Friday, June 10, 2011

Another Queer Version of the Meaning of the Invisible Hand Metaphor

In The Educated Imagination Blog HERE:

The most idolatrous claim of the Christian right is that the invisible hand of the free market is none other than the hand of God, and any attempt to regulate the free market, according to this theology, belies a lack of faith in God.” – Andrew Walsh, author of Religion, Economics and Public Policy.

I lay the blame for such nonsense at the feet of Paul Samuelson and all the other modern economists who have taken the isolated metaphor from Adam Smith and have invented meanings for it at variance with Smith. He used a popular metaphor that was used regularly by 17th-18th century authors, poets, and men of religion, for the quite specific purpose, as all metaphors are used, namely to ‘express in a more striking and interesting manner’ its object, which in Moral Sentiments referred to ‘necessity’ leading landlords to feed their dependent serfs, labourers and their families, if they were to work each day, and in Wealth of Nations, it referred to the aversion of some, but not all merchants, of investing only 'domesitckally' from their perceived extra risks of foreign trade.

These were the only two occasions he used the IH metaphor in these two books, though he used many other metaphors throughout his books, but he never used the IH metaphor in relation to how markets work, nor for any imagined purpose to do with God.

Because Samuelson et al (including some Marxists) never stated how their imagined 'invisible hand' did what it mysteriously was supposed to do, nor how it did it, it was left open to the imagination of others to fill in the gap with their own ideas, and in the case of some it was the ‘hand of God’, and it other it was 'supply and demand', market forces, et al, though Smith defined how market forces worked in Books I and II without mentioning 'an invisible hand', and nor did he need to given his completely adequate descriptions of markets without it.

No term for the IH appears in any of the equations of those who spout a more secular version and nobody has answered yet my question: what does the IH do and how does it do exactly?

All kinds of assertions abound on what it means today, including the IH of the market, and of supply and demand. Apparently these assertions ignore the very real and very visible role of prices – yet no market can work without visible prices! There is no mystery, nor anything miraculous about markets that is 'beyond human understanding'.

That we now have ‘idolatrous claims’ from ‘the Christian right’ is not surprising. If you ignore what metaphors are, and also ignore how Adam Smith defined them (‘Lectures in Rhetoric and Belles Lettres, [1763] 1983, p 29), and to some extent you show disrespect for Adam Smith and, indeed, for his literacy in the English language.



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