“Every individual… neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
Life is like a piano, what you get out of it depends on how you play it.
Due to the complexity of the world around us we have a tendency to attribute our situation to either the hand of providence (if things are good) or hidden cabals and conspiracies (if they are not). For Adam Smith things were very good. Britain in the eighteenth century was a prosperous commercial society with what appeared to be the best of all possible worlds. At least it was for Smith and those in his social class or above. It was easy for the Scottish philosopher to imagine that such good fortune had the hallmarks divine favour, and in his two treatises he described the out workings as the “invisible hand”.
Whether this invisible hand was that of God or the natural machinery of a Newtonian universe is still debated. What is agreed by Smith’s modern acolytes is that order comes out of apparent chaos, not by human design, but by sociological propensities toward selfishness. As we act toward our own self interest, Smithians would argue that “things just work out best for all concerned”, and the economy and social order rises toward ever more evolutionary perfection. It is like it is being guided by an invisible hand (see what I mean?)
What I would like to say is that this is rubbish. But I can’t say that without seeming reductionist (and crass). So I will say this; Adam Smith was only partly right. And the modern armchair economists who wax lyrical about the laissez-faire idea of free market capitalism view the world through this jaundiced looking glass. Things do NOT just work out well for everyone when we all act selfishly. Thing actually screw up majestically, mostly for those below Smith’s class, the working and the poor. This was the case in 1776 when Smith wrote his famous tome “Wealth of Nations” and it continues today. While certainly the oft-quoted “it is not from the benevolence of the butcher, the brewer, or the baker, that expect our dinner, but from their regard to their own interest” contains the superficial ring of truth, it is only a part of the truth. Successful business has always had to swallow a degree of other-interest in order to maintain their client base. In other words, it’s not just about the price and supply of goods, but also the relationship between the seller and the buyer, and other nuances that create order and social benefit. Modern business knows this but classical economists still love to pontificate about “the market” as if it was a highly trained tiger that will perform its tricks meekly so long as it is fed a raw steak every now and again. I think Siegfried and Roy (or “the Tiger King”) would beg to differ.
OK, I can imagine some readers might say, “Who do you think you are to argue with centuries of economic and sociological wisdom?” Well I am nobody. But I am a nobody with a PhD in the history of political and social reform. My research took me through the ideas eighteenth-century Scottish philosophers such as Adam Smith and his contemporaries. Even then, their ideas of self-interest as the driver of providential growth was challenged by men and women who saw many social injustices the “invisible hand” allowed to continue. Today the idea of the invisible hand of providence guiding the growth of our modern world has become a tool to hijack our economy and decimate the common good. What Milton Friedman might have shrugged helplessly and called “the market” was actually the results of decisions; decisions by people to change things, either through clever ideas, political lobbying or by mass movements of protest. Leaders with a concern for “the common good” made decisions to legislate us into the kind of prosperity we have come to see as the norm in the developed world. If we saw any kind of well-being, it wasn’t because we all acted toward our own self-interest, but because we acted partially toward this common good.
Today. Much of the world seems to many to be spiraling into chaos and disorder. I as write this, the world is aflame with protests (and some rioting) in support of the Black Lives Matter movement. We are also in the midst of the Covid-19 virus pandemic. There is a narcissistic liar ruling like a king in the United States and Britain has given a “two finger salute” as a farewell to EU membership. People are wondering how we got here. I am not totally sure, but one thing I do know is that it wasn’t Adam Smith’s invisible hand. People were to blame. Their hands are visible and their fingerprints are all over the messes we are living through. My purpose in this blog is to investigate and report what others have found about who these hands belong to, to argue for blame as well as cause and effect.
Welcome to The Visible Hand.