A Source Quoted on 'Loony Tunes' Objects (Politely)

I received a couple of comments (23 April) to my listing a snippet on Loony Tunes no 36 from “UMR Cycling Club”, but unfortunately  “lost” them both temporarily when I pressed “publish”.

I would not like to leave the impression that I censor comments that make polite sense, whether I agree with them or not.

Here is one of UMR’s comments on my listing on Loony Tunes no. 36:

““The Iron Calculator vs. The Invisible Hand” HERE

“No longer are uncertain outcomes or risks acceptable, i.e. The Invisible Hand.” …

…“The Invisible Hand leaves it unknown who should go to college, even though someone may not pass The Iron Calculator’s criteria, there might just be some other factor that will cause them to succeed. The Invisible Hand leaves to chance having the potentially ill baby…”

““This newcomer does not seem to grant us the benevolence and unlimited possibilities that chance, or The Invisible Hand granted us. …

To which listing, UMR Cycling Club replied:

“As author of 6, I think you took what I wrote a little out of context. But thanks for noticing my post. Also, I'm always interested to learn about economics, so if you'd like to point me to literature (that you personally recommend) explaining why ever increasing regulation/calculation is good versus allowing for randomness, please do.”

My response:

I Thank “UMR” for his comments. First, the regular “Loony Tunes” series is for those published pieces I spot in the Google Alert’s daily service that appear to be using the metaphor of the “invisible hand” in a extraordinary manner, completely at variance to its use by Adam Smith, mostly out of ignorance of the very restricted sense of a metaphor’s grammatical role as used by Adam Smith on the two occasions in which he used it, once each in his to published Works, “Moral Sentiments”, 1759, and “Wealth Of Nations”, 1776.

(I know he used it once on another occasion in his “History of Astronomy”, posthumous, 1795, but that was as a noun, not a metaphor, when describing the pagan superstitious belief about their god Jupiter’s supposed power of firing thunderbolts at enemies of Rome).

However, these historical facts about Adam Smith’s limited use of a metaphor have no connection to the modern invention of a much more general application of the “invisible hand” into a “theory”, “concept”, even a “paradigm”, that came to be applied in economics after the 1940s, and associated with a modern theory of “general equilibrium”, or "Pareto Optima", perhaps best summed up as the assertion that the “self-interests” of individuals (even their “selfishness”) led society “miraculously”, to an optimum, that was “best” for society. 

It is in this context, that “UMR’s” statements about the invisible-hand decides “who goes to college” and “who passes”, and so on, which are extentions of the modern inventions about the ubiquitous role of this invented phenomenon, which I credit to so-called neo-classical economic theory.   It certainly has nothing to do with Adam Smith’s published thinking.

Turning to “UMR’s” request that I explain “why ever increasing regulation/calculation is good versus allowing for randomness”, I can assure “UMR” that I have never argued for such a proposition on Lost Legacy, and it does not reflect Adam Smith’s published views either.

I should make clear that on modern political issues, certainly as presented by “Leftish” or “Rightist” ideologues”, I do not take stances, except in so far as either side claims the authority of Adam Smith for them.  

Adam Smith did make specific references to instances where regulation by government was required and would be beneficial (capping interest rates, for instance).  Smith never argued for laissez-faire; insisted on the rule of law and an effective system of justice as necessary for commerce.  He did not express the view that the state had no role in society (he was not an extreme anarcho-libertarian). 

 He objected to the “sovereign” (which included his self-interested influencers) imposing economic policy decisions that benefitted them but which had deleterious affects on general prosperity and growth, i.e., he opposed what he considered the “wrong” forms of state interventions (tariffs, prohibitions, Guild privileges, apprenticeship Acts, Settlement Acts, Combination Acts, leading to “jealousy of trade” between nations, and colonial wars), and he supported the “right” forms of state intervention, such as support for “little schools” on the Scottish model to end illiteracy and innumeracy among the labouring poor, for civic cleanliness, street lighting, pavements, road works, standard measurement systems, assay and quality offices, defence provisions, banking reforms, lighthouses, canals, toll roads, and harbours.

In short, Smith’s stance was to favour markets where possible, and state intervention where necessary.  This may be contrary to modern perceptions of him, but Smith’s views are well expressed in his two books, Moral Sentiments and Wealth Of Nations. 

‘Tis a pity that most of those who quote him today do not read him, and rely upon his modern epigones instead.