David Warsh Is Unusually Problematic
One of my personal highlights at the History of Economics Society conference, at George Mason University 8-12 June, was to meet with David Warsh, retired top-flight US journalist and knowledgeable voyeur-extraordinaire of the people in economics and their ideas, and he Blogs at Economic Principals.
David was headline speaker at a plenary event and a very good one too. He was also a discussant at a session I attended earlier on 9th June, when Professor Emeritus, Warren Samuels, Michigan State University, spoke on the ‘Use of the Concept of the Invisible Hand and the Function it Serves’. I shall come back to Professor Samuel’s paper.
Today, I visited Economics Principals and found an article by David on ‘The Daily Diary of the Impartial Spectator Weighs a Buy-out’ about the proposed Murdoch take-over of the Wall Street Journal, about which I have no data.
In the article I found the following:
“In 1759, [Adam Smith] laid out a complicated moral philosophy based on what he asserted was the nearly universal human capacity for feeling sympathy for others. "How selfish soever man may be supposed," stated the first sentence of The Theory of Moral Sentiments, "there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it." But it wasn't do-good altruism, as opposed to self-interest, that made things work. Beneficence, wrote Smith, is the ornament, not the foundation of human affairs. "Justice...is the main pillar that upholds the whole edifice." The book earned him a university professorship.’
Comment
Journalists are sticklers for facts and armies of ‘fact checkers’ fall over themselves checking their facts before publication. Smith wrote Moral Sentiments sometime between 1753-59. It was published in 1759.
Outstanding as Moral Sentiments was as a book, it played no part in his election to either professorial post, given that he was elected to the Chair of Logic at Glasgow University in January 1751, and moved to the Chair of Moral Philosophy in April 1752, five years before his book was published.
He may have included some aspects of Moral Sentiments in his earlier Edinburgh Lectures (1748-51), but beyond a smattering of ideas from Francis Hutcheson it seems unlikely that the intensely developed ideas in Moral Sentiments were in an impressive format so early. Certainly there is no extant documentation or letters to suggest differently. University Senates, then and today, are seldom impressed with promised dissertations by aspirant academics.
David continues:
“Sixteen years later, though, Smith published An Inquiry into the Nature and Causes of the Wealth of Nations and that was the book which made him famous. It also turned him from a moral philosopher into an economist. This time Smith employed another metaphor, the Invisible Hand, to describe the spontaneous order that interdependent markets tend produce: a pattern of coordination that looks as though it must have produced by some the design of some individual or group, but that instead arises from a process that can't be described as having had the outcome "in mind." Today we call this mechanism the "price system." David Ricardo and the next generation began the intricate work of excavating and refining Smith's intuition into the modern high-tech concept of "general equilibrium," meaning a pervasive interdependence produced by the tendency of factors to move from low rates of return to high, forever tending to counterbalance.”
Comment
With all my genuine respect for David’s knowledge of the history of economics, I find this a particularly striking set of assertions to which I reluctantly attach the label of ‘highly problematic’. I discussed the invisible hand in my paper to the HES conference, “Adam Smith’s invisible hand: from metaphor to myth”, and I think I thoroughly discredited the attributions that David (and many, too many, US trained economists) award to this particular metaphor.
David asserts that Smith used the invisible hand “to describe the spontaneous order that interdependent markets tend produce: a pattern of coordination that looks as though it must have produced by some the design of some individual or group, but that instead arises from a process that can't be described as having had the outcome ‘in mind’."
I shall not rehearse again the evidence of Smith’s use of the metaphor (only once in Moral Sentiments and once on Wealth Of Nations), but I can state with conviction that on both occasions his use of it had nothing to do with ‘interdependent markets’. (His reference to ‘the invisible hand of Jupiter’ in his essay, known as the ‘History of Astronomy’, c. 1744-54, is about religious superstition.)
I shall further assert that ‘Ricardo and the next generation’ may have done quite a lot of things, but they most certainly did not ‘refine Smith’s intuition’ about the metaphor of the invisible hand, which ‘today we call this mechanism the ‘price system’." The metaphor and the ‘price system’ were in quite different parts of Wealth Of Nations (and its prior use in Moral Sentiments was about feudal lords maintianing their serfs and retainers at least at subsistence level). Smith’s price system is discussed in Books I and II of Wealth Of Nations and the metaphor of ‘an invisible hand’ appears in Book IV, during his critique of mercantile political economy. It is nothing more than a metaphor of the ‘whole is the sum of its parts’. For details see my paper.
David ends:
“With the triumph of the Invisible Hand, the Impartial Spectator promptly receded into the outer twilight of the economists' discourse. It's a measure of the extent to which their field dominates a certain kind of public conversation that today the term sounds quite foreign to our ears.”
