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A lot of people don’t believe in the invisible hand. The rational always have difficulty believing in what they cannot see. Even those that profess to believe in this mysterious hand often have no understanding of how it works.

I don’t suppose I can lay claim to full understanding of the mysterious nature of the invisible hand any more than any other man. But I am a believer.

How could I be anything else when the invisible hand has shaped my life in spite of my best efforts?

But before I go on, let me first give you a passage from Adam Smith’s The Wealth of the Nations to meditate on…..

By preferring the support of domestic 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. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

To often people do not stop and think about the central point of this passage. To them, it seems obvious that Adam Smith is arguing that man’s selfish choice will make society as a whole wealthier. But strictly speaking, that is not what Mr. Smith is arguing. His point was that the invisible hand would make society better even as it worked with the selfish motives of an individual.

Of course, most of the believers of the invisible hand take it for granted that a better society is a wealthier one. But many non-believers would disagree. They would argue that a society should be measured on more than just its wealth. And it is most often because of this belief that they will not believe in the invisible hand.

But I think that Adam Smith would be the first to agree that the worth of a society cannot be judged solely on the basis of its wealth. In fact, I take his whole point in invoking an “invisible hand” to be an indication that he thought that the benefits of free economic choice would go beyond the merely material.

I don’t mean to be sidetracked into an argument about what a long-dead man believed. To my mind, the truly important question is does the invisible hand exist? And does it produce benefits for society beyond merely material things?

My personal experience and my ponderings on the matter lead me to conclude that the answer is yes to both questions. In fact, I would argue that the primary purpose of the invisible hand is to produce truth. In my view, the wealth that is commonly attributed to the work of the invisible hand is only a side product of the revelation of truth.

Due to time constraints, I must leave you with that mysticism for today. But while you are waiting for me to elaborate, imagine a world in which Albert Einstein became a janitor. That is to say, imagine that he had the childhood that he really had (for that is where his character was formed) but that he lived in a society that compelled him to become a janitor. What would such a society be like?

Let us also imagine a society where he was compelled to become a businessman after having the childhood that he really had. What would such a society be like?

Let us also consider the types of societies that would enable the Amish to thrive. In which types would they fare the best and in which type would they fare the worst?

And one last question: In what type of society would it be easiest to be a hypocrite and escape attention?

To be continued….

6 Responses to “The Revenge of the Invisible Hand, part one.”

  1. on 12 Sep 2007 at 6:51 pmAnonymous

    http://www.slate.com/id/2173458

    if human depopulation is, as they seem to think, beneficial “to the planet” (as of course humans are the worst species “for the planet”!) this may be an example of individual selfish choices acheiving the desired aim much more readily…

  2. on 12 Sep 2007 at 6:58 pmAnonymous

    ok, I admit I just posted that to see your reaction to the educated class contemplating encouraging species suicide

  3. on 13 Sep 2007 at 7:25 pmApe Man

    That was a good comment.

    As it happens, that is very much the way I am planning to go with the series. Not so much the demographic angle, but rather how the over arching good that free markets provides is so often misunderstood. Most people think the benefit of a free market is prosperity, but I think that the benefit of a free market is the revelation of truth.

    To give just one example of what I mean let us say that there is a small country that has large oil deposits underneath it. Such a country could be quite wealthy with out having a free market. Yet a county with this type of wealth will almost invariably become quite corrupt.

    Why?

    Because their great wealth will insulate them from any kind of testing. They will never see a need to change their behavior. There will be no need for the truth. Their hearts will become hardened as it were.

    On the other hand, a free market is always shoving the truth right in people’s faces. That is almost invariably why people don’t like it.

    For example, how many people would be in favor of below replacement level reproduction if the government did not promise to take care of health care costs for the elderly? If people knew that they would have to depend on the good graces of the free market to take care of them in their elderly years, I don’t think they would be so cavalier about below replacement rate reproduction.

    But because people have managed to convince themselves that government will take care of them when they get older, they don’t feel the need to worry about such issues. Who needs kid when the government will take care of you?

    That is just one example of how doing away with the free market breeds the acceptance of lies.

    As for giving you a reaction to “the educated class contemplating encouraging species suicide” that will have to wait for when I am not so tired. Since you are such a loyal reader, I will make every effort to see that I post a reaction before the weekend is over.

    But while you are in the mood to admit things, could you tell me why you read this blog? I understand why most of the people who read this blog do so. But you I just don’t fathom.

    Frankly, I don’t think that I would read this blog. Anything you can get here you can get better from some place else. That is why I am curious about why you read it.

    (My essay site I am not so modest about.)

  4. on 30 Sep 2007 at 2:28 pmAnonymous

    I agree that everything you can get here you can get somewhere else better. I guess I like reading it here, because here you get this pained, incessantly self-doubting voice that nonetheless works its way to what seems to be an undeniable truth. It’s a lot more convincing and human to read of ideas through that lens than it is through most columnists, who if they have such insecurities about their beliefs, are experts at masking them. Also, I don’t understand the world, and I can’t comprehend people who do, so I like to read people who do not as well. And I have a somewhat romantic view of the “hill billy” in American life. There are probably more reasons; or perhaps the only reason is that I fell into habit of checking this site frequently because for some reason it got on my favorites list with all the other sites I check frequently.

    Anyways, keep posting, please.

  5. […] For those of you who care, that series has a better chance of being finished then most of my uncompleted series. Though you would never know it from the way I started out in Revenge of the Invisible Hand Part One, the series relates to my personal feelings of self pity over the last year or so. Since those particular feelings show no sign of going away in hurry, the impetus to finish the series is likely to remain. […]

  6. […] A while back an anonymous commenter tried to get me to react to this article in Slate. In the words of my anonymous commenter, “I just posted that to see your reaction to the educated class contemplating encouraging species suicide.” […]

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