Friday, December 03, 2010

On The Take has Nothing to do with Smith's Use of the Invisible Hand Metaphor

Kirsten Swinth posts about “Cabritismo”, a malpractice common in Mozambique petty markets on the Fordham American Studies Blog HERE:

Coincidentally, the next morning over coffee, I read this passage, from a piece by Adam Gopnik in The New Yorker, on Adam Smith's archetypal idea, the invisible hand:

‘…one can't grasp the idea of the invisible hand without the balancing idea of the imaginary inner witness. All those [inner] moral judges are what let the invisible hand work….The narrow animal instinct is not to trade and exchange and invest; it is to hoard and guard and pillage. The acquired human trait is the market trait, and it depends on trust, sympathy. To see what happens in the absence of trust, one need only consider the recent history of the developing world; if there is not civic capital, a network of trust, already in place, "privatization" just produces kleptocracy.’

So, here is Adam Smith in 1776 understanding perfectly the cabristmo that markets, without sympathy and trust, produce. My wariness of neoliberal American ideas about unregulated markets is rather unexpectedly confirmed by looking west from Mozambique

If you are curious as to why Adam Smith’s use of the metaphor of “ is an invisible hand” linked by Kirsten Swinth to Mozambique business skimming practices, you should follow the links to a Blog from a Jesuit University in New York.

I am allowing for the fact that Kirsten quotes from Adam Gopnik in the New Yorker. And hence my remarks are directed mainly at him, not Kirsten.

From the text of the post, the author seems to believe that the invisible hand actually exists, if not physically, then certainly in effect. This a long way for a metaphor to travel in a couple of centuries, from a rhetorical device that refers to its object and describes in a “more striking and interesting manner” (Adam Smith: Lectures on Rhetoric and Belles Lettres, [1763] 1983, p 29, Oxford University Press).

What’s that you say? No. I am not joking. It was not another phrase for the magical manner in which markets operate , at least not in anything Adam Smith said about it.

The quoted passage from the New Yorker suggest that Adam Gopnik leans on Smith’s idea from his ‘Theory of Moral Sentiments (1759) of the impartial spectator to give credence to his assertion that “moral judges are what let[s] the invisible hand work”. Good try, but no cigar.

Smith in all his discussions on the role of the impartial spectator did not link it to his single use of the metaphor of “an invisible hand” in TMS. That use was about the behaviour of a “rich and unfeeling” landlord who provided his serfs and house servants with their subsistence out of his land’s produce. Why did he do this? Not because of his compassion (excluded by Smith).

We can uncover the object of the “invisible-hand” metaphor (as explained by Smith as the role of all metaphors) by asking what led the landlord to feed those who worked for them? Well, what choice did they have? Actually none. Without food, the labourers could not work, moreover, they would not last a winter. The power and self-imagined greatness rested on the productivity of their workforce. No food, no work.

Feeding their workforce, at least to a low subsistence level (and it was a bare subsistence, we know), therefore, was an absolute necessity. And necessity was the object that was expressed by the metaphor of an “invisible hand” by the 18th-century master of rhetoric, Adam Smith.

The invisible hand was not Smith’s “archetypal idea”. It was a metaphor, and one that was not original to Adam Smith. It was fairly common in the 17th-18th centuries in literature, sermons, fiction and discourse. I offer a list of examples in Adam Smith: a moral philosopher and his political economy, 2nd edition, paperback, from Palgrave, 2010, £18.99 (price check at Amazon’s). Recently, I have seen even long lists of earlier users before Smith.

It had nothing to do with the impartial spectator, nor was it connected to markets, even small markets as found in Mozambique, nor with trust and sympathy (qualities that were not common among feudal landlords!).

Lastly, Adam Smith was well aware of a capacity for cheating, fraud and other malpractices in and around markets and widely in society, and had much to say about morality in behaviour in both his Moral Sentiments and Wealth Of Nations. But its also an irrefutable fact that these observations had nothing to do with his use of the metaphor of ‘an invisible hand’ (oly used three times in all of his writings put together.



Post a Comment

<< Home