Friday, July 08, 2011

Back To Business

Richard Wade Hunter Marr, a songwriter in Los Angeles quoted (HERE) by Duane Roggendorff:

"It is time to choose something different. The "God of Economics" which we started worshiping with Adam Smith's declaration that the "Marketplace" is led by an "Invisible hand," is the most bloodthirsty of all man-made myths!

As “the most bloodthirsty of all man-made myths!” it may be news to his readers that it is a myth that had nothing to do with Adam Smith. He never said anything so silly as the market is ‘’led by an invisible hand”.

The market consists of visible prices for things at which some sellers are willing to supply them and some buyers are willing to buy them, as set out in Books I and II of his book, Wealth Of Nations (1776).

There is no mention in anything that Adam Smith wrote that mentions markets in relation to his single use of the metaphor, ‘led by an invisible hand’ (in Book IV, chapter 2).

Nor was it used in the other single use of the metaphor of ‘an invisible hand’ by Adam Smith in his other work ‘Moral Sentiments’, published in 1759.

There are, in fact, two myths at work in relation to the metaphor of ‘an invisible hand’.

First myth, that Adam Smith used it in relation to markets; he didn’t.

Second myth, that such an entity actually exists in markets; it doesn’t.

Both myths originated, initially, in the later 19th century (Smith died in 1790) and grew, at first, among some economists in 20th century in academe (Cambridge, England) and later in Chicago, USA). The myths ‘took off’ from the 1940s, primarily by Paul Samuelson – in his highly successful textbook, Economics: an introductory analysis, 1948, McGraw-Hill – and then by imitation by other authors in lectures, speeches, other textbooks, professional articles, and lastly by constant repetition by graduates in the media, politics, PR, and everyday conversations through to today. Samuelson’s famous text published its 20th edition in 2010 and 5 million copies later.

This may be a quote from a non-consequential source to High Academe and those professional economists and philosophers, with whom I have debate, the meaning they attribute to Adam Smith’s use of a popular 17th-18th century metaphor, I readily confess, to little effect, so far.

They listen, mostly politely – sometimes a trifle tetchy – but always (so far) with studied indifference.

The IH metaphor is too ‘neat’ and too ‘convenient’ for them to separate entirely from the myth that it was conceived (indeed, on occasion, that it was ‘invented’, ‘conceived’, or even, ‘first applied’) by Adam Smith. Apparently, my pointing out the historical truth is a sign of my taking the ‘romance’ out of philosophy and economics.

Possibly, but the same economists claim to expound ‘science’; I claim a more humble role: to present the historical facts and to try to restore Adam Smith’s lost legacy.

The result of the libel on Adam Smith’s legacy is that the 21st century believer in the myths as peddled by Academic authorities, is that a Richard Wade Hunter Marr, a songwriter in Los Angeles a songwriter in Los Angeles, spreads emotive anti-market ideas that influence those who listen to his songs (joining the rest of those who turn against markets in favour of I know not what, but certainly do not wish to try).



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