David Hull accounts for the success of science in terms of an invisible hand mechanism, arguing that it is difficult to reconcile scientists' self-interestedness or their desire for recognition with traditional philosophical explanations for the success of science. I argue that we have less reason to invoke an invisible hand mechanism to explain the success of science than Hull implies, and that many of the practices and institutions constitutive of science are intentionally designed by scientists with (...) an eye to realizing the very goals that Hull believes need to be explained by reference to an invisible hand mechanism. Thus, I reduce the scope of Hull's invisible hand explanation and supplement it by appealing to a hidden hand explanation. (shrink)

In this paper I will discuss the idea of the invisible hand in the connection of its recent use in the philosophy of science. It has been invoked by some philosophers of science with a naturalistic bent as a part of their account of science. Some have made explicit references to the idea (Hull, 1988a) and others have only presupposed it (Giere, 1988; Goldman, 1991; Kitcher, 1993). I will argue that there are some problematic features in the way (...) the idea of the invisible hand isused inthese accounts. I will first discuss some general properties of the invisible hand explanations and then present some motives for its use in the theory of science. Then I will show how one particular philosopher of science, David Hull, uses the idea. I will use Hull's account as a practising target and offer some comments and criticism in order to promote more disciplined use of this model of explanation in science studies. (shrink)

Invisible-hand explanations suggest that many social practices are a product of human action, but not human design. In coming to terms with such explanations, it is essential to distinguish between explanations of the _emergence_ of practices and explanations of the _persistence_ of practices. The kind of invisible-hand explanation that accounts for the emergence of practices might turn out to be altogether different from the kind that accounts for their persistence. The emergence of practices is often best (...) explained by _aggregating_ explanations: Diverse and dispersed action by numerous people might produce some kind of pattern, even if they did not foresee it or intend to bring it about. By contrast, practices often persist because of _evolutionary_ explanations. They survive some sort of competition. Survival value may have nothing to do with the emergence of a practice in the first place. (shrink)

The idea of the invisible hand has had an impact not only on the eighteenth and the nineteenth centuries but on the twentieth and twenty-first centuries as well, and it has had a curious ideological career: in previous centuries it had been used to promote ideals of secular, enlightened progress, while in the twentieth and the twenty-first, it is used inversely to promote conservative reverence toward traditions. There are two main models for invisible-hand explanations, and the (...) current, inverse, ideological use of the idea of the invisible hand by conservative circles as against liberals and social planners springs from not distinguishing between the two models. (shrink)

Introduction -- Unintended consequences -- The origin of money -- Segregation -- The invisible hand -- The origin of money reconsidered -- Models and representation -- Game theory and conventions -- Conclusion.

In Invisible Hands, the historians Jonathan Sheehan and Dror Wahrman identify a defining feature of the eighteenth-century Enlightenment: the decline of God as a source of order in favor of a new model of self-organization.” Sheehan and Warhman provide a novel account of how people on the threshold of modernity understood the continuing presence in the world of apparent disorder, randomness, and chance. If God no longer actively guaranteed that order will always prevail, what or whom did? The answer, (...) the authors argue, was a new appreciation for complexity, new understandings of causality, and new functions for the divine hand. At the foundation of this novel way of thinking was the ability to imagine complex systems--be they natural or human--asself-organizing. Invisible Hands maps and explains the intensifying presence of the languages of self-organization throughout the eighteenth century, proliferating as they did with ever greater sophistication across numerous intellectual domains and cultural arenas. For self-organization was less a theory than a field of new insights: insights into the dynamics of chance and randomness, into the relationship between agency and determinism, into the role of God in a world without hands-on providence. (shrink)

Building on work by Popper, Schweber, Nozick, Sober, and others in a still-growing literature, I explore here the conceptual kinship between Adam Smith''s ''invisible hand'' and Darwinian natural selection. I review the historical ties, and examine Ullman -Margalit''s ''constraints'' on invisible-hand accounts, which I later re-apply to natural selection, bringing home the close relationship. These theories share a ''parent'' principle, itself neither biological no politico-economic, that collective order and well-being can emerge parsimoniously from the dispersed action (...) of individuals. The invisible hand operates on ''memes'' the way natural selection operates on genes. Like Darwin''s concept, it brings together traditional opposites, ''nature'' and ''selection,'' forming a saltation-mitigating transition between biological instinct and full-blown conscious design. Herschel''s criterion of confirmation, which Darwin long strove to satisfy, is itself an invisible hand-like meme – a ''Midas effect'' revealing and rewarding the fittest theories, Darwin''s and Smith''s emphatically among them. (shrink)

