A Reader's Question and An Answer
A reader asks:
Dear Professor, I have not understood, really, your comment on my comment on invisible hand: what I wrote in very plain and uncontroversial for any serious scholar of Smith. Why you comment it critically? I have dedicated many papers and some books to Smith, and I think to know enough his theory of invisible hand to comment it properly, isn't?
To which I respond:
Dear Reader,
You do not say how many of the posts on Lost Legacy you have read but I did not elaborate on my criticism of your reference to Adam Smith’s ‘idea of invisible hand’ represented in your post:
““Smith's idea of invisible hand (mentioned more than once) is actually very central in both his theory of market (wealth of nations) and in his theory of human sentiments and social behaviour: the invisible hand mechanism is one of the most powerful idea in modern social sciences”.”
The two examples of Smith’s use of the metaphor of ‘an invisible hand’ in Moral Sentiments and Wealth Of Nations are not about “his theory of markets”, which he elaborates in Books I and II without mentioning the IH metaphor. Moreover, the sole example he gives of the IH metaphor in Book IV has no connection to his theory of markets. Likewise, in Moral Sentiments his example of the IH metaphor also is not about markets.
Next, I suggest we examine what Adam Smith said about using metaphors in English grammar, remembering that Smith was an accomplished public lecturer in Rhetoric from 1748 to 1751 in Edinburgh and from 1751-64 in Glasgow (Rhetoric was part of a Moral Philosophy degree in the 18th century). Few traces have been found of Smith’s original text. One such were “Notes of Dr Smith’s Rhetorick Lectures” that was found in a manor-house sale in Aberdeenshire by John M. Lothian (1896-1970) in 1961 (and published by him as Lectures on Rhetoric and Belles Lettres Delivered in the University of Glasgow by Adam Smith, Reported by a Student in 1762-63 (Nelson, 1963). These student Notes were re-edited by J. C. Bryce (and A. S. Skinner) and published as Lectures on Rhetoric and Belles Lettres for the Glasgow Edition of the Works and Correspondence of Adam Smith by the Oxford University Press in 1983 (available from Liberty Fund, 1985).
Adam Smith taught that the role of a metaphor is to “describe in the more striking and interesting manner” its object (Adam Smith, “Lectures on Rhetoric and Belles Lettres” [1762-3] 1983, p 29).
In Moral Sentiments Smith’s use of the IH metaphor was about how proud and unfeeling rich landlords in feudal Europe fed their retainers, serfs and slaves, who, with their families, otherwise would die of starvation. If they could not work who, then, would work the ‘rich and unfeeling landlords’ fields and who would keep out intruders, and who would keep the other poor at bay, and also help keep other lordly rivals from taking over the fields of their masters? This meant that the rich landlords had to share their harvests with their underlings, just as much as servants, serfs, and slaves had to work to get fed. The IH metaphor referred to the consequences of this necessary mutual dependence, policed by the Feudal Lord's power and oppression. But it had nothing to do with how markets work (peasants were not hired in a market economy).
In Wealth Of Nations, some merchants, but obviously not all, traded with and invested in the colonial settlements in North America, the Caribbean, Africa, and India –and continental Europe - but other merchants preferred to invest their capital domestically, where it was under their immediate control, rather than risk it by sending it abroad at the mercy of events (shipwreck, piracy and war) beyond their control. The merchants also distrusted people they did not know, who were not subject to UK justice. Therefore, they invested solely in the domestic economy, but in doing so, unintentionally, they added to domestic revenues and employment (public benefits in Smith’s view). He used the IH metaphor to describe ‘in a more striking and interesting manner’ the consequence of their risk aversion leading to this public benefit, without making any reference to how markets work, or to greater ‘harmony’ or to the ‘magical’ distribution of the benefits. It was simply the consequential arithmetic rule that the ‘whole is the sum of its parts’.
In TMS Smith referred to feudal landlords being led by the IH to feed their serfs, slaves and retainers, which enabled them to work for him and, unintentionally, contributed to the propagation of the human species; in WN he referred to some, but not all, merchants whose insecurity about the risks of foreign and colonial trade being led by an IH to prefer to invest in the ‘domestick’ market, which added to “annual output and employment” (an example of the simple arithmetic rule that the whole is the sum of its parts).
In each case, the object of the metaphor is specified: in TMS, the landlords were ‘led by an invisible hand’, out of the necessity of feeding their serfs, peasants and retainers if they were to survive to work through the seasons and the winters; in WN, the risk averse merchants were ‘led by an invisible hand’ to invest locally, to avoid the higher risk of the loss of their capital and their destitution that could follow.
[In Smith’s third use of the IH metaphor in his History of Astronomy (published posthumously in 1975) heathen Romans feared ‘the invisible hand of Jupiter’ (their stone god), who they believed fired thunderbolts from his pointed finger at enemies of Rome (Smith called it their ‘pusillanimous superstition’, but again absolutely nothing to do with his theory of markets)].
