Blog Outrages!

The History of Economic Thought 40^th Anniversary Conference

Pollock Halls

University of Edinburgh

3-5 September 2008

Adam Smith and the Invisible Hand: from metaphor to myth

Gavin Kennedy

Emeritus Professor, Heriot-Watt University, Edinburgh

‘It almost seems as if Adam Smith, who only intends to write an economic Inquiry into the Nature and Causes of the Wealth Of Nations, is led by an invisible hand to promote and end which was not part of his intentions: the writing of a Gothic Novel’

(Andriopoulos, S. 1999 ‘The Invisible Hand: Supernatural Agency in Political Economy and the Gothic Novel’, English Literary History – Vol. 66, No. 3, pp. 739-758)

[May be quoted or commented upon without permission]

Contact: gavinK9@gmail.com

Adam Smith and the Invisible Hand: from metaphor to myth

Gavin Kennedy

Introduction

References to the ‘invisible hand’ are ubiquitous in books and articles from scholarly, and media sources, that mention Adam Smith.  This is strange because Adam Smith did not credit the invisible hand metaphor with the importance that authors, from the mid-20^th century onwards, give to it.  In this paper I discuss what Adam Smith most probably meant by his use of the ‘invisible hand’ metaphor. [1]

Among recent contributors, William Grampp identified nine different meanings given to the invisible hand (ten, including his own, ‘strange’, one) in modern literature.[2] Warren Samuels is preparing a typically authoritative analysis of the way the invisible hand has been used by modern economists.[3] Emma Rothschild gave a detailed exposition of the invisible hand and what Smith meant by it – a ‘mildly ironic joke’ in her considered view - in a 1994 session of the American Economic Association, which she later expanded into an authoritative treatment in 2002.[4]

I shall argue slightly differently that Smith had no ‘theory’ of invisible hands and that he showed no inclination to treat the invisible hand as anything more than an isolated, though well-known metaphor in mid-18^th-century literature.  Significantly, in Books I and II of Wealth Of Nations, and contrary to the assumptions of the modern consensus, he gave the invisible hand no role in his theory of competitive markets. Such roles as it has been given rely completely on assertions and interpolations by modern economists which are not supported by Smith’s texts.

The invisible hand metaphor is important because of the use of it by modern economists has stretched its application way beyond its lowly significance to Adam Smith which, it is arguable, damages our understanding of his moral philosophy and political economy. 

Currently, with economies entering the initial phases of recession, an immediate consequence of the invisible hand rhetoric of the post-mid-20th century declamations of those who repeatedly magnified a mere metaphor into a ‘theory’, ‘concept’, even ‘paradigm’ of high importance to their analyses of how market economies work and claimed to justify why government interventions were unnecessary, it has generated a torrent of mocking condemnations of its evident impotence to explain, let alone prevent, what are perceived to be serious global market failures. 

Exponents of the invisible hand are silent about what went wrong with their assertions that individuals and corporations acting in their self interests unintentionally serve the wider public good and must (not just should) be left alone.  The relatively sudden collapse in market confidence has in turn been a propaganda godsend to those who oppose markets as the primary source of economic wellbeing in favour of state management. 

The failure of the myth of the invisible hand to achieve what its proponents preached about it is embarrassing for those who taught its fallacies; it has been harmful to the long-term reputation of the wholly innocent Adam Smith, who never gave the metaphor anything remotely like what modern economists loudly and repeatedly claimed for it with that arrogance of certainty that Smith reserved for the ‘man of system…wise in his conceit’ (TMS VI.ii.2.17: p 233-4).

Added to these consequences, the myth of the invisible hand taught generations of economists to believe in an impossible idea, namely that markets, though thoroughly understood in the real world, were somehow (why was never explained) under the influence of a ghostly essence, which some cast in the role of the ‘hand of god’ intervening in and assuring an outcome which was an absurdity outside the bounds of scientific inquiry.   Because the myth was invented by economists of stature in the profession it gained undeserved credibility and poses a serious barrier to those economists who read Adam Smith’s works and seek to return the metaphor to its purely literary role of little note to the author who used it.  

The ‘invisible hand’ appears once in his History of Astronomy,[5] referring to pagan and heathen superstitions about the existence of invisible gods; once in Moral Sentiments,[6] referring to feudal lords divvying up their produce among their retainers and tenants in roughly the same proportions as would be distributed if the land had been divided equally; and once in Wealth Of Nations,[7] referring to their risk aversion incentivising merchants to act circumspectly in their preference for domestic projects, which unintentionally benefited the domestic economy. This is only three times in over a million words in his surviving essays and books, written between c.1744 and 1790.

Yet, three leading economists (Nobel Prize Winners) lauded the invisible hand metaphor,[8] describing it variously as:

 

● ‘The profoundest observation of Smith’ … ‘the system works behind the backs of the participants; the directing hand is invisible.’;

● ‘surely the most important contribution [of] economic thought’;

● ‘one of the great ideas of history and one of the most influential’. [9] 

How did Smith’s casual metaphor achieve such high status when neither he nor readers, up to the late 19^th century, took much notice of it?[10]

The invisible hand is called Smith’s metaphor, but he didn’t invent it.  Scholars [11] (I have drawn on their work for what follows) report many early literary references to ‘invisible hands’, showing substantial prior use of it before Smith and with whose work he was familiar (he had many of their books in his library):

●        Homer (Iliad, 720 BC); ‘And from behind Zeus thrust him [Hector] on        with  exceeding mighty hand’; [12]   

●        Horace, Fulminantis manus Jovis (‘The mighty hand of        thundering Jove’); [13]

●        Ovid of Caeneus at Troy: ‘twisted and plied his invisible hand,     inflicting wound within wound’;[14]

●        Lactantius (De divinio praemio, c.250-325): early use of ‘invisibilis’;                 

●        Augustine, 354-430AD, “God’s ‘hand’ is his power, which moves    visible things by invisible means’;[15]  

●        Shakespeare, (1605) ‘Thy Bloody and Invisible Hand’;[16]

●        Glanvill, J. 1661. ‘nature work[ing] by an invisible hand in all things’;      ‘invisible intellectual agents’;[17]

●        Voltaire (1694-1778) in (1718): “Tremble, unfortunate King, an       invisible hand suspends above your head’; and ‘an invisible       hand   pushed away my presents’;[18]

