Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street

By Tomas Sedlacek | Go to book overview

11
The History of the Invisible Hand of the
Market and Homo Economicus

They say seeing is believing. This is odd; how can we believe something we see—how do we believe something that is (or seems to be) evident? Don’t we have to believe what we have not seen? It is impossible to see something that is invisible, such as the invisible hand of the market, which is why even we as economists have to believe in it (or not).

The belief in the invisible hand of the market has had a tough life. Either people believe too blindly in its omnipotence and omnipresence and view it as a (disguised, thus invisible) solution to almost all of life’s (and global) problems, or they believe it is the root of all evil. We are in a similar situation with another key concept of economics: the notion of homo economicus.

As the classic in the field, Albert Hirschman notes1 that Saint Augustine believed in the following three principal vices (or lusts): lust for power (libido dominandi2), sexual lust (libido carnalis), and lust for money. Each of the three vices has been given a key position in the writings of influential thinkers as the instrumental driving force of mankind or society. And all of these (personal) vices have eventually turned at the hands of other thinkers (each in its own way and own time) into virtues and principles that drive mankind and society forward.

Take power, for example. “Augustine’s libido dominandi is comparable with Nietzsche’s der Wille zur Macht, ‘will to power’ … the essential difference between Nietzsche and Augustine is that the former considered the ‘will to power’ a virtue, but the latter deemed the ‘lust for power’ a vice.” 3

1 As Hirschman notes in his classic The Passion and the Interest, 15. It must be pointed out, however, and Hirschman seems not to be aware of this, that for Augustine love is the basic human impulse. Love is behind everything, good or bad. In these three areas Augustine describes a situation where love has gone out of control, or, if you will, has gone out of proportion, or has gone in a bad direction. For more see Hare, Barnes, and Chadwick, Zakladatelé myšlení [Founders of Thought], chapter 9 on Augustine.

2 According to Augustine, the principal characteristic of Babylon, the city of man, is libido dominandi, “the lust for power” (City of God 1, praef. 1.30; 3.14; 5.13, etc.) Also see Fitzgerald et al., Augustine through the Ages: An Encyclopedia, 84.

3 Fitzgerald et al., Augustine through the Ages: An Encyclopedia, 84. As Thomas Lewis puts it, “domination is not an end in itself; it is a means to the end of recognition for being powerful.” (Lewis, T., “Persuasion, Domination and Exchange: Adam Smith on Political Consequences

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