Friday, March 19, 2010

A Clear Understanding of Adam Smith in Huffington Post

Klunk posed in Can.politics an article written by David Sloan Wilson HERE

The original article is from Huffington Post HERE

The Invisible Hand is Dead. Long Live (Smart) Regulation

The invisible hand metaphor originates with Adam Smith in The Wealth of 
Nations (1776). Bernard Mandeville made a similar point with his Fable of 
the Bees (1705), which fancifully describes human society as a wondrously 
productive bee hive, even though each bee is as selfish as can be.

Smith was critical of Mandeville and presented a more nuanced view of human 
nature in his Theory of Moral Sentiments (1759), but modern economic and 
political discourse is not about nuance. Rational choice theory takes the 
invisible hand metaphor literally by trying to explain the length and 
breadth of human behavior on the basis of individual utility maximization, 
which is fancy talk for the narrow pursuit of self-interest. For the general 
public, unfettered competition has been turned into a moral virtue and 
"regulation" has become a sin.

…. For those who wish to learn more about how economics is going beyond rational choice theory, I recommend a book titled Moral Sentiments and Material Interests: The Foundations of Cooperation in Economic Life (2006), edited by Herbert Gintis, Samuel Bowles, Robert T. Boyd, and Ernst Fehr. Gintis, Bowles, and Fehr are eminent economists while Boyd is an eminent evolutionary anthropologist, illustrating how integrative the new economic theory has become. I have also written an essay titled "The New Fable of the Bees" that explores the theme of this blog in more detail.”

There is much more as well. David Sloan Wilson (professor of biology and anthropology at Binghamton University, part of the State University of New York) is pretty-well informed about Adam Smith and his actual writings (and Bernard Mandeville’s too; plus recent work by behavioural economsts) and I highly recommend that you follow the link. It’s a short lesson in Adam Smith’s legacy.

If I have a criticism, it is that David Sloan Wilson accepts the modern invention of the invisible hand by default but criticizes it on its phony merits. But what is a small blemish in a fine article?

NB. The Huffington Post appears to be pretty consistent recently in its appreciation of Adam Smith from Kirkcaldy, compared to the usual North American version of Adam Smith, ‘alive and well and living in Chicago’ (George Stigler, 1976).

Long may it continue!

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Blogger Micky said...


I am going through a self-teaching class of classical economics. I actually pulled the syllabus off the Oxford website and just decided to go with it. It has Adam Smith, David Ricardo, and Karl Marx as the people to read.

I am reading wealth of nations now. They recommend books 1 -4. What is your impression? I am going very slow detailing notes and just finishing the first book after a long week.

Do the rest of the books move faster or are they as nuanced as the first book which has lots of theory?

Do you believe all the books are neccesary to gain a very good understanding?

Thank you

6:59 pm  

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