Monday, November 30, 2009

A Malevolent Invisible Hand?

Bryan Caplan, regular and brilliant columinist at the Econ Library of Economics and Liberty reports on “The Malevolent Invisible Hand” (HERE)

Lately my colleague Dan Klein has presented new evidence that the "invisible hand" was more central to Adam Smith's thought that most scholars now believe. Perhaps that's why this passage from Will and Ariel Durant jumped out at me. It's a discussion of the ultramontanist philosopher de Maistre:

"War is divine, since it is a law of the world" - permitted by God through all history. Wild animals obey this rule. "Periodically an exterminating angels comes and clears away thousands of them." "Humanity can be considered as a tree that an invisible hand is continually pruning, often to its benefit... A great deal of bloodshed is often connected with high population." [emphasis mine]

I was curious about what the Durants left out in the ellipses. It makes de Maistre sound worse! "In truth the tree may perish if the trunk is cut or if the tree is overpruned; but who knows the limits of the human tree?" [emphasis original] I can almost hear him cackling with maniacal glee. Who knew the invisible hand metaphor would have such broad appeal


I replied (in brief):

“Hi Bryan

I am curious as to what exactly you mean in this sentence:
"Lately my colleague Dan Klein has presented new evidence that the "invisible hand" was more central to Adam Smith's thought that most scholars now believe."
Is it "that" or "than"?

"Most [modern] scholars" certainly believe that Smith meant a great deal when he used the metaphor of "an invisible hand", which is in itself a strange story, given its relatively recent (post 1950s) invention.

I would be cheered if Dan Klein had found something to contradict the few scholars (myself included) who do not believe that Smith meant by his use of the metaphor what "most scholars" on the contrary now believe, if you get my drift.

Dan has to be congratulated for his detective work, to which I shall respond shortly after I have completed pressing and unavoidable domestic obligations.

Gavin Kennedy”



Blogger entech said...

just picked up a copy of Freaconomics in a second hand bookshop, could be a fun read.
in the opening explanatory remarks I read,"...interviewing many economists and found that they often spoke English as if it were a fourth or fifth language." If this is true perhaps it goes a long way towards explaining some modern interpretations of the English used by Smith over two hundred years ago.

5:51 a.m.  
Blogger Gavin Kennedy said...

Interesting hypothesis.

However, it may not be needed as there is a perfectly (well, almost) explanation for the emergence of the new version of the "invisible hand" in the mid-20th century (well, largely in the 20th century - one of two writers in the late 19th century came close to mentioning it in similar vein, though laregly with a theological meaning).

It fitted ideological enthusiasm for markets over the large-scale suppression of markets in the new Soviety republic - and in shorter-lived National Socialist Germany in the 30s - in favour state control of production, distribution and consumption.

The emergence of successful attempts at 'proving' albeit mathematical models of general equilibrium in the 1940s, also providd a ready enthusiasm for the 'invisible hand' guiding everything (not just the risk- averse merchants of interest to Adam Smith in Book IV Wealth Of Nations).

Most, but not all, progenitors of the modern 'invisible hand' spoke excellent English (please, no jokes about American-English).

They knew what they were doing, so no excuses...


7:33 p.m.  
Blogger entech said...

I must confess to being a little facetious.

Being born in England (with a large Cornish and Scottish family input) It goes against the grain but I must admit that although British and American usage has changed since the the colonial days it is still the same language and that some American usage is more (historically) correct. I think Dubnet was referring to the tendency towards "in group speech" or jargon. The problem seems to be in starting with meaning and reading to justify it, rather than deriving meaning from the text.


10:44 p.m.  

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