Tuesday, September 15, 2009

A Wild Goose Chase; Another Disappointment

In another debate elsewhere on the invisible hand in Adam Smith, which I am engaged in lightly, a contributor identified not three uses by Smith of the popular 18th-century metaphor, but four.

That sent me to the library to search out the source of the 4th use. When examined, I find the claim is in History of Political Economy in January 1990, nearly 20 years ago.

I was surprised by the revelation of a fourth invisible hand in Adam Smith that I had missed, but my surprise soon became wonder – how did I miss it? - which, however, was soon dampened when I located and read it. The article, by Syed Ahmad, at the time of the Department of Economics at McMaster University, Hamilton, Canada, boldly titled “Adam Smith’s four invisible hands” (HOPE, 22:1 (137-44).

It discusses the three well-known instances, somewhat inadequately in my view, and achieves the four count by asserting that the reference to ‘an invisible hand’ in Moral Sentiments has two distinct meanings, adding a fourth meaning to the original three. Yes, I agree the claim is close to tentative in the extreme, but, to be fair, if Syed’s reasoning had worked he would have made a major discovery. Unfortunately, it doesn’t and he didn’t.

Syed asserts that the first invisible hand appears in Moral Sentiments in the guise of the “size of the landlord’s stomach” (139). You can read the quotation in full at: TMS IV.ii.10: 184-85. I must ask why does the physical limits of a human stomach – and all other stomachs in nature - need “an invisible hand”?

Syed adds the comment: “Without this limitation ‘all the thousands’ would have perished through his selfishness” (139). But the stomach’s limit is physical, not psychological. Moreover, if the landlords' stomach was without limits, so would every other human’s stomach be without limits too – the problem of starvation would then be exacerbated without limit.

Syed notes correctly that the “selfishness of the landlord is constrained for human survival”, but this has nothing to do with the invisible hand. He also accepts that “it was not man’s prudence or reasonableness or any other mental attitude which prevents catastrophe; it is the physical limitation of his stomach.

But wait. Syed introduces the ‘second’ invisible hand ‘in the form of the residual selfishness of the landlord”. He notes that the size of the stomach prevents the landlord from ‘eating all the food he has” but “he could still let the rest go to waste” (a view implied by W. D. Grammp (2000. 'What did Adam Smith means by the invisible hand?' Journal of Political Economy, 108: 3, 441-65)in his weird account of the invisible hand). Syed calls this a “positive role” for “selfishness”.

He joins this muddle to Bernard Mandeville’s Private vices, publick benefits” (“Whilst Luxury/ employ’s a Million of the Poor”). This sidesteps Smith’s concerns with the “thousands whom they employ” on their land producing the acres of food for consumption, before we take up the the issue of the landlord’s consumption of the luxuries supplied by the town’s artisans and producers of foreign imports.

Like the physical limitations of the stomach – an attribute of all humans long before the first landlords appeared from the agricultural ‘revolution’ 8-11,000 years ago – the absolute, inescapable necessity of feeding the labourers (and their families) who prepared the land, sowed the seeds from last season’s harvest, tended the crops (and the farm animals), and harvested and stored the products of the land is fully explainable without an invisible hand metaphor. If the labourers received nothing from a season’s harvest, they would starve and, if it was a general rule across all of society, who would undertake the labourers’ roles in the following spring?

Syed describes the limited stomach’s of the landlords as the first ‘invisible hand’ and the second role of distributing a share of the harvest to the farm labourers, the second invisible hand. Both roles are spurious as examples of an invisible hand explanation. In both examples, the parties to these transactions had no choice but to do what they did; there was no role for an invisible hand to lead them to do what they had to do anyway.

The only meaning that Smith could have meant was the singular role of the landlords in doing what they did as an example of unintentional outcomes, despite their delusions of greatness as the owners of their great estates and the employers of the thousands, who tended their fields and their domestic luxuries, plus, as trade between the country and the town (and foreign towns too) grew, their supply to landlords effective employed the skilled artisans and merchants who supplied luxury items (fine clothes, jewels, gold and silver plate, tapestries, and furniture).

Syed Ahmad did not discover a fourth invisible hand, and the two he elaborated upon in his article were contrived and, therefore, spurious.

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