Friedrich Hayek’s account of “spontaneous order” has generated increasing interest in recent decades. His argument for the superiority of the market in distributing knowledge without the need for central oversight has appealed to progressive democratic theorists, who are wary of the hubris of state planning and attracted to possibilities for self-organization, and to Foucaultians, who have long counseled political theory to cut off the King’s head. A spontaneous social order, organized by an invisible hand, would appear to dispense (...) with arbitrary power and foster creativity and individual liberty. This article challenges this view by highlighting the centrality of submission to Hayek’s account of spontaneous order. It shows that Hayek struggles to obscure the providentialism underpinning the account of social order he derives from Adam Ferguson and the Scottish Enlightenment. Nonetheless, his own account of spontaneous order relies on faith in the workings of the market, and submission to unintelligible market forces. (shrink)

The argument of the "Invisible Hand" is that the system of free enterprise benefits society in general even though it is not the aim of any particular economic agent to do that. This article proposes an analysis of why this is so. The key is that the morality of the market forbids only force and fraud; it does not require people to do good to others. Nevertheless, when all transactions are voluntary to both parties, that is exactly what (...) we can expect to happen. This is both because the sum of the benefits of innumerable transactions, which are beneficial to both parties, is very great, but also and especially because of Positive Externalities. People use the particular products and services they get in market exchanges in ways that benefit others in ways not at all foreseen by the agents to those transactions at the time. These externalities range from the benefits of invention and ingenuity to the exercise of charity and philanthropy, all of which flourish in developed capitalist societies. (shrink)

The version of the invisible hand argument in Adam Smith's Theory of Moral Sentiments differs in important respects from the version in The Wealth of Nations. Both are different, in turn, from the version invoked by Milton Friedman in Free to Choose. However, all three have a common structure. Attention to this structure can help sharpen our sense of their essential thrust by highlighting the questions (about the nature of economic motivation, the structure of markets, and conceptions of (...) the public interest) to which answers of certain kinds would have to be available for any of the versions to succeed. (shrink)

The unintendedness of the phenomenon that is to be explained is a constraint visible in the various applications and clarifications of invisible-hand explanations. The article casts doubt on such a requirement and proposes a revised account. To have a role in an invisible-hand process, it is argued, agents may very well act with a view to contributing to the occurrence of the social outcome that is to be explained, provided they see what they do as an (...) aggregation of their individual actions rather than as something they jointly perform. (shrink)

An invisible hand seems to play an important role in science. In this paper I set out the general structure of invisible-hand explanations, counter some objections that have been raised to them, and detail the role that they play in science. The most important issue is the character of the mechanisms that are supposed to bring about invisible-hand effects.

Adam Smith's metaphor of the "invisible hand" and its analogue in classical physics are investigated in detail. Smith's analogue was the mechanics of the solar system. What makes the analogy fail are not the idealisations in the caricature-like model of the rational economic man . The main problem rather is that the metaphor does not employ the correct analogue, which belongs to thermodynamics and statistics. In the simplest macro-economic model, the business cycle has the same formal structure as (...) the heat flow between two heat reservoirs and a business cycle of growing efficiency works like a refrigerator: it pumps money from the poor to the rich. More complicated models do not give a friendlier image. Due to technological push, an economic system behaves like a thermodynamic system far from the equilibrium, showing chaotic behaviour and developing into unpredictable states. (shrink)

The men and women in Invisible Hands reveal the human rights abuses occurring behind the scenes of the global economy. These narrators--including phone manufacturers in China, copper miners in Zambia, garment workers in Bangladesh, and farmers around the world--reveal the secret history of the things we buy, including lives and communities devastated by low wages, environmental degradation, and political repression. Sweeping in scope and rich in detail, these stories capture the interconnectivity of all people struggling to support themselves and (...) their families. (shrink)

