Monday, April 21, 2014
Onozaki T.; Yanagita T (2003) on Onozaki, T. Yanagita, T. Monopoly And Oligopoly Led By An Invisible Hand;  Allan M. Lees The Invisible Hand;  Jan Narveson The "Invisible …:
下载全文 资源分 350 (Volume-OnPage: Volume 18, Number 3, October 2003, pp. 537-54)
[GK: It’s still nonsense in any language]
NEW BIG BOOK ON ECONOMICS OF INEQUALITY ON THE WAY
"Economist Receives Rock Star Treatment": That was the headline yesterday on Jennifer Schuessler’s story in The New York Times. The facts bear her out. Thomas Piketty, 42, of the Paris School of Economics, seemed to be everywhere last week. Publication of his 685-page Capital in the Twenty-First Century had been moved up by two months, sales were soaring (46,000 copies so far), a triumphant tour of Washington (meeting with Treasury Secretary Jack Lew) and New York (appearing at the United Nations) has been completed. Encomiums were pouring in. “Pikettty has transformed our economic discourse,” wrote Paul Krugman in the current New York Review of Books. “We’ll never talk about wealth and inequality the way we used to.”
Not bad for an economist who traded an appointment at the Massachusetts Institute of Technology for a job as a researcher for the French government in 1996, when he was 25. “I did not find the work of US economists entirely convincing,:” he writes in the introduction to Capital in the Twenty-First Century:
I was only too aware of the fact that I knew nothing at all about the world’s economic problems. My thesis consisted of several relatively abstract mathematical theorems. Yet the profession liked my work. I quickly realized that there had been no significant effort to collect historical data on the dynamics of inequality since [Simon] Kuznets [in the 1950s and ’60s], yet the profession continued to churn out purely theoretical results without even knowing what facts needed to be explained.
He went home to collect some of the missing facts.
Piketty wanted to teach at the Ecole des Hautes Etudes en Sciences Sociales, the elite institute whose faculty had included many of the foremost figures in the Annales school, including Lucien Febvre and Fernand Braudel – a group of scholars, most of them quantitative historians, that achieved enormous influence around the world publishing in the journal Annales. Economies, sociétés, civilisations (or Annales. Histoire, Sciences Sociales as it is called today).
Piketty got that job, along with time to do the research he wanted, first producing a book in 2001 on high incomes in France since 1901, then enlisting Anthony Atkinson, of Oxford University, in a similar investigation of Great Britain and severalother countries. His friend and countryman Emmanuel Saez, of the University of California at Berkeley, produced similar data for the US. The World Top Incomes Database (WTID) is the result. Data on wealth, following the methods of Robert Lampman, of the University of Wisconsin, came next. Starting in 2003, Piketty began setting up the new Paris School of Economics; in 2006, he was named its first head. He resumed teaching and writing the next year.
Piketty’s thesis is set out succinctly on the first page of his introduction:
When the rate of return on capital exceeds the rate of growth of output, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based. There are ways nevertheless democracy can regain control over capitalism and ensure that the general interest takes precedence over private interests, while preserving economic openness and avoiding protectionist and nationalist reactions.
What are those measures? Four chapters in the fourth section of the book draw a variety of policy lessons from the first three parts for a “social state:”
The right solution is a progressive annual tax on capital. This will make it possible to avoid an endless inegalitarian spiral while preserving competition and incentives for new instances of primitive accumulation.
Piketty says he’s left Paris only a few times on short trips since returning nearly twenty years ago. My hunch is that, after last week, it will be a long time before he takes another. He’s left behind a beautiful book, one that will receive a great deal of attention around the world in the years to come. He’s gone home to work on others.
This new book by Thomas Piketty, “21st Century Capital”, of which we are going to hear a lot more about it - meantime read some reviews HERE HERE HERE HERE
I shall first read Piketty’s book and then comment upon it. From the review/reports I have read his book looks interesting, though it seems to simply accept that modern economists’ accounts of Adam Smith (‘invisible hand’, ‘laissez-faire’ and all that) are accurate, when they patently are not. Karl Marx is also beyond redemption in the hands of modern marxists, and weren’t up to much in Karl’s original efforts either, without mentioning the practice of modern marxists.
Notions of evolving to some kind of equality - the driver of modern social democracy - and the vague ‘hope’ of equality evolving ‘naturally’ are, increasingly in my view, just that: “notions”. What is more interesting is what happens when people realise that the equality garb is, er, invisible too?
Hence, I look forward to my summer reading. Meanwhile, follow the early reviews and read for yourself. I hope Thomas is a more balanced author when he is both praised and criticised than last year’s author of a very long book, David (er) Graeber.
