An Authentic Account of Adam Smith by Gavin Kennedy

Author:Gavin Kennedy
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

The above selections support the point about the public disbenefits or otherwise of specific, though common cases, of merchants self-motivated non-competitive behaviour. Of course, these examples of some non-beneficial actions noted by Smith should be set against the quite clear statement by Smith that the merchant’s self-motivated actions can occur in ‘this as in many other cases’. Both competitive and non-competitive behaviours of merchants and manufacturers are common in markets. Neither option should be conceived as singular events only. By placing instances as Exhibits together underlines the wider point that a merchant’s motivated actions can have either or both positive or negative outcomes for society and the merits of individual cases must be assessed on a case by case basis.

Though clearly, whilst Smith mentions that there is ‘an Invisible Hand’ affect in ‘this and many other cases’, he suggests the possibility that a multiplicity of positive ‘Invisible Hand’ affects could also occur in the natural course of an economy, as well as the possibility of a multiplicity of negative affects from individual choices of non-competitive actions by merchants and manufacturers. Only ideologues for either motivated action focus on one possible option.

That is why we must also consider Smith’s many other examples throughout Wealth of Nations where the consequences of an entrepreneur’s actions, both historically and in 1776–1790 were detrimental locally when they occurred. Specifically, non-beneficial examples are spread throughout WN.

Apart from the reference quoted earlier, from the The Antiquary (1816) by Sir Walter Scott, there were several other authors of literary fiction, who, presumably, were attracted to the ‘Invisible Hand’ for its imaginative literary potential. See: ‘Mary Shelley (1818), Frankestein. 27 In each case, nothing of particular relevance to Smith’s use of the metaphor in political economy was involved or implied by the use by these nineteenth century popular authors of fiction in their allusions to a literary ‘Invisible Hand’ but they indicate the spread of the notion beyond political economy of the popularity of the metaphor.

Raphael, F. D. and Macfie (1985) 28 give a non-fictional instance of its use in the early eighteenth century, when a captain wrote in his log that the ship had been saved from sinking by ‘the Invisible Hand of Providence’. That the idea of the guiding hand of an unseen god, ensuring desirable social consequences of self-seeking behaviour—without the phrase of the ‘Invisible Hand’ itself, however—was a commonplace of late eighteenth century social commentary was shown by Hayek, 1948: 7. 29 In references to Edmund Burke, a distant but long-time friendly correspondent of Adam Smith, who wrote in 1795 for example in reference to a theological ‘invisible’ entity: ‘The benign and wise disposer of all things … obliges men, whether they will it or not, in pursuing their own selfish interests, to connect the general good with their own individual success’ (Edmund Burke 1795).

Only five late nineteenth-century academic authors wrote of Smith’s use of the ‘Invisible Hand’ metaphor, suggesting it was not as widely recognised as it was to become from the second half of the twentieth century.

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