●        Daniel Defoe, ‘A sudden Blow from an almost invisible Hand, blasted        all my Happiness’, in Moll Flanders (1722); ‘it has all been brought to        pass by an invisible hand’ (Colonel Jack, 1723); [19]

●        Nicolas Lenglet Dufesnoy (1735) an “invisible hand” has sole power          over “what happens under our eyes”;[20]

●        Charles Rollin (1661-1741), whom Pierre Force describes as ‘very well     known in English and Scottish Universities’, said of the military       successes of Israeli Kings “the rapidity of their consequences ought to      have enabled them to discern the invisible hand which conducted           them”;[21] 

●        William Leechman (1755): ‘the silent and unseen hand of an all wise        Providence which over-rules all the events all the events of human       life, and all the resolutions of the human will’;[22]

●        Charles Bonnet (whom Smith befriended in Geneva in 1765) wrote of      the economy of the animal: “It is led towards its end by an invisible         hand”;[23]
●        Jean-Baptiste Robinet (1761) (a translator of Hume) refers to fresh          water as “those basins of mineral water, prepared by an invisible      hand”;[24]

●        Walpole, H. 1764. ‘the door was clapped-to with violence by an    invisible hand’[25]

●        Reeve, C. (1778) ‘Presently after, he thought he was hurried away          by an invisible hand, and led into a wild heath’.[26]

His use of the invisible hand metaphor was hardly remarked upon until assumptions about its role slipped into the mainstream almost unnoticed and unquestioned; it only became synonymous with his name from the mid-20^th century onwards.  Among the few exceptions were Karen Vaughan,[27] Emma Rothschild and Sam Fleischacker.[28]

To open the discussion on what Smith may have meant by his use of the metaphors such as ‘an invisible hand’, note how he described the role of metaphors in his lectures on Rhetoric in 1763. While discussing how Shakespeare used metaphors, he described them as a ‘figure of speech’ in which ‘there must be an allusion betwixt one object and an other’, and that a metaphor can have ‘beauty’ if it ‘is so adapted that it gives due strength of expression to the object to be described and at the same time does this in a more striking and interesting manner’.[29]  A metaphor is representative; it does not have substance; it is not identical to its object.  It is not a paradigm.

The invisible hand in the ‘History of Astronomy’

Smith, in his History of Astronomy, published posthumously in 1795, mentions the Roman god, Jupiter, and his invisible hand.[30] Jupiter (Jove) was worshipped by Roman citizens from its early days.  Jupiter was represented by statues, paintings, pottery and on coins, the latter showing a (visible) hand which they believed fired thunderbolts at the enemies of Rome and, in later centuries, at enemies plotting sedition against the Emperor.  For religious believers, the ‘invisible hand’ was not a metaphor at all; it was real, and had all the force and terrors of Hades. This clearly separates the invisible hand of his History of Astronomy from his adoption of it as a metaphor in both Moral Sentiments and Wealth Of Nations.

Smith’s essay explains why mankind had ‘little curiosity’ in ‘the first ages of society’.  A ‘savage, whose subsistence is precarious, whose life is everyday exposed to the rudest of dangers, has no inclination to amuse himself with searching out what, when discovered, seems to serve no other purpose than to render the theatre of nature a more connected spectacle to his imagination.’  As those ‘appearances terrify him, therefore, he is disposed to believe every thing about them which can render them still more the objects of his terror’;[31] ignorance fosters paranoia.

Smith’s explanations of the origins of pagan religions gives contextual force to his casual remark about ‘the invisible hand of Jupiter,’ with absolutely no pretence that he refers to anything other than what those people believed to be a real object in their frightened and ignorant minds.  He assumed his educated readers to understand it that way. 

‘For it may be observed, that in all Polytheistic religions, among savages, as well as in the early ages of Heathen antiquity, it is the irregular events of nature only that are ascribed to the agency and power of their gods.   Fire burns, and water refreshes; heavy bodies descend, and lighter substances fly upwards, by the necessity of their own nature; nor was the invisible hand of Jupiter ever apprehended to be employed in those matters.’ [32]

Smith reworked this passage to some extent in one of his other early essays, when speaking of the ‘first ages of the world’:

‘In the first ages of the world, the seeming incoherence of the appearances of nature, so confounded mankind, that they despaired of discovering in her operations any regular system.  Their ignorance, and confusion of thought, necessarily gave birth to that pusillanimous superstition, which ascribes almost every unexpected event, to the arbitrary will of some designing, though invisible beings, who produced it for some private and particular purpose.’ [33]

He moved from the singular ‘invisible hand’ to multiple ‘invisible beings’ and rooted them in ‘pusillanimous superstition’.  There are those who believe that Smith had a notion of mystical (invisible) forces guiding the market economy, despite Smith’s analyses in Books I and II of Wealth Of Nations, which showed how a commercial economy worked without making any references to invisible hands.[34]  The invisible hand was and remains a mere metaphor that adds nothing to our understanding of how markets work. In fact, it obfuscates understanding by its metaphysical undertones.[35]

Like natural science explains the rainbow without taking anything away from our admiration of its raw beauty, Smith analysed the ‘connecting chain of intermediate events’ that fills ‘the interval betwixt them’ in the ‘ordinary course of things’, and while the philosopher lost his ‘wonder’, he gained his ‘admiration’ of the ‘beauty’ of ‘eclipses of the sun and moon’, which once ‘excited the terror and amazement of mankind, seem now no longer to be wonderful, since the connecting chain has been found out which joins them to the ordinary course of things’.[36]

‘Philosophy,’ he asserted ‘is the science of the connecting principles of nature’ [37] and like the artisan ‘who has been for many years familiar with the consequences of all the operations of his art’ and ‘feels no such interval’ between the ‘connecting principles’ of his trade, the philosopher is able, ‘by representing the invisible chains’ that ‘introduce order into this chaos of jarring discordant appearances’, to allay his ‘tumult of the imaginations, and to restore it, when it surveys the great revolutions of the universe, [and in commerce: when it reveals ‘so beautiful and so orderly a machine’[38]] to that tone of tranquillity and composure, which is both agreeable in itself, and most suitable to its nature’. [39]

