Wednesday, February 25, 2009

A Philosopher Pontificates in Ignorance

Steve Gimbel, a philosopher at Gettysburg College writes Philosopher’s Playground Blog,(‘One Part Sandbox, One Part Soapbox: An on-going game of intellectual tag concerning ethics, science, politics, and all topics philosophical’), HERE:

But we can layer onto rationality the question of morality. Even Adam Smith, the father of Capitalism, wrote his classic Theory of Sentiments to argue that enlightened self-interest which guides the invisible hand of the marketplace is insufficient for a good human life, one must also have what he termed "sympathy," what we call empathy. Human ethical behavior must smooth the rough workings of the marketplace. We see this after natural disasters when price gauging is a both a crime and a dastardly undertaken, that is, it is deemed wrong to sell something at market price.”

Adam Smith did not write Moral Sentiments to “argue that enlightened self-interest which guides the invisible hand of the marketplace is insufficient for a good human life”.

He didn’t even write in Wealth Of Nations about ‘an invisible hand’ guiding “the marketplace”. His use of the metaphor had nothing to with markets in either book (where it is mentioned only once in each book).

Steve Gimbel should pause, reach for a copy of either (preferably both) and read each chapter (there is only two!; one in each book) on how Smith used the popular 18th-century metaphor of an invisible hand. One both occasions it had nothing to say about how markets work.

After that exercise, he could usefully read my paper, ‘Adam Smith and the Invisible Hand: from metaphor to myth’. 2008 (downloadable from the Home Page of Lost Legacy in red). Then and only then should he pontificate on Smith’s use of The Metaphor.

Odd in a way: I would have thought that doing the above as a minimum would be what a philosopher (not the least particular about the meaning of words in all the disciplines taught in universities and colleges) would do before making such fallacious assertions.



Blogger Steve Gimbel said...

Yeah, the history is sloppy, but it's a blog post, dude. The point of that post was not a detailed explication of Smith -- yes, the invisible hand metaphor is used in three distinct fashions throughout Smith's writings... -- rather, it was used to frame a modern, and to my mind, interesting question.

On the one hand, you have the Smith of "The Wealth of Nations" who gets turned into a superhero by Friedmanites in their worship of market forces and the notion of a market price is given meaning through rules based on humans as rational self-interested agents.

On the other hand, you have the Smith of the "Theory of Sentiments" who is nothing like the neo-social Darwinians who worship him, but rather someone who sees empathy as integral to proper human interaction. The question is how this Smith would address the question of a fair price.

My "pontificating" answer was a resolute, "dunno, what do you think?" As far as ignorance, I open claim it. That, in fact, is the entire point of the post. I want to know what other people think is meant by the phrase "fair price" in a moral sense, not just what you would be willing to pay because I might be perfectly willing to do something immoral to gain something I want.

So, what do you think? Is there such thing as a fair price? It can't be equivalent to market price because of cases like price gauging, but then what else is it?

2:31 am  
Blogger Gavin Kennedy said...

Hi Steve
Thanks for your explanation.
I am not sure that standards of accuracy should be abandoned becuase it is a 'blog post'.

The fact that certain people - 'Friedmanites' and 'neo-social Darwinians' - have misused Adam Smith is no reason to adopt their views as being representative of Smith's works, or for you to make wrong assertions about what Smith wrote in his books.

There is nothing, of course, to stop you writing whatever you write, not to stop me commenting on what you write when you place your works in the public domain.

The meaning of a 'fair price' depends on what you believe should be charged for something, bearing in mind that ina free society, what you might judge to be fair as a 'buyer' (the cheaper the price the more left over in your income to buy other things, or save) and fair as a seller (the higher the price, the more income you have as a seller to buy other things, or save).

If there is an extreme shortage of a good, you can sell the good at a low fair price, quickly exhaust the available supply so that everybody behind you in the queue gets nothing; or you can sell dear and those with the money will get the scarce product, and those who don't want to product at that price will do without.

You have to decide which circumstance is to apply. That becomes a matter of opinion, for which nobody has a 'correct' answer.

Negotiation by voluntary bargaining is probably a 'better' system than rationing, or state management. That's my view but need not be yours.

Empathy is compatible with bargaining, as is greed. If people do not get what they want, they also react. Some people steal; some people withdraw from producing what they cannot get a price to cover their costs.

6:08 pm  

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