SMITH'S NOT SO 'NOTORIOUS' METAPHOR OF THE INVISIBLE HAND

Wayne Burrows posts ((25 June 2014) commenting on an article, first published in June, 2013): HERE 

Waymes comments are on Blue:

“THE INVISIBLE HAND, PUPAPHOBIA AND THE PUPPET STATE”

“Perhaps it’s significant now, in a way it might not have been in the mid-1960s, when the films were made, that the central justifying metaphor of the neoliberal free market is ‘the invisible hand’, the Enlightenment economist Adam Smith’s coinage for one of the many forces creating disjunctions between the intended and actual consequences of human and social actions in complex systems of the kind his classic study, The Wealth of Nations (1776), explored. Raised to a fetish by the advocates of deregulation and privatisation in the 1970s and 1980s, Smith’s concept of an ‘invisible hand’ at work in an economy, directing money to the deserving while securing the most efficient and beneficial ends for all, has become the free market’s founding catechism and a notion that puppetry fits like the proverbial glove.

If the allegorical point made by Jiří Trnka’s Ruka was largely directed at Stalinist control of cultural production in his own time and place, then, its contemporary resonance may be quite different, since the hand’s controlling powers – most forceful when the hand is that of the puppeteer, concealed from view as it invariably is – ensure that the forces acting on us in our everyday lives pass unnoticed, as somehow ‘natural’. …

The failure to observe or understand the forces that shape us reduces us to the condition of puppets ourselves, a position of superstition and fear as to what purpose the ‘invisible hand’ might have for us. Those who would claim to comprehend these forces on our behalf, to defend us from their worst effects, are, by definition, the powerful: those who ‘lead’, as Jan Švankmajer suggested in 1997, ‘the Great Manipulators’. When Adam Smith first deployed his now notorious image of the ‘invisible hand’ in The History of Astronomy, a work dating from the late 1750s, it was, strangely enough, in precisely this context, a point that flags up a warning about its decontextualisation when quoted from later texts. In the 1750s, Smith noted that, in an age before rational enquiry, “fire burns and water refreshes; heavy bodies descend and lighter substances fly upwards by the necessity of their own nature; nor is the invisible hand of Jupiter ever apprehended to be employed in those matters.” The ‘invisible hand’ is here that of the Gods who must be appeased, regardless of the social and natural forces at work; the Gods whose influences must necessarily disappear once Enlightenment and Reason hold sway and we finally shape our own destinies through the pursuit of new knowledge.”

Comment

The “central justifying metaphor of the neoliberal free market is the invisible hand” may well be true and fits to underlying confusion between so-called neo-liberal ideologies that are rampant in US politics” but such views have little connection to “the purported views of “the Enlightenment economist Adam Smith’s coinage for one of the many forces creating disjunctions between the intended and actual consequences of human and social actions”.

Such purported views are completely at odds with Smith’s use of the IH metaphor.  Smith’s did not have a “concept of an ‘invisible hand’ at work in an economy, directing money to the deserving while securing the most efficient and beneficial ends for all”. For Smith metaphors were used to “describe in a more striking and interesting manner” the "object" to which they referred.  I would expect a literate dramatist to know about metaphoric rhetoric in the English language.  Smith lectured annually on Rhetoric in the English language from 1748-63 (15 years).  A near verbatim copy of his Rhetoric lectures was discovered in 1958 and has been available in print since1983 from the Oxford University Press (and in a low-price edition by Liberty Press).  

Wayne Burrows should read Smith's Rhetoric lectures before accepting the neo-liberal fabrication of Smith’s meaning when he used the “invisible hand” metaphor.  He should also read Smith’s biography - I recommend Ian Ross: ‘The Life of Adam Smith’, 2010, 2nd ed. Oxford University Press before making assertions about Smith’s Works.

Smith wrote what became ‘The History of Astronomy” between 1744 and 1758, but until 1795 it remained in manuscript form only.  He kept it in a bureau in his bedroom, showing it to nobody, not even his close friend, David Hume, until he informed him by letter of it and where to find it prior to his trip to London, and should Smith not return, he told him to publish it if he died   On his death bed, in 1790, he told his executors (Joseph Black and James Hutton) to publish it posthumously, which they did in 1795.  

Apart from his account of the history of astronomy up to to Newton, its first part was basically on the history of philosophy from ancient times and throughout pagan theological superstition. "Astronomy" had nothing to do with markets! Its reference in a passing remark to the “invisible hand” was to the Roman classical god, Jupiter, that was widely believed to fire from his invisible finger visible lightening bolts at citizens who were enemies of Rome during Roman storms (a wholly frightening experience I can affirm, having lived in Rome and its storms while working for UNESCO).  Hence, Wayne’s reference to “a point that flags up a warning about its decontextualisation when quoted from later texts”, is more than misleading, to say the least.

Wayne continues: “Smith’s concept of an ‘invisible hand’ at work in an economy, directing money to the deserving while securing the most efficient and beneficial ends for all” is also misleading.

His two other references to the IH are not supported by Smith’s texts. His reference to the IH in Moral Sentiments had nothing to do with market economies; it refers to relations between “proud and unfeeling landlords” in the history of agriculture which covers many millennia from c.10,000 years ago, during which times said landlords fed their slaves, serfs, and labourers in exchange for their forced (to pit it mildly) labours that supported the landlord’s (Emperors, Kings, and Warlords, etc.) “greatness” (“palaces”, Pyramids and etc.).  Without food the labourers and their families would starve to death and without their labour, the landlords would lose their “greatness”.

The “invisible hand” metaphorically described “in a striking and more interesting manner” the exchange relations between “proud and unfeeling” landlords and their unhappy labourers, founded on their separate motivations for acting as they did: no labour, no food; no food production; no Landlord's greatness. In so acting, the said Lords and Labourers intentionally their immediate needs which enabled them to continue their rather one-sided relationship. However, in the very long-term their motivated actions also had unintentional consequence that Smith noted benefitted human societies, which consequence Smith identified as “the propagation of the species”.

Waynes assertion of Smith’s concept of an ‘invisible hand’ at work in an economy” is similarly unfounded. Wealth Of Nations (Book IV) refers to some (not all) “merchants and manufacturers” who are led by their motives to actions that intentionally lowered the perceived risks from foreign trade. By so investing locally they avoided foreign trade. However, such actions to achieve their intended consequences also had unintended consequences, specifically by adding their capital to “domestic revenue and employment”, they added to the amount of domestic employment available and to national wealth creation. This unintended consequence was beneficial to the society. But this had nothing to do with the metaphor of an “invisible hand”. There is no directing “invisible hand”, guiding a comercial economy: the invisible hand is a metaphor for the motives that drives people to take an action to achieve their intended consequence, and in doing so the unintended consequences may be benign socially, or not as the case may be. That is why we describe the unintended consquence as a result of the actions, but not the initial motives for those actions.

There are many motives for the actions of agents in an economy. Not all are socially beneficial. Smith details many instances (so many that many modern economists, including ideological rightists and leftists) have remarked in puzzlement at his numerous instances of the anti-social behaviours of  “merchants and manufacturers” in Wealth Of Nations that do not secure “the most efficient and beneficial ends for all”.  Tariffs, prohibitions, boycotts, trade wars, pollution, and 'tragedies of the commons', and so on are seldom beneficial; they reduce competition and raise prices, or destroy resources. Also State inspired policies are not necessarily an improvement on doing nothing.

Now what all this has to do with puppets, ‘fitting like a glove”, “puppet states” and so on, I leave readers to make their own minds up…