The invisible hand was a vivid metaphor for how the market works. No more, no less. It was an attractive metaphor. It was simple and perhaps simplistic. However, people are reading too much into this metaphor, and the misunderstanding has created tremendous confusion.
People read too much into this simple and simplistic metaphor and draw unwarranted conclusions.
Joseph Tham
Thank you, professor, for bringing this really interesting topic.
I think, you are right, that it was a metaphor. Sorry to add, maybe it has misled generations.
The term "invisible hand" does not give recognition to the powerful role of the government, the institution of regulations, international agreements and collaborations-- to minimize potential problems of a free market economy.
The anthropological perspective is that this demonstrates the rooting of Economics in Christian religious theology ("the market as a representation of God") rather than science, that continues today in magical beliefs about "growth" in place of empirically based social science. I credit Noam Chomsky with focusing debate on the social sciences in a way that would separate empirical social science from theology. I recently published a piece that describes the religious aspects of contemporary economics and offers a way to restructure it as an actual science.
“Is Economics in Violation of International Law?: Remaking Economics as a Social Science,” Catalyst: A Social Justice Forum, 2018, Vol. 8, Issue 1, Article 6 , pages 95 – 260 (90,000 words) Available at: http://trace.tennessee.edu/catalyst/vol8/iss1/6 The same issue of the journal, Catalyst, on-line, has articles on similar problems and on restructuring approaches in other social sciences.
Early social science was part science (there is much empirical social science in Smith's work, as in Thomas Malthus) and part religion. By establishing clear standards, we can advance the scientific approach of these classic scholars. Unfortunately, over the past few decades, we have been regressing and turning social sciences back into ideological and theological beliefs, politicizing fields and selling them for short-term interests, distorting or erasing classic social scientific work. Perhaps in this time of the coronavirus, economic crisis and environmental collapse, people can be convinced of the value of predictive social science.
David Lempert Fascinating and intriguing response. Will need to think about it and then reply.
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