Tuesday, August 14, 2007

A Producer In Search of a Idea for a Programme

On NY Public Radio, a producer got carried away with an idea for a radio show (from an intern?) (here):
In 1776, writer Adam Smith came up with a theory: when lots of buyers and lots of sellers get together, the resulting "market price" that emerges through all that buying and selling is in fact the work of an "invisible hand." He meant god. We think he really meant "emergence." This segment, we go looking for invisible hands in a variety of places: at an ox-guessing contest in Plymoth, England, in the roiling mass of traders in the "pit" of the New York Securities and Exchange, and also in the secret recipe that makes Google such a great search engine. Author Steven Johnson explains the art of Google-bombing. Producer Ben Rubin presents the bottom-up organization of stock trading in sound.”

The premise of the radio show falls at the first hurdle.

Adam Smith did not link buyers and sellers to markets or their prices, analysed in Book I. He used, once only in a million words, 'an invisible hand' as a metaphor to the risk aversion of merchants in regard to risking their capital in foreign trade (Book IV). This had nothing to with markets.

That is a notion originating in the 20th century near 59th Street, Chicago, and had nothing to do with his book, 'An Inquiry into the Nature and Causes of the Wealth of Nations', 1776


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