Monday, April 25, 2011

Sociologists on the IH Metaphor

Steve Mcdonald and Jacob Day write in Sociology Compass, North Carolina State University (July 2010) (HERE):

Race, Gender, and the Invisible Hand of Social Capital

To better understand persistent race and gender inequality in the labor market, this article discusses the informal processes by which social connections provide individuals with access to information, influence, and status that help to further people’s careers. Because social networks are segregated by race and gender, access to these social capital resources tends to be greater for white men than for minorities and women. To illustrate this point, research on the invisible hand of social capital is presented. In short, high-level job openings are commonly filled with non-searchers – people who are not looking for new jobs – thanks to their receipt of unsolicited job leads. Recent studies find that this process operates more effectively for white men than for minorities and women, demonstrating how the invisible hand of social capital helps to perpetuate race and gender inequality. The article concludes with a discussion of the implications of these findings and directions for future research.”

It seems that the sociologists have captured a metaphor commonly claimed by modern economists since the 1940s and attributed historically to Adam Smith, but only after garbling Smith’s use of the popular 17-18th-century metaphor and transforming it into a new meaning inspired by mathematical models, though a term for it is absent from all the equations.

A metaphor can be applied by an author to any object which it represents in a “more striking and interesting manner” (Adam Smith, Lectures on Rhetoric and Belles Lettres, [1763] 1983, p 29).

However, some metaphors work for their objects, and some don’t. This one from sociology may work or may not. I only read the abstract; the article is behind a subscription wall.

Smith’s worked for his use of “an invisible hand”, once in Moral Sentiments (1759) and once in Wealth Of Nations (1776). It doesn’t work in its modern uses and has been given a ‘mysterious’, even ‘miraculous’ role, never explained. When all else fails, its modern exponents revert to the default meaning of a “hand of God’ (interestingly, the most common meaning to the metaphor by the self-same 17th-18th theological preachers, but not by Adam Smith)

Later, in the references I found these references to the invisible hand:

“The assumption that society benefits most when individuals are allowed to define and pursue their own self interests” David Kirkwood Hart

from The Blackwell Encyclopedia of Management: the IH metaphor:

The assumption that society benefits most when individuals are allowed to define and pursue their own self‐interests, with minimal interference from governments or other authorities. However, this assumption also presumes there is some guiding natural force – seldom mentioned and almost never defined – that ensures a just equilibrium will result from such self‐interested behaviors. The concept of the invisible hand first emerges in the work of Adam Smith, who mentions it in two brief passages in his two major books. Nowadays the term has been captured by the economists, but, originally, it had more to do with Smith's moral philosophy than it did with merely his economic ideas. It is this larger, moral conception that is of greatest interest for business ethics. Smith, profoundly influenced by Stoicism, believes the invisible hand is a beneficent force of nature, operating without human intention and within a system of natural liberty, which allocates social goods in a rough and ready, but generally fair, distribution. This eventually results in the greatest happiness for the greatest number, a concept he borrows from his mentor, Francis Hutcheson. Some argue that Smith's ideas about the invisible hand come from the rather unsavory philosophy of unmitigated self‐interest advocated by his contemporary, Bernard Mandeville, who argued that the pursuit of “private vices” resulted in …

I like that: ‘captured by the economists’. Note also the assertion that “originally, it had more to do with Smith's moral philosophy” a somewhat dubious proposition in my view.

The example of Smith’s use of the IH metaphor in Moral Sentiments is not more significant than the example he gives in Wealth Of Nations. Whenever we see a metaphor we should look for the “object” to which it refers.

To clarify what the “object” means I quote from Hugh Blair, Lectures on Rhetoric and Belles Lettres, (1820) 3 volumes, London. Vol. 1, Lecture XV: Metaphors:

Metaphors are:

founded entirely on the resemblance which one object bears to another … it is no other than a comparison, expressed in an abridged form.

When I say of some great minister ‘ upholds the state, like a pillar which supports the weight of a whole edifice’, I fairly make a comparison; but when I say of such a minister ‘that he is a pillar of the state’, it has now become a metaphor. The comparison betwixt the minister and a pillar is made in the mind, but it is expressed without any words that denote comparison. The comparison is only insinuated, not expressed, the object is supposed to be so like the other, without formally drawing the comparison; the name of one may be put in place of the other
” (pp 342-3).

Hugh Blair took over Adam Smith’s public lectures on Rhetoric that he gave to a “respectable auditory” in Edinburgh, 1748-51, taking them inside the University o Edinburgh, where Blair was appointed a professor of Rhetoric (then a prime element of a degree in Moral Philosophy).

Note his definition and example of a metaphor, which corresponds to Adam Smith’s (and all literate persons') use of metaphor ; indeed it was – and is – the standard use of a metaphor in English language and literature, whatever else modern economists and sociologists unthinkingly assert about its meaning today.

In Moral Sentiments, the IH metaphor’s object was the absolute necessity compelling rich landlords, whatever the degree of their selfishness and indifference, to feed their servants, serfs, labourers and retainers, at least to subsistence level from the produce of their fields. In Wealth Of Nations the object of the IH metaphor was the risk aversion felt by some, but not all, merchant traders to avoid foreign trade in favour domestic trade, which added to domestic “annual revenue and employment” (the whole is the sum of its parts).

This much should be clear to any literate person, amongst which category I include all modern economists and all sociologists. Simple, eh?



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