Sunday, April 07, 2013

Unfeeling Landlords and Insecure Merchants


P. L. Thomas of Furman University writes to Blog, the becoming radical HERE 
Beyond Choice: The Invisible Hand v. Lady Justice”
One tactic common among choice advocates is to associate the Invisible Hand of the market with Lady Justice, blurring the essential nature of choice and competition as sorting mechanisms with the goal of equity among educators seeking social justice.”
“The Invisible Hand, however, driven by choice and competition always sorts and never attends to social justice or equity.
Comment
There is no such entity as an invisible hand “driven” by anything.  It is a metaphor for describing what leads a person to do something  from their motivations that has unintended consequences.
There is no “invisible hand of the market”.  It does not exist.  It is a metaphoric figure of speech that “describes in a more striking and interesting manner” the metaphor’s grammatical object.  That’s all.  Check it out in a good English language dictionary, or even in the original Latin definition.
When Adam Smith used one in his first book, Moral Sentiments (1759) he used the IH metaphor to describe the consequences of the “unfeeling landlord” feeding his serfs – the “thousands he employed” to tend his fields (almost certainly not generously – his overseers would see to that).  Why did he feed them? Landlords had no choice but to feed them. If he did not feed them they would die and be unable to labour and the consequences included they could not propagate the species. Smith described the landlords as being “led an invisible hand”, that is by using a popular metaphor much used by authors, preachers and poets in the 17th and 18th centuries.
In his second book, “Wealth Of Nations” (1776) Smith identified a number of merchants who because they felt insecure about sending their capital abroad, tended to invest “domestically”, and thereby they added arithmetically to domestic “revenue and employment”. It was their fear for the security of their capital that led them to invest domestically.  Smith described these merchants as being “led an invisible hand”, that is by using a popular metaphor much used by authors, preachers and poets in the 17th and 18th centuries, mostly before Adam Smith (who did not “coin” the metaphor, as we often hear).
Hence, promoting the “invisible hand” into an entity such that “it is driven by choice and competition” and “ always sorts and never attends to social justice or equity” is an absurd assertion both by those who might believe the proposition (many modern economists) and by those who might challenge (such as Mr. P. L. Thomas of Furman University) the validity of the proposition is an absurdity.
Mr Thomas may care to read what Adam Smith wrote about the role of metaphors by reading his “Lectures On Rhetoric and Belles Lettres” [1762-3] 1983, p.29, from Oxford University Press or Liberty Fund.

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