Smith illustrates the pathway to Wonder without any allusions to metaphysical, spiritual or godly forces at work, for example in the

‘motion of a small piece or iron along a plain table [which] is in itself no extraordinary object, yet the person who first saw it begin, without any visible impulse, in consequence of the motion of a loadstone some little distance from it, could not behold it without the most extreme Surprise; and when that momentary emotion was over, he would still wonder how it came to be enjoined to an event so little suspected it to have any connection’.  Two objects that seem to be unconnected are ‘disjoined’, and ‘we feel a want of connection betwixt them’ and finding an explanation – the loadstone, say, connected to the iron by a magnetic field – they ‘seem no longer disjoined, and the imagination flows smoothly and easily along them’ because ‘upon the clear discovery of a connecting chain of intermediate events’ the ‘gap or interval betwixt them vanishes altogether’.[40]  It is here, unmentioned by Smith, where the role of a metaphor, like the invisible hand, could come into play, but doesn’t. We shall see when he uses the famous metaphor in Moral Sentiments and Wealth Of Nations, to supplement his complete explanations which on both occasions, he gives the full explanation first and only then he use the metaphor of an invisible hand; its significance means nothing more than that.

Important digression on the context of History of Astronomy

The history of ideas is not just an exegetical concordance of texts; it is also about the circumstances in which their authors wrote them, and the context in which Adam Smith composed HOA is a legitimate part of the history of his thoughts.

Briefly, Smith, in a letter to David Hume, referred to the HOA essay as ‘a fragment of an intended juvenile work’[41], and asked him to be his literary executor by preparing HOA for posthumous publication if anything happened to him during a visit to London to finish Wealth Of Nations for publication (Smith was burdened with hypochondria throughout his life).  Notably, Smith nearly 50 in 1773 referred to HOA as his ‘intended juvenile work’, suggesting that HOA was composed c.30 years earlier.  He had been a close (‘intimate’) friend of Hume for 22 years, but he had not shown him the lengthy essay of over 70 pages, despite their many common interests in theories of philosophy.  Smith told Hume that he could find the essay in a ‘thin folio paper book in my writing desk in my bedroom’, where he kept it for a further 17 years. 

Why was HOA so important to him that he saved it with the clear intention to have it published posthumously (which it was in 1795) [42] when all his other papers – 14-16 volumes of them – were burned on his orders a few days before he died in 1790?

His modern editors of HOA, W. P. D. Wightman and J. C. Bryce, report that ‘it has been fairly generally assumed that he at least laid the foundation of the History of Astronomy at Oxford; but from further internal evidence it may be inferred that he did not finish it there.’[43]  Now, placing its origins in Oxford is interesting, because it was in Oxford that Smith had a most unhappy time from 1740-46.[44]

He suffered some kind of depressive illness, which was part hypochondria and part physical (Hume called his earlier experience of similar symptoms, ‘the disease of the learned’),[45] probably from over-studying,[46] but also because the 17-year-old had changed intellectually by his early twenties and may have suffered from a collapse of his faith, adding great stress to his ailments.  His mother had brought him up as a religious Protestant, as she was and as she remained to her death.[47] Her only portrait, aged 80, (1778) shows her holding a hymnal.

Smith was at Oxford on a Snell Exhibition[48] from Glasgow to be educated to enter the Anglican Church for a career as a Minister of the Episcopalian Church of Scotland.  He was not necessarily sticking to the official syllabi (an unconfirmed anecdote says he was caught reading Hume’s, Treatise, and was severely chastised by his tutors for doing so).[49]

His contempt for his tutors (divines of the Church of England) had not diminished 30 years later in Wealth Of Nations: ‘In the university of Oxford, the greater part of the publick professors have for these many years, given up altogether even the pretence of teaching’.[50]  He also made some unexplained ‘ageist’ remarks about unsuitability of those ‘advanced in years’ (presumably thinking of his much older and despised Oxford tutors) because they risk ‘lunacy and frenzy’ and those without imagination ‘from being late in applying, have not got those habits which dispose them to follow easily the reasonings of abstract science’; if they try to do so, ‘they become, first confused, then giddy, and at last distracted’.[51]

His personal religious problems were compounded, first by how his mother (to whom he was devoted)[52] would react to her son’s apparent withdrawal from what would be a safe and respectable job for life as a Church Minister, and second by how his academic sponsors at Glasgow University, especially Professor Francis Hutcheson, who selected him for the singular honour of going to Oxford, would regard his abandonment of their well-meaning plans for him (Hutcheson’s death on 8 August 1746, proved fortuitous in this respect; Smith commenced his final journey home to Kirkcaldy in August 1746).

The turmoil in his spirit brought him low and, I suggest, no small part was played in these events by his studies in natural philosophy and by his research for HOA, shown in its lightly disguised mocking attacks on religious attempts to explain the events of nature.  True, he only referred explicitly to pagan ‘pusillanimous superstition’, but his underlying theme is that knowledge about nature’s events that caught the attention of philosophers through the ages constantly pushed back the veil of ignorance over the obstructions from religion. 

His declaration that philosophy is ‘one of those arts which address themselves to the imagination’ and that his task was to ‘trace it, from its first origin, up to the summit of perfection to which it is at present supposed to have arrived, and which it has equally been supposed to have arrived in almost all former times’ (emphasis added)[53] is a declaration of his independence from those whose ideas about it did not go beyond what was preached on Sundays in every parish in Scotland.

Smith was wise enough in 18^th-century Scotland not to make his non-religious philosophical views public, or even to ask publicly any questions about it.  He would never have offended his mother so cruelly.  He found his soul mate with David Hume, who did reveal his scepticism too publicly and paid an academic price (being refused chairs in both Edinburgh and Glasgow Universities).[54]

Smith secretly clung onto his essay on the philosophical method, illustrated by his history of astronomy, and ensured that it would be published posthumously; leaving it to future readers to realise what was truly in his mind when he wrote it between 1744 and sometime before 1758, and why it was so important to him personally that the truth be known eventually.[55] I believe Smith’s uses of the metaphor in Moral Sentiments and Wealth Of Nations were completely different to his first use of the ‘invisible hand of Jupiter’ in HOA.

Moral Sentiments and the Invisible Hand

In Moral Sentiments the ‘invisible hand’ metaphor was a useful rhetorical literary support of his complete explanations of the ‘connecting chain of events’ linking personal motivations to their unintended consequences.

