invisible hand

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes
by Mark Skousen
Published 22 Dec 2006

On a general scale, the voluntary self-interest of millions of individuals would create a stable, prosperous society without the need for central direction by the state. His doctrine of enlightened self-interest is often called "the invisible hand," based on a famous passage (paraphrased) from The Wealth of Nations: "By pursuing his own self interest, every individual is led by an invisible hand to promote the public interest" (423). Adam Smith's invisible hand doctrine has become a popular metaphor for unfettered market capitalism. Although Smith uses the term only once in The Wealth of Nations, and sparingly elsewhere, the phrase "invisible hand" has come to symbolize the workings of the market economy as well as the workings of natural science (Ylikoski 1995).

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Despite its imperfections, "the invisible hand has an astonishing capacity to handle a coordination problem of truly enormous proportions," declare William Baumol and Alan Blinder (2001, 214). Frank Hahn honors the invisible hand theory as "astonishing" and an appropriate metaphor. "Whatever criticisms I shall level at the theory later, I should like to record that it is a major intellectual achievement. . . . The invisible hand works in harmony [that] leads to the growth in the output of goods which people desire" (Hahn 1982, 1, 4, 8). The First Fundamental Theorem of Welfare Economics The invisible hand theory of the marketplace has become known as the "first fundamental theorem of welfare economics."8 George Stigler calls it the "crown jewel" of The Wealth of Nations and "the most important substantive proposition in all of economics."

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Pareto's optimality, Edgeworth's box) confirm mathematically and graphically the validity of Adam Smith's principal thesis, but it shows how, in most cases, government-induced monopolies, subsidies, and other forms of noncompetitive behavior lead inevitably to inefficiency and waste (Ingrao and Israel 1990). Smith's References to the Invisible Hand Surprisingly, Adam Smith uses the expression "invisible hand" only three times in his writings. The references are so sparse that economists and political commentators seldom mentioned the invisible hand idea by name in the nineteenth century. No references were made to it during the celebrations of the centenary of The Wealth of Nations in 1876. In fact, in the famed edited volume by Edwin Cannan, published in 1904, the index does not include a separate entry for "invisible hand." The term only became a popular symbol in the twentieth century (Rothschild 2001, 117-18).

The Darwin Economy: Liberty, Competition, and the Common Good
by Robert H. Frank
Published 3 Sep 2011

For instance, the same wedge that separates individual and group interests in Darwinian arms races also helps explain why the invisible hand might not automatically lead to the best possible levels of safety in the workplace. The traditional invisible-hand account begins with the observation that, all other factors the same, riskier jobs tend to pay more, for two reasons. Because of the money employers save by not installing additional safety equipment, they can pay more; and because workers like safety, they will choose safer jobs unless riskier jobs do, in fact, pay more. According to the standard invisible-hand narrative, the fact that a 10 CHAPTER ONE worker is willing to accept lower safety for higher wages implies that the extra income was sufficient compensation for the decrement in safety.

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His observations persuaded him that the interests of individual animals were often profoundly in conflict with the broader interests of their own species. In time, I predict, the invisible hand will come to be seen as a special case of Darwin’s more general theory. Many of the libertarians’ most cherished beliefs, which are perfectly plausible within Smith’s framework, don’t survive at all in Darwin’s. Giving the Invisible Hand Its Due Even so, the invisible-hand theory remains a genuinely revolutionary insight, all the more so because in hindsight it seems so obvious. Why does a business owner go to the trouble of designing a new product that consumers are likely to find appealing?

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People with less extreme preferences on these two dimensions do best by choosing jobs with intermediate values of wages and safety. According to the traditional invisible-hand account, then, workers get as much safety on the job as they’re willing to pay for. Since making jobs safer requires real resources that could be used for other things we value, that’s as it should be. If a worker doesn’t get the extra safety he claims he wanted, that must mean he didn’t value it enough to be willing to pay its cost. Why Skepticism about the Invisible Hand Persists Market skeptics often respond, tellingly, by citing behavior by employers that seems transparently at odds with the invisible hand’s rosy portrayal of market outcomes.

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor
by William Easterly
Published 4 Mar 2014

This system has nobody in charge, yet finds the best solutions for your problems and helps you find your own best role as a problem-solver for others. This is the Invisible Hand. Again, the wonder of Adam Smith’s breakthrough is often lost under a thick layer of ideological abuse of the Invisible Hand by both its proponents and opponents. The Invisible Hand is not utopia; it is not perfect; it is always a work in progress. There are genuine concerns about income distribution, in which the rich get their needs met so much more than the poor. There are still so many things wrong with the private suppliers of our needs that we could also describe the Invisible Hand in reverse: it is the process of driving out of business the incompetent in favor of the mediocre, the mediocre in favor of the good, and the good in favor of the excellent.

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The top three six-digit specialties in Lesotho generated only $87 for each and every person in Lesotho. The Invisible Hand helps with scaling up success as well as with finding success in the first place. Once workers get into a virtuous circle of learning by doing and increasing production on your chosen specialty, they still need the Invisible Hand to keep scaling up. They need it to efficiently get them the scale of the inputs, both domestic and imported, that go into producing the increasing scale of specialized output at which they are becoming so good. To free up those inputs, the Invisible Hand has to shut down many other specialties at which they are not so good.

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Herbert, 98–100, 101 “Free China” image, 70–71 Free cities, during the Middle Ages, 129–130, 131–133 Free development, 7. See also Authoritarian/technocratic development versus free development debate Free market, 244 versus government debate, 11–12 See also Invisible hand; Market versus government debate; Markets Free trade, and invisible hand concept, 243–245. See also Invisible hand Freedom, 137–139, 150–151, 297–299, 344 versus autocracy, 11, 24–25, 152 See also Economic freedom; Political freedom Freedom House, 344–345, 346 Freschi, Laura, 176 Friedman, Thomas, 313 Fujian Province, China, 79, 226–229. See also China Fukuyama, Francis, 313 Gains from specialization, 245, 246–247, 247–248, 266–269, 271.