Sunday, April 20, 2014
SMITH ON 'GRAVITATION' AS A METAPHOR
This a new paper I have recently completed which may interest readers of Lost Legacy. The full paper will be published soon on the 'Social Science Research Network' (SSRN). I can send a draft copy to those who request one; others wait a few days and it will be on SSRN.
"Adam Smith’s Use of the ‘Gravitation’ Metaphor"
This paper commments on a paper by Prof David Andrews, ‘Adam Smith’s Natural Prices, the Gravitation Metaphor, and the Purposes of Nature’, 2014, published in Economic Thought, 3.1, pp. 42-55, which takes a philosophical view of Adam Smith’s use of the ‘gravitation’ metaphor from ideas of Aristotle and Empedocles, rather than Isaac Newton. Instead, this paper takes the view that Smith was using a metaphoric ‘figure of speech’, following his teachings on Rhetoric in his “Lectures on Rhetoric and Belles Lettres’ (LRBL) and not a literal use of possible deeper philosophical meanings, interesting as they are, though not entirely relevant to Smith’s purposes on this occasion. Smith’s rhetorical use of ‘gravitation’ is consistent with his LRBL teachings and his long explanation of the dynamic relationships between ‘natural’ and ‘market’ prices in WN I.vii-xi.p, pp.72-267.
Keywords: Adam Smith, natural price, normal price, gravitation, sellers’ and buyers’ behaviours.
This interesting short-paper by David Andrews is instructive in provoking me to recount the interpretation of Smith’s use of metaphors, on this occasion confined to the use of ‘gravitation’ to describe a relationship between ‘natural’ prices (before products are sold in markets — a sort of ex-works, ‘factory-gate’ price) and ‘market’ prices realised later in actual markets when actual sellers offer their products in actual markets to actual buyers (‘effectual demanders’).
David’s paper also provoked memories of attending, long-ago, A-level Physics classes for university entrance exams and subsequently, in later years, when reading Adam Smith’s use the ‘gravitation’ metaphor. This background leads me to a different take to David Andrews’s interpretation of Smith’s use of the ‘gravitation’ metaphor in Wealth Of Nations (WN I.v.ii: ‘Of the natural and Market Price of Commodities’, pp. 72-81).
For some years since 2003, I have taken a particular interest in Adam Smith’s use of metaphors throughout his Works, especially the metaphor most closely associated with his name today in respect of his use of the ‘Invisible Hand’ metaphor (see my many Blog posts in www.adamsmithslostlegacy.blogspot.co.uk, 2005-14): and Kennedy, 2005, 2008, 2009, 2010, 2011, 2013, 2014). Much of my work on metaphors used by Adam Smith is applicable to understanding his treatment in usinf metaphors elsewhere in his Works.
From this background, I believe that Smith’s use of the ‘gravitation’ metaphor in WN was quite different from David Andrew’s philosophical interpretation (Aristotle and Empidocles) in his paper and in his comments on Marshall and several modern economists: Pierangelo Garegnani (Garegnani 1976, p. 27), Geoffrey Harcourt ((Harcourt and Kriesler 2012, p. 9), Ian Steedman, John Eatwell and Murray Milgate (Eatwell and Milgate 1999, p. 83), Tony Aspromourgos (2010, pp. 65-6), Heinz Kurz and Neri Salvadori’ (Kurz and Salvadori 1998, p. 3) and Piero Sraffa’s Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Interesting as this knowledge may be, it does not quite clarify Smith’s use of ‘gravity’ as a metaphor.
David sets out his case in his abstract:
“The first section examines the context in which Smith’s gravitation metaphor appears in order to show that it was intended as an assertion about the movement of market prices rather than one about the meaning of natural price. Section Two explores the gravitation metaphor in detail to show that what Smith described is gravity in the ancient rather than the modern sense, implying that movement results from the inclination of market price rather than from any property of natural price. The third section focuses attention on Smith’s understanding of nature, arguing that, according to Smith’s Aristotelian usage, ‘natural’ refers to the reproduction of species, including the human species. Based on this discussion, Section Four presents an interpretation of the sense in which natural prices are said to be natural in Smith” (Andrews, 2014, p. 3)
He also asserts:
“For Smith, [Gravitation] is not a Newtonian metaphor for the attractive character of natural price, but rather an Aristotelian metaphor for the pattern of movement of market prices, in which natural price serves merely as a reference point” (Andrews, 2014. p.2).
