Saturday, June 25, 2011

On Metaphors in Economics

The Irish Economy (HERE), discusses the role of metaphors in recent economic discourse.

The Use of Metaphor in the Irish Economy, A Guest Post by Gavin Kostick (This post was written by John McHale).

John Donne is remembered on the blog by the phrase, “no man is an island” indicating, a good deal before Adam Smith, the interconnectedness of our lives. Donne (1572 – 1631) was the Dean of St Paul’s Cathedral, and a metaphysical poet. He specialized in drawing unexpected comparisons between a theoretical, spiritual or abstract notion and a concrete, palpable object. For example, Donne compared mutual love to a pair of mapping compasses, which, where-ever the points are placed on the surface of the world, lean towards each other and are connected.

The history of language itself is the history of the movement from the concrete to the abstract. Our ancestors had a far larger vocabulary than we do, as they were more particular than general.

The power of metaphor consists in making the abstract once again visceral: philosophy ‘proved upon our pulses’, in Keats’s phrase.

But it is a suspect power as it may not so much illuminate, as rhetorically persuade, or falsify.

The history of political and economic thinking is filled with metaphoric physicalisation of abstract ideas - from Hobbes’s “war of all against all”, Smith’s “invisible hand”, Marx’s “spectre haunting Europe”, right up to Matt Taibbi’s “great vampire squid”, powerful gut images have managed to consolidate a set of ideas, capture the public imagination, frame debate.

I enjoyed reading this essay on metahors because it illustrates the power of a metaphor to do what ‘it says on the tin’ (to quote an advertising slogan in the UK on a paint for all weathers), and how the metaphor can become meaningless if badly crafted or it is non-applicable (as we have with ‘the invisible hand of the market, etc., when related to Adam Smith). His many other metaphors in TMS and WN are often quite brilliant, and one of two are rather awkward.

Too many economists do not understand metaphors at all, yet many misattribute to Adam Smith (himself an accomplished rhetorician) their interpretation of the IH metaphor as a real entity in itself (they believe that the IH actually exists!), instead of how Adam Smith defined the role of metaphors – and how he used of them in all of his writings – in his Lectures on Rhetoric and Belles Lettres ([1762] 1983, p 29): they describe in ‘a striking and more interesting manner’ their objects (which are explained in his text or are relayed from classical works familiar to all educated readers in his day).

That his use of metaphors describe their objects can be illustrated by his use of a classical metaphor for the relative insecurity of paper money, compared to the solidity of gold because paper money, which is ‘suspended on Daedalian wings’, is liable to lose its value. Smith was not suggesting that there were actual wings of Icarius attached to paper money! Every reader educated in Greek mythology would know what he meant, as they would when he referred to the ‘great wheel of circulation’, and, of course, to the popular 17th-18th-century metaphor of ‘an invisible hand’ (they would hear it spoken in Church sermons, in Shakespeare’s play, Macbeth, or various historical essays, and Defoe’s novels (Moll Flanders and Colonel Jack, and etc.).

Which is probably why no contemporary of Smith’s noted his reference to the IH metaphor, nor did but very few non-contemporaries until the last quarter of the 19th century, and later in the oral traditions of Cambridge (UK) and Chicago universities in the 20th century. What happened to cause the tidal wave (metaphor) of references to he IH from the 1940s and through to today (Google the IH to see the daily flood – another metaphor – across the world)?

I suggest it is related to the current obsession with theoretical equilibrium in markets, of which we can excuse Adam Smith of any complicity in this sorry, to quote YHT, ‘inherent error’.

[Follow the link to see an excellent review of the use of metaphors in the debates among economists and others on the current financial crisis and how it affects the debate in Ireland.]



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