Anarchy State and Utopia
by Robert Nozick
Published 15 Mar 1974

However, to remind the reader of our slight weakening of the Weberian condition, we occasionally shall refer to the dominant protective agency as “a statelike entity,” instead of simply as “a state.” THE INVISIBLE-HAND EXPLANATION OF THE STATE Have we provided an invisible-hand explanation (see Chapter 2) of the state’s arising within a state of nature; have we given an invisible-hand explanation of the state? The rights possessed by the state are already possessed by each individual in a state of nature. These rights, since they are already contained whole in the explanatory parts, are not provided an invisible-hand explanation. Nor have we provided an invisible-hand explanation of how the state acquires rights unique to it. This is fortunate; for since the state has no special rights, there is nothing of that sort to be explained.

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Our explanation of this de facto monopoly is an invisible-hand explanation. If the state is an institution (I) that has the right to enforce rights, prohibit dangerous private enforcement of justice, pass upon such private procedures, and so forth, and (2) that effectively is the sole wielder within a geographical territory of the right in (I), then by offering an invisible-hand explanation of (2), though not of (I), we have partially explained in invisible-hand fashion the existence of the state. More precisely, we have partially explained in invisible-hand fashion the existence of the ultraminimal state.

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independent enforcing justice private enforcement of justice indexical expressions, and moral principles inequality, Rawls on innocent shield innocent threat invisible-hand explanations examples of of marketplace of money satisfying quality of of the state See also invisible-hand process invisible-hand process de facto monopoly and coordination games and macro states as social compact See also invisible-hand explanation Jacobs, J justice in holdings See also entitlement theory Kalven, H Kant Katz. J J Kessell, R Kim, J Kimura, M Kirzner Krader Krantz Kristol Krystofiak, T labor theory of value Lancaster, K Laslett, P Leary, T legitimacy of state Levene,H Lewis.

Adam Smith: Father of Economics
by Jesse Norman
Published 30 Jun 2018

In this case, the invisible hand is being invoked as an external force within a putatively pre-scientific and personalized explanation for individual, often adverse, events. The contrast with modern views of the invisible hand as a scientific, law-like, iterated and collective explanation for benign market phenomena is evident, and reinforces the suggestion that Smith has no overall theory of the invisible hand. See Eugene Heath, ‘Metaphor Made Manifest: Taking Seriously Smith’s “Invisible Hand”’, in David F. Hardwick and Leslie Marsh (eds.), Propriety and Prosperity: New Studies on the Philosophy of Adam Smith, Palgrave Macmillan 2014, pp. 169 ff. Corn laws: see Avner Offer, ‘Self-Interest, Sympathy and the Invisible Hand: From Adam Smith to Market Liberalism’, Economic Thought, 1.2, 2012.

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By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. The idea of the invisible hand has been celebrated or denounced for many decades. For some, it is nothing less than the fundamental idea that the market is an equilibrating mechanism that transforms individual greed via competition into general welfare. For others, the invisible hand is the symbol of a winner-takes-all economic system that uses an appeal to impersonal market forces to legitimize coercion of those without economic power.

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For the former, government is at best an impediment to efficient markets and general welfare; for the latter, it is an essential safeguard against unfairness and inequality. And there have been many other interpretations of the invisible hand, from the ironic to the providential. It is, therefore, vital to be clear about what the invisible hand is and is not for Smith, and whether and why it matters. First of all, it is important to note that there are only three mentions of the phrase in the entire corpus of his writings. Far from being the centrepiece of The Wealth of Nations, the metaphor of the invisible hand appears exactly once there, and receives no specific elaboration or development. Nor, even there, is it the paean to unfettered markets and the beneficent effects of self-interest claimed by some.

How Markets Fail: The Logic of Economic Calamities
by John Cassidy
Published 10 Nov 2009

In introducing the concept of social cost, Pigou pinpointed a central problem with the invisible hand that many free market economists had deliberately obscured or ignored. He also proposed some simple ways of correcting the market’s shortcomings, sometimes through the tax system, but also by the provision of public services and the introduction of regulations. Moreover, he accomplished all this using the same tools of “marginal analysis” that Walras, Pareto, and others had used to extol the virtues of the invisible hand. The defenders of free market orthodoxy could hardly dismiss Pigou’s conclusions as the product of an inappropriate methodology: his method was theirs!

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Between the collapse of communism and the outbreak of the subprime crisis, an understandable and justified respect for market forces mutated into a rigid and unquestioning devotion to a particular, and blatantly unrealistic, adaptation of Adam Smith’s invisible hand. Milton Friedman, who died in 2006, said the test of an economic theory is that it should explain a lot with a little. But the modern theory of the invisible hand that Friedman and others promoted explains too much with too little. At its core, it says simply: self-interest plus competition equals nirvana. There is no mention in this equation of the institutions of modern capitalism, such as multinational corporations, derivatives markets, universal banks, and mutual funds.

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Monetary policy. 4. Banks and banking. I. Title. HB3722.C37 2009 381—dc22 2009029529 www.fsgbooks.com To Lucinda, Beatrice, and Cornelia CONTENTS Copyright Dedication Introduction PART ONE: UTOPIAN ECONOMICS 1. Warnings Ignored and the Conventional Wisdom 2. Adam Smith’s Invisible Hand 3. Friedrich Hayek’s Telecommunications System 4. The Perfect Markets of Lausanne 5. The Mathematics of Bliss 6. The Evangelist 7. The Coin-Tossing View of Finance 8. The Triumph of Utopian Economics PART TWO: REALITY-BASED ECONOMICS 9. The Prof and the Polar Bears 10. A Taxonomy of Failure 11.

