The Three Varied Objects of an Invisible Hand
In Resilience Science (‘coping with ecological surprise in a human dominated world’)
HERE:
Gerard Roe in Annual Review of Earth and Planetary Sciences writes about 'Feedbacks, Timescales, and Seeing Red', writes:
“The history of the recognition of feedbacks is perhaps best described as an emerging awareness. Adam Smith, for instance, had a clear understanding of the feedbacks inherent in the operation of the invisible hand—the set of natural and mutual interactions that govern commerce’ (Smith 1776).”
Comment
Brilliant… if true. But unfortunately, Gerard Roe has been unintentionally conned. `There is no such ‘feedbacks inherent in the operation of the invisible hand’, at least as far as Adam Smith was concerned.
He used the ‘invisible hand’ as a metaphor – literary device to express in ‘a more striking and interesting manner’ its ‘object’ (see Adam Smith’s Lectures on Rhetoric and Belles Lettres [1762-3] 1983, p 29)0.
In all three (only) cases in which he used the metaphor, the objects of the metaphor was not about ‘govern[ing] commerce’.
In Smith’s first use in his ‘History of Astronomy’ ([1744-c50] 1795; 1980, p 49) he referred to the ‘invisible hand of Jupiter’, which was belonged to the invisible Roman god, Jove, who was believed to fire thunderbolts at enemies of Rome.
This example of the ‘pusillanimous superstition’ (Ibid, p 50) of the Romans had nothing to do with ‘the set of natural and mutual interactions that govern commerce’.
In the first published use by Smith of the metaphor, the invisible hand led ‘a proud and unfeeling landlord’ to ‘make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and, thus without intending it, without knowing it, advance the interests of society, and afford the multiplication of the species’. (Moral Sentiments, ([1759] 1976, pp 184-5).
Landlord- serf relationships were not driven by ‘the set of natural and mutual interactions that govern commerce’. Serfs were not in a market- relationship with their landlords.
In fact, Smith’s context for the parable of the ‘proud and unfeeling landlord’ was from pre-Roman times to the absolute monarchies. (Moral Sentiments, p 185).
Smith’s third and final use of the metaphor was in Wealth Of Nations, ([1776] 1976, p 456) where he refers to some, not all, merchants who preferred to trade in local (national) markets, rather than invest in the more risky trade with the foreign countries or colonies. The ‘wholesale merchant’ was concerned ‘with this own security’ – the real likelihood, as he saw it subjectively, that he might be ‘deceived', and fail to secure redress from foreign courts, from dealing with people whose characters he did not know as well as his local partners, because his capital was not ‘under his own view or command’ (Wealth Of Nations, p 454).
Clearly, the ‘set of natural and mutual interactions that govern commerce’ were not working in these cases, and it was each trader’s ‘insecurity’ that led him to invest locally, not ‘the invisible hand’ of the market. Bear in mind that many other traders did invest abroad from 18th-century Britain, and many made their fortunes, while some went bankrupt.
Foreign traders exercised their trade under the protection of the continuation of Cromwell’s Navigation Acts, guaranteeing them a legal monopoly of the carrying trade, enforced by the Royal Navy and by draconian fines and seizures by British courts. Meanwhile, at home in Britain, trade was rigidly overseen by the monopoly laws of the Incorporated Towns and Guilds, by the Elizabethan Apprentices Acts, the Settlement Acts, and by sc ores of national tariffs and outright prohibitions.
None of these could be said to ‘set of natural and mutual interactions that govern commerce’. They certainly ‘governe[d] commerce’ but to describe them as ‘natural and mutual interactions’ loses touch with the realities of commerce in 18th-century Europe’ in Smith’s time.
It was Adam Smith’s ‘clear understanding’ of the realities or commerce that led him to apply the metaphor to its varied objects (‘pusillanimous superstition’), ‘proud and unfeeling’ landlords having to feed their serfs their subsistence because they had no choice but to do so because starving and dead serfs could not work the landlords’ fields, and risk-averse merchants because too fearful to invest abroad, are no choice but to invest at home, which added to national ‘revenue and employment’ (the whole is the sum of its parts).