This paper explains why I regard the relevance of David’s philosophical interpretations somewhat sceptically. First, I examine Adam Smith’s teaching and use of metaphors and, second, I comment on David Andrews’s arguments on ‘gravitation’ in its “Epidoclean” and not “Newtonian” sense in relation to the relationship between ‘natural’ and ‘market’ prices (WN I.ii.vii-xip).
Sunday, April 13, 2014
HUNTER GATHERERS WITH iPHONES?
Peter Foster’s new book is announced in Canada Free Press (“Because without America There is no free world”) HERE
‘Why We Bite the Invisible Hand: The Psychology of Anti-Capitalism’ published by Pleasaunce Press, Toronto on 1 May.
In the publisher’s promo we read:
“Hunter Gatherers with IPhones”
“In Why We Bite the Invisible Hand, award-winning journalist and author Peter Foster delves into a conundrum: How can we at once live in a world of expanding technological wonders and unprecedented well-being, of improving health and longer lives, and yet hear a constant drumbeat of condemnation of the system that created it?
That system – capitalism – is guided by the “Invisible Hand,” the metaphor for economic markets associated with the great Eighteenth Century Scottish philosopher Adam Smith. The hand guides people to serve others in the pursuit of their own interests, and produces a broader good that, as Smith put it, is “no part of their intention.” Critics however claim that the hand is tainted by greed and exploitation, leads to inequity and dangerous corporate power, and threatens not merely resource depletion but planetary disaster.
Foster, with Adam Smith as his constant reference point, probes misunderstanding, fear and dislike of capitalism – and political exploitation of those feelings—from the dark satanic mills of the Industrial Revolution through to the murky concept of sustainable development.
His journey takes him from New Jersey in the wake of Superstorm Sandy, through Kirkcaldy, the town of Smith’s birth, Moscow McDonald’s, Karl Marx’s Manchester and Ayn Rand’s Hollywood.
He refutes claims that capitalism’s validity depends on the system being “perfect” or economic actors “rational.” He also notes the key difference between capitalism and capitalists, who are inclined to misunderstand the system as much as anyone.
Corporations, he points out, can usually only become dangerous through government favour. Moreover, if big business is to be condemned, it should be not for flinty-eyed devotion to profit maximization, but for falling for subversive notions such as corporate social responsibility and sustainable development, and agreeing to beg for “social licence” from radical, unelected environmental non-governmental organizations, ENGOs, whose own political power has soared in the past two decades.
Related to the rise of the ENGOs, Foster deals with one of the biggest and most contentious issues of our time: projected catastrophic man-made climate change. He notes that while this theory is cited as the greatest example in history of “market failure,” it in fact demonstrates how both scientific analysis and economic policy can become perverted once something is framed as a “moral issue,” and thus beyond debate.
Foster’s book is not a paean to greed, selfishness or radical individualism. He believes that the greatest joys in life come from family, friendship and participation in community. What has long fascinated him is the relentless claim that capitalism destroys these aspects of humanity rather than promoting them.
Moreover, he concludes, when you bite the Invisible Hand… it always bites back.”
The first thing I noted in the announcement is its relaxed writing style, full as it is with witty metaphors, similes, allusions, hyperboles, and sharp nuances. Combined they entice the reader towards the message: I ought to buy the book or at least drop the promo headliner into conversations for social affect: “hunter gatherers with iphones” Hence, my Blog headline above - I bet it grabbed your attention!
But what of the substance of the offering of Peter Foster’s new book, “Why We Bite the Invisible Hand: The Psychology of Anti-Capitalism’?
The promo says it all: “capitalism – is guided by the “Invisible Hand,” the metaphor for economic markets associated with the great Eighteenth Century Scottish philosopher Adam Smith. The hand guides people to serve others in the pursuit of their own interests, and produces a broader good that, as Smith put it, is “no part of their intention.”
There is no “invisible hand” guiding people to serve others. Nor is the invisible hand a metaphor for “people” serving others in pursuit of their own interests”. In Smith’s writings the metaphor described the action that followed from a person’s motives, which had intended consequences (the immediate purpose motivating the action) that, in turn, sooner or later may have unintended consequences, for good or ill, on the individual or the society of individuals.
There is nothing necessarily benign in the consequences, intended or unintended, that follow from the actions of peoples’ motives. From the actions of people motivated to smoke cigarettes, the immediate consequences of those addicted to tobacco may be a sensation of relaxing their craving sensations; later they could suffer the unintended consequences of cancers to the body and shorter life-spans. Society generally may enjoy the beneficial side affects of lower taxation from the tax and duties paid by addicted smokers, net of the increased health spending occasioned by treating smokers in hospitals (for which health employees and medical businesses may benefit), though the diversion of funds to treat them may cause reduced attntion to other medical problems of non-smokers . Not to mention the consequential personal costs of deeply felt grief at the early death of one’s children, spouses, or parents and grandparents, and dear friends.