Comment
As above, David’s time-line for his assertion is completely problematical. Let us examine it:
‘With the triumph of the Invisible Hand…’. Er, what triumph, when, and in which century? It certainly did not triumph when he was alive; and after he died it was hardly mentioned (once by Dugald Stewart, his first biographer, I believe, but the reference is not to hand – I am France and my library is in Edinburgh).
Professor Warren Samuels, while presenting his paper on the ‘Use of the Concept of the Invisible Hand and the Function it Serves’, he reported that he could not find a single reference to the ‘invisible hand’ among economists in the 19th century (he invited the audience to send him any they knew about). This suggests a remarkable ‘triumph for the invisible hand’ in that nobody has noticed it!
Now, David Warsh attended this session and he listened attentively to what Professor Samuels had to say, including the gist of his paper that the ‘invisible hand’ in its modern form (but not Smith’s) was in effect ‘re-invented’ in the mid-20th century by neoclassical economists, mainly influential in Chicago, and spread rapidly in textbooks all over the world, and acts as a ‘balm’, and even as a semi-blessing of general equilibrium theory.
The mid-20th century is a long time after the loss of influence or prominence of the ‘impartial spectator’, which actually occurred from the early 19th century, though Moral Sentiments remained in print (I have several 19th century editions of it in my library) through to the 21st century.
That ‘the Impartial Spectator promptly receded into the outer twilight of the economists' discourse’ is of no greater significance than the fact that Adam Smith’s Wealth Of Nations also ‘receded into the outer twilight of the economists' discourse’. There is widespread ignorance of Smith’s political economy among modern economists; he is more often quoted than read. At seminars and in private conversation, many participants are astonished to hear even straightforward facts from Smith’s life and books. In fact, it is only a little exaggeration to say that the real world also has ‘receded into the outer twilight of the economists' discourse’.
Incidentally, and just for the record and balance, there were several references in literary English essays and novels to ‘invisible hands’ in the early 19th century, as there were to ‘invisible hands’ in classical times, and in the 16th, 17th, and 18th centuries, many of which Smith almost certainly knew about. Its association with ‘spontaneous order’ is owed to Hayek, in the 1940s; it was not something Smith suggested.
Those interested in reading my paper: ‘Adam Smith’s invisible hand: from metaphor to myth’ should send me an email to gavin [at] negweb {dot} com and I shall send an electronic copy; any comments, positive or negative, are welcome (including any additional references to uses of ‘invisible hand’ metaphor beside the ones in the paper).
David was headline speaker at a plenary event and a very good one too. He was also a discussant at a session I attended earlier on 9th June, when Professor Emeritus, Warren Samuels, Michigan State University, spoke on the ‘Use of the Concept of the Invisible Hand and the Function it Serves’. I shall come back to Professor Samuel’s paper.
Today, I visited Economics Principals and found an article by David on ‘The Daily Diary of the Impartial Spectator Weighs a Buy-out’ about the proposed Murdoch take-over of the Wall Street Journal, about which I have no data.
In the article I found the following:
“In 1759, [Adam Smith] laid out a complicated moral philosophy based on what he asserted was the nearly universal human capacity for feeling sympathy for others. "How selfish soever man may be supposed," stated the first sentence of The Theory of Moral Sentiments, "there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it." But it wasn't do-good altruism, as opposed to self-interest, that made things work. Beneficence, wrote Smith, is the ornament, not the foundation of human affairs. "Justice...is the main pillar that upholds the whole edifice." The book earned him a university professorship.’
Comment
Journalists are sticklers for facts and armies of ‘fact checkers’ fall over themselves checking their facts before publication. Smith wrote Moral Sentiments sometime between 1753-59. It was published in 1759.
Outstanding as Moral Sentiments was as a book, it played no part in his election to either professorial post, given that he was elected to the Chair of Logic at Glasgow University in January 1751, and moved to the Chair of Moral Philosophy in April 1752, five years before his book was published.
He may have included some aspects of Moral Sentiments in his earlier Edinburgh Lectures (1748-51), but beyond a smattering of ideas from Francis Hutcheson it seems unlikely that the intensely developed ideas in Moral Sentiments were in an impressive format so early. Certainly there is no extant documentation or letters to suggest differently. University Senates, then and today, are seldom impressed with promised dissertations by aspirant academics.
David continues:
“Sixteen years later, though, Smith published An Inquiry into the Nature and Causes of the Wealth of Nations and that was the book which made him famous. It also turned him from a moral philosopher into an economist. This time Smith employed another metaphor, the Invisible Hand, to describe the spontaneous order that interdependent markets tend produce: a pattern of coordination that looks as though it must have produced by some the design of some individual or group, but that instead arises from a process that can't be described as having had the outcome "in mind." Today we call this mechanism the "price system." David Ricardo and the next generation began the intricate work of excavating and refining Smith's intuition into the modern high-tech concept of "general equilibrium," meaning a pervasive interdependence produced by the tendency of factors to move from low rates of return to high, forever tending to counterbalance.”
