Friday, October 16, 2009

An Early Non-Believer in the Invisible Hand


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Thirty-two years ago I reviewed a book for the Times Higher Education Supplement by John Cornwall, 1977, Modern Capitalism: its growth and transformation (Martin Robertson).

It is among my library in France and I looked it up yesterday. In its preface I found this reference to the invisible hand:

"To put the matter somewhat differently, what is downgraded in the pages that follow is the view that economic events are the outcome of some invisible hand guiding an economy through time and space in some predetermined way, with the outcome depending only upon some assumed initial conditions" (Preface, page x).

Comment
Of all the references to the metaphor of "an invisible hand" I have read lately - and believe me I have looked up and read moany more than a few (my notebook is up to page 84) - this is the only one, including a couple of self-proclaimed marxist/radical authors, that specifically rejects the use of the "invisible hand" to account for economic activity.

Some books, mainly published before 1945, of course, do not mention the invisible hand at all, my contention being that the metaphor of the "theory", "concept", "paradigm", of the invisible hand is a modern invention, attributed wrongly to Adam Smith from the post-war years, singly at first in the late 1940s (Lange, Samuelson) and then in a flood-like ubiquity (if I may allowed such a violent expression) from the early 1970s.

Thank goodness for John Cornwall, then of Dalhhousie University, to resist the early torrent of mysticism and present his analysis shorn of a metaphor that has no role in serious economic analysis.

I wonder what happened to John Cornwall.

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