This essay argues that Merleau-Ponty’s phenomenological description of gestural motility in his Phenomenology of Perception contributes to, and in a material way carries forward, not only (1) the account of alienation that Marx proposes in his writings on the condition of manual labour, but also (2) the reflections, at once critical and utopian, that Marx set out in his 1844 Economic and Philosophical Manuscripts , evoking in terms of praxis the realization and fulfillment of our sensuous nature as embodied beings. (...) It is also argued, here, that Merleau-Ponty’s critique of the philosophical accounts of gesture formulated by intellectualism and naturalism shows that, in spite of their differences, they are both ideologically constituted systems of thought that uncritically reflect, and consequently reproduce, the alienations and reifications to which Marx calls attention in his critique of capitalism. Thus, as long as the invisible hand of capital rules, the hands of the worker that exploitation has damaged - and indeed the fully realized hands of which Marx in his early years dreamed - will remain invisible. Key Words: alienated labour • Marx • Merleau-Ponty • motor pathologies • phenomenology • reification. (shrink)

Waheed Hussain’s Living with the Invisible Hand argues that, although the market economy is valuable for efficiently coordinating production and consumption, it is morally problematic because it draws us into patterns of activity that bypass our own judgment as rational beings. This makes the market potentially “authoritarian.” But what exactly does it mean to say that the market “bypasses our judgment”? In this article, I seek to clarify this idea and suggest that Hussain has actually identified a few (...) separable senses in which it might be true. These different senses are important to distinguish because they call for different remedies. (shrink)

writings, however, reveals a profoundly medieval outlook. Smith is preoccupied with the need to preserve order in society. His scientific methodology emphasises reconciliation with the world we live in rather than investigation of it. He invokes a version of natural law in which the universe is a harmonious machine administered by a providential deity. Nobody is uncared for and, in real happiness, we are all substantially equal. No action is without its appropriate reward – in this life or the next. (...) The social desirability of individual self-seeking activity is ensured by the ‘invisible hand’, that is, the hand of a god who has moulded us so to behave, that the quantity of happiness in the world is always maximised. (shrink)

In his embryological treatise De plastica seminis facultate , Jacob Schegk , professor of philosophy and medicine at the University of Tübingen, developed, through a unique interpretation of the Aristotelian embryology, a theory of the "plastic faculty" , whose origin lay in the Galenic idea of the formative power. The present study analyses the precise nature of Schegk's theory, by setting it in its historical and intellectual context. It will also discuss the hitherto unappreciated Neoplatonic dimension of Schegk's notion of (...) the soul's vehicle. (shrink)

Adam Smith is usually thought to argue that the result of everyone pursuing their own interests will be the maximization of the interests of society. The invisible hand of the free market will transform the individual''s pursuit of gain into the general utility of society. This is the invisible hand argument.Many people, although Smith did not, draw a moral corollary from this argument, and use it to defend the moral acceptability of pursuing one''s own self-interest.

This book examines the use, principally in economics, of the concept of the invisible hand, centering on Adam Smith. It interprets the concept as ideology, knowledge, and a linguistic phenomenon. It shows how the principal Chicago School interpretation misperceives and distorts what Smith believed on the economic role of government. The essays further show how Smith was silent as to his intended meaning, using the term to set minds at rest; how the claim that the invisible (...) class='Hi'>hand is the foundational concept of economics is repudiated by numerous leading economic theorists; that several dozen identities given the invisible hand renders the term ambiguous and inconclusive; that no such thing as an invisible hand exists; and that calling something an invisible hand adds nothing to knowledge. Finally, the essays show that the leading doctrines purporting to claim an invisible hand for the case for capitalism cannot invoke the term but that other nonnormative invisible hand processes are still useful tools. (shrink)

