One of the more
acceptable ways to make a name for yourself in the more liberal areas of Academia
is to go after the moral philosopher Adam Smith (1723-1790). All you have to do is say the “right” things
about Smith, thereby demonstrating you have the “right” attitude about
capitalism and its purported high priest, and you will be accepted, or at least
acceptable — assuming you don’t transgress any other unwritten law of the
Groves of Academe.
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| Adam Smith |
A particular
fixation of modern economists and moral philosophers is Smith’s “invisible
hand.” This is odd, because neither
Smith’s detractors nor his champions appear to know what Smith was talking
about! For example, “free” (the term
should be understood in a rather limited, if not equivocal sense) market
advocates have long cited the invisible hand as the justification for laissez faire, that is, unrestrained capitalism
or similar economic programs.
Ironically,
people who actually understand Smith come to a different conclusion about the
invisible hand, even as they disagree with Smith’s individualistic emphasis. As the solidarist sociologist Father Wilhelm
Schwer noted,
Already in the circle of the
physiocrats (led by Quesnay), the expression “laissez faire” opened the way for
unchecked development and the use of individual inclinations and power,
although the founder of economic liberalism (Adam Smith, d. 1790) did not wish
it understood in the way of the later Manchester school. (Wilhelm Schwer,
S.T.D., Catholic Social Theory. St. Louis, Missouri: B. Herder Book Co.,
1940, 157-158.)
There is, in
fact, no evidence that Smith encouraged in any way the unbridled greed and
rapacity that he is often credited — if that is the right word — with
advocating or inspiring.
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| Heinrich Rommen |
It is evident,
then, that “laissez faire” is one of the many terms that were redefined as
society shifted away from its fundamental basis in the lex ratio (reason) to the lex
voluntas (will or faith). As the
solidarist jurist Dr. Heinrich A. Rommen noted in his book on the natural law,
this established an intellectual atmosphere in which moral and legal positivism
became the predominant social philosophy, and faith and reason became
antagonists instead of partners.
To explain, Laissez faire originally meant nothing more than an economic system
that recognized and protected individual initiative and sovereignty within a
clear moral and juridical framework, such as Smith described in The Theory of Moral Sentiments (1759). Under pressure from the spread of moral and
legal positivism and the consequent confusion of the difference between
absolute title but limited use, however, “leave alone” began to mean an
unrestrained “do what you will” and “might makes right.”
The invisible
hand is often cited as the basis for the neo-conservative “restoration” of Say’s
Law and the underpinnings of “supply side” economics. (See Thomas Sowell, Say’s Law:
An Historical Analysis.
Princeton, New Jersey: The Princeton
University Press, 1972.) Neo-conservatives,
however, are often not quite sure as to what the invisible hand is and how it
operates — or how it was supposed to operate.
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| See what we mean? |
The invisible is
not a mystic concept as both its supporters and critics maintain. Contrary to popular belief, Smith never said
that a metaphysical entity of some kind directs events as if human beings are
some kind of pieces on a cosmic chessboard.
Rather, the
invisible hand is a metaphor for the workings of a system, the “invisible
structure” of organized activity. Smith’s
point was that if a system is set up properly, and if the
institutions of that system are structured in a way that they conform to the
end purpose of the system (that is, they do the job for which they were
designed), then a system operates as
if an invisible hand were leading things.
That is all. No mystical beings, no cosmic force or forces
directing human actions behind the scenes, eliminating free will and
liberty. No man behind the curtain. Just people acting in accordance with certain
principles and within the parameters of established “social habits” —
institutions.
Many people,
however, fall into the trap of thinking that Smith was referring to the hand of
an actual supernatural being of some kind, and not using a metaphor for a
system. Paradoxically, at the same time,
many of Smith’s critics admit that it is a metaphor, and then continue to
analyze Smith as if he posited an actual manmade market deity. Frankly, most liberals reveal that they are
no clearer on the invisible hand concept in criticizing it, than the neo-conservatives
and capitalists are in supporting it.
No, Smith made
other mistakes in his invisible hand argument, and we may eventually get around
to taking a look at them.
#30#