HERE:
Gerard Roe in Annual Review of Earth and Planetary Sciences writes about 'Feedbacks, Timescales, and Seeing Red', writes:
“The history of the recognition of feedbacks is perhaps best described as an emerging awareness. Adam Smith, for instance, had a clear understanding of the feedbacks inherent in the operation of the invisible hand—the set of natural and mutual interactions that govern commerce’ (Smith 1776).”
Comment
Brilliant… if true. But unfortunately, Gerard Roe has been unintentionally conned. `There is no such ‘feedbacks inherent in the operation of the invisible hand’, at least as far as Adam Smith was concerned.
He used the ‘invisible hand’ as a metaphor – literary device to express in ‘a more striking and interesting manner’ its ‘object’ (see Adam Smith’s Lectures on Rhetoric and Belles Lettres [1762-3] 1983, p 29)0.
In all three (only) cases in which he used the metaphor, the objects of the metaphor was not about ‘govern[ing] commerce’.
In Smith’s first use in his ‘History of Astronomy’ ([1744-c50] 1795; 1980, p 49) he referred to the ‘invisible hand of Jupiter’, which was belonged to the invisible Roman god, Jove, who was believed to fire thunderbolts at enemies of Rome.
This example of the ‘pusillanimous superstition’ (Ibid, p 50) of the Romans had nothing to do with ‘the set of natural and mutual interactions that govern commerce’.
In the first published use by Smith of the metaphor, the invisible hand led ‘a proud and unfeeling landlord’ to ‘make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and, thus without intending it, without knowing it, advance the interests of society, and afford the multiplication of the species’. (Moral Sentiments, ([1759] 1976, pp 184-5).
Landlord- serf relationships were not driven by ‘the set of natural and mutual interactions that govern commerce’. Serfs were not in a market- relationship with their landlords.
In fact, Smith’s context for the parable of the ‘proud and unfeeling landlord’ was from pre-Roman times to the absolute monarchies. (Moral Sentiments, p 185).
Smith’s third and final use of the metaphor was in Wealth Of Nations, ([1776] 1976, p 456) where he refers to some, not all, merchants who preferred to trade in local (national) markets, rather than invest in the more risky trade with the foreign countries or colonies. The ‘wholesale merchant’ was concerned ‘with this own security’ – the real likelihood, as he saw it subjectively, that he might be ‘deceived', and fail to secure redress from foreign courts, from dealing with people whose characters he did not know as well as his local partners, because his capital was not ‘under his own view or command’ (Wealth Of Nations, p 454).
Clearly, the ‘set of natural and mutual interactions that govern commerce’ were not working in these cases, and it was each trader’s ‘insecurity’ that led him to invest locally, not ‘the invisible hand’ of the market. Bear in mind that many other traders did invest abroad from 18th-century Britain, and many made their fortunes, while some went bankrupt.
Foreign traders exercised their trade under the protection of the continuation of Cromwell’s Navigation Acts, guaranteeing them a legal monopoly of the carrying trade, enforced by the Royal Navy and by draconian fines and seizures by British courts. Meanwhile, at home in Britain, trade was rigidly overseen by the monopoly laws of the Incorporated Towns and Guilds, by the Elizabethan Apprentices Acts, the Settlement Acts, and by sc ores of national tariffs and outright prohibitions.
None of these could be said to ‘set of natural and mutual interactions that govern commerce’. They certainly ‘governe[d] commerce’ but to describe them as ‘natural and mutual interactions’ loses touch with the realities of commerce in 18th-century Europe’ in Smith’s time.
It was Adam Smith’s ‘clear understanding’ of the realities or commerce that led him to apply the metaphor to its varied objects (‘pusillanimous superstition’), ‘proud and unfeeling’ landlords having to feed their serfs their subsistence because they had no choice but to do so because starving and dead serfs could not work the landlords’ fields, and risk-averse merchants because too fearful to invest abroad, are no choice but to invest at home, which added to national ‘revenue and employment’ (the whole is the sum of its parts).
Labels: Invisible Hand
0 Comments:
Post a Comment
<< Home