The claim that wide-eyed trust in the free market has more in common with fundamentalist religious faith than it does with any philosophically well-founded and defensible position is becoming increasingly a commonplace. People you meet - at dinner parties and suchlike social occasions - will frequently tell you as much (unless they are trying to persuade you of the reverse, that is). One of my aims has been to bear the commonplace out by demonstrating, through an analysis of the best arguments for the free market I can think of, that it states a truth. Now, because this study would be incomplete without an examination of less rights-based, more consequentialist, forms of libertarianism, we must turn to some of the worst. It is generally known that there is such a thing as the invisible hand argument, but far less widely realised just how bad - how thin and tawdry - so many versions of that argument are. These, the more usual forms of invisible handism, form the subject of this chapter.
The reader will recall that ‘vulgar invisible-handism’, as I shall call it from now, presupposes a distinction between private, or ‘self’, interest on the one hand and, on the other, the general interest or public good. It states that the unrestricted pursuit of the former (unrestricted except by laws which defend private property and freedom of contract, of course) leads, unintentionally and ‘as if by an invisible hand’, to the realisation of the latter. In other words, it states that ‘private vice is public virtue’. Still, ‘vice’ and ‘virtue’ are not especially helpful terms here, and neither are ‘self-interest’ or ‘public good’, so, to be as fair to the argument as possible, we should respecify it.
Proponents of invisible-handism may or may not have especially self-centred or selfish motives in mind (Mandeville obviously did, others may not), but the point of the claim is clear either way. We should take ‘self-interest’ to mean - simply - that sort of interest which can be satisfied by the free market left to itself. This might not be ‘selfish’ in the ordinary sense. For example, someone who rushes to the pharmacist’s late at night to purchase medicine for a tiresome, but sick, relative is acting ‘unselfishly’ in the ordinary sense of that phrase, but, nevertheless, this person can be said to have an ‘interest’ for which the market successfully caters. We must also respecify ‘the general interest’ because most proponents of the thesis, in common with libertarians generally, tend to insist that ‘society’ is ‘nothing more than the sum of the individuals who compose it’ and not, for example, some supra-personal entity or ‘body politic’ with a will and an interest of its own. Therefore, we must construe the phrase to mean that state of affairs in which each individual’s interest is satisfied to the greatest degree possible. What state of affairs is that? Libertarians and invisible-handers are not well disposed towards equality, so I suggest that we take it to be that state of affairs in which, although it may contain inequalities, those worst off (as well as everyone else, or at least most people) are better off than they would be under any other alternative arrangement. (The situation would roughly align with Rawls’s ‘difference principle’. )