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Review (2012): Erasing the Invisible Hand: Essays on an Elusive and Misused Concept in Economics
Erasing the Invisible Hand: Essays on an Elusive and Misused Concept in Economics
|Author(s):||Samuels, Warren J.|
Published by EH.Net (February 2012)
Warren J. Samuels (assisted by Marianne F. Johnston and William H. Perry), Erasing the Invisible Hand: Essays on an Elusive and Misused Concept in Economics. New York: Cambridge University Press, 2011. xxviii + 329 pp. $95 (hardcover), ISBN: 978-0-521-51725-6.
Reviewed for EH.Net by Gavin Kennedy, Edinburgh Business School, Heriot-Watt University, Edinburgh (Professor Emeritus).
Warren Samuels was an American historian of economic thought located at the top of its first division.? He started work for this book in 1983 and took 28 years to complete.?? This was no rushed job and it shows in his meticulous and, therefore, authoritative scholarly account of the now widely quoted ?invisible hand? (pp. 20-26). Smith did not ?coin? the phrase. It was prevalent in classical times from Aeschylus through to St Augustine, and later, in numerous seventeenth- and eighteenth-century theological texts, sermons, plays (Shakespeare), poems, and novels (Defoe, Walpole), and in political rhetoric (George Washington).??
Adam Smith used it only twice as a metaphor in his Theory of Moral Sentiments (1759) and Wealth of Nations(1776), and once in his History of Astronomy (1795, posthumous). After Smith, there was an absence of mentions of the invisible hand metaphor among economists to 1875 and near silence thereafter until it was rediscovered and re-invented into the ?founding concept? of modern economics from the 1940s.
Samuels reports Amazon listing 33,888 books discussing the invisible hand (2009). The annual rate of mentions rose from ?very low? (1816-1938), but the decade (1990-1999) recorded eight times the level of mentions between 1942-1974 and nearly 20 percent higher than for 1980-89 (p.18-19). In consequence, the invisible hand is now widely believed to be significant, and it has spread to other disciplines. Samuels dissects forensically this phenomenon of belief, though he understates the unique role of Paul Samuelson (from 1948) in popularizing modern notions of Adam Smith?s ?invisible hand.??
Samuels discusses Adam Smith?s supposed use of the invisible hand in his political economy.? Essay 3 examines the numerous modern identities of the invisible hand and Essay 4 discusses Smith?s argument that philosophical ideas help to ?soothe the imagination.? Essay 5 examines conceptual problems associated with ?naturalism? and ?supernaturalism? in philosophy.? Essay 6 examines the invisible hand as a ?figure of speech,? which for me is Samuels? most disappointing essay.? Samuels continues with his examination of the invisible hand as ?Knowledge? (Essay 7) within the economic role of government, while Essay 8 addresses misconceptions that Smith was a doctrinaire advocate of ?laissez-faire.?? Samuels continues in Essay 9 on claims that Smith?s ideas led to the welfare theorem.? Samuels? conclusions in Essay 10 are best summarized by his question: ?what is left of the invisible hand? (p. 293) and by his answer: ?There is no invisible hand as that term is used in economics.? Its continued use must at its base constitute an embarrassment.? Almost all uses of the term add nothing to substantive knowledge? (pp. 290-91).
There are two parts to the enigma of ?an invisible hand.?? There was Adam Smith?s use of the invisible hand metaphor (what did Smith mean?) and second, there is how modern economists use the same figure of speech (what do they mean?). Samuels? otherwise excellent and thorough account produces an ambiguous answer. He says that his ?account clearly does not conclude the conventional view(s) of the invisible hand is (are) wrong, in whole or in part? (p. 295). However, ?Conventional views? may well be true, if judged strictly as beliefs. Simultaneously and separately, beliefs in attributions to Adam Smith that assert his complicity in those conventional views are false.
Samuels? problem is sourced in Essay 6 on ?uncertain language.?? He identifies ?one dozen major responses? to the question of ?what is the invisible hand?? plus ?some four dozen identities? (p 135).? However, his analysis of the role of metaphors is particularly disappointing because, while he provides an authoritative survey of the modern use of metaphors and associated figures of speech, he does not acknowledge Adam Smith?s own teaching on metaphors. Instead, Samuels sources his ?conclusions? from eight twentieth-century linguistic authorities (from 1979 and 1993) and Samuel Johnson?s Dictionary (1755), of which Smith published a scathing critical review. Samuels makes no mention in the text nor in the bibliography of surely the prime witness as to what Smith meant by ?an invisible hand,? that is, Adam Smith himself!
Smith discussed the role of metaphors clearly in his ?Lectures on Rhetoric and Belles Lettres? ( 1983): ?Now it is evident that none of these metaphors can have any beauty unless it be so adapted that it gives the due strength of expression to the object to be described and at the same time does this in a more striking and interesting manner? (Smith, LRBL, Lecture 6, p. 29; see also Oxford English Dictionary, 1983).
Smith used the metaphor of ?an invisible hand? to ?describe in a more striking and interesting manner? their particular objects: it was the absolute mutual dependence of the ?unfeeling landlord? on his serfs, servants, and tenants (?no food, no labour?), and their mutual dependence on him (?no labour, no food?), which mutual dependence led him to share his crops with them, unintentionally benefiting humanity through the ?propagation of the species? (Theory Moral Sentiments, 1759, p. 185); and it was the insecurity felt by some, but not all, merchant traders, that led them to prefer to invest in ?domestick industry? (mentioned four times), rather than risk the ?foreign trade of consumption? (Wealth Of Nations, 1776, p. 456), also unintentionally benefiting society by adding to domestic revenue and employment.? Smith?s use (History of Astronomy, 1795, p. 49) of the ?invisible hand of Jupiter? simply states the pagan beliefs of Romans about their god, Jupiter, whom they believed (but never witnessed) cast his lightning bolts at humans.?? In all three cases, it is evident that for Smith the ?invisible hand? does not exist; it is an imaginary figure of speech and an imagined pagan belief.? We cannot see, but we can imagine; we may choose to believe or not to believe.? The ?invisible hand? ?corresponds to nothing in reality,? it ?contributes nothing to knowledge,? and is a ?distraction and a diversion, (Samuels, p. 146).
Samuels simultaneously announces that ?designating something ? for example, the market, the price-mechanism, an entrepreneur, or anything else? ? as the function ostensibly performed by something called ?the invisible hand? literally adds nothing.?
Warren Samuels has written an authoritative, detailed and mainly original contribution to scholarship, ably assisted by his collaborators, Marianne Johnston and William Perry.
Gavin Kennedy, professor emeritus, Heriot-Watt University, Edinburgh (gavinK9@gmail.com), is the author ofAdam Smith: A Moral Philosopher and His Political Economy, second edition, (Palgrave, 2010) and http://www.adamsmithslostlegacy.blogspot.com/
Copyright (c) 2012 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (email@example.com). Published by EH.Net (February 2012). All EH.Net reviews are archived at http://www.eh.net/BookReview.
|Subject(s):||History of Economic Thought; Methodology|
|Geographic Area(s):||General, International, or Comparative|
|Time Period(s):||18th Century
20th Century: WWII and post-WWII
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