Monday, December 19, 2011

Once More on Robert Frank's Invented Charles Darwin

Elliott “chats” with Robert Frank in FireDog Lake HERE

Smith’s theory of the invisible hand, which says that competition channels self-interest for the common good, is probably the most widely cited argument today in favor of unbridled competition–and against regulation, taxation, and even government itself. But what if Smith’s idea was almost an exception to the general rule of competition? That’s what Frank argues, resting his case on Darwin’s insight that individual and group interests often diverge sharply. Far from creating a perfect world, economic competition often leads to “arms races,” encouraging behaviors that not only cause enormous harm to the group but also provide no lasting advantages for individuals, since any gains tend to be relative and mutually offsetting.”

Comment
I agree that: “Smith’s theory of the invisible hand, which says that competition channels self-interest for the common good, is probably the most widely cited argument today in favor of unbridled competition–and against regulation, taxation, and even government itself”. But not a word of it is true about Adam Smith being the author of it.

Adam Smith never said anything like that statement. It is a complete fabrication – or rather several fabrications run together, popularised by modern economists and was repeated endlessly by ideologically-committed politicos in the Cold War decades since the 1940s, and then raised to shriek-levels since the Cold War ended with the fall of communism in the 1990s.

First, Adam Smith never had a “theory of an invisible hand”; he used the IH metaphor as a metaphor, it was never a “theory”. It was a figure of speech, referring to specific objects, as all metaphors in English are crafted to do (see: "Adam Smith, Lectures in Rhetoric and Belles Lettres", [1763] 1983, p 29).

In Moral Sentiments, the object of the IH metaphor was the unavoidable necessity that “rich and unfeeling” landlords had to feed their serfs, servants, and armed retainers, from the crops in their lands (no food, no toil). In Wealth Of Nations the IH metaphor was the response of some, but not all, merchants to their concerns for the "security" of their capital who preferred to invest in “domestick industry”. In each case, the public good benefitted from the unintentional survival and procreation of the species, or the unintentional addition to the “annual revenue and employment “ in boosting “domestick industry”.

Whether all self-interested actions had such benign outcomes depends on a case-by-case consideration. The notion that "an invisible hand" “channels self-interest [that always benefits] the common good” is a gross exaggeration. The fact that benign self-interest “channels benign self-interest for the common good”, perhaps, is an acceptable interpretation in the two cases only mentioned by Adam Smith that he identified, but not all self-interest is always benign; many actions, unintentional or otherwise, are not in the public interest. Some (indeed, many) “merchants and manufacturers” exercised their self-interest in non-benign monopoly activities, when they met their “competing” compatriots”, even for diversion”, they end up “conspiring against public”, they lobby (indeed “clamour” for) the legislature to set tariffs and other trade prohibitions, they conspire with “competitors” in secret “combinations” to hold wages down and to reduce them, and, from spreading “jealousy of trade, they join the jingoistic clamour for the government for wars against rival trading countries to “narrow the competition” and to “raise prices”.

Robert Frank rests “his case on Darwin’s insight that individual and group interests often diverge sharply”. This is hardly a new insight, neither unknown nor ignored by Adam Smith. What is Wealth Of Nations about other than a critique of “mercantile political economy” where “merchants and manufacturers” pit their individual self-interests against those of all consumers as a group? In what manner was this already discovered and clearly – even repeated - viewpoint of Adam Smith in 1776 become “Darwin’s insight” 82 years later at the Linean Society?

Robert Frank’s book was reviewed on Lost Legacy on 23 September (HERE ,
so I won’t rehearse my critique here. Smith spoke of the unintentional actions of thousands of “merchants and manufacturers”, who can, and did, consciously react to events in pursuing their self-interests; Franks refers to Darwin – though not to Darwin’s theory of natural selection, as published in 1859 in “Origin of Species”, in that he has some elks who are born with larger antlers than others, and some hawks born with keener eyesight that others, both benefitting from either dominating smaller antlered elks in contests with rival elk males for female sex partners, or other less well-sighted hawks in food contests for the survival baby hawks. These favoured antlers or eyesight are genetic benefits ensuring, all things considered, the survival, having been born with these advantages, of a larger number of progeny surviving per season.

The difference between humans and both elks and hawks is that genetic differences, advantageous or disadvantageous, are not within the control, consciously or otherwise, of neither the elks nor the hawks, hence they cannot consciously engage in “arms races”, nor avert them; each generation is a prisoner of their nature and their environment. In comparison, the actions of humans are within their ability to consciously change them, or not to do so, up to a limited point. They are able within wider parameters, to act consciously as their existing generation, and those yet to come. Humans are not prisoners of their nature nor their environment to the same extent as elks and hawks. Behavioural changes may occur for the better or worse, among humans in their societies. “Arms races” can be averted by agreement; elks and hawks cannot “call a truce” and voluntarily "disarm"!

Adam Smith understood that – so have most philosophers. Darwin understood that too, though not the invented ”Darwin” invented by Robert Frank, or his reviewers – none so far that I have seen makes these elementary points that demolish the thesis upon which he bases his politics and the prospects for Adam Smith's reputation in a hundred years time.

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3 Comments:

Blogger airth10 said...

"In Moral Sentiments, the object of the IH metaphor was the unavoidable necessity that “rich and unfeeling” landlords had to feed their serfs, servants, and armed retainers, from the crops in their lands (no food, no toil). In Wealth Of Nations the IH metaphor was the response of some, but not all, merchants to their concerns for the "security" of their capital who preferred to invest in “domestick industry”.

From what I read here the IH metaphor is more that just a metaphor. However, you are right to say the IH metaphor is not a theory at all because there is no question as to what it is describing as happening.

I still say the IH metaphor is real and more than just a metaphor because it is describing something that is really happening. The 'invisible hand' animates for us what we can't see or what some of us can't imagine.

6:39 p.m.  
Blogger Gavin Kennedy said...

airth

The IH metaphor is just a metaphor, albeit a very powerful metaphor. Many metaphors are poor, and so awkward as to be to strained. Smith refers, apologetically, for one of his other metaphors as being 'a very violent metaphor".

The test is whether a metaphor "describes in a more striking and interesting manner" its object (Lectures On Rhetoric and Belles Lettres" [1763]. But in English, metaphors are not real.

Their objects may be real or even imaginary, but the metaphor is not. All metaphors "describe something", but that does not make the metaphor real. It is ruled by English grammar.

It is important to know the difference.

Gavin

2:01 p.m.  
Blogger airth10 said...

I am sorry but I don't agree with that distinction, that the metaphor is just a metaphor and doesn't describe anything real or a phenomenon. You could then say that about every word in language, that they are just words and nothing more.

I like Scott Fitzgerald's metaphor in The Great Gaspy about Daisy's voice, that "Her Voice is full of money." With that metaphor you really understand an aspect of life. That metaphor is an excogitation, like most metaphors are.

3:03 p.m.  

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