For Profit: A History of Corporations
by William Magnuson
Published 8 Nov 2022

In The Wealth of Nations, Smith famously argued that an “invisible hand” oversaw the market. The invisible hand ensured that selfish individuals, looking out solely for themselves, ended up promoting the greater good of society as a whole. Precisely how the invisible hand did its work was unclear, but it generally involved some combination of supply and demand: by competing with one another in responding to the demands of consumers, corporations supplied the goods and services that society needed with high quality and at a reasonable price. The idea of the invisible hand of capitalism has since captured the imagination of economists, politicians, and executives around the world.

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Adam Smith, the father of capitalism, understood this. In the seldom-read passage of The Wealth of Nations in which he articulated his vision of the invisible hand, he was careful to provide an important caveat about capitalism as a cure-all. The invisible hand is not infallible. “By directing [his] industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention,” Smith wrote. “Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it.”

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ADAM SMITH, THE FOUNDING PHILOSOPHER OF CAPITALISM, BELIEVED that an invisible hand guides our markets. It nudges, pulls, and sometimes shoves profit seekers toward the greater good. It leads corporations to invent, innovate, and grow. It makes them sensitive to scarcity, consumer demand, and the welfare of workers. These incentives are often good. They align the interests of corporations and society. But Adam Smith was no Pangloss. He understood that the invisible hand falters. It grows weary. It sometimes drops the ball. For the good of everyone, we need to learn when the invisible hand is most likely to fail us and when it will lead us down dangerous or harmful paths.

The Penguin and the Leviathan: How Cooperation Triumphs Over Self-Interest
by Yochai Benkler
Published 8 Aug 2011

This does not claim us to be saints; it merely says that we are capable of virtue, and that we need not be robotic slaves to the government’s Leviathan, automatons guided by the Invisible Hand of the market, or parts of the collectivist Hive of fascism to serve the common weal. In honor of Tux, the symbol of Linux, I’ll call this alternative the Penguin. Cycles of Leviathan and the Invisible Hand Modern European and North American history has cycled between social, political, and economic systems that tended toward the Leviathan, and those that were based on the Invisible Hand. Throughout the seventeenth and eighteenth centuries, Europe’s absolute monarchies were more or less inefficient versions of Leviathan (just substitute “monarchy” for “government”).

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Throughout the seventeenth and eighteenth centuries, Europe’s absolute monarchies were more or less inefficient versions of Leviathan (just substitute “monarchy” for “government”). The inefficiency in exercising control provided substantial breathing room for Invisible Hand and the social action, the Penguin, to flourish underneath the Leviathan, more or less informally. By the nineteenth century the decline of the monarchy, the Industrial Revolution, and the subsequent rise of commerce swept the Invisible Hand into power (nowhere with more painful effects than in Britain, as Friedrich Engels and Charles Dickens portrayed with such excruciating detail). This long reign of the Invisible Hand in both Europe and America was punctuated by panics and crashes throughout the nineteenth century, then, in 1929, came to a swift and abrupt end as the markets crashed, ushering in the Great Depression.

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The second assumption was Adam Smith’s alternative solution to our assumed selfishness—the Invisible Hand. Smith’s Wealth of Nations argued that because humans are inherently self-interested and human decision making is driven by the rational weighing of costs and benefits, our action in a free market would tend to serve the common good. In other words, in our pursuit of self-interest we would work to fulfill one another’s needs, not because we care about one another’s well-being, but because it is mutually advantageous to do so. Though their prescriptions are quite different, both Leviathan and the Invisible Hand have the same fundamental starting point: a belief in the selfishness of mankind.

Luxury Fever: Why Money Fails to Satisfy in an Era of Excess
by Robert H. Frank
Published 15 Jan 1999

Although we have seen a substantial body of evidence consistent with the claim that our current consumption patterns are profoundly wasteful, we are unlikely to reach consensus on ways of changing these patterns until we can agree on why they are wasteful. What is it, exactly, that makes the invisible hand go awry? THE INVISIBLE HAND RECONSIDERED I hasten to emphasize that, in posing the question in these terms, I do not mean to suggest that Adam Smith’s invisible hand idea has had a negative impact on the course of human history. On the contrary, free-market economies all over the globe, whose institutions were inspired by it, have prospered to a degree that even Smith himself would have found difficult to imagine.

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Our conflict is rooted in the fact that human nature is simply not what economic orthodoxy assumes it to be. The orthodox models that underlie Adam Smith’s invisible hand take the primary economic determinant of a person’s sense of well-being to be his absolute standard of living. But as virtually everyone else has long been aware, it is relative living standards that often prove far more important. And as we shall see, when satisfaction depends importantly on relative living standards, all bets regarding the efficacy of the invisible hand are off. CONCERNS ABOUT RELATIVE POSITION Having been raised as an only child, I have always observed the sibling rivalries among my own children with great interest.

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Smith’s view was by far the more optimistic, but Darwin’s more hard-edged analysis holds the key to understanding our current situation. SMITH AND DARWIN ON COMPETITION Writing more than two centuries ago, Adam Smith introduced his concept of the invisible hand, which went on to become one of the most celebrated and influential ideas of all time. His insight was that individuals seeking to promote only their own interests in the marketplace would be driven, “as if by an invisible hand,” to promote the greatest good for all. Thus producers seeking to steal market share from their rivals would develop cost-reducing innovations, which would be mimicked by others, and which in time would lead to lower prices for all.

