Saturday, January 28, 2017


Sam Rolley post (27 January) on Personal Liberty HERE 
“BUST: Trump will take the fall for the economic collapse”
“What this means is that Trump’s best efforts to revive the economy will be foiled by the invisible hand of elitist economic manipulation. The elites control the Fed– they always have. And the elites hate the populism that Trump represents– they always will.

Another populist invention of a role for the ubiquitous “invisible hand”... 


Blogger Gavin Kennedy said...

Testing the comments Section

2:56 pm  
Blogger Tom Hickey said...

He should have said "invisible fist" instead. IIRC it was Joseph Stiglitz that came up with that one.

5:04 pm  
Blogger Gavin Kennedy said...

Hi Tom
Could you elaborate a little, and explain 'IIRC'? Thanks.

7:09 am  
Blogger Tom Hickey said...

I was being facetious.

IIRC means "if I recall correctly." Actually, I did not recall this correctly.

Checking into what Joe Stiglitz said, I find that I had misremembered. What he said is, "Adam Smith's invisible hand - the idea that free markets lead to efficiency as if guided by unseen forces - is invisible, at least in part, because it is not there." So he also buys into the myth about Smith while exposing the myth about the virtuous invisible hand commonly attributed to Smith.

I was actually thinking about this:

"Blinder’s description of the invisible hand as virtuous in this context is in itself a value judgment. It would not be supported by Madrick, nor by the inhabitants of some neighborhoods in the South Bronx—with a median income of $8,700—not per month, but per year.[6] In fact, Madrick argues that we should be instilling in our students from the outset the point that markets that are not well regulated are dangerous. Without sufficient countervailing power the invisible hand becomes an invisible fist that cruelly keeps a substantial portion of the population from a decent life. So Blinder’s virtuous invisible hand should by no means be the default model taught to Princeton undergraduates; instead we need to stress that only with adequate oversight will markets provide equitable outcomes in a stable economy. Perhaps it would be best to forget about the invisible hand metaphor altogether; after all, as Stiglitz suggests it is an outdated metaphor for our time."

John Kolmos, "The Virtuous Invisible Hand of Alan Blinder" World Economics Association Newsletter 5(1), February 2015, pp. 8-9

4:59 pm  
Blogger Tom Hickey said...

Actually, quite a few people have made the observation that "Adam Smith's" (benevolent) invisible hand is really a malevolent "invisible fist." There are other interpretations of fist vs hand out there, too. You previously commented on one.

Arnold Brown wrote an article, "The invisible fist" in The Futurist; Washington33.9 (Nov 1999): 26-28, in which he contends that "Adam Smith's invisible hand" is really an "invisible fist" forcing producers to cooperate thereby reducing their market power.

Then there is is mutualist economist Kevin A. Carson. “The Iron Fist Behind the Invisible Hand: Corporate Capitalism as State Guaranteed Privilege”

Carson writes, “The current structure of capital ownership and organization of production in our so-called “market” economy, reflects coercive state intervention prior to and extraneous to the market. From the outset of the industrial revolution, what is nostalgically called “laissez-faire” was in fact a system of continuing state intervention to subsidize accumulation, guarantee privilege, and maintain work discipline.”

Lawyer Frank Pasquale's "Invisible Hand or Hidden Fist?" is about collusion among firms that led to the Global Finance Crisis.

You are probably aware of Warren J. Samuels, Erasing the Invisible Hand: Essays on an Elusive and Misused Concept in Economics (2011), in which he cites the various permutations of the invisible hand metaphor (pp. 148-149).

"“A multiplicity of copycat usages has developed. These include: a palsied hand, a grabbing hand, a vanishing hand, an invisible fist, a visible hand (government, corporate management), an invisible hand with a green thumb (profitable environmentalism, and the tracking of the invisible hand (convergence of double auctions to competitive equilibrium).”

So here we have a myth erroneously attributed to Smith multiplying itself in his name.

5:00 pm  

Post a Comment

<< Home