Comment
With all my genuine respect for David’s knowledge of the history of economics, I find this a particularly striking set of assertions to which I reluctantly attach the label of ‘highly problematic’. I discussed the invisible hand in my paper to the HES conference, “Adam Smith’s invisible hand: from metaphor to myth”, and I think I thoroughly discredited the attributions that David (and many, too many, US trained economists) award to this particular metaphor.
David asserts that Smith used the invisible hand “to describe the spontaneous order that interdependent markets tend produce: a pattern of coordination that looks as though it must have produced by some the design of some individual or group, but that instead arises from a process that can't be described as having had the outcome ‘in mind’."
I shall not rehearse again the evidence of Smith’s use of the metaphor (only once in Moral Sentiments and once on Wealth Of Nations), but I can state with conviction that on both occasions his use of it had nothing to do with ‘interdependent markets’. (His reference to ‘the invisible hand of Jupiter’ in his essay, known as the ‘History of Astronomy’, c. 1744-54, is about religious superstition.)
I shall further assert that ‘Ricardo and the next generation’ may have done quite a lot of things, but they most certainly did not ‘refine Smith’s intuition’ about the metaphor of the invisible hand, which ‘today we call this mechanism the ‘price system’." The metaphor and the ‘price system’ were in quite different parts of Wealth Of Nations (and its prior use in Moral Sentiments was about feudal lords maintianing their serfs and retainers at least at subsistence level). Smith’s price system is discussed in Books I and II of Wealth Of Nations and the metaphor of ‘an invisible hand’ appears in Book IV, during his critique of mercantile political economy. It is nothing more than a metaphor of the ‘whole is the sum of its parts’. For details see my paper.
David ends:
“With the triumph of the Invisible Hand, the Impartial Spectator promptly receded into the outer twilight of the economists' discourse. It's a measure of the extent to which their field dominates a certain kind of public conversation that today the term sounds quite foreign to our ears.”
Comment
As above, David’s time-line for his assertion is completely problematical. Let us examine it:
‘With the triumph of the Invisible Hand…’. Er, what triumph, when, and in which century? It certainly did not triumph when he was alive; and after he died it was hardly mentioned (once by Dugald Stewart, his first biographer, I believe, but the reference is not to hand – I am France and my library is in Edinburgh).
Professor Warren Samuels, while presenting his paper on the ‘Use of the Concept of the Invisible Hand and the Function it Serves’, he reported that he could not find a single reference to the ‘invisible hand’ among economists in the 19th century (he invited the audience to send him any they knew about). This suggests a remarkable ‘triumph for the invisible hand’ in that nobody has noticed it!
Now, David Warsh attended this session and he listened attentively to what Professor Samuels had to say, including the gist of his paper that the ‘invisible hand’ in its modern form (but not Smith’s) was in effect ‘re-invented’ in the mid-20th century by neoclassical economists, mainly influential in Chicago, and spread rapidly in textbooks all over the world, and acts as a ‘balm’, and even as a semi-blessing of general equilibrium theory.
The mid-20th century is a long time after the loss of influence or prominence of the ‘impartial spectator’, which actually occurred from the early 19th century, though Moral Sentiments remained in print (I have several 19th century editions of it in my library) through to the 21st century.
That ‘the Impartial Spectator promptly receded into the outer twilight of the economists' discourse’ is of no greater significance than the fact that Adam Smith’s Wealth Of Nations also ‘receded into the outer twilight of the economists' discourse’. There is widespread ignorance of Smith’s political economy among modern economists; he is more often quoted than read. At seminars and in private conversation, many participants are astonished to hear even straightforward facts from Smith’s life and books. In fact, it is only a little exaggeration to say that the real world also has ‘receded into the outer twilight of the economists' discourse’.
Incidentally, and just for the record and balance, there were several references in literary English essays and novels to ‘invisible hands’ in the early 19th century, as there were to ‘invisible hands’ in classical times, and in the 16th, 17th, and 18th centuries, many of which Smith almost certainly knew about. Its association with ‘spontaneous order’ is owed to Hayek, in the 1940s; it was not something Smith suggested.
Those interested in reading my paper: ‘Adam Smith’s invisible hand: from metaphor to myth’ should send me an email to gavin [at] negweb {dot} com and I shall send an electronic copy; any comments, positive or negative, are welcome (including any additional references to uses of ‘invisible hand’ metaphor beside the ones in the paper).
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