The Collapse of Western Civilization: A View From the Future
by Naomi Oreskes and Erik M. Conway
Published 30 Jun 2014

Belief in geoengineering as a climate “solution” was a sub-set of HAO. (2) The capacity of humans to remain optimistic and adapt to changed circumstances, even in the face of daunting difficulties, and even if the form of “adaptation” required is suffering. L e x i c o n o f A r c h A i c T e r m s 59 invisible hand A form of magical thinking, popularized in the eighteenth century, that economic markets in a capitalist system were “balanced” by the actions of an unseen, immaterial power, which both ensured that markets functioned efficiently and that they would address human needs. Belief in the invisible hand (sometimes also called the invisible hand of the marketplace) formed a kind of quasi-religious foundation for capitalism (see capitalism; external costs; market failure; market fundamentalism).

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market failure The social, personal, and environmental costs that market economies imposed on individuals and societies were referred to as “market failures.” The concept of market failure was an early recognition of the limits of capitalist theory (see external costs; invisible hand ). market fundamentalism A quasi-religious dogma (see invisible hand) promoting unregulated markets over all other forms of human socioeconomic organization. During the Penumbra, market fundamentalists tended to deny the existence of market failure, thus playing a key role in the denial of the changes that were already under way and therefore in the catastrophes that ensued.

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Even at the time, some recognized this system as a quasi-religious faith, hence the label market fundamentalism. 38 M a r k e t F a i l u r e Market fundamentalism—and its various strands and interpretations known as free market fundamentalism, neoliberalism, laissez-faire economics, and laissez-faire capitalism—was a two-pronged ideological system. The first prong held that societal needs were served most efficiently in a free market economic system. Guided by the “invisible hand” of the marketplace, individuals would freely respond to each other’s needs, establishing a net balance between solutions (“supply”) and needs (“demand”). The second prong of the philosophy maintained that free markets were not merely a good or even the best manner of satisfying material wants: they were the only manner of doing so that did not threaten personal freedom.

Virtual Competition
by Ariel Ezrachi and Maurice E. Stucke
Published 30 Nov 2016

With the rise of pricing algorithms in an increasingly digitalized market universe, in which web-aggregators, algorithms, and data pools provide the foundation for possible unilateral, coordinated, and Frenemy behav ior, is the invisible hand still a viable concept? After all, in a market that is in reality controlled by bots and algorithms, what power does the invisible hand possess? One may argue that the invisible hand remains a power ful force. Humans, after all, program and nominally control the algorithms. We still trust the invisible hand in many markets where robots manufacture products or provide ser vices, or where computers help facilitate trade. Moreover, we have seen how computers can enhance competition and our welfare.

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Also, suppose the payoff would depend on how frequently the phrase appears in English-language books. If you could invest in one of these phrases—price regulation or invisible hand—which one would you pick? Google’s Ngram Viewer shows how often a phrase has occurred in a corpus of Englishlanguage books. As Figure 5 reflects, an investor in price regulation would have profited in the 1940s (see the gray line in Figure 5), but the overall winners are those who picked invisible hand (the dotted line in Figure 5). The result parallels the shift in emphasis in modern times, from regulation to free market philosophy. Price regulation has taken a beating, especially, as Chapter 3 explores, with the rise of neoclassical economic theories associated with the University of Chicago.

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Surge areas were on and off, sometimes by the second, and being in the surge area did not guarantee requests from within the surge area.17 To Regulate or Not to Regulate 211 Even if surge pricing did not have its intended effect of quickly attracting additional drivers to the road, the invisible hand could still be at work. Arguably, Uber has to price competitively. Other wise users will turn to other ride-sharing apps, taxis, public transportation, or other modes of travel. Thus, in markets with a competitive alternative, the invisible hand ultimately checks Uber. If Uber’s surge price is too frequent, too high, or for too long, its app users would opt for other modes of travel (or simply walk). But as we saw in Chapter 6, as Uber’s platform increases in popularity outside options are limited and switching costs become high.

The Production of Money: How to Break the Power of Banks
by Ann Pettifor
Published 27 Mar 2017

Shadow banking was only named and identified by the economist Paul McCulley as late as 2007, in a speech at the annual financial symposium hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming.9 Members of the shadow banking ‘blind-eye brigade’ include Alan Greenspan, who in 2004 said that under the deregulated system of credit creation, ‘Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.’10 Credit creation and Goethe’s ‘Sorcerer’s Apprentice’ As argued above, to ensure that the monetary system addresses society’s varied needs, credit (debt) creation must be managed to ensure it is offered at low real rates of interest, and used productively and sustainably to create employment, and with it savings, income and other revenues, part of which can be used to repay the debt. If the system is to remain stable and useful to society as a whole, then publicly accountable authorities must manage and regulate not just the creation of credit, but also the ‘price’ of that credit: the rate of interest. If, instead, the power of credit creation is left to the ‘invisible hand’ of the market, the consequences will be similar to those faced by Goethe’s ‘Sorcerer’s Apprentice’. Readers will recollect that, in the absence of the Sorcerer, the Apprentice misused his master’s magic to conjure up water, brushes and pails that would magically undertake, without supervision, the work of cleaning up his master’s studio.

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Economists reckoned that an excess supply of money (‘the global savings glut’) had, thanks to market forces, lowered the ‘price’ (interest rate) of money. Because of their conviction that bankers as dealers in money were like other intermediaries, simply acting as agents between buyers and sellers, economists thought banking activities could safely be guided by the ‘invisible hand’ of the market. Private commercial bankers could hardly believe their luck. The Sorcerer – in the form of a financial regulator – had vacated a vast amount of monetary space and left them in charge of the magic of credit creation, not just in their own country, but globally; not just within the retail banking system, but outside the purview of regulators, in the ‘shadow’ banking system.