This chapter examines the “invisible hand” theory proposed by Adam Smith. It explains how Smith uses the phrase as a description of unintended social benefits resulting from individual actions, and the way that markets promote cooperation. It enumerates two famous positions of the theory which became prevalent in different periods: the incentive argument, popularized by Emile Durkheim during the early twentieth century, which discusses how markets were superior to other institutional forms because they allowed society to economize on (...) moral motivation; and therefore the market, proposed by Friedrich Hayek during the advent of large-scale bureaucratic organizations and centrally planned economies that consists of large multidivisional companies, which states that markets allow society to economize on knowledge. The chapter analyzes the history and development of these two different lines of thought, and shows how the various theories came together to provide the most sophisticated case for the market. (shrink)

Over the past decade, the number of clinical trials registered with the Food and Drug Administration has increased dramatically. The business of clinical research has become more diverse, involving academic institutions, clinician-researchers in community settings, pharmaceutical companies, and contract research organizations. This growth has been accompanied by increasing concerns about the ethical conduct of research. Much of this concern has been directed to procedural issues including institutional review board review, data monitoring, and informed consent forms. However, the protection of human (...) subjects cannot be achieved by relying solely on procedural safeguards. There are more nuanced issues related to recruitment and retention of subjects, and to the process of informed consent, that are generated during the interaction between study staff and subjects. It is only through an examination of these relationships that one can more fully define and understand the challenges of protecting subjects in research. (shrink)

Why do we vote, protest, and boycott? Economists explain partisan actions, despite their costs, by arguing political irrationality by a single partisan isn’t costly to them as an individual - they can afford the political irrationality, despite the social costs. And some philosophers worry about the moral and epistemic costs of political irrationality. Here I argue that political irrationality has some benefits: it encourages partisans to engage in virtue signaling and rationalization in politics. And while virtue signaling and rationalization are (...) often epistemically and morally bad, they can nonetheless confer benefits too, like facilitating societal and moral progress. (shrink)

The practice of giving the wealthy perpetual control of their assets is re-emerging in an era of great wealth inequality, long after it had been banned in common law countries. The philosophical justification for such control rests on the claim that there are posthumous rights to wealth, and that such rights do not extend in problematic way to other goods, such as political suffrage. On the basis of such a claim, we give people freedom of testation, and deem them vulnerable (...) to posthumous harm. I present a short history of legally sanctioned posthumous control of property in common law, and I argue that its philosophical justification is untenable. No principled case for posthumous rights to wealth survives scrutiny, and the large and powerful institutions that enforce such rights are morally illegitimate. (shrink)

The invisible hand image is at the centre of contemporary debates about capacities of markets, on which discussion of many other topics in business ethics rests. However, its meaning in Adam Smith’s writings remains obscure, particularly the religious associations that were obvious to early readers. He drew on Isaac Newton’s theories of divine action and providence, mediated through the moderate Calvinism of the eighteenth century Scottish circles in which he moved. I argue within the context of Smith’s general (...) providential account of markets, the invisible hand operates restrain inequality and capital flight, thereby stabilizing the market system. Such an understanding of the invisible hand raises questions for contemporary religious and secular discussions of the capacities of markets in the wake of the global financial crisis. (shrink)