When Smith refers to ‘an invisible hand’ in Moral Sentiments, he explains fully the details of his example before he deploys the metaphor; his complete explanation was followed by the metaphor, and, therefore, the metaphor did not ‘explain’ his example; it merely supported it for those who did not understand it (not all readers in his day were graduate philosophers; Smith aimed at a wider audience among an albeit educated minority).  Savages and heathens who did not understand the science of nature relied on notions of ‘invisible beings’ with ‘invisible hands’ to explain unusual phenomena.  Some scholars, not accepting the sufficiency of his explanations, focus on the metaphor and detect theology in Smith’s language that purports to show that he was, if not a Christian, at least a Deist, [56] and a believer in Divine Providence.[57]  

Smith begins by acknowledging that others before him recognised utility was a ‘principal’ source of beauty, specifically citing David Hume’s definition that the ‘utility of any object … pleases the master [owner] by perpetually suggesting to him the pleasure or conveniency, which it is fitted to promote.’[58]  Smith agrees that beauty is closely bound with admiration for an artefact’s ‘fitness’ for its purpose; the chapter title is:  ‘Of the beauty which the appearance of utility bestows upon all the production of art, and of the extensive influence of this species of beauty’.[59]

Smith observed that ‘any production of art, should often be more valued, than the very end for which it is intended’.[60]  He found it highly significant that people were more interested in ‘the perfection of the machine that serves to attain’ some end, than they were in the end itself. By ‘art’, Smith referred to the skill or knowledge of making any mechanical or manufactured item, or any useful piece of knowledge that serves a purpose, examples of which could be appreciated by consulting contemporary encyclopaedias, [61] or by noticing the popularity of societies during the Enlightenment for the study of ‘arts’, for example the ‘Edinburgh Society for Encouraging Arts, Sciences, Manufactures, and Agriculture in Scotland’, founded in 1755.[62]

Smith describes the tragedy of the ‘poor man’s son, whom heaven in its anger has visited with ambition’, which causes him to devote himself ‘for ever to the pursuit of wealth and greatness’ and to sacrifice ‘a real tranquillity that is at all times in his power’.   The rich were admired not so much for their ‘superior ease or pleasure which they are supposed to enjoy’ as they were for their possession of ‘numberless artificial and elegant contrivances for promoting this ease or pleasure.’  He does not imagine that the rich ‘are really happier than other people, but he imagines that they possess more means of happiness’.  When the poor man’s son reaches ‘the last dregs of life’, his body ‘wasted with toil and diseases, his mind galled and ruffled by the memory of a thousand injuries and disappointments which he imagines he met with from the injustice of his enemies, or from the perfidy and ingratitude of his friends’, he begins ‘at last to find that wealth and greatness are mere trinkets of frivolous utility.’ [63]

He ‘curses ambition’ and ‘vainly regrets’ giving up ‘foolishly’ the ‘ease and the indolence’ of his youth for what he acquired in pursuit of happiness. He realises too that ‘power and riches’ are ‘enormous and operose machines contrived to produce a few trifling conveniences to the body’ and in his melancholy elaboration of this ‘splenetic philosophy’ he suffers ‘sickness and low spirits’. However, in happier times ‘of ease and prosperity’, before low spirits sets in, his ambition and optimism is transformed into admiration of the beauty of ‘the palaces and œconomy of the great’ because he believes that everything in them is ‘adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires.’[64]  It is only later as a rich man that he realises that his happiness is ephemeral; lacking the satisfaction he strove for, and not worth the anxiety, fear and sorrow to which he was exposed while acquiring his riches. But, noted Smith, ‘we rarely view it in this abstract and philosophical light’. [65]  These contrasting perspectives run right through society, reaching all levels, affecting individuals in all stages of the delusion.

Smith turns the direction of his argument from these deceptions to the role that the striving in pursuit of such mirages means for society.  For society’s sake, he assures us, it is well that these ‘deceptions’ are widespread, because ‘this deception rouses and keeps in continual motion the industry of mankind’:[66] 

‘It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth.  The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants.’ [67]

From the perspective of the delusionary commitment of human energy to what are really ephemeral goals, Smith turns to consider the affects of these delusions on the behaviours of a ‘proud and unfeeling landlord’, who views his extensive fields without a thought for the wants of his brethren.  When looking at his fields and the harvest growing on them, he imagines that he ‘consumes himself the whole harvest that grows upon them’ but he ‘will receive no more than that of the meanest peasant’ because ‘the capacity of his stomach bears no proportion to the immensity of his desires’. 

In fact, the unfeeling landlord has no choice but to dispose of the surplus above his own, even extravagant, desires in some manner.  If he doesn’t distribute the harvest, it rots in his fields or his barns, and the people, who do the work, without food would not last the winter to plant his crops in the spring.  The very notion that the rich landlord can escape his obligation to feed his employees is a nonsense that was never contemplated by other than a madman.

The landlords, therefore, can do no other, but distribute the surplus among those who:

●        ‘prepare ‘in the nicest manner’ that ‘little which he himself makes use of’;

●        ‘fit up the palace in which this little is to be consumed’;

●        ‘provide and keep in order all the different baubles and trinkets’ employed ‘in the œconomy of greatness’;

●        ‘derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice’.

●        are among ‘all the thousands whom they employ’. [68]

The ‘thousands whom they employ’ are of particular interest to Smith’s moral judgments, namely the labourers who toil in the landlord’s fields for their landlord’s wealth and for their own subsistence.  The landlord’s ‘natural selfishness and rapacity’ serves his own ‘conveniency’ and the ‘gratification’ of this own ‘vain and insatiable desires’, but the necessary and absolutely inescapable costs of his living his delusions consists of his supplying his employees’ subsistence as well.

Because the landlord does not labour, he must arrange for landless labourers to do that for him, or rent fields to tenants who deliver the bulk of the seasonal produce to him in return for receiving annual subsistence shares for their families.   Either way, the labourer’s subsistence is maintained by the surplus produce of the land above the landlord’s own generous consumption, net of next season’s seed stock.  This is stated clearly by Smith, and should not be regarded as exceptional; it is barely worthy of comment and certainly is not miraculous. 