Hugh Blair, who followed Adam Smith as a lecturer in rhetoric at Edinburgh University published his own lectures in the 1800s, Lectures on Rhetoric and Belles Lettres, 3 volumes, London. Vol. 1, Lecture XV: describes Metaphors and gives examples as:
“founded entirely on the resemblance which one object bears to another … it is no other than a comparison, expressed in an abridged form.
When I say of some great minister ‘ upholds the state, like a pillar which supports the weight of a whole edifice’, I fairly make a comparison; but when I say of such a minister ‘that he is a pillar of the state’, it has now become a metaphor. The comparison betwixt the minister and a pillar is made in the mind, but it is expressed without any words that denote comparison. The comparison is only insinuated, not expressed, the object is supposed to be so like the other, without formally drawing the comparison; the name of one may be put in place of the other” (pp 342-3).
This literary explanation given by Hugh Blair of the role of metaphors corresponds well with Adam Smith’s rougher spoken words, but clearly means the same (as it still does in modern English).
For these reasons, I critically commented on your remarks that “the invisible hand mechanism is one of the most powerful idea in modern social sciences”. This ignores Smith’s specified role of the IH metaphor in the English language (I cannot speak for other languages). The only question is what were the objects for the IH metaphor in the case in Moral Sentiments and Wealth Of Nations?
I suggest in Moral Sentiments the IH metaphor expresses in a “more striking and interesting manner” its object, namely, the invisible compulsion of necessity that drives rich landlords to feed their peasants and their families so that they continued to toil in his fields, which makes him and his family rich and ‘great’ – no food, no toil; no toil no food.
I also suggest in Wealth Of Nations the IH metaphor expresses in a “more striking and interesting manner” its object, namely, the invisible’ compulsion to avoid perceived foreign risks by investing their capital domestically that raises ‘the annual revenue and employment’ higher than it would be if they had sent it abroad – lower domestic investment lowers domestic revenue and employment.
Yes, I accept that this is somewhat different from the modern texts read by students and taught by modern economists (and widely believed in the media). But Oscar Lange (a Marxist) and Paul Samuelson (an exponent of the capitalist mixed economy) introduced the modern version of Adam Smith’s use of the IH metaphor in the 1940s and it was boosted by modern theories of welfare economics and general equilibrium. For this the IH metaphor was hijacked, so to speak, to give their theories an authoritative pedigree back to Adam Smith.
Lost Legacy works tirelessly to draw attention to what Adam Smith actually wrote against the stubborn resistance of most of my colleagues who defend their modern version eloquently with many other modern theories, though none of them are related to Adam Smith’s meaning. I base my case solely on Smith’s works, which is the best guide to his meaning.
Gavin
Dear Professor, I have not understood, really, your comment on my comment on invisible hand: what I wrote in very plain and uncontroversial for any serious scholar of Smith. Why you comment it critically? I have dedicated many papers and some books to Smith, and I think to know enough his theory of invisible hand to comment it properly, isn't?
To which I respond:
Dear Reader,
You do not say how many of the posts on Lost Legacy you have read but I did not elaborate on my criticism of your reference to Adam Smith’s ‘idea of invisible hand’ represented in your post:
““Smith's idea of invisible hand (mentioned more than once) is actually very central in both his theory of market (wealth of nations) and in his theory of human sentiments and social behaviour: the invisible hand mechanism is one of the most powerful idea in modern social sciences”.”
The two examples of Smith’s use of the metaphor of ‘an invisible hand’ in Moral Sentiments and Wealth Of Nations are not about “his theory of markets”, which he elaborates in Books I and II without mentioning the IH metaphor. Moreover, the sole example he gives of the IH metaphor in Book IV has no connection to his theory of markets. Likewise, in Moral Sentiments his example of the IH metaphor also is not about markets.
Next, I suggest we examine what Adam Smith said about using metaphors in English grammar, remembering that Smith was an accomplished public lecturer in Rhetoric from 1748 to 1751 in Edinburgh and from 1751-64 in Glasgow (Rhetoric was part of a Moral Philosophy degree in the 18th century). Few traces have been found of Smith’s original text. One such were “Notes of Dr Smith’s Rhetorick Lectures” that was found in a manor-house sale in Aberdeenshire by John M. Lothian (1896-1970) in 1961 (and published by him as Lectures on Rhetoric and Belles Lettres Delivered in the University of Glasgow by Adam Smith, Reported by a Student in 1762-63 (Nelson, 1963). These student Notes were re-edited by J. C. Bryce (and A. S. Skinner) and published as Lectures on Rhetoric and Belles Lettres for the Glasgow Edition of the Works and Correspondence of Adam Smith by the Oxford University Press in 1983 (available from Liberty Fund, 1985).
Adam Smith taught that the role of a metaphor is to “describe in the more striking and interesting manner” its object (Adam Smith, “Lectures on Rhetoric and Belles Lettres” [1762-3] 1983, p 29).