In Smith’s first published example in his Theory of Moral Sentiments (1759) the “proud and unfeeling” landlord was motivated to supply his slaves, serfs, or labourers from the produce they laboured upon in the landlord’s fields – who couldn’t do otherwise, for without food the labourers could not work. Likewise, the labourers in slavery, serfdom or free, laboured in the landlord’s fields in order to feed themselves and their families, for without food they could not live.
Smith made the further observation that beyond the intended consequences of the motivated actions of both the landlords and their labourers there was the intended consequences of the propagation of the species, one of the ends of ‘nature’, despite the death rates of under-fed labourers, sick wives and infants, plus the social ‘accidents’ of life in the feudal centuries.
Similarly, in Smith’s second example of the use of the metaphor on “an invisible hand” in Wealth Of Nations (1776), where he described the motivations of a merchant who, because he felt foreign trade had too many risks and because he therefore avoided sending his capital abroad, he preferred to act by investing his capital at his perceived lower risk in the domestic economy. Again a merchant’s motives of insecurity led him to his intended actions (safer to invest locally) and in doing so he necessarily added to domestic investment. His motivations (lower the risks of investment) led to his intended actions (invest locally) and in consequence his actions had intended consequences. By adding to domestic investment the insecure merchant also added to domestic “revenue and employment”, which were public benefits in what today we would call higher GDP.
Since Smith’s time his metaphor for the above examples, “an invisible hand” has become a virtual religion because it has become a mythical allusion way beyond anything contemplated by Smith’s innocent use of metaphor. Briefly, there is no actual invisible hand operating in “markets”.
Metaphors “describe in a more striking and interesting manner” what they are describing. We know that this is the case with Smith’s use of the “invisible hand” metaphor because the description of the role of metaphors in the English language comes from page 29 of Adam Smith’s “Lectures on Rhetoric and Belles Lettres” that he delivered at Glasgow University in 1762-3. Moreover his lecture corresponds to the definitions in the Oxford English Dictionary (1973).
In Smith’s case the “invisible hand” metaphor described the motivated consequences of the actions of “unfeeling’ landlords and “risk averse” merchants whose initial motivated actions had unintentional consequences that happened in their case to be on balance beneficial. Of course, a moments reflection will show that the initial motivations for an action can lead to unintended consequences detrimental to the initial actor and, also, detrimental to others, and in some cases, detrimental to society at large.
Believers in the mythical interpretation of Smith’s use of the metaphor of “an invisible hand” – used only three times in all of Smith’s Works or Correspondence – seldom, if ever, consider the possible detrimental personal and social consequences of motivated actions in general. A short acquaintance of everyday motivated actions would inform Believers that their evident trust that there is “an invisible hand” actually operating mysteriously – even miraculously – in markets to ensure harmony and beneficial outcomes everywhere for everybody is ridiculous. Adam Smith never claimed there was such an entity.
Peter Foster play a different tune. He writes well and no doubt with the best of intentions in his polemical defence of his views on capitalism – of which this post is not a direct criticism - but in doing so he weakens his case by alluding to the myths of the invented “invisible hand” of the 20th century and he libels the actual meanings of Smith’s innocent use of a metaphor in the 18th century.
By the way: how do you “bite” something that is invisible and, anyway, is only a metaphor?
Thursday, April 10, 2014
UNNECESSARY COMPLICATION TO AN ALREADY NON-SENSICAL MYTH
Kevin T. Jackson on “Virtuosity in Business: Invisible Law Guiding the Invisible Hand” (University of Pennsylvania Press), 2011 HERE
“The recent global financial crisis raises pressing issues that are not exclusively economic. The health of the economy, Kevin T. Jackson contends, reflects the moral health of the wider culture: ethics must be considered along with economics to understand world markets, especially now that globalization and other forces have increasingly complicated the regulation of transnational corporate conduct. "Virtuosity in Business" calls on businesspeople and ethicists to expand their thinking by stressing the profound relevance of philosophy to business and economics.
"Virtuosity in Business" shows that ethics has been the overriding problem for business and that it is the only enduring solution. Drawing on a variety of philosophical sources, including Aristotle, Thomas Aquinas, and Jean-Paul Sartre, Jackson applies the concept of virtue to the competitive realm of the marketplace. Virtuosity, in all realms of human endeavor, is not merely a display of technical skill or adherence to conventional norms.