I have read a 2019 essay by Professor Miriam Ronzoni entitled "Who Will Sustain Sustainable Prosperity?" In it she introduces an idea: "the idea that agents will use their freedom—sometimes deliberately, but often not—to undermine the preconditions of one another’s freedom over time—and that this must be countered." She then says, "There is an invisible hand, but one which does harm rather than good." I would not use the concept of an invisible hand here, but originally (...) it is a metaphor and perhaps one cannot restrict how a metaphor is used in line with my preferred usage. Anyway, this is a first attempt to capture my usage: there is an invisible hand if and only if there is some effect which appears to be caused by a certain intention but it is actually the consequence of a set of individual actions none of which involve that intention. We talk of an invisible hand in relation to market solutions to societal needs. Societies have needs, or the people within them have needs, such as for food, medicine, and more. How does a society ensure that these needs are met? To people with our stupid brains, the obvious solution is for the government to instruct, "You people make food, because we need food," and "You people make medicines, because we need medicines," based on skills. But this is mostly not what happens in Western capitalist societies. Instead (according to the official story from Adam Smith), someone wants to make a living and so they spot a gap in the market - something that people want but is not currently supplied - and they fill the gap and by this means the needs of the society are met: someone does this for food production, someone does this for medicine production, and more. It may seem as if by design, government design, that a person suited to farming farms and a person suited to pharmacy makes medicines, but it is just by individuals pursuing their self-interest, specifically the interest of making a living. (If you are not suited to it, you probably won't get far in that line.) There is no government hand guiding them, but the result is as if there were such a hand, hence one metaphorically speaks of an invisible hand. Now a set of individuals losing their freedom by selfish decisions (for example, their freedom to go by the river, because they dump litter there) does not seem to be an invisible hand phenomenon, because one does not observe the effect of lost freedom and think, “This seems as if it arose by intentional design,” before overcoming that perspective. (Perhaps some very peculiar observers do though: "These people surely collectively intended to reduce their freedom, finding it all too much for themselves! They want more structure.") By the way, I personally tend to be cautious with using tools from another discipline, such as the concept of an invisible hand, though I sometimes boldly risk doing so. I am (unwisely?) wondering whether Ronzoni and her entire social class, or subclass etc., is disposed to just try things and, if there is risk of serious wrong/harm, someone should stop them - including even just try neurosurgery say. "That is how we get the hang of things new to us." (But the concept of an invisible hand explanation is part of political philosophy too, for example in Nozick's Anarchy, State, and Utopia.) I recommend coding, because the computer does not (usually) do what you want when you make a mistake. (shrink)

Economic globalization looks like the "powerless" expansion of communications and markets, but allows the United States to harness the rest of the world to its rhythms and fortify its empire-like power. Action by Europe, China, and East Asia is a vent for hope.

Children posit unobserved causes when events appear to occur spontaneously. What about when events appear to occur probabilistically? Here toddlers saw arbitrary causal relationships in a fixed, alternating order. The relationships were then changed in one of two ways. In the Deterministic condition, the event order changed ; in the Probabilistic condition, the causal relationships changed. As intended, toddlers looked equally long at both changes. We then introduced a previously unseen candidate cause. Toddlers looked longer at the appearance of a (...) hand and novel agent in the Deterministic than the Probabilistic conditions, but looked equally long at novel non-agents, suggesting that by 2 years of age, toddlers connect probabilistic events with unobserved agents. (shrink)

Markets, just like states, are systems of governance. Their justification must therefore meet similar standards of moral scrutiny, despite the fact that their authority structure is impersonal. In order to argue for the role of markets as systems of governance that raise similar justificatory burdens, this book provides a philosophical account of market institutions. According to this view, shared social institutions define a framework for how members of a political community think and act toward one another, consistent with citizens respecting (...) themselves and one another as free persons, each entitled to guide their activities in light of their own judgments. The market is one of these shared institutions, so its rules must also be consistent with mutual respect as free persons. This perspective represents a fundamentally different way of thinking about economic life, which rejects both the view of economic actors as disconnected individuals in a state of nature and the view of economic actors as mere preference orderings that are inputs to a giant social welfare function. The book formulates a deeper framework for thinking about economic life, which can displace the familiar ideas that underpin contemporary neoliberalism and finance capitalism. In so doing, the book works out the implications of the idea that the burdens of equal citizenship extend to economic life, such that appropriately regulated markets and workplaces elicit and realize a system in which people respect one another as free. The book concludes with a defense of economic democracy, elements of which can be found under German codetermination. (shrink)

One of the central tenets of mainstream economics is Adam Smith's proposition that, given certain conditions, self-interested behavior by individuals leads them to the social good, almost as if orchestrated by an invisible hand. This deep insight has, over the past two centuries, been taken out of context, contorted, and used as the cornerstone of free-market orthodoxy. In Beyond the Invisible Hand, Kaushik Basu argues that mainstream economics and its conservative popularizers have misrepresented Smith's insight and (...) hampered our understanding of how economies function, why some economies fail and some succeed, and what the nature and role of state intervention might be. Comparing this view of the invisible hand with the vision described by Kafka--in which individuals pursuing their atomistic interests, devoid of moral compunction, end up creating a world that is mean and miserable--Basu argues for collective action and the need to shift our focus from the efficient society to one that is also fair. Using analytic tools from mainstream economics, the book challenges some of the precepts and propositions of mainstream economics. It maintains that, by ignoring the role of culture and custom, traditional economics promotes the view that the current system is the only viable one, thereby serving the interests of those who do well by this system. Beyond the Invisible Hand challenges readers to fundamentally rethink the assumptions underlying modern economic thought and proves that a more equitable society is both possible and sustainable, and hence worth striving for. By scrutinizing Adam Smith's theory, this impassioned critique of contemporary mainstream economics debunks traditional beliefs regarding best economic practices, self-interest, and the social good. (shrink)

