune of the Romans in which he considers the meaning of the fact that the Romans built a temple to Fortune centuries before they built a temple to any of the virtues. In a sense, this is a metaphor for the whole pre-capitalist economy in Europe from the time of the Romans to the early modern age. All the virtues – the province of the philosopher, the scientist, the clerk – were subordinate to the warrior class, who saw in Fortune the rationality of the system of war. However, the warriors couldn’t actually live on war – they lived on treasure, they lived on the slavery of those planted on the lands they conquered or were rewarded. Fortune, which provided that final margin which balanced the battle, sealed the alliance of the warrior caste and the Gods. The slave – the man who ‘owed’ his life to his conqueror, redeeming that debt, as David Graeber shows in his Debt: the first 5,000 years, by dedicating his life to enriching the man who spared it. Not, of course, that the slave volunteered for this fate, but along with physically direct coercion there came a morale of defeat.

It would be a huge mistake to equate the slave economy of the Ancients and the economy of the Middle Ages. The Christians, for good reason, fought against Fortune, and it wasn’t simply because Fortune was diabolic – it was because Fortune pitted itself, at the deepest level, against the virtues.

our debt problem

In important ways, the D.C. drone drone drone about deficits and debt is right. Unfortunately, they have targeted the wrong debt. It isn't the government's debt that is the problem: it is the people's debt.

Unfortunately, the government could have chosen to do something radical about debt in 2009 and it didn't. No, I don't mean that we could have balanced the budget in D.C. - we could have helped balance the budget in the U.S.

Instead of loaning, at 1 percent, 16 trillion dollars to the American people, which would have effectively re-liquidated every American household, this is what the Federal Reserve - which is the government - did: it chose to loan that 16 trillion to the banks in the 2008-2010 period. What was the beneficial effect of this policy? It saved the banks. What does that mean? The government loans money to banks at 1 percent or below, so the banks can loan money to businesses, people and the government at from 2 percent to 14 percent (for you lucky credit card holders).
What does this mean? It means that the investment class was given a free ride, while the vast majority of people - for whom the economy exists - were given an elbow in the mouth.
Here is what debt politics should be about: our debts. A combination of policies to radically crush private debt while creating a large enough deficit to counter-act the private sector's collapse of demand for labor - for instance, by simply hiring every unemployed person - would have taken us out of the Great Recession by now.

As I have pointed out, will point out, and will probably mumble on my deathbed, the policies and politics of our epoch are determined by the curious fact that we have left the wealth of the wealthy out of the equation. We pretend that we can't afford to do things that we could do in the fifties or sixties, when we were much poorer. We actually can. However, to do so we would cut deeply into the wealth of the wealthiest, who are the investor class who massively benefited by the Government's welfare for banks scheme, and who would not benefit from liquidated the debt bondage in which the mass of Americans are held - quite the contrary.

Let's not end on an exasperated note. Let's end as one ends a love letter. This love letter is to the Occupy Wall Street people. You are right. Think big. Operating in the interests of the majority, you will either win now or win later, but you will win. The elites, the pluto-parties that monopolize our politics at the moment, are not so different from the horrific and racist parties that dominated the political scene in America in 1900. Don't worry that we are too senile as a nation, have filled our veins too full of shit and our heads too full of trivia, to live. That old nation will die, in fact is in its death throes, but a new one will arise.

the boytoy "left"

I have read with amazement the news about the speeches at the Labour conference that is going on this week. Labour has discovered its niche in the political sphere, apparently: support for ‘deficit reduction”, i.e. mass employment and wage deflation, combined with a strong on crime stance. Thus, the silent majority may huddle in their homes waiting for the layoff slip or the round of unaffordable bills, but at least they can have the satisfaction of seeing the noisy unemployed person in the house next door put out in the street.

This is what the supposed “Left” has come to.

Clearly, the Blairist poobahs that have reformed Labour have no time for the economic sillyness of their forefathers. Someone like Bevin, surveying the current scene, would have summed up the deficit debate very simply: we will cure deficits by curing unemployment and stimulating higher wages. In the interim, we will consider nationalizing the bond markets if they can’t do a better job of pricing the risk in bonds. And in the future, we will consider whether the idea of a private bond market for state finance isn’t altogether archaic.

It bears repeating, as nobody repeats it: bond traders work for financial institutions, banks, mutual funds, hedge funds, etc. Financial institutions were, worldwide, floated by 16 trillion dollars in emergency funds by the Federal Reserve. Instead of loaning sixteen trillion dollars to the working class – to those making below 100 thousand dollars – in the U.S., through easily created modalities (the Post Office, anyone), the Fed chose to continue a system that can’t clear. Let’s say this again: cant clear. It can’t clear because clearing would cause mutual collapse on all sides. The EU and various European governments, on a lesser scale, also propped up the financial system, which then turns around and loans to the European governments through buying bonds, which are then, through the auctioning system, repriced – in effect, the interest rates the bonds pay are increased. What we have here is obviously a vicious circle of borrowing, A “loaning” at .05 percent to B, which then loans at 2 percent to A - which exists only partly to do what the state and private financial enterprise are supposed to do – guard the well being of the population and supply capital for private enterprises and credit for consumers – and majorly to insure the fortunes of the richest. Another way of saying this is: we are paying the rich to sit on our faces.

Labour’s boytoys want us to be outraged because – as the rich sit on our faces, somebody with dreadlocks or a dyed Mohawk has moved into the apartment down the street!