The invisible law of virtuosity, which discourages misconduct and rewards good corporate citizenship, guides ethical firms and wise entrepreneurs toward greater success by playing a constructive part in the human enterprise. A pioneering work in the contemporary philosophy of business, "Virtuosity in Business" revivifies business ethics to address concerns arising from the global financial crisis, such as restoration of faith in the market, respect for human rights, and environmental sustainability.”
Allowing for publishers’ blurb-writers who are not the books authors and whose knowledge of the origins of the modern myth of the “invisible hand” is next to nothing, this is an extraordinary version of the now standard myth.
Instead of merely having a ‘mysterious’ and “miraculous” entity guiding the vast complexities of the modern economy, we have something described as “virtuosity guiding the invisible hand”!
Er, what guides “virtuosity” that in turn guides the entity known as the “invisible hand” and what does the “invisible hand” do?
How do these imaginative entities operate - in tandem or sequence? How do they communicate?
Wait! Is ‘virtuosity’ a subjective property of a player – say, a player in markets, who adopts “virtue”, the necessary content of “virtuosity”, to guide her behaviour in markets, which in turn controls her, or somebody else’s, “invisible hand”?
Markets operate by VISIBLE prices – they cannot work without them - and this construction does not add clarity to an already perfectly clear construct, specifically that markets work through visible prices.
Perhaps should have posted it in our regular column of "Loony Tunes"?
Monday, April 07, 2014
THE ANSWER IS BOTH, NOT ONE OR THE OTHER
Joseph Stiglitz (3 April) posts on “Social Europe” HERE
“Reforming China’s State-Market Balance”
“No country in recorded history has grown as fast – and moved as many people out of poverty – as China over the last thirty years. A hallmark of China’s success has been its leaders’ willingness to revise the country’s economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?
In answering that question, the crucial point to bear in mind is that, as in the past, the current round of reforms will restructure not only the economy, but also the vested interests that will shape future reforms (and even determine whether they are possible). And today, while high-profile initiatives – for example, the government’s widening anti-corruption campaign – receive much attention, the deeper issue that China faces concerns the appropriate roles of the state and the market.”
Stiglitz confronts the dominat issue that has contrary remedial policies for adherents of the idealogical “solutions” to the question that he asks of “the deeper issue” facing China” (and every other country) of “the appropriate roles of the state and the market.”
China’s “deep” question is not unique. The same question dominates all countries that exist, or can exist anywhere since Homo sapiens walked upright out of the African bush.
The division of labour was not invented in a ‘pin factory’; it appeared long ago with early humans because of wide natural variations in human abilities; some were good at tracking food, especially sources of meat, other weren’t as good; some were better at making stone tools or woodern weapons to secure food; others good at making fires and securing night-time stopping places; and so on across the skill sets that separated small groups of humans from nature and what was necessary for their survival. Some, albeit, minmal co-operation within the separated groups trumped short-sighted selfishness in others. Humanity was never given a free-pass to survive on Earth for ever, or at all.
It was ever thus. And still is. Today the first few thousand of the human species is now 7 billion strong and counting. The false question is not whether we rely on state or market provision; we are bound to have both. Of course, we can have 'too much' of one and 'too little' of the other.
The argument is about the appropriate balance for both, because human societies need both and, I would venture to suggest in our high-tech complex societies, they cannot subsist for long with all of one (state provision, say) and no markets, or vice versa, except in the fantasies of those who are not paying attention either to the present arrangements or to history plus so-called ‘pre-history’, which is 'written' in the physical remnants of the past that passed away where we find their skeletal remains amidst their self-created detritus.
ANOTHER SWEEPING CLAIM ABOUT THE CAUSE OF THE INDUSTRIAL REVOLUTION
Stuart Jeanne Bramhill reviews “The Wealth of Nations by Adam Smith Abridged Version” by Laurence Dickey, Professor of History, University of Wisconsin-Madison (Hackett Publishing 1993) and adds somewhat controversial comments on Adam Smith’s Wealth Of Nations HERE “Reclaiming Adam Smith”: “Contrary to conservative claims, Adam Smith was a liberal who argued for government intervention to ensure economic growth and “general prosperity.” I find it intriguing that he attributes Britain’s global economic dominance to “division of labor” and a superior agricultural system. Despite an entire chapter in Book I on the origin of money, he makes no mention of the role of English banks in creating money (which started in 1666), which kick started the industrial revolution.”
Comment: The abstract excites my interest. But before I proceed to look at Stuart Jeanne Bramhill’s Review, I wonder why the much earlier banks founded in today’s Netherlands and in Italy centuries earlier than 1666 did not ‘kick start the industrial revolution’ too?