In Moral Sentiments Smith’s use of the IH metaphor was about how proud and unfeeling rich landlords in feudal Europe fed their retainers, serfs and slaves, who, with their families, otherwise would die of starvation. If they could not work who, then, would work the ‘rich and unfeeling landlords’ fields and who would keep out intruders, and who would keep the other poor at bay, and also help keep other lordly rivals from taking over the fields of their masters? This meant that the rich landlords had to share their harvests with their underlings, just as much as servants, serfs, and slaves had to work to get fed. The IH metaphor referred to the consequences of this necessary mutual dependence, policed by the Feudal Lord's power and oppression. But it had nothing to do with how markets work (peasants were not hired in a market economy).
In Wealth Of Nations, some merchants, but obviously not all, traded with and invested in the colonial settlements in North America, the Caribbean, Africa, and India –and continental Europe - but other merchants preferred to invest their capital domestically, where it was under their immediate control, rather than risk it by sending it abroad at the mercy of events (shipwreck, piracy and war) beyond their control. The merchants also distrusted people they did not know, who were not subject to UK justice. Therefore, they invested solely in the domestic economy, but in doing so, unintentionally, they added to domestic revenues and employment (public benefits in Smith’s view). He used the IH metaphor to describe ‘in a more striking and interesting manner’ the consequence of their risk aversion leading to this public benefit, without making any reference to how markets work, or to greater ‘harmony’ or to the ‘magical’ distribution of the benefits. It was simply the consequential arithmetic rule that the ‘whole is the sum of its parts’.
In TMS Smith referred to feudal landlords being led by the IH to feed their serfs, slaves and retainers, which enabled them to work for him and, unintentionally, contributed to the propagation of the human species; in WN he referred to some, but not all, merchants whose insecurity about the risks of foreign and colonial trade being led by an IH to prefer to invest in the ‘domestick’ market, which added to “annual output and employment” (an example of the simple arithmetic rule that the whole is the sum of its parts).
In each case, the object of the metaphor is specified: in TMS, the landlords were ‘led by an invisible hand’, out of the necessity of feeding their serfs, peasants and retainers if they were to survive to work through the seasons and the winters; in WN, the risk averse merchants were ‘led by an invisible hand’ to invest locally, to avoid the higher risk of the loss of their capital and their destitution that could follow.
[In Smith’s third use of the IH metaphor in his History of Astronomy (published posthumously in 1975) heathen Romans feared ‘the invisible hand of Jupiter’ (their stone god), who they believed fired thunderbolts from his pointed finger at enemies of Rome (Smith called it their ‘pusillanimous superstition’, but again absolutely nothing to do with his theory of markets)].
Hugh Blair, who followed Adam Smith as a lecturer in rhetoric at Edinburgh University published his own lectures in the 1800s, Lectures on Rhetoric and Belles Lettres, 3 volumes, London. Vol. 1, Lecture XV: describes Metaphors and gives examples as:
“founded entirely on the resemblance which one object bears to another … it is no other than a comparison, expressed in an abridged form.
When I say of some great minister ‘ upholds the state, like a pillar which supports the weight of a whole edifice’, I fairly make a comparison; but when I say of such a minister ‘that he is a pillar of the state’, it has now become a metaphor. The comparison betwixt the minister and a pillar is made in the mind, but it is expressed without any words that denote comparison. The comparison is only insinuated, not expressed, the object is supposed to be so like the other, without formally drawing the comparison; the name of one may be put in place of the other” (pp 342-3).
This literary explanation given by Hugh Blair of the role of metaphors corresponds well with Adam Smith’s rougher spoken words, but clearly means the same (as it still does in modern English).
For these reasons, I critically commented on your remarks that “the invisible hand mechanism is one of the most powerful idea in modern social sciences”. This ignores Smith’s specified role of the IH metaphor in the English language (I cannot speak for other languages). The only question is what were the objects for the IH metaphor in the case in Moral Sentiments and Wealth Of Nations?
I suggest in Moral Sentiments the IH metaphor expresses in a “more striking and interesting manner” its object, namely, the invisible compulsion of necessity that drives rich landlords to feed their peasants and their families so that they continued to toil in his fields, which makes him and his family rich and ‘great’ – no food, no toil; no toil no food.
I also suggest in Wealth Of Nations the IH metaphor expresses in a “more striking and interesting manner” its object, namely, the invisible’ compulsion to avoid perceived foreign risks by investing their capital domestically that raises ‘the annual revenue and employment’ higher than it would be if they had sent it abroad – lower domestic investment lowers domestic revenue and employment.
Yes, I accept that this is somewhat different from the modern texts read by students and taught by modern economists (and widely believed in the media). But Oscar Lange (a Marxist) and Paul Samuelson (an exponent of the capitalist mixed economy) introduced the modern version of Adam Smith’s use of the IH metaphor in the 1940s and it was boosted by modern theories of welfare economics and general equilibrium. For this the IH metaphor was hijacked, so to speak, to give their theories an authoritative pedigree back to Adam Smith.
Lost Legacy works tirelessly to draw attention to what Adam Smith actually wrote against the stubborn resistance of most of my colleagues who defend their modern version eloquently with many other modern theories, though none of them are related to Adam Smith’s meaning. I base my case solely on Smith’s works, which is the best guide to his meaning.
Gavin
Labels: Invisible Hand, Smith on Metaphors
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