In an otherwise interesting treatment of the invisible hand, its author  completely misinterprets Smith’s statements as an instance of the landlords’ ‘charity’, and makes the extraordinary claim that they appear to have a proclivity for being ‘dumbbells’, who ‘never learn’ that they need to make only ‘one distribution’ to the poor, not regular distributions each year! [69]

Smith asserts famously:  the landlords ‘are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among its inhabitants, and thus without intending it, without knowing it, advance the interests of the society, and afford the means to the multiplication of the species.’[70] 

Let’s address Smith’s assertion.  Taking the historical view, in Smith’s four age’s sequence, private property in land emerged 11,000-8,000 years ago as individuals first, then whole groups, left the age of hunting and entered the ages of shepherding and farming in parts of Europe (I side step historical variations of agriculture associated with the ‘hydraulic’ agricultural societies of Egypt, Babylon, India and China).[71]   In those early ages after hunting, etc., private property was inextricably bound up with agriculture and grazing land. Open fields exposed to human traffic and to wandering flocks, and free-range herds proved too troublesome in practice (as the Biblical story of Cain, the farmer, and Abel’s, the herder, travails demonstrated) [72] and these inconveniences were eliminated eventually by the gradual creation of communal and private property and its emergence as the mainstay of civilisation.  The universal experience is that without the emergence of property, human tribes remain in a state of nature.

In theory, property is not incompatible with equal portions of the land distributed among aspirant farmers.  Equality of land distribution was enshrined in early Roman agrarian law, but, noted Smith, subsequent (very human) events undid its prospects because the ‘course of human affairs, by marriage, by succession, and by alienation, necessarily deranged this original equal division, and frequently threw the lands, which had been allotted for the maintenance of many different families into the possession of a single person’, and this law ‘was either neglected and evaded, and the inequality of fortunes went on continually increasing.’ [73]

Private property in land and animals happened in conditions associated with low-density populations living in large ‘open’ territories, into which aspirant farmers could move freely up to the capacity of the available land, and up to their capacity to work it, and to their ability to overcome the objections of any current inhabitants.  Equality of land distribution limits population growth to the capacity of the settled territory to be divided into equal shares.[74]  Beyond that capacity, too many individuals seeking equal shares of viable plots would have insufficient land for maintaining equal distribution, without further conquests, possibly displacing resident populations, net of those ‘absorbed’, killed or sold into slavery; ‘solutions’ associated with Roman imperialism and the early Chinese, Mongolian empires and Babylonian and Egyptian kingdoms. 

In all events, agriculture and herding must eventually increase annual subsistence output above that obtainable from hunting and gathering, for without minimal subsistence, populations decline as infant mortality rises and life-spans contract.[75]  Minimal subsistence, related to the sustainable reproduction of the population, sets the base below which it cannot drop without impacting negatively on population.  Private property in land was viable if it raised total output of subsistence and would need to have risen above earlier levels if populations were to continue growing, keeping per capita consumption roughly constant (as appears to have happened).  Population was affected by plagues, warfare, and social practices (infanticide and age-related culls), and the amount of total subsistence diverted by the elites to buildings, temples, walls, roads, and appurtenances of ‘civilisations’, which together limited population growth to the ‘Malthusian trap’ of the available subsistence.[76]

For agriculture to be associated with sustainable rising population levels, per capita consumption had at least to match subsistence levels eventually, even if it remained below the per capita consumption of smaller hunting populations.[77]  Therefore, Smith’s assertion that private landlords divided their produce ‘very nearly the same’ as ‘would have been made had the earth been divided into equal portions’ is neither surprising, nor significant.  It was an inescapable requirement of any society, except those in terminal decline.   The self-deception that reconciled ‘proud and unfeeling’ landlords to (albeit non-egalitarian) shares of their surplus with their retainers, serfs and tenants can and did operate within a wide range of relative subsistence, from deep privation for labourers’ families to mild prosperity, as seasonal bounties and dearth allowed.

Pierre Force notes perceptively that “in the rhetorical tradition, the economy of something is the relationship between the whole and the parts”,[78] an idea pregnant with insight into Smith’s use of ‘an invisible hand’ metaphor in Moral Sentiments.  The landlord, in my view but perhaps not Pierre’s,  was not ‘led by an invisible hand’, divine or ghostly, in a mysterious or ‘miraculous’ sense that there was an actual entity driving him to act in the manner that he did; he was led, inexorably, to keep the ‘operose machines’ of the mode of subsistence working, for unless he sustained the subsistence of labourers who toiled for him on his farms, and his armed retainers to defend his property rights against rival rich, indigent poor, and foreign invaders alike, all ambitions for his personal ‘vain and insatiable desires’ would have come to nought.

As the whole is the sum of its parts, neglecting the minimal subsistence of the parts, in due course, would terminate the landlord’s access to ‘greatness and riches’. The delusion driving him would have evaporated in failure.  The stone detritus of past civilisations testifies to this stark reality since agriculture first appeared on a small portion of the Earth.

Smith’s original principle explained how utility was less important as a driver than its ‘beauty’ - a hovel and a palace provided shelter from the elements, but the beauty of the fitness for purpose of the palace drew aspirants from their beds early each morning to strive to acquire the means to acquire such beauty by either working hard, or by ensuring that others worked hard for them.

The invisible hand metaphor, as a ‘figure of speech’, does precisely its job, as Smith intended, by drawing the image of an ‘an allusion betwixt one object and an other’, the object being the self-deception of the landlord and the ‘beauty’ of the metaphor that ‘is so adapted that it gives due strength of expression to the object to be described and at the same time does this in a more striking and interesting manner’.[79]  And Smith’s prime candidate for undertaking this in a ‘striking and interesting manner’ was the well-known and oft-used contemporary literary metaphor of an invisible hand, which has come, incorrectly, though probably now irreversibly, a name tag for a version of economics, mainly from exponents of the paradigm of the near mystical, invisible force allegedly at work in modern markets.  But metaphors are representative, not real, they exist only as the imaginary image of what they allude to; they do not define it.[80]  Modern economists have projected onto a venerable metaphor a construction ill-suited for it and out with any significance given to it by Adam Smith, and, worse, have embedded it into his corpus as if it was his intention.