Reviving the Invisible Hand is an uncompromising call for a global return to a classical liberal economic order, free of interference from governments and international organizations. Arguing for a revival of the invisible hand of free international trade and global capital, eminent economist Deepak Lal vigorously defends the view that statist attempts to ameliorate the impact of markets threaten global economic progress and stability. And in an unusual move, he not only defends globalization economically, but also (...) answers the cultural and moral objections of antiglobalizers. Taking a broad cross-cultural and interdisciplinary approach, Lal argues that there are two groups opposed to globalization: cultural nationalists who oppose not capitalism but Westernization, and "new dirigistes" who oppose not Westernization but capitalism. In response, Lal contends that capitalism doesn't have to lead to Westernization, as the examples of Japan, China, and India show, and that "new dirigiste" complaints have more to do with the demoralization of their societies than with the capitalist instruments of prosperity. Lal bases his case on a historical account of the rise of capitalism and globalization in the first two liberal international economic orders: the nineteenth-century British, and the post-World War II American. Arguing that the "new dirigisme" is the thin edge of a wedge that could return the world to excessive economic intervention by states and international organizations, Lal does not shrink from controversial stands such as advocating the abolishment of these organizations and defending the existence of child labor in the Third World. (shrink)

Video games aren't merely casual entertainment: they are the heart of one of the fastest-growing media industries in the world, and a cultural phenomenon in their own right. Gaming has evolved from a niche pastime into a global business that rivals film and television, creating, in the process, new art forms and social arenas and have become the subject of endless public debate. This book shows that games also provide a unique space in which to study economic behavior. Games, more (...) than any other form of media, demonstrate the power and creative potential of human choice - an idea that's also the foundation of economic thinking. Whether it's developing trade relations, or the use of money, or even complex legal institutions, virtual worlds provide a captivating and entertaining arena for studying economic behavior in its most dynamic forms. The overarching theme of the volume is the economic order that governs virtual worlds, and the many ways individuals work together, often without knowing it, to govern their social relations in digital space. (shrink)

The connection between Adam Smith and Alasdair MacIntyre is not evident at first glance. In fact, those who know MacIntyre’s work might bristle at the association. MacIntyre is inherently anticapitalist. He believes that moral people ought to reject the modern state and large-scale corporations.1 He also rejects what he terms the enlightenment project, claiming not only that it failed but that it was doomed to do so.2 Furthermore, MacIntyre’s perspectivalism seems to run counter to any “impartial spectator” theory such as (...) Smith ’s; tradition-bound rationality necessarily assumes partiality.3 In short, MacIntyre regards himself as an opponent of the liberal tradition, that intellectual lineage which is most closely associated with Smith, and, although he rejects association with communitarianism, he holds a similar place in contemporary philosophy. He is liberalism’s critic, not its reformer. But ethics makes strange bedfellows. MacIntyre’s theory of rationality, I contend, provides a useful and important complement to Smith ’s moral psychology. It allows for the intermingling of emotion and reason that is so important for Smith ’s work.4 It creates a structure for bridging Smith ’s individuals and the communities of which they are a part. In essence, I argue, MacIntyre’s work allows us to better understand Smith ’s jump from deliberation on the individual level to the development of cultural standards and norms. I conclude that Smith ’s emphasis on the individual results in an incomplete theory of communal rationality, and that MacIntyre’s emphasis on tradition leaves out a foundation of individual agency. The two theories, however complement each other well. As a bit of preparation, it is worth mentioning that both thinkers, and Smith, in particular, are often portrayed inaccurately. Smith is not the self-interest focused libertarian that he is made out to be. He is, instead a sophisticated moral theorist whose first book, The Theory of Moral Sentiments was celebrated and influential in its time. (shrink)