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Both inflation and deflation pose real threats to the wider economy and to social and political stability. Deflation, if it becomes entrenched, is particularly difficult to reverse (witness Japan’s deflated economy since 1990) as the public authorities have few tools with which to address deflationary pressures. That is why it is vital that credit creation is not left to the ‘invisible hand’ – to players in financial markets. In a democracy, it is the responsibility of ‘the guardians of the nation’s finances’ – central bankers, finance ministers and treasury civil servants – to manage the almost effortless process of both credit creation and the rate of interest – for the benefit of the economy as a whole.

Where We Are: The State of Britain Now
by Roger Scruton
Published 16 Nov 2017

When it is said that nations are artificial communities, however, it should be remembered that there are two kinds of social artefact: those that result from a decision, as when two people form a partnership, and those that arise ‘by an invisible hand’, from decisions that in no way intend them, such as folk songs and folk religions. Institutions that arise by an invisible hand have a spontaneity and naturalness that may be lacking from institutions that are explicitly designed. Nations are spontaneous by-products of social interaction. Even when there is a conscious nation-building decision, the result will depend on the invisible hand: it is the affection, not the decision, that shapes the national identity. This is even true of the United States of America, which is by no means the entity today that the Founding Fathers intended.

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There you have a brief summary of American history: people settling together, solving their conflicts by law, making that law for themselves, and in the course of this process defining themselves as a ‘we’, whose shared assets are the land and its law. The ‘invisible hand’ process, which was so illuminatingly discussed by Adam Smith, depends upon, and is secretly guided by, a legal and institutional framework.9 Under a rule of law, for example, the free interaction of individuals will result in a market economy. In the legal vacuum of post-communist Russia, by contrast, this free interaction of individuals has produced a command economy in the hands of gangsters. Likewise the invisible hand that gave rise to the nation was guided at every point by the territorial law. This ‘law of the land’ has been an important shaping force in English history, as F.

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Lawrence, London, 1907. 8Ernest Gellner, Nations and Nationalism, Oxford, 1983; Benedict Anderson, Imagined Communities, 2nd edn, London, 1991; Eric Hobsbawm, Nations and Nationalism since 1780, Cambridge, 1990; Elie Kedourie, Nationalism, London, 1960; Kenneth Minogue, Nationalism, London, 1967. 9See Adam Smith, Inquiry into the Nature and the Causes of the Wealth of Nations, 1776, and the discussion of ‘invisible hand’ explanations in Robert Nozick, Anarchy, State and Utopia, Oxford, 1974. The invisible-hand theory was generalized by F. A. Hayek to produce a comprehensive account of legal and institutional development, in Law, Legislation and Liberty, 2 vols, London, 1976. 10F. W. Maitland, The Constitutional History of England, London, 1908. 11A few classic instances: George Eliot, Middlemarch; Adalbert Stifter, Nachsommer; Marcel Proust, À la recherche du temps perdu; Ingmar Bergman, Wild Strawberries; James Joyce, Dubliners.

A Little History of Economics
by Niall Kishtainy
Published 15 Jan 2017

When Akerlof and Stiglitz began their new field of information economics, many economists thought that markets worked pretty well most of the time. They believed in the ‘invisible hand’, Adam Smith’s idea that buying and selling in markets leads to the best use of society’s resources. Breakdowns in the market because of information problems don’t necessarily mean that people are being stupid or irrational. It’s perfectly rational for people to stop buying horses because they suspect that they’re being offered old nags. But the breakdowns mean that the invisible hand no longer works. On receiving his Nobel Prize, Stiglitz suggested that the reason that the hand is invisible is that it’s not there – and if it is, it’s paralysed.

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This is important because how we think about the economy can influence how it actually treats different people. In a sense, the economic theories that we’ve looked at in this book – perfect competition, the law of demand and so on – are stories that economists tell over and over again. A famous one is Adam Smith’s invisible hand. Of course there isn’t really an invisible hand, just lots of people buying and selling things in an ordered way. It’s a story, although a useful one. Diana Strassmann (b. 1955), a pioneer of feminist economics, points out that most of the economic stories were first told by men, often in the nineteenth century. Many of the male economists who told them shared their society’s misgivings about women having an active role in the economy.

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Classification: LCC HB71 .K527 2017 | DDC 330.09—dc23 LC record available at https://lccn.loc.gov/2016042806 A catalogue record for this book is available from the British Library. 10 9 8 7 6 5 4 3 2 1 Contents 1Cool Heads and Warm Hearts 2The Soaring Swans 3God’s Economy 4Going for Gold 5Nature’s Bounty 6The Invisible Hand 7Corn Meets Iron 8An Ideal World 9Too Many Mouths 10Workers of the World 11A Perfect Balance 12Shut Out the Sun 13The Profits of War 14The Noisy Trumpeter 15Coke or Pepsi? 16The Man With a Plan 17Flashing your Cash 18Down the Plughole 19Creative Destruction 20The Prisoners’ Dilemma 21The Tyranny of Government 22The Big Push 23The Economics of Everything 24Growing Up 25Sweet Harmony 26A World in Two 27Fill Up the Bath 28Ruled by Clowns 29Money Illusion 30Future Gazing 31Speculators on the Attack 32Saving the Underdog 33Knowing Me, Knowing You 34Broken Promises 35Missing Women 36Minds in Fog 37Economics in the Real World 38Bankers Go Wild 39Giants in the Sky 40Why Be an Economist?