The invisible hand in Wealth Of Nations

Tariffs and monopolies of the home market encourage those industries that benefit from them and they thereby draw a greater share of labour and stock than would be the case in their absence.  These distortions of the ‘natural balance of an industry’ may not be justified, and may reduce the employment of capital by causing a below normal rate of capital accumulation.[81]  The principles he advanced were: ‘The general industry of society can never exceed what the capital of the society can employ’, and ‘the number of those that can be continually employed by all the members of society, must bear a certain proportion to the whole capital of that society, and never can exceed that proportion.’  He added that: ‘No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain’ and that ‘it can only divert part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society than that into which it would have gone in of its own accord’.[82]

Protection and prohibitions boost domestic production of certain items, which inevitably diverts capital and employment away from unprotected to protected sectors.  The reduced, or eliminated, competition from imports reduces the pressure of price competition on domestic suppliers, and consumers lose out from higher domestic prices that lower their real incomes.  The net gains and losses distort capital allocation across society.

When the natural inclinations of individuals are considered, they ‘continually exert’ themselves to find the most advantageous employment for their capital, and he shows that in exerting themselves in this manner they may unintentionally prefer what is most advantageous for society.[83]

When every individual exerts himself to find that employment of his capital that is most advantageous for himself, the sum of individual personal endeavours drives society to the most advantageous employment of its capital.  Smith believed this was best achieved by leaving people to find out which employment suits them best, i.e., individuals are the best judge of their self-interests and do not need central direction. But it does not follow that because they know what is best for them that the outcome is always the best for society.  In 1765, a (neglected) Finnish political economist, Anders Chydenius, published the National Gain, carrying similar passages to Smith, such as this:

‘every individual spontaneously tries to find the place and the trade in which he can best increase National Gain, if laws do not prevent him from doing so.

Every man seeks his own gain.  This inclination is so natural and necessary that all Communities in the world are founded upon it.  Otherwise Laws, punishments and rewards would not exist and mankind would soon perish altogether.  The work that has the greatest value is always best paid, and what is best paid is sought after.’[84]

Smith gives an example of where it is coincidently best for society. People prefer investment opportunities as ‘near home as possible’, with the proviso that they can obtain the ordinary, or not a great deal less than the ordinary, profits from stock.  Wholesale merchants preferred their capital ‘under [their] own immediate view and command’ and therefore preferred the home trade to the foreign trade for consumption, and both to the carrying trade.  Their behaviour was influenced by the increased risk (and thereby distrust that promoted risk aversion) of trading over longer distances for longer durations before their capital plus its profits returned. To avoid the greater risks of distant trade, they might accept lower domestic profits if they felt their capital was safer and would be replaced sooner.[85]  This last consideration of delayed turnover was not a trivial one:

“If, in the direct foreign trade of consumption which we carry on with America, the whole capital employed frequently does not come back in less than three or four years; the whole capital employed in this round-about one is not likely to come back in less than four or five. If the one can keep in constant employment but a third or a fourth part of the domestick industry which could be maintained by a capital returned once in the year, the other can keep in constant employment but a fourth or fifth part of that industry.” [86]

Given the circumstances, the outcome is unexceptional and unremarkable.  Smith asserts, in the circumstances of Britain’s protected monopolies in the colonial trade (the last qualification about the monopoly circumstances in then British colonies, is usually dropped in modern presentations of his proposition):

‘As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestick industry, and so direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of society as great as he can.’ [87]

Only after stating this logical and unexceptional outcome from his assumptions, does he introduce the now famous metaphor to underline the imperatives of natural risk-averse behaviour among some merchants:

‘He generally, indeed, neither intends to promote the publick interest, nor knows how much he is promoting it.  By preferring the support of domestick to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, 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.’ (Emphasis added)[88]

But Smith had already fully explained the reason for the merchant’s risk-averse behaviour regarding his own security before introducing the metaphor of ‘an invisible hand’ that purports to lead him to do what he did anyway in the stated circumstances.  In Smith’s corpus, the instance of the invisible hand metaphor is only a ‘relatively small point’.[89]  And this is the proper role of a metaphor; it presents the ‘complex’ mechanics of the arithmetical connection between individual actions and aggregate outcomes, into an understandable and ‘beautiful’ allusion for those of his readers not alert to his earlier explanation.  As it is, most people who quote this paragraph ignore the prime importance of the phrase it includes and upon which the link between behaviour and the outcome is paramount: ‘he intends only his own security’.

Should we interpret Smith to suggest that an individual’s motivations are too weak to affect and direct his behaviour that he needs, to coin a phrase, a helping hand?  Surely not! Needing a helping hand makes redundant his explanation of the merchant’s risk aversion to losing sight of his capital in ‘the foreign trade of consumption’.   So, how does ‘an invisible hand’ induce the behaviour that a person’s insecurity induces anyway?   It does nothing.  To believe otherwise, implies an unknown and complex (‘invisible’) element to human motivation, akin to credulous beliefs that Jupiter’s invisible hand determined human fortunes, for good or ill, which he mocked in his History of Astronomy and from which Emma Rothschild roots her interesting conclusion that Smith continued to mock those merchants whose credulity led them to require an invisible hand when clearly they did not. If it was an ‘ironic joke’, most modern economists didn’t get it.

The metaphor of an invisible hand is just a metaphor and modern wonder over its meaning is, well, meaningless.  This conclusion is underlined in the next paragraph where Smith famously (because much quoted) warns that statesman ‘who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had the folly and presumption enough to fancy himself fit to exercise it.’[90] 

If statesmen, etc., cannot be trusted (as, indeed, he believed they could not) in the allocation role, then leaving individuals to allocate their own capitals, because they are the best judges of their circumstances, makes sense, more so than the false conclusion that Smith introduced an unnecessary and redundant metaphysical entity, supposedly, of a disembodied and invisible, even godly, hand to explain what he already explained perfectly in the preceding paragraphs. 

The metaphor is not meant by Smith (the educator) to be taken literally; it was only for expository purposes for those readers (including statesmen and those who influenced them) who were unable to grasp the connecting chain between a motivation arising from risk aversion and its ‘safer’ available remedy of their investing locally and not abroad in the British colonies in North America. Remember, Book IV focussed on his critique of mercantile political economy, his ‘very violent attack [he] made upon the whole commercial system of Great Britain’,[91] which was not about markets, nor a ‘theory’ of them.