This book contributes to the 'new view' reading of Adam Smith, providing a historically and contextually rich interpretation of Smith's thought. Smith built a moral philosophy on the foundations of a natural theology of human sociality. Examination of his life, relationship with David Hume, and use of divine names shows that he retained a progressive form of Christian theism. The book interrogates the metaphor of the 'invisible hand' and highlights the importance of the religious dimension of Adam Smith's (...) thought for his moral philosophy, his jurisprudence and his economics. It reflects on the contemporary relevance of a theological reading of Smith and lays the ground for further inquiry between economic and religious perspectives. (shrink)

Contemporary western democracies like the United States and the United Kingdom bear the imprint of historical racial injustice – slavery, segregation, discrimination, and mistreatment and neglect by public authorities. Libertarian political theory might appear well placed to contribute to debates about attaining racial justice, given its emphasis on individual rights and strict limits on state action, but Charles Mills claimed libertarians largely ignored questions of race and often opposed measures aimed at achieving racial justice. This article reexamines Robert Nozick’s Anarchy, (...) State, and Utopia in the light of Mills’ claims. Nozick endorses libertarian beliefs about the ability of free markets to eliminate injustice, the role of the state in creating injustice, and the danger of political projects that propose to engineer a just society, but his work also shows that these beliefs do not exhaust questions of race and racial justice. Analysis of Nozick’s work illuminates the potential for invisible-hand processes to reproduce as well as eliminate injustice, the impossibility of establishing a just starting point for the series of voluntary exchanges that have led to real-world holdings of income and wealth, and the fact that injustice concerns more than harms inflicted on specific persons by identifiable individuals. A form of universal basic income may therefore be justified to rectify historical injustices while minimising the risk of future political exploitation. (shrink)

Mainstream climate economics takes global warming seriously, but perplexingly concludes that the optimal economic policy is to almost do nothing about it. This conclusion can be traced to just a few “normative” assumptions, over which there exists fundamental disagreement amongst economists. This paper explores two axes of this disagreement. The first axis measures faith in the invisible hand to adjust the natural thermostat. The second axis expresses differences in views on the efficiency and equity implications of climate action. (...) The two axes combined lead to a classification of conflicting approaches in climate economics. The variety of approaches does not imply a post-modern “anything goes”, as the contradictions between climate and capitalism cannot be wished away. (shrink)

Hayek's social theory presupposes that rules are unintended consequences of individual actions. This essay explicates one kind of Hayekian explanation of that claim. After noting the kinds of rules that Hayek believes are subject to such a theory, the essay distinguishes three functional explanations advocated by Hayek. He combines one of these functional explanations with an invisible hand explanation. A schema suitable for constructing invisible hand-functional evolutionary theories is employed to outline this combination.