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems
by Linda Yueh
Published 4 Jun 2018

Smith was, naturally, a product of his times, which witnessed the advent of industrialization that led to an unprecedented increase in incomes and living standards. His 1776 The Wealth of Nations is the seminal work on the subject. Smith’s legacy is evident in nearly every aspect of economics. We still view the economy through the lens he fashioned. So, Adam Smith is the first Great Economist in the book. His idea of the ‘invisible hand’ of market forces – meaning the innate effects of supply and demand, rather than direct intervention by governments or other institutions – is the foundation of economic theory. As I explored in that Radio 4 programme, the British government is trying to rebalance the economy towards making things once again, after the 2008 crisis revealed the downsides of relying too much on financial services.

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America, China and other major economies are also seeking to rebalance their economies so that they can grow in a more sustainable fashion. What would Adam Smith say about these attempts? How would he reconcile his affinity for manufacturing with an aversion to governments intervening in the workings of the ‘invisible hand’? An economist inspired by Adam Smith later became the father of international trade. In 1817 David Ricardo formalized the theory of comparative advantage that shows how every country benefits from free trade. This is true even if that country is worse than every other country in the world at producing everything.

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Still, China is undergoing perhaps the most challenging part of its marketization process. How would Marx judge the trail that the Chinese economy is blazing? On the opposite side of the planning – market spectrum from Karl Marx was his near contemporary Alfred Marshall. Instead of the government running the economy, Marshall formalized how Smith’s ‘invisible hand’ achieves an equilibrium for the economy through market forces. He showed how supply and demand determine the price and quantity of a good. Marshall’s belief in a self-correcting market that moves towards an equilibrium means that we only need a laissez-faire state. There is no imperative for the government to intervene a great deal in the workings of the market economy, for instance, in the ups and downs of a business cycle.

The Code of Capital: How the Law Creates Wealth and Inequality
by Katharina Pistor
Published 27 May 2019

Law’s Guiding Hand The legal code of capital may be invisible to the casual observer, but that does not make it less real. Some may find it easier to believe in the market’s “invisible hand” immortalized by Adam Smith, than to spend their time decoding capital’s legal structures.16 And yet, changes in the legal structure have fundamentally altered the conditions for Smith’s invisible hand to do its work. As is well known, Smith argued that the pursuit of individual self-interest will inevitably benefit society. Often ignored is the mechanism that powers the invisible hand. “Every individual,” Smith explained, “endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry; provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock.”17 Why so?

…

Because “he can know better the character and situation of the persons whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress.”18 Whereas conventional wisdom attributes the operation of the invisible hand to the market, it might just as well be read as a reference to the quality of the rules of the game where business is conducted. The invisible hand does its job under weak institutions; it becomes superfluous once institutions are in place that allow economic agents to enforce their rights and interests anywhere. Today’s entrepreneurs no longer need to seek redress at home, and the fate of their wealth is no longer tied to the communities they left behind.

…

Recall that in Adam Smith’s account, the lack of institutional certainty in foreign places was the invisible hand that drove merchants back home, where they would invariably share some of their spoils with their community. For the merchants, this presented itself as a massive institutional failure, which greatly increased their costs of doing business and reduced their private gains. If institutions could be streamlined around the globe, business would become more predictable and the merchants could simply dispense with the invisible hand and keep their spoils for themselves. Building the legal infrastructure for global commerce has taken, for the most part, one of two forms: the harmonization of laws in different states, and the recognition and enforcement of foreign law.

The Armchair Economist: Economics and Everyday Life
by Steven E. Landsburg
Published 1 May 2012

His topic was the analogy between Darwinian evolution, advancing the species biologically by allowing only the fittest to survive, and the Invisible Hand of the marketplace, advancing our species economically by eliminating all but the most efficient producers. I suspect that he didn't know much about biology. I'm sure that he didn't know much about economics. And his analogy, though familiar, was profoundly wrong. In biology, there is no equivalent of the Invisible Hand. Survival of the fittest is a different thing altogether. Nothing in evolutionary theory either promises or delivers the spectacular efficiency of the competitive marketplace.

…

Under quite general conditions, when goods are produced and exchanged in competitive free markets in which people trade at market prices, economic activity leads to efficient outcomes. This fact is what economists have in mind when they talk about the Invisible Hand. In the eighteenth century, Adam Smith described the economic actor who "intends only his own gain" but is nevertheless led "by an invisible hand to promote an end which was no part of his intention," that end being the welfare of society, which economists call efficiency. The metaphor endures, having survived countless misinterpretations. It has been said that Smith was expressing a religious sentiment, a faith that Providence oversees our affairs.

…

This is so even though individual rationality and competition without prices rarely leads to such desirable outcomes. The Invisible Hand Theorem is not at all obvious, but it is true. In the 1950s, the economists Gerard Debreu and Lionel Why Prices Are Good 77 McKenzie, working separately, successfully translated the Theorem into a statement about pure mathematics and rigorously proved that statement. Their accomplishment is one of the triumphs of modern economics. Along with its modern formulation, the Invisible Hand Theorem has acquired a modern name. It is now called the First Fundamental Theorem of Welfare Economics, and it can be stated succinctly: Competitive markets allocate resources efficiently.

Exploring Everyday Things with R and Ruby
by Sau Sheong Chang
Published 27 Jun 2012

This means the producer with the higher prices will have unsold goods, which in turn forces the prices to go down. The end results are that the average price goes down until it nears the cost of producing the goods. Finally, we see the invisible hand! The invisible hand of Adam Smith has weighed in on our simulation and pushed the prices down. Now that we have witnessed the invisible hand and charted its effects, let’s get slightly more complicated. Resource Allocation by Price In the previous simulation, every producer creates only one type of goods, which we imaginatively called goods. This, of course, is not realistic (nothing modeled in economics is realistic, but that’s a different point).