What then does the metaphor add to what we know about behaviour, and have known since the 18^th century, and not just from Adam Smith? [92]  As it was Smith’s purpose to persuade statesmen, legislators and those who influence them of the benefits of leaving merchants and manufacturers to arrange their own affairs according to their interests (within the limits of justice), his allusion to the illusion of an invisible hand reads better for those who found the link between risk aversion and social benefit too difficult to grasp or, more important perhaps, needed help to explain the connection later to others whom they wished to influence in order to carry forward Smith’s critique of existing regulatory interventions but who would not necessarily understand his arguments in detail.  Political economy was not (arguably still isn’t) an everyday subject of literate discourse in and around the British or any other legislature.[93]

Benign order?

The metaphor of ‘an invisible hand’ had little if any significance for Smith, and certainly was not his ‘greatest idea’, [94]  nor did the metaphor make ‘theoretical social science itself possible’.[95] Frederick Hayek,[96] the original author of Karen Vaughan’s ascription of the role of the invisible hand as the gateway to making social science possible, took Smith’s ‘borrowed’ metaphor to be a first approximation of his themes of ‘spontaneous order’.[97]

Smith’s identification of processes associated with the unintended consequences of individual actions in such diverse phenomena as language, money, moral sentiments, exchange and markets,[98] across social experience, are usefully judged to be an early recognition of evolutionary ‘emergent order’, which in my view is a more helpful phrase than spontaneous order, because it takes many self-correcting and self-generated, trials over long periods for a workable order to emerge as an accepted norm, whereas ‘spontaneous order’ suggests sudden change rather than evolving many steps over a long period of time, most of them in error, until the ‘correct’ one is taken.  

Complex systems like language and markets do not emerge suddenly or spontaneously and most certainly not by design; a long maturation period is required to bring them to term, as is great and persistent effort.  Two people trying to communicate in the absence of a common language make many mistakes as they experiment with different combinations of gestures, grimaces and strings of word sounds to make even simple meanings mutually understood, and, as important, to make them understood by others (they also may choose the option of not bothering to continue); hominids striking stones to make meat-cutters or axes would miss-strike and regularly break near-finished hand tools forcing them to start again, before they created workable tools replicable by others.  Those that did not master the art lost the opportunity to improve their chances of surviving long enough to breed and bring children to maturity. Time, except for the individual, was not at a premium; the emergent order of successful stone-knapping technology lasted a million years.  Long periods of individual experiments, including many dead-ends that did not produce useable or lasting innovations (or ‘spontaneous orders’), and even longer periods of changeless low-level technologies right up to the 18^th century and beyond, suggest the absence of an invisible hand.

One of the problems with mixing the concepts of spontaneous order and invisible hands is to conclude that the outcomes of individual actions are necessarily always, or mostly, benign.  Robert Nozick identifies 16 examples of ‘Invisible-hand explanations’,[99] covering evolutionary theory, ecology, race, religion, genetics, IQ, pricing, equilibria in markets, crime, trade, managerial incompetence, and economic theories, and not all of those he cited have benign outcomes.   

Karen Vaughan, however, accepts, correctly, that ‘one could easily imagine a spontaneous order in which people were led as if by an invisible hand to promote a perverse and unpleasant end’ (emphasis added).  She comments that ‘the desirability of the order that emerges as the unintended consequences of human action depends ultimately on the kind of rules and institutions within which human beings act, and the real alternatives they face’. [100]   Vaughan, correctly, undoes the connection between an always benign invisible hand and its general application. 

Parenthetically, in Smith’s usage, the ‘invisible hand’ did not act ‘as if’ it led people; the metaphor in his examples was that they were definitely ‘led by an invisible hand’. [101]  Others insert the words, ‘as if’, as a softener of the stronger imperative, ‘was led by’, changing its character while remaining safe from critical scrutiny because Adam Smith’s Works tend to remain unread.

Because individuals undertake various possible actions in response to their motivations and their regard for their self-interests as they interpret them, we can only know afterwards, and not beforehand, if and whether the summation of their actions leads to benign consequences.  What are the invisible hands doing when individuals’ actions emerge as malign outcomes for society (e.g., the ‘tragedy of the commons’)?  To imply that there are benign and malign invisible hands at work in the same space and time returns this ‘great idea of history’ to its status of a literary metaphor.  Whatever the answer, the possibility, and the incidence in Wealth Of Nations of malign outcomes, compromises the metaphor’s alleged benign imperative. [102]

Smith was not party to the idea that self-interested actions were always socially benign; his was not a generalised explanation of all unintended consequences, but a partial one and it acts ‘in this, as in many other cases’, selectively.[103]  It was not a universal benign rule for markets, which would have required Smith to have written: ‘in this, as in all other or most other cases’. 

Indeed, as Fleischacker points out: ‘If he had wanted to proclaim that an invisible hand always guides individual economic decisions toward the good of society, we would expect the proclamation at the opening of the book, as part of his grounding theory of economic activity.  The theory Smith gives us there does support the claim that individuals generally promote the social good in their economic behaviour without intending to do so, but there is no hint that this holds in all cases, much less that it is guaranteed to hold by either empirical or metaphysical laws’.[104]

Human behaviours in situations where markets operate less than competitively in aggregate, can and do result in sub-optimal outcomes, such as from the imposition of monopolies, protectionism, and conspiracies to restrict supplies, to which we can add, pollution and indifference to spill-over externalities, and tragedies of the commons.  Whether in the mathematical theory of perfectly competitive conditions in general equilibrium the ‘many other’ cases qualifier becomes ‘all other cases’ is beside the point; these conditions do not exist outside the constructs of the theory, from which humans are absent.   Modern benign invisible hand explanations from the second half of the 20^th century elevated the metaphor into ‘principles’, ‘theories’ and ‘paradigms’ of markets but do not correspond to anything written or implied in Smith. 