In lieu of an abstract, here is a brief excerpt of the content:110 DAVID HUME'S INVISIBLE HAND IN THE WEALTH OF NATIONS THE PUBLIC CHOICE OF MORAL INFORMATION Introduction The thesis I shall defend is that there are systematic aspects of Adam Smith's economics which make little sense when read in isolation from a literature in which David Hume provides the signal contributions. Consequently, parts of Hume's own work are stripped of meaning, isolated as they are from later (...) developments. The puzzles about Smith's analysis which I find illuminated by Hume's are the following: 1. Why does Smith both defend the importance of economic growth for the material of well-being of the working class and claim that property originates as spoil, impoverishing the working class? After all, in the classical system the existence of property is one requisite for economic growth. 2. Why does Smith exalt the assumption of self-interested behavior in private activity but claim that irrationality dominates the political process? 3. Why does Smith deny the importance of benevolence in Wealth of Nations and insist on the importance of morality Sentiment morality in Theory of Moral its?3 The three questions have a common feature: they are related to the question of how public goods are provided. The particular public good in question is the institution of private property. As with all true I am obligated to the Center for Study of Public Choice for generous support of my research. Suzanne Levy gets the credit for the extent to which this approaches English. I have benefited from acute comments from Charles Rowley and Charles Griswold. The errors and obscurities which remain are solely my responsibility. Ill public goods, society considered as a whole benefits from having such an institution, but each individual considered separately can gain by anti-social behavior.4 Public goods provide a considerable difficulty for any social institution; neither competition in the market nor government requests that individuals reveal how much they wish to be taxed are certain to be efficient. There are aspects of the classical economic analysis which stress the importance of moral information as a partial solution to the public goods problem. By "moral information" I only require that the theory is employed as a guide and that if an individual acts contrary to the theory, this choice is not cited as "falsifying" the theory. Rather, something is said to be "wrong" or "wicked" about the choice.6 Much of modern economic analysis assumes that individuals have perfect information; this postulate rules out any significant role for moral information in the provision of the public goods. To avoid assuming away such a role for morality, we will drop the perfect information assumption and then examine if we can make sense of the classics' attack on the public goods problem. Of course, the specification that individuals see their own interests very poorly is consistent with Smith's general approach. The technique employed below is to look at the issue which Hume and Smith addressed as a problem in modern economics. The key difficulty is to determine under what conditions moral information could guide individuals with very imperfect perceptions to maximize their utility. In particular, suppose we find that moral guidance tells an individual how efficiently to produce. Is this morality self-enforcing or are resources required to persuade people to act in accord with these teachings? If resources are required, we will not pay much attention to just how this persuasion 112 is provided, e.g., whether we tell people that theft is "evil" or whether we hang a few thieves. General production theory tells us we probably will do both, but this is a separate issue. The argument to be advanced is that moral information has self-enforcement properties in private activities but these properties are missing in public activities. In this account, then, real resources will be required for implementing the morality. This consideration in turn raises an interesting issue. If the government expends these resources, what reason is there to believe that they will be provided to serve the public interest and not the interest of the government? Is it possible that the government can prosper by keeping people ignorant or by giving them advice... (shrink)

Proponents of the dominant contemporary model of corporate governance maintain that the shareholder is the primary constituent of the firm. The responsibility for managerial decision makers in this governance system is to maximize shareholder wealth. Neoclassical economists ethically justify this objective with their interpretation of Adam Smith's notion of the Invisible Hand. Using a famous quotation from The Wealth of Nations, they interpret the Invisible Hand as Smith's (An Inquiry into the Nature and Causes of the (...) Wealth of Nations, Methuen & Co., London) assertion that market participants, in pursuing their own self-interests without regard to the interests of others, will collectively provide the optimal economic benefit to society. We argue that the traditional interpretation of Smith is too narrow and potentially harmful to society. In order to fully understand Smith's notion of the influence of the Invisible Hand on human behavior, one must also consider The Theory of Moral Sentiments. In that work, Smith (The Theory of Moral Sentiments, A. Millar, London) portrays the pursuit of self-interest as only one of several potential motivations for human action. He also acknowledged the existence of a “sympathy principle,” which refers to the ability and propensity of human beings to consider the interests of others. Heilbroner (The Essential Adam Smith, W.W. Norton, New York, p. 59) suggests that Smith's sympathy principle allows one to “determine the appropriate degree of self-interest, the proper display of benevolence, the desirable strictness of justice.” In fact, Smith indicates that (1) a society whose members pursue self-interest without a sense of justice will eventually collapse; (2) a society whose members pursue self-interest checked by their sense of justice alone will survive; (3) a society whose members pursue self-interest, justice, and the interests of others will flourish. Since a more complete reading of Smith indicates that human beings, in considering their own interests, also reflexively consider the interests of others when making decisions, then the traditional corporate governance model appears to be lacking. A broader, multiple stakeholder approach to corporate governance that considers the interests of other constituencies may be more consistent with Smith's views. In particular, Smith's sympathy principle provides a theoretical foundation for a shift away from the narrow, yet dominant, shareholder-based corporate governance model and toward multiple stakeholder models of corporate governance [e.g., Business and Society: A Strategic Approach to Corporate Citizenship, Houghton Mifflin, Boston, MA] and internal decision-making [e.g., Sloan Management Review 38, (1997) 25–37]. (shrink)