Friday, June 01, 2007

A Tale of Two Stories - one a gem, the other, er, not

Gerard Jackson writing in Free Market News Network - Pompano Beach, FL, USA – provides a lovely gem of information (at least for me) and an awful example of a misattribution to Adam Smith on the regular subject of ‘an invisible hand’. It’s in an article entitled: ‘The Ignorance and Sheer Bigotry of Lefty Journalists

First the awful bit:

But Barker's sneering response is to attack Smith's invisible hand, caustically referring to it as a "Utopian theory".

[To which Gerard responds:]

Smith's metaphor was based on observation, Mr Barker, not fantasy. It epitomises the market process that coordinates the hundreds of millions of decisions that are made in the market place each day; bringing together consistent plans while signalling the failure of others; coordinating an infinite amount of ever changing discrete and incomplete pieces of information conveying ideas about expectations, technical knowledge, changing tastes; using prices to transmit knowledge of shortages, surpluses, expected profits and losses, and to allocate factors to their most valued use.”

I am unlikely to agree with “Barker’s” leftist politics reported in Gerard’s post, but his description of the invisible hand as ‘utopian’ is closer to the being correct than Gerard’s response (which is a myth).

Smith’s use of the metaphor was not from an ‘observation’: how does anybody see and invisible hand?(!) It had nothing to do with markets in Smith’s case. Check it out: Wealth Of Nations Book IV.ii.9: p 456.

Now markets do operate via signals, ‘coordinating hundreds of millions of decisions’, etc., but Smith did not use the metaphor in this connection. That is a myth. It emanated from Chicago economics department, the ‘Chicago Adam Smith’, but not, alas, the Adam Smith born in Kirkcaldy, Scotland.

However, now the gem:

Gerard informs us that: ‘It seems that the brilliant metaphor the invisible hand originated with the English author Joseph Granville in his The Vanity of Docmatising 1661.

Now that’s news. I am now searching for confirmation.

I’d ask Gerard Jackson, but though I have put him on first name terms, he may not respond so kindly. If anybody else knows, please let me in on the details. Thank you.


Blogger BSF said...

I think it might be Joseph Glanvill, The Vanity of Dogmatising.


1:36 am  
Blogger Gavin Kennedy said...

Thanks Brian

Gerard printed as shown.

I have found it on Amazon and have ordered a modern reprint.

I am giving a paper at History of Economics Society at GMU a week Sunday on the 'myth of the invisible hand'. Should be interested in reading it, let me know and I shall send you one.


8:32 am  

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