Is Phil Mirowski Correct About Samuelson's Role in the False Attributions to Adam Smith About the Invisible Hand?
Brad Delong posts on Washington Centre for Equitable Growth HERE http://equitablegrowth.org/author/bdelong The Invisible Hand and the System of Natural Liberty
“The Conversation About Economic Growth with Equity that Washington Should Be Having The Invisible Hand and the System of Natural Liberty”
“So this morning I am reading Phil Mirowski’s presidential address to the historians of economic thought, and trying to keep my ire contained…
Mirowski has one good point: that Paul Samuelson, in his Economics principles textbook, started or at least greatly amplified the movement of economists citing Adam Smith’s “Invisible Hand” as his summary statement of his belief in the magic of the market–and that is not what the “Invisible Hand” did in Smith’s writings.
Phil Mirowski: Does the Victor Enjoy the Spoils?: Paul Samuelson as Historian of Economics: “There are a number of articles repeatedly pointing out that Adam Smith intended nothing resembling Pareto optimality or general equilibrium by his use of the [invisible hand] metaphor; but Gavin Kennedy (2010) has demonstrated that it was Samuelson’s 1948 introductory textbook that first ushered us down that particular cul-de-sac…”
But Mirowsky takes off from there and uses that as a springboard to say things that strike me as completely false:
Phil Mirowski: Does the Victor Enjoy the Spoils?: Paul Samuelson as Historian of Economics: “The whole fallacious drive to recast Adam Smith as a proto-neoclassical… was largely instigated by Samuelson….
Adam Smith was, in order:
An Enlightenment Scottish moral philosopher, a la David Hume…
A contributor to the existing eighteenth-century literature on “Political Oeconomy”…
The founder of Economics, and an extraordinarily strong believer in the efficacy, power, and natural justice of the properly-structured and properly-regulated competitive free market.
But when he talked about (3), he used not the metaphor of the “Invisible Hand”, but spoke instead about the “system of natural liberty”.
Thus when Mirowski says that Paul Samuelson erroneously painted Adam Smith as a “proto-neoclassical… [when he actually] intended nothing resembling Pareto optimality or general equilibrium”, it is Mirowski who is wrong, and not Samuelson
Here are five examples of how Smith uses the concept of the “system of natural liberty”–and, yes, it is something that he sees as something like general equilibrium, and something he sees as like Pareto optimality:
[Brad Delong cites the following from Adam Smith’s Wealth Of Nations for which the references are below:
“(1) Adam Smith: An Inquiry Into the Nature and Causes of the Wealth of Nations, IWN Book V chapter 9. Pages: 663
(2) Adam Smith: An Inquiry Into the Nature and Causes of the Wealth of Nations: (WN Book IV chapter 2 Pages 452-72
(3) Adam Smith: An Inquiry Into the Nature and Causes of the Wealth of Nations: WN Book II chapter 2: Pages 286-329.”
That the distinguished Brad Delong and Phil Mirowski debate from a reference to my work on naming Paul Samuelson as the origin of the modern, almost unanimous’ and false notion of Adam Smith's use of the metaphor on "an invisible hand", I confess it is pleasing to me. I shall comment more when I receive and read Mirowski’s paper in the Journal of the History of Economic Thought (full citation): Philip Mirowski (2013): “HES Presidential Address. Does the Victor enjoy the spoils? Paul Samuelson as Historian of Economics”. Journal of the History of Economic Thought, vol. 35, pp 1-17.