…

His book An Inquiry into the Nature and Causes of the Wealth of Nations (excerpted here) is considered the first modern work of economics, while he himself is often regarded as the father of economics: It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Smith coined the metaphor of the “invisible hand” to label this natural inclination, effectively describing what we know today as the market economy. In this chapter, we will simulate a market economy to see if we can observe the invisible hand in action. A Simple Market Economy First, let’s take stock of the different roles and features of an ideal market economy (which are what we want to simulate). Producers The people who produce the goods.

…

: (question mark, colon), in Ruby ternary conditional expression, if and unless > (right angle bracket), The R Console, Variables and Functions -> assignment operator, R, Variables and Functions > R console prompt, The R Console ' ' (single quotes), enclosing Ruby strings, Strings [ ] (square brackets), Vectors, Matrices, Data frames accessing subset of R data frame, Data frames enclosing R matrix indexes, Matrices enclosing R vector indexes, Vectors [[ ]] (square brackets, double), enclosing single R vector index, Vectors A aes() function, R, Aesthetics An Inquiry into the Nature and Causes of the Wealth of Nations (University of Chicago Press), The Invisible Hand apply() function, R, Interpreting the Data Armchair Economist (Free Press), How to Be an Armchair Economist array() function, R, Arrays arrays, R, Arrays–Arrays arrays, Ruby, Arrays and hashes–Arrays and hashes, Arrays and hashes artificial society, Money (see Utopia example) as.Date() function, R, Number of Messages by Day of the Month ascultation, Auscultation assignment operators, R, Variables and Functions at sign, double (@@), preceding Ruby class variables, Class methods and variables attr keyword, Ruby, Classes and objects Audacity audio editor, Homemade Digital Stethoscope average, Interpreting the Data (see mean() function, R) Axtell, Robert (researcher), It’s a Good Life Growing Artificial Societies: Social Science from the Bottom Up (Brookings Institution Press/MIT Press), It’s a Good Life B backticks (` `), enclosing R operators as functions, Variables and Functions bar charts, Plotting charts, Interpreting the Data–Interpreting the Data, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation barplot() function, R, Plotting charts batch mode, R, Sourcing Files and the Command Line Bioconductor repository, Packages birds flocking, Schooling Fish and Flocking Birds (see flocking example) bmp() function, R, Basic Graphs Boids algorithm, Schooling Fish and Flocking Birds–The Origin of Boids Box, George Edward Pelham (statistician), regarding usefulness of models, The Simple Scenario break keyword, R, Conditionals and Loops brew command, Installing Ruby using your platform’s package management tool butterfly effect, The Changes C c() function, R, Vectors CALO Project, The Emailing Habits of Enron Executives camera, pulse oximeter using, Homemade Pulse Oximeter case expression, Ruby, case expression chaos theory, The Changes charts, Charting–Adjustments, Plotting charts, Statistical transformation, Geometric object, Interpreting the Data–Interpreting the Data, Interpreting the Data–Interpreting the Data, Interpreting the Data–Interpreting the Data, The Second Simulation, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation, The Final Simulation–The Final Simulation, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate, Money–Money, Money–Money, Implementation bar charts, Plotting charts, Interpreting the Data–Interpreting the Data, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation histograms, Statistical transformation, Geometric object, Money–Money line charts, Interpreting the Data–Interpreting the Data, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation Lorenz curves, Money–Money scatterplots, Interpreting the Data–Interpreting the Data, The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, Implementation waveforms, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate class methods, Ruby, Class methods and variables class variables, Ruby, Class methods and variables–Class methods and variables classes, R, Programming R classes, Ruby, Classes and objects–Classes and objects code examples, Using Code Examples (see example applications) colon (:), Symbols, Vectors creating R vectors, Vectors preceding Ruby symbols, Symbols comma-separated value (CSV) files, Importing data from text files (see CSV files) Comprehensive R Archive Network (CRAN), Packages conditionals, R, Conditionals and Loops conditionals, Ruby, Conditionals and loops–case expression contact information for this book, How to Contact Us conventions used in this book, Conventions Used in This Book cor() function, R, The R Console Core library, Ruby, Requiring External Libraries corpus, Text Mining correlation, R, The R Console CRAN (Comprehensive R Archive Network), Packages CSV (comma-separated value) files, Importing data from text files, The First Simulation–The First Simulation, The First Simulation, Interpreting the Data, The Simulation, Extracting Data from Sound–Extracting Data from Sound, Extracting Data from Video extracting video data to, Extracting Data from Video extracting WAV data to, Extracting Data from Sound–Extracting Data from Sound reading data from, Interpreting the Data writing data to, The First Simulation–The First Simulation, The Simulation csv library, Ruby, The First Simulation, The Simulation, Grab and Parse curl utility, Ruby Version Manager (RVM) D data, Data, Data, Everywhere–Data, Data, Everywhere, Bringing the World to Us, Importing Data–Importing data from a database, Importing data from text files, The First Simulation–The First Simulation, Interpreting the Data, How to Be an Armchair Economist, The Simulation, Grab and Parse–Grab and Parse, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives, Homemade Digital Stethoscope–Extracting Data from Sound, Extracting Data from Sound–Extracting Data from Sound, Homemade Pulse Oximeter–Extracting Data from Video, Extracting Data from Video analyzing, Data, Data, Everywhere–Data, Data, Everywhere, Bringing