Sunday, December 02, 2012

George Washington's Theological Invisible Hand

I was looking up modern textbook writes, after Samuelson’s popular text in 1948 and through 20 editions to 2010 and found an earlier post by Greg Mankiw, who teaches economics 101 at Harvard, and is the author of best selling introductory textbooks. In 2006 (4 July) he posted the following on his popular Blog:
No people can be bound to acknowledge and adore the Invisible Hand which conducts the affairs of men more than those of the United States."
The answer: George Washington in his first inaugural address.
If you read the speech, you will find that Washington was referring to God, not to the workings of supply and demand. But then Smith may well have thought of the market's "Invisible Hand" as having a degree of divinity as well.
Was it mere coincidence that Washington and Adam Smith both used the "Invisible Hand" metaphor? Perhaps, but consider this story from Princeton professor Alan Krueger:
“NOT long ago, I asked my research assistant, Melissa Clark, to track down a passage from "The Wealth of Nations" by Adam Smith. Although I expected her to consult the modern edition, she instead requested the original 1776 edition from Princeton's Rare Book Library. The librarian accidentally gave her the fifth edition, published in 1789, and therein she discovered a remarkable signature: George Washington”
Happy July 4th everyone!'
If it was the 5th edition of WN, this was a 3 volume-set that was printed in London in February 1789. The First Inaugural address was delivered in New York on 30 April, so the printed sheets for this edition were probably in circulation in sheet or bound form a month or so later, plus the time taken to ship them to New York (3 weeks?).  Truly, it was ‘hot off the press” by the time George Washington acquired the 3 volumes (the anecdote just refers to the ‘fifth’ edition).
Professor Peter Harrison, Oxford University, connects the invisible hand to the order of nature” from about 40 references in theological books and sermons (see Peter Harrison’sAdam Smith and the History of the Invisible Hand”, Journal of the History of Ideas, September, 2011) and he writes of the prevalence of the divine association of God’s “invisible hand” in Smith’s and George Washington’s time:
In short, the idea that God could accomplish his purposes, in spite of the intentions of human agents, was a standard way of deploying the notion of the invisible hand throughout the seventeenth and eighteenth centuries.”
Harrison’s article expands on the theme that the “invisible hand” was a  theological idea (I saw a draft copy before Harrison published his paper).  I have criticised the idea that the “invisible hand” had a theological meaning to Adam Smith (Kennedy, G. “The Hidden Adam Smith in his Alleged Theology”. Journal of the History of Economic Thought, Volume 33, Number 3, September 2011).
George Washington would have been well aware of the theological use of an “invisible hand” without waiting to receive his copy of Smiths 3-volume WN, read it, find the single non-theological mention of an ‘invisible hand’ tucked away near the middle of the book in an obscure argument about the effect of the felt risks of foreign trade by some, but not all, British merchants, leading them to prefer domestic to foreign trade and the arithmetically positive consequence of them so doing for British “annual revenue and employment”.  One wonders why the “hand of God” only “led” this small group of merchants to prefer domestic trade out of their “concern or their security” (mentioned four times by Smith – how many hints as to the grammatical “object” of the metaphor do readers require?).  How about all the rest of British merchants?
Given the near total dependence of the former British colonies on British trade, due to the monopolistic British Navigation Acts that guaranteed the prosperity of British traders, George Washington might have wondered why some British merchants preferred to trade locally rather than enjoy the fruits of the British trade monopoly.   It was that monopoly that was one of the reasons that motivated former colonists to join Washington’s rebellion.
I should have thought that George Washington was more inclined to find in God’s providential care much spirtual comfort from God's “invisible hand” behind the rebellion and “to acknowledge and adore the Invisible Hand which conducts the affairs of men more than those of the United States”.  I doubt that Washington was thinking about Adam Smith’s obscure reference when he composed his speech – and Greg Mankiw hints as much too.


Blogger gune said...

According to Adam smith's general supposition the mercantile stock of every country naturally courts the near and shuns the distant employment.Accordingly Adam smith's inductive analysis pay attention to the wholesale merchant who has invested his capital in the carrying trade and felt insecurity.What are his inductive inferences?1.Home is the center,2.Wholesale merchant's natural in inclination is to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry.Adam Smith has applied inductive analysis in respect of wholesale merchant to support general suppositions in regard with every individual.He infers from inductive reasoning-the capitals of the inhabitants of every country[WN.IV.ii.9].Farmer's capital is 'more secure than' that of manufacturers of whose capital is 'more secure than' that of the foreign merchant[WN.III.i.7].Security of capital is an intended end of all hot only of merchants but also of other owners of capital.Inductive analysis has been applied in order to prove deductive conclusions.Whatever the relationship existed between George Washington and theological use of an invisible hand Adam Smith thinks at one occasion from general to particular and another situation from particular to general.

5:13 pm  

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