Academic journal article The Journal of Philosophical Economics

Smith's Invisible Hand: Controversy Is Needed

Academic journal article The Journal of Philosophical Economics

Smith's Invisible Hand: Controversy Is Needed

Article excerpt

Introduction

Economics and political economy seem to be insufficiently effective in criticizing, in theory and in practice, Neoliberal ideology. Among the roots of this trouble is a lack of radical thinking and an unwillingness to re-consider afresh established ideas. Our intention is to show the importance of such theoretical limit, and its effects in practice, by critically reconsidering a well-known concept: Smith's invisible hand. This will be done by using Micocci's concept of the metaphysics of capitalism, as argued especially in Micocci (2009/10 and 2016), and reconsidering Neoliberalism in this light.

Our main argument is that Smith's invisible hand and much present-day economics are based on a 'deception' (in Smith's own words) and a misunderstood imagination of things capitalist. In this respect, Neoliberalism is closer to Adam Smith than liberal (in both the European and American senses) capitalism. We aim to contribute to economics and political economy the radicalism needed to neatly put forward such point of view. In so doing we leave aside a lot of literature relevant to normal, non-controversial economic theory. We simply intend to awaken more economists to controversy, in the belief that discussion, however sharp, helps progress.

To do so, and help shortness of expression, we distinguish, within the economic Mainstream, an orthodoxy and a heterodoxy. The former is easy to figure out because it is based on the teaching (internally incoherent but capable of capturing different schools) imparted by the traditional textbooks: take Samuelson (2002), still widely taught or taken as a model. For the latter, we refer the reader to the IIPPE and WEA Associations, which criticize in various ways the supposed main pillars of the mainstream orthodoxy and offer what they call an alternative view without ever pretending to leave the field of economics. This is particularly serious if you are a Marxist, for in such case you should propose a completely 'other' political economy, which the present study cannot develop. The Austrians and their followers are yet another category, akin to the Mainstream orthodoxy in practice if not in method. Finally, we take an anti-Hegelian stance in Marxism that sets up apart from what we have therefore called the 'Marxist orthodoxy' (see Micocci (2002, 2009/2010, 2016, Micocci and Di Mario, 2017): the majority, Hegelian view.

The following section puts some needed order into the literature and in the main economic ideas to the purposes of this paper. The section which focuses on The Invisible Hand of Adam Smith develops the theoretical argument, connecting Smith's Wealth of Nations (117761 1999) with his Theory of Moral Sentiments ([1759] 2009). The section on Class mobility, financial rent and neoliberalism sketches the basic sociology of Neoliberal times: financialisation and the presence of a privileged class. The section on The metaphysics of neoliberal capitalism compares the present-day privileged class of financial rentiers with Smith's description of the invisible hand. The conclusions come back to economic theorization.

The relevant literature

As announced, the present paper is not offering the reader a considerate screening of the whole literature on Adam Smith. The first reason for it is that Samuels (2011) has reviewed, with his interesting book, the most important, and still quite recent, the literature on the subject of the Invisible Hand. The second is that, as it will be demonstrated subsequently: most of the work around Adam Smith is just tangential to the problems set for ourselves. It is necessary therefore to stick to the aim of this paper by mainly criticizing, in the present section, the recurrent faults of the literature in this regard.

A first, relevant stream comprehends, for instance, Redman (1993), Alvey (2002), Montes (2003, 2008), Andrews (2014). All these people discuss in depth the relationship between Adam Smith and his contemporaries in the Scottish Enlightenment, first and foremost Isaac Newton. …

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