Saturday, September 17, 2016

David Sloan Wilson in EVONOMICS HERE
The Death of the Invisible Hand: Why the Narrow Pursuit of Self Interest Always Fails”
Regulation comes naturally for small human groups but must be constructed for large human groups.
I hope that our economy recovers, but the time has come to declare its guiding metaphor dead. This is the metaphor of the invisible hand, which makes it seem as if the narrow pursuit of self-interest miraculously results in a well-functioning society.
The invisible hand metaphor originates with Adam Smith in The Wealth of Nations(1776).
COMMENT
No it didn’t originate with Adam Smith! The Invisible Hand has a much longer history than Adam Smith use of it. In the 17th century the IH was a religious metaphor for ‘the hand of God’, which continued into the 19th century, and it can still be reported as such through to the 21st century. (Google “invisible hand” and see how often and in what form it is mentioned daily).
Moreover, Adam Smith was credited with a version of the IH metaphor that has become universal for its quite different role today. Paul Samuelson was responsible for this modern secular version becoming so popular in his 1948 textbook, Economics, reporting it as being about how “selfish” actions lead to public benefits. 
After 19 editions of his textbook to 2010, Samuelson’s 5+ million readers innocently spread Samuelson’s original misguided assertion which  became the dominant narrative, despite some attempts by Samuelson (particularly with his co-writer, Nordhouse, to modify his 1948 erroneous assertion in later editions of his famous textbook). 
See my article, in the History of Economic Ideas, “PAUL SAMUELSON AND THE INVENTION OF THE MODERN ECONOMICS OF THE INVISIBLE HAND”.

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