QUICK BITS no. 11

“Steven Pearlstein is a Post economics writer. He is also Robinson Professor of Public Affairs at George Mason University. He posts (3 June) in The Washington Post HERE 

“In 1714, Bernard Mandeville published the “Fable of the Bees,” a tale of a hive of industrious and avaricious bees that became so prosperous that it had the luxury of beginning to worry about its virtue — and by so doing brought on its own demise. It was Mandeville’s paradox of “private vice and public benefit” that Adam Smith would revive decades later in writing of the “invisible hand” of the market that miraculously transforms individual greed into collective prosperity. And ever since, economists and champions of free markets have relied upon this paradox to defend not only the wealth-creating efficacy of capitalism but its morality as well.”

Comment

Adam Smith was a trenchant critic of Bernard Mandeville's political analysis. His fairy story of the Bees acting like reason-directed humans was imaginative but unreal.

At the time - 15th thru 18th centuries - there was detailed debate on European governance as the new economic forces of trade intruded on to earlier feudal and absolutist rule. For a detailed account of the transition period from Feudalism to Markets, see Istvan Hont: Jealousy of Trade: international competition and the Nation-State in historical perspective,  Balknap, Harvard.