There are paragraphs in Wealth Of Nations relevant to the invisible hand debate which do not mention anything about ‘an invisible hand’, including some that refer directly to the same instance in which the metaphor was used by Smith. Its absence in these instances is a glaring confirmation that his earlier use was as a literary metaphor and not evidence of a new theory, precisely because he gives a complete economic explanation of the merchants’ risk-averse behaviour and its consequences without resort to the metaphor.   Because of their importance in this debate, I quote an important instance of the absence of the metaphor, where it may be thought to have particular relevance, though it makes no mention of an invisible hand:  

‘The mercantile stock of every country, it has been shewn in the second book, naturally seeks, if one may say so, the employment most advantageous to that country.   If it is employed in the carrying trade, the country to which it belongs becomes the emporium of the goods of all countries whose trade that stock carries on.  But the owner of that stock necessarily wishes to dispose of as great a part of those goods as he can at home.   He thereby saves himself the trouble, risk, and expence, of exportation, and he will upon that account be glad to sell them at home, not only for a much smaller price, but with somewhat a smaller profit than he might expect to make by sending them abroad. He naturally, therefore, endeavours as much as he can to turn his carrying trade into a foreign trade of consumption.  If his stock again is employed in a foreign trade of consumption, he will, for the same reason, be glad to dispose of at home as great a part as he can of the home goods, which he collects in order to export to some foreign market, and he will thus endeavour, as much as he can, to turn his foreign trade of consumption into a home trade.  The mercantile stock of every country naturally courts in this manner the near, and shuns the distant employment; naturally courts the employment in which the returns are frequent, and shuns that in which they are distant and slow; naturally courts the employment in which it can maintain the greatest quantity of productive labour in the country to which it belongs, or in which its owner resides, and shuns that in which it can maintain there the smallest quantity.  It naturally courts the employment which in ordinary cases is most advantageous, and shuns that which in ordinary cases is least advantageous to that country.’ [105]

Smith continues in this vein because distant trade is ‘as necessary for the welfare of the society as a near one’.  How then does it occur naturally that some stock should be withdrawn from advantageous employment locally to distant locations where it is less advantageous?  The answer is fully explained in the model from Book II, namely the higher profits obtainable in distant trade (scarcer capital is employed in distant than local trade, raising the market rate of profit above its natural rate), which motivates some individuals to overcome their risk aversion.

‘It is thus that the private interests and passions of individuals naturally dispose them to turn their stock towards employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution.   Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society, among all the different employments carried on it, as nearly as possible in the proportion which is most agreeable to the interests of the whole society.’ [106]

Again, he makes no mention of the intervention of ‘an invisible hand’.  This is because there is no need for anything remotely mystical to be said about market signals and incentives.  The natural workings of markets are fully sufficient to explain what happens and do not need ‘invisible hands’.

Why then did Smith not mention that ‘an invisible hand’ intervened in these and other cases?  How then, pace those who assert that Smith believed they worked under the benign influence of ‘an invisible hand’ (his ‘proudest’ and ‘most important contribution [to] economic thought’, and ‘one of the great ideas of history’), [107] were they led to do precisely what he clearly showed elsewhere throughout his book they did on their own unaided account?  

In the two cases in which the metaphor was deployed, as an after thought following his full and explicit explanation of the circumstances, what does ‘an invisible hand’ add to the clarity of the self-deception of landlords and the risk-aversion of merchants?  Rich landlords and merchants did not need to be ‘led by an invisible hand’ to prefer what they did from their existing knowledge of their circumstances.   

And Smith reminds us of the consequences for consumers and society generally when the self-interests of merchants are let loose on the wider public interest: merchants demand, and proselytise among gullible legislators for ‘high duties’ and ‘absolute prohibitions’ against foreign countries’ exports. [108] It is in their interests to do so, but not necessarily in the interests of consumers. 

He is even more critical of the clash of interests in Book I:  The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the publick. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the publick; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the publick, who have generally an interest to deceive and even to oppress the publick, and who accordingly have, upon many occasions, both deceived and oppressed it.’ [109]

The invisible hand metaphor added nothing to what Smith, the analyst, and his attentive readers, knew.  It was a ‘device’ to keep the attention of his other readers. Understanding the processes behind these cases is more important than the metaphor.  In Book II, Smith the educator explains why at times he goes into pedestrian detail, in this case over the complexities of banking practices, but his remarks could be applied to his analysis of the complexities of the political economy of Britain’s foreign trade and its colonies and elsewhere:

‘The practice of drawing and redrawing is so well known to all men of business, that it may perhaps be thought unnecessary to give any account of it. But as this book may come into the hands of many people who are not men of business, and as the effects of this practice upon the banking trade are not perhaps generally understood even by men of business themselves, I shall endeavour to explain it as distinctly as I can.’[110]

His use of a metaphor to support an explanation of the effects of incentives on individual merchants, therefore, is not exceptional and is understandable, but it had in this case the unforeseen effect of creating an ever growing literary industry from the late 20^th century devoted to those proclaiming it as proof of grand religious and deeply mystical meanings in his moral philosophy and political economy (such assertions about the invisible hand metaphor cannot apply to HOA, as its context reveals his deep, even mocking, skepticism of religious explanations).  What posterity, if it had noticed, might have made of his use of his plea to ‘be allowed’, for example, to use ‘so violent a metaphor’ as one he used in Book II, of ‘a sort of wagon-way through the air’[111] (shades of terrestrial levitation?) when discussing ‘judicious operations of banking’, does not bear thinking about!

Smith had to make a convincing case for as wide a readership as possible, otherwise his ‘clear and distinct confutation’[112] of mercantile policies would have been compromised, and with it his ‘very violent attack upon the whole commercial system of Great Britain’ would have stalled.[113]   

Smith insisted that individuals in the two cases, whatever their state of ignorance of, or indifference to the public good, would act, if allowed to act in their own best interests as they see them in their circumstances, to maximise their returns from their capital and labour, and in doing so, they would contribute towards maximising the annual revenues of society.  The ‘logic’ and the arithmetic were faultless, yet doubts must linger about their inevitability.  Legislators and those who influence them – his target audience – may not be given to accepting his arguments from their prejudices, from receiving the persuasion of ‘gold’ and social preferment, and from the complexities of competing views on political economy. 

If a metaphor – ‘a wagon-way through the air’, or ‘an invisible hand’ – helped some readers to understand his main points, then so be it; Smith the educator spent his adult life ‘persuading’ students, colleagues, legislators, influencers and readers of his book, to change the commercial system of Great Britain and he drew on literature and his natural talents to make the best case for the change as possible.

[Revised: 24 October 2008]

END NOTES