What Can Shakespeare Teach Modern Economists?
"Sick Economies: Drama, Mercantilism, and Disease in Shakespeare’s England in Penn Current
(News, ideas, and conversations from the University of Pennsylvania)
HERE (Originally published on February 26, 2004)
“The body has long played a role in Western perceptions of the economic. In 18th-century France, physiocrats talked of the blood-like circulation of wealth, while Scottish economist Adam Smith wrote about the “invisible hand” of the market.”
Half-understood notions of analogy, good and violent metaphors, overworked similes, and wishful allegories, are the stuff off bad writing and the absence of perspicuity. This last, in Smith’s firm view, was the main object of good writing.
Of such offences Adam Smith was not guilty. He was an accomplished Rhetorician from the classical mould. He lectured on Rhetoric and Belles Lettres from 1748 to 1751 in a borrowed meeting hall belonging to the Philosophical Society.
Smith’s lectures were delivered to a “respectable auditory” of Edinburgh citizens and also some students of law and theology from the local university attending in their spare time. Edinburgh University at that time, and for another 60 years did not have classes in rhetoric. From attendees fees, Smith earned around £100 a year from his Rhetoric lectures, a goodly sum at that time.
Most fortunately for scholars today, a set of Smith’s Rhetoric lectures were taken down by students attending Glasgow University the 1762-3 session and were found, fortuitously, among the papers offered for sale in an Aberdeen house-clearance in 1962. These verbatim lectures notes were published in the “Glasgow Edition of the Works and Correspondence of Adam Smith” from 1976-83 as “Lectures on Rhetoric and Belles Lettres”.
In this context, that part of the sentence quoted above, specifically, that the “Scottish economist Adam Smith wrote about the ‘invisible hand’ of the market” is absolutely untrue. Nowhere in anything Adam Smith wrote did he refer to the ‘invisible hand’ of the market”.
Yet such authors who regularly make such assertions are apparently immune to (polite) correction. Not surprisingly, at least to Lost Legacy’, the same immunity to polite correction extends beyond the ill informed, such as the author of the above, but also to the well-informed scholars with whom I have corresponded, and from their writings, it applies to the highly well-informed, Noble prize-winners and leading scholars too, who, as regularly, give the same false assertions an unjustified status of credibility.
So, why is the misreading of, or the plain invention of, the “invisible hand of the market”, apart from its associated misattribution to Adam Smith, so important?
As a literary error, it is possibly less important in the great scale of history, but it is of the utmost importance and significance in the science of political economy. I have tended to underplay this aspect, though, of course, it is of the utmost importance in the real world affecting billions of people going about the “ordinary business of life”.
If the belief of an “invisible hand of the market” becomes the agenda for economic policy choices and disappointed, and decision makers acting on that belief are likely to be sorely misled. Moreover, if opponents of the consequential policies that flow from those beliefs, do not like the outcomes that follow and adopt alternative agenda instead – such as derived from the equally fictional “visible hand of the state” – we end up with the inevitable political economy of “turn-about” politics depending on which party’s turn it is on attaining office to reverse the policies and institutions of the previous government.
Lastly, back to Shakespeare. He knew nothing of the “invisible hand of the market”, but he did know of the “invisible hand” metaphor. In fact he used it once as: “They bloody and invisible hand” (Macbeth 1605: 2.3). Similarly many other authors used it in the 17th-18th centuries, as well as countless preachers (“Hand of God”), including preachers known to and possibly heard by Smith ((William Robertson, Hugh Blair, etc.,).
'Tis a pity that some academics invented a fiction about Adam Smith and the "IH of markets" and have followed a fictional entity supposedly guiding markets to an equilibrium that doesn't exist at the cost of policies appropriate for market economies that do exist.
Thank goodness medicine didn't similarly tread water, otherwise the ignorance of medicine in Shakespeare's time would still be with us! How long before modern economists wake up and smell the coffee? (Note the use of simile and metaphor).