Trivia, timewasting, and a plutocratic ideology in which the leaders of a party formerly representing the workers has drowned themselves has now become the U.K’s opposition party. Really.

Stamp out the parties.

“The sweetest sleep and fairest-boding dreams
That ever ent'red in a drowsy head
Have I since your departure had, my lords.
Methought their souls whose bodies Richard murder'd
Came to my tent and cried on victory.
I promise you my soul is very jocund
In the remembrance of so fair a dream.”

the battle and the market: geneology of unintended consequences, two

The battle and the market

“Might one, then … bring on the Romans once more as witnesses in behalf of Fortune, on the ground that they assigned more to Fortune than to Virtue? At least, it was only recently and after many years that Scipio Numantinus built a shrine of Virtue in Rome; elater Marcellus23 built what is called the Temple of Virtue and Honour;24 and Aemilius Scaurus,25 who lived in the time of the Cimbrian Wars, built the shrine of Mens so﷓called, which might be considered a Temple of Reason. For at this time rhetoric, sophistry, and argumentation had already found their way into the City; and people were beginning to magnify such pursuits. But even to this day they have no shrine of Wisdom or Prudence or Magnanimity or Constancy or Moderation. But of Fortune there are splendid and ancient shrines, all but coeval with the first foundations of the City.” – Plutarch, On the Fortune of the Romans

In an essay exploring the concept of Fortuna in the Latin world, Nicole Hequet-Noti demonstrates the parallel between the growth of the cult of the goddess and the growth of the military aspect of Rome. In other words, as Rome became a great generator of battles, it also became a great worshipper of that mysterious quality associated with being lucky. As Hecquet-Noti puts it, paraphrasing Cicero’s praise of Sylla: ‘That gift, originally exterior to man, is incorporated in order to become an immanent force in this man, a good properly belonging to him, conferring a particular force superior to that of others…” 18

This double development should be remembered when considering the place of Fortune in Plutarch’s Moralia and biographical writings – an unconsidered source for what became articulated, in the Enlightenment, as the programmatic concept of unintended consequences, except that somewhere in this line of transmission – which might be thought of as the modern moment, co-ordinate with the de-legitimation of glory as the reason of the State - the market is substituted for the battle.

Plutarch’s moralia and his history seem have been divided among different sorts of scholars, who commonly don’t take the time to connect the two text types systematically. What Plutarch meant by his parallel lives, though, was more than just the telling of a history through the lives of great men. Rather, biography here serves as a sort of laboratory in which, through different situations, we see the sentiments or virtues – which are, abstractly, atomic and unified – express themselves differently. This is the doxic force of tyche, of chance.

Now of course in the synthesis of luck and reason that ‘builds’ the market system (as well as the war system), virtue – Plutarchian practical reason – is not wholly powerless before luck. But luck has on its side sheer incident; and sheer incident is hard to treat neutrally. Sheer incident is the screen upon which we project the uncanny, in the Freudian sense. Plutarch tells a story to illustrate how the force of fortune can impose upon virtue – a lesson that is surely underneath the discovery of ‘unintended consequences’ in the Enlightenment:

” Caesar's son, who was the first to be styled Augustus, and who ruled for fifty-four years, ewhen he was sending forth his grandson to war, did he not pray to the goddess to bestow upon the young man the courage of Scipio, the popularity of Pompey, and his own Fortune,38 thus recording Fortune as the creator of himself, quite as though he were inscribing the artist's name on a great monument?a For it was Fortune that imposed him upon Cicero, Lepidus, Pansa, Hirtius, and Mark Antony, and by their displays of valour, their deeds, victories, fleets, wars, armies, raised him on high to be the first of Roman citizens; and she cast down these men, through whom he had mounted, and left him to rule alone. p343It was, in fact, for him that Cicero governed the State, that Lepidus commanded armies, that Pansa conquered, that Hirtius fell, that Antony played the wanton. fFor I reckon even Cleopatra as a part of Caesar's Fortune, on whom, as on a reef, even so great a commander as Antony was wrecked and crushed that Caesar might rule alone. The tale39 is told of Caesar and Antony that, when there was much familiarity and intimacy between them, they often devoted their leisure to a game of ball or dice or even to fights of pet birds, such as quails or cocks; and Antony always retired from the field defeated. It is further related40 that one of his friends, who prided himself on his knowledge of divination, was often wont to speak freely to him and admonish him, 320"Sir, what business have you with this youth? Avoid him! Your repute is greater, you are older, you govern more men, you have fought in wars, you excel in experience; but your Guardian Spirit fears this man's Spirit. Your Fortune is mighty by herself, but abases herself before his. Unless you keep far away from him, your Fortune will depart and go over to him!”
The uncanny has a collective effect that we should not underestimate. Marx’s idea that the political economists had endowed things with a power that they did not have – that, in other words, by avoiding examining human power, political economists were the blind promoters of ideology – plucks out this uncanny moment that binds Roman Fortune and the Invisible Hand of the Scots. Plutarch’s trope concerning Augustus is at least distantly echoed in Smith’s famous passage about the Invisible Hand:
“As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”
In the Plutarch passage, the work of virtue in those who went before Augustus resulted – in spite of themselves – in adding to Augustus’ glory. The movement, here, is from the virtuous to the fortunate. In Smith, it is an opposite movement – the fortunate make their fortune, in spite of their concentration on selfish gainseeking ends, only by making the larger fortune of others, i.e. the nation itself.