the World to Us, How to Be an Armchair Economist charts for, How to Be an Armchair Economist (see charts) obstacles to, Data, Data, Everywhere–Data, Data, Everywhere simulations for, Bringing the World to Us (see simulations) audio, from stethoscope, Homemade Digital Stethoscope–Extracting Data from Sound CSV files for, Importing data from text files, The First Simulation–The First Simulation, Interpreting the Data, The Simulation, Extracting Data from Sound–Extracting Data from Sound, Extracting Data from Video from Enron, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives from Gmail, Grab and Parse–Grab and Parse importing, R, Importing Data–Importing data from a database video, from pulse oximeter, Homemade Pulse Oximeter–Extracting Data from Video data frames, R, Data frames–Data frames data mining, The Idea data.frame() function, R, Data frames database, importing data from, Importing data from a database–Importing data from a database dbConnect() function, R, Importing data from a database dbGet() function, R, Importing data from a database DBI packages, R, Importing data from a database–Importing data from a database Debian system, installing Ruby on, Installing Ruby using your platform’s package management tool def keyword, Ruby, Classes and objects dimnames() function, R, Matrices distribution, normal, Money dollar sign ($), preceding R list item names, Lists doodling example, Shoes doodler–Shoes doodler double quotes (" "), enclosing Ruby strings, Strings duck typing, Ruby, Code like a duck–Code like a duck dynamic typing, Ruby, Code like a duck–Code like a duck E economics example, A Simple Market Economy–A Simple Market Economy, The Producer–The Producer, The Consumer–The Consumer, Some Convenience Methods–Some Convenience Methods, The Simulation–The Simulation, Analyzing the Simulation–Analyzing the Simulation, The Producer–The Producer, The Consumer–The Consumer, Market–Market, The Simulation–The Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation, Price Controls–Price Controls charts for, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation Consumer class for, The Consumer–The Consumer, The Consumer–The Consumer Market class for, Some Convenience Methods–Some Convenience Methods, Market–Market modeling, A Simple Market Economy–A Simple Market Economy price controls analysis, Price Controls–Price Controls Producer class for, The Producer–The Producer, The Producer–The Producer simulations for, The Simulation–The Simulation, The Simulation–The Simulation email example, Grab and Parse–Grab and Parse, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives, Number of Messages by Day of the Month–Number of Messages by Day of the Month, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, MailMiner–MailMiner, Number of Messages by Day of Week–Number of Messages by Hour of the Day, Interactions–Comparative Interactions, Text Mining–Text Mining charts for, Number of Messages by Day of the Month–Number of Messages by Hour of the Day content of messages, analyzing, Text Mining–Text Mining data for, Grab and Parse–Grab and Parse Enron data for, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives interactions in email, analyzing, Interactions–Comparative Interactions number of messages, analyzing, Number of Messages by Day of the Month–Number of Messages by Day of the Month, Number of Messages by Day of Week–Number of Messages by Hour of the Day R package for, creating, MailMiner–MailMiner emergent behavior, The Origin of Boids (see also flocking example) Enron Corporation scandal, The Emailing Habits of Enron Executives Epstein, Joshua (researcher), It’s a Good Life Growing Artificial Societies: Social Science from the Bottom Up (Brookings Institution Press/MIT Press), It’s a Good Life equal sign (=), assignment operator, R, Variables and Functions Euclidean distance, Roids evolution, Evolution example applications, Using Code Examples, Shoes stopwatch–Shoes stopwatch, Shoes doodler–Shoes doodler, The R Console–Sourcing Files and the Command Line, Data frames–Introducing ggplot2, qplot–qplot, Statistical transformation–Geometric object, Adjustments–Adjustments, Offices and Restrooms, A Simple Market Economy, Grab and Parse, My Beating Heart, Schooling Fish and Flocking Birds, Money artificial utopian society, Money (see Utopia example) birds flocking, Schooling Fish and Flocking Birds (see flocking example) doodling, Shoes doodler–Shoes doodler economics, A Simple Market Economy (see economics example) email, Grab and Parse (see email example) fuel economy, qplot–qplot, Adjustments–Adjustments heartbeat, My Beating Heart (see heartbeat example) height and weight, The R Console–Sourcing Files and the Command Line league table, Data frames–Introducing ggplot2 movie database, Statistical transformation–Geometric object permission to use, Using Code Examples restrooms, Offices and Restrooms (see restrooms example) stopwatch, Shoes stopwatch–Shoes stopwatch expressions, R, Programming R external libraries, Ruby, Requiring External Libraries–Requiring External Libraries F factor() function, R, Factors, Text Mining factors, R, Factors–Factors FFmpeg library, Extracting Data from Video, Extracting Data from Video field of vision (FOV), Roids fish, schools of, Schooling Fish and Flocking Birds (see flocking example) flocking example, Schooling Fish and Flocking Birds–The Origin of Boids, The Origin of Boids, Simulation–Simulation, Roids–Roids, The Boid Flocking Rules–Putting in Obstacles, The Boid Flocking Rules–The Boid Flocking Rules, A Variation on the Rules–A Variation on the Rules, Going Round and Round–Going Round and Round, Putting in Obstacles–Putting in Obstacles Boids algorithm for, Schooling Fish and Flocking Birds–The Origin of Boids centering path for, Going Round and Round–Going Round and Round obstacles in path for, Putting in Obstacles–Putting in Obstacles research regarding, A Variation on the Rules–A Variation on the Rules Roid class for, Roids–Roids rules for, The Origin of Boids, The Boid Flocking Rules–The Boid Flocking Rules simulations for, Simulation–Simulation, The Boid Flocking Rules–Putting in Obstacles flows, Shoes, Shoes stopwatch fonts used in this book, Conventions Used in This Book