Singular explanations for the ‘industrial revolution’, itself a process lasting more than a century, are often suspect. For a detailed scholalry examination of the process by which per capita incomes rose from the historical norm of less than $1 a day towards $150 a day in commercial/capitalisr societies I suugest preliminary reading should include Deidre McCloskey’s volumes: “Bougeois Virtues’ (2007) and ‘Bourgeois Dignity: why economics can’t explain the modern world’ (2010) - plus a couple more volumes to come, published by Chicago University Press.
I shall comment further on Bramhill’s Review later.
ASK A QUESTION AND SOMEBODY SOMEWHERE KNOWS THE ANSWER
On 23 February, 2009 I asked readers of Lost Legacy a question which had stumped me regarding an obscure phrase:
“A Query for Wordsmiths
Does anybody know what William Magee, Bishop of Dublin, may have meant in 1809 by the words ‘scolists and whitlings’?”
Does anybody know what William Magee, Bishop of Dublin, may have meant in 1809 by the words ‘scolists and whitlings’?”
I didn’t receive an answer and the quesiton faded from my mind. Last Month, out of the blue so to speak, a reader (Michael Horn) answered my query and I post his answer below:
“I think Magee's title was Archbishop of Dublin.
Being intellectually arrogant, I had to have a crack at the question that you posed five years ago, so I may as well submit it, belatedly.
“Scolist” is a typographical error for “Scotist”, the name given to the philosophical and theological system or school named after John Duns Scotus, a Catholic priest (c.1265-1308). The error probably arises via faulty character recognition of scanned pages of old books.
If you Google the words “Scolists and Thomists” you will see many examples where “Scolist” is obviously intended to be “Scotist” – for example”
• “Dominicans, the Franciscans, the Benedictines, the Scolists, the Thomists, the monks . . .”
• “His opposition to Thomas gave rise to the parties called Thomists and Scolists (q. v.), whose controversies became peculiarly warm, when Scotus declared ...”
These documents were originally printed in a font type that character recognition software misinterprets. In many cases where the print is an image of the original, although the search engine finds the word “Scolist, the image of the word is “Scotists”. Look at, for example:
A History of the Church: From Its Establishment to the Present Century books.google.com.au/books?id=RdcTAAAAYAAJ Charles Constantine Pise - 1830 - Church history... surnamed the subtle doctor, whose speculative opinions were opposed to those of S. Thomas : and hence the origin of the Scolists and Thomists. (2) Spondan ..
On the matter of “whitling”, I am unsure, but I will venture a possible meaning – it should be "witeling", one tormented in hell. It is sometimes used by computer-gamers and writers of other-world fantasies to mean a devil.
The words “wight, white and “wite” are easily confused. One of the number of related meanings for the word “wite” is “Punishment, penalty; pain inflicted in punishment or torture, especially the torments of hell. If you take the meaning “punishment in hell”, then adding the suffix “ling” would mean souls consigned to be punished in hell, as the suffix is used in the sense that it is used in words like “Earthling”and “sibling” (“sib” means family in Old English). As an aside, in Dutch the word for "white" is "wit" pronounced "vit" and the adjective is "witte" pronounced vitta, so a "witteling" means an albino.
Here again, character recognition software may throw up a word that a spellchecker flags as wrong, and then an earthling with indifferent language skill decides what the word should be. As with “Scolism”, Archbishop Magee may not have written “whitling”. If you can find a scanned image of those words, it may be worth checking what was actually printed originally.
PS I enjoyed reading Adam Smith's Wealth of Nations when I was in my early 20s, and I have in the intervening fifty years read it twice again. I have only read about a hundred books in my 60-year reading life, so to have read a weighty tome thrice says something about the quality of the author. I have never read any of Friedrich Hayek's writing, but I listened to two lectures that he gave, which seemed to put him in the Adam Smith camp. Hayek had experienced much officious interference in Austria in his younger days where he witnessed the negative effects of rent controll, and unlike Keynes, he did not favour an economic system run by officials. Via the Adelsaufhebungsgesetz of 1919 (Law on the Abolition of Nobility) Von Hyek and Von Mises last the “Von” in their surnames – so much for officiousness. I have not thought much about it, but I think the most meaningful difference between Hayek and Keynes was that the latter had a naive trust in the goodwill of officialdom, as one may expect from an Etonian whose Civil Service career started in the India Office, whereas Hayek mistrusted them.”
CommentThe response speaks for itself and I am most grateful for the effort of my correspondent, Michael Horn. At this distance, I am red-faced ashamed to admit, that I have forgotten why I was searching for the meaning of ‘scolists and whitlings’ in 2009. It was important to me at the time but some memory loss is both annoying and inconvenient.
Nevertheless, I am most obliged for the answer and for the short biographical history of Michael Horn, my correspondent. Such erudition and interesting commentary on Friedrich Hayek and Mises (and a footnote on Keyne’s attitude to ‘officialdom’ suggests a rich life in the Republic of Letters in his “60 year reading life” for a man in his “early 70s”.
Behind the veil of his modesty is someone whom I would be pleased to meet for a long conversation …
Saturday, April 05, 2014
Loony Tunes no. 94
“Protestation” posts (4 April) HERE https://twitter.com/Protestation/statuses/452285294356602880
“Adam Smith’s Invisible Hand Is at Our Throats”
Aldus Huxtable asks (6 October 2011) HERE http://www.experienceproject.com/question-answer/
‘Now Can You Show Me On This Doll Where Adam Smith's "invisible Hand" Touched You?’
Yingxu Wang (PhD, Professor, Calgary University) asks (15 September 2013) HERE
“Was the classical illustration of Adam Smith’s invisible hand shown upside down between the curves of demand and supply in economics textbooks?”
[The good professor’s answer is also loony because the ‘invisible hand’ does not exist; its a metaphor (but not for supply and demand curves!, and not an actual entity!]
‘Pro-active’ comments on Thought Leader (Mil & Guardian (South Africa) HERE
“Is it 18th century Adam Smith’s “Invisible Hand” or the “modern invisible hand” reaching into our century-influencing directions?”
Saturday, March 29, 2014
A LITTLE KNOWLEDGE IS MISLEADING
Philipp Gassner writes (29 Mar 2014 ) in Business Mirror (Philippines) HERE “Nature’s invisible hand: Simply complex”
“Marveling the resourcefulness of nature’s incredibly ludicrous and squandering inventions, one cannot help but wonder: what’s the point and how is this even possible? By sheer chance? Surely not.
Scottish economist and moral philosopher Adam Smith offers an answer. Exactly 238 years ago, on March 9, 1776, he published The Wealth of Nations.
In this fundamental work in classical economics, he illuminates how our incredibly complex, inventive and powerful economy works and developed—a similarly puzzling mystery to nature’s rich biological diversity.
In a nutshell: each enterprise is doing its best to prosper, yet without the “benefit” of a centralized planner. Something very simple—individual competition—results invisibly to our eye in something very complex—an efficient economy.
But how can Smith’s famous metaphor of the invisible hand of the self-regulating market explain our rich natural biodiversity? English naturalist Charles Darwin wondered too, and coined the term “Economy of Nature,” according to which life on Earth evolves without the guidance of a designer. Instead, in his book Origin of Species he explains the “invisible hand” of nature, better known as evolution.”
ADAM SMITH AND CHARLES DARWIN’S ideas from different perspectives have much in common. We know Darwin read “Wealth Of Nations” (he refers to it and it was taught at Edinburgh while Darwin was a student there). Smith did not develop a theory of how commercial entities were guide by an IH, nor did he develop a theory using the metaphor of an “invisible hand” that performed a co-ordinating role, including a ‘designer’, in a parallel fashion to “evolution”. Back projecting such ideas to Smith are anachronistic wishful thinking.
The IH metaphor referred to something else entirely and that such an idea is used today as an analogy for Darwinian evolution is, well, sad. In fact the entire economics discipline suffers from a category 1 error in regard to the IH metaphor.
Briefly, Smith taught Rhetoric as well as Moral Sentiments at Glasgow University. He defined metaphors as describing their “object” in a “more striking and interesting manner”, giving examples to his listeners (see Adam Smith’s “Lectures on Rhetoric and Belles Lettres”, 1762-3). The “object” is what is described by the metaphor.
Smith only used the IH metaphor 3 times throughout his entire published works, and his definition is confirmed still today in the Oxford English Dictionary, as well as most other English language dictionaries, not often read by economists.
In no case did he use the IH metaphor in reference to “competition”, individual or combined, or as a “co-ordinating role” or in a “complex economy”.
His first reference in his History of Astronomy (posthumous 1793 - written 1744-58) was to the belief of credulous Pagan Romans that their invisible God, Jupiter, fired thunderbolts at non-believers and enemies of Rome in, ironically, very visible and noisy, thunderstorms.
His second reference in Theory of Moral Sentiments (1759) was to “proud and unfeeling landlords” who fed their serfs, slaves and peasantry, with food from their landlords’ fields. With no other source of food, the serfs would soon expire from starvation and excessive labour; moreover, the landlord’s source of greatness would disappear without labourers. This exchange of food for work to produce more food arrangement enabled the landlords’ economy to function, on which their rule depended.
His third reference 0n Wealth Of Nations, (1776), was to those merchants who avoided trading abroad for fear of losing their capital to unscrupulous foreign traders and therefore they preferred to invest it locally in their “domestic industry” and thereby added to domestic output. Their “insecurity” helped to grow the economy.
The philosophical point Smith was making had to do with what agents (those who acted) were “led” to do. by their motives. He started with the plausible but invisible motives of the actors - we cannot see into the minds of other people. In these 3 cases the ‘credulous’ Romans, the ‘unfeeling’ landlords and the ‘insecure’ merchants. He then identified the (plausible) visible actions that followed: the ‘credulous’ cowered in fear during thunderstorms and remained at home; the ‘unfeeling’ landlords shared some portion of ‘their’ crops with their fieldworkers, and the ‘insecure’ merchants, invested their capital which necessarily added to the capital available to the domestic economy.
The actors’ motives “led” them to their chosen actions and were intended to produce their intended consequences - loyalty to Rome, sufficiently-fed labourers to undertake heavy field work, and to secure the profitable use of the merchants’ capital.
However, Smith added another set of consequences from the actions, which is important enough to be remarked upon by Smith, because this time the intended consequences of their initial actions also had “unintended consequences” from the agents’ motivated initial actions.
Superstitious Romans remained loyal to Rome, therefore this added to intended political stability from fears of lightening strikes (and also fewer Romans died from lightening strikes by their staying in doors than those careless enough to venture outside); field labourers laboured more effectively with regular food, which had ‘unintended consequences’ over the long run from continuous procreation of the species, and GDP was maintained at a higher level, long term.
Of course, unintended consequences were not always positive. If conspirators moved freely in defiance of the credulous beliefs about lightening strikes being other than random, they could, perhaps catch a garrison by surprise and seize power in a rebellion as happened in far away parts of the Empire (also see Shakespeare’s “Julius Ceasar’); if “unfeeling landlords” disregarded the quality of the serfs’ food or its amount, then health losses could cause labour shortages and a relative decline for an individual landlords’ “greatness”; and if domestic-focussed merchants also prevented any imports with lobbying for tariffs, they could slow GDP growth and weaken the economy, not strengthen it.
Now you do not get such analysis from modern economists who have invented wholly spurious interpretations on Adam Smith’s use of the “invisible hand” metaphor, worse they have invented a mythical entity that does not exist to be at work in an economy.
Visible prices play the co-ordinating role in economies. No economy can work without visible prices. Simple, eh?
THE ANSWER IS IN THE SOIL
Following comments by Michael Webster ( along standing regular reader of Lost Legacy, I want to explore the consequences for early and proto-humans in the long, so-called ‘pre-history’ of our species. We have a ‘marker’ species against which we can ‘measure’ human’ performance – the chimpanzees that stayed still in mid-Africa.
Archeology also provides our ‘history’ well beyond the written record that currently provides our very short literate ‘History’ (a few Millennia). I adopt a perspective of history that includes all of the detailed archeological record from the stone-age (the data is quite deep from the Lower Pleistocene (1 million BP) and nearly prolific from 500,000 BP, and then very prolific from 100,000 BP.
To the cases: humans slowly spread across Africa, and apparently so did pre-humans before them. Following water-courses (Nile), humans then crossed into Europe and eventually along the North Mediterranean coast and East. Daily movement in search of food was imperative with various strategies – locust style, casual mobile harvesting, small species hunting, seasonal visits, new food sources, group adult hunting, herd following, limited shepherding, limited plant gathering, seasonal settlements, sporadic farming, sporadic contact with other groups, including, eg. Neanderthals.
My brief point is that these traces required daily decisions for groups (family, extended families, larger groups) with thin margins for errors and violent disputes, especially amidst regular environmental and climate changes, which over millennia were ‘frequent’.
We cannot know for certain how decisions were reached; we can see in the records often buried in the ground, in caves, and in ‘middens’, how groups performed and details of their diets. Hence, on a results basis –brutal, no doubt – those that lasted for centuries or millennia, viably ‘solved’ the decision problem, others disappeared within the short-lifetimes of those who got it wrong. Moreover, those that got it right more often than wrong, left their record for us to ‘read’ in slowly changing organised encampments, even primitive structures and domestic living spaces, plus their ‘tools’.
One large study I found is Cyprian Broodbank’s “The Making of he Middle Sea: a history of he Mediterranean from the Beginning to the Emergence of the Classical World”, Thames and Hudson (via Amazon).
It is a conscious changing experience about Human deep history, grounded in science. It certainly put the modern debate – by implication – over the market versus state stalemate into perspective, at least for me.