Wednesday, November 14, 2007

Invisible Hand no 371


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Gavin Kennedy







Raul Ramos y Sanchez, an author, writes a Blog: Author’s Diary (here)

He joins a debate on immigration into the USA (of which I am neutral, not voting there) and includes this gem:

A look at our planet from space shows no national borders. Examine a fifty-year-old globe and it becomes apparent that sovereign boundaries are illusions that change over time. What we are seeing today is Adam Smith’s invisible hand redrawing the map of our hemisphere.”

Comment
Whatever is ‘redrawing the map of our hemisphere’ it has absolutely nothing to do with “Adam Smith’s invisible hand”.

There were no boundaries when the continent’s first migrant invaders arrived across from North Asia, or the second, third and fourth waves moved in, some of them stopping in what we call Mexico.

Native Americans came from Asia; Europeans from Europe, and the rest from all over, some voluntarily, others as slaves. The USA is a land of immigrants.

None of them were driven by invisible body parts, unless the metaphor has been given a life of its own.

In Adam Smith’s case, the metaphor was about the risk avoidance of traders preferring to invest locally than in distance sales and abroad, and specifically refers to the whole being the sum of its parts, in that each individual’s decision to invest locally to lower their risks, meant that the amount of local investment was higher, which had beneficial outcomes for the local economy.

It’s not clear what the metaphor added to Adam Smith's analysis of the process – it certainly did not make much any sense of what happened and which motivations caused it.

As a mere rhetorical flourish, he used a literary metaphor, common enough in the 17th and 18th centuries (Shapespeare used it too) to be used widely (see my paper: 'Adam Smith and the Invisible Hand', June 2007, which is available free as an electronic file from Lost Legacy), but was given a new lease of life in the 20th century by neoclassical economists and a meaning never intended by Adam Smith.

1 Comments:

Blogger Complete bio said...

Mr. Kennedy,

Methinks thou doth protest too much. Adam Smith’s invisible hand has become a widely used metaphor to describe the power of the marketplace -- not as a specific reference to the works of Adam Smith. The fact you have spotted this reference 371 times should be a clue. Do you also get your knickers in a twist when someone uses “Dickensian” or “Orwellian” as an adjective? C’mon, Gavin. Give today’s writers a break.

Raul Ramos y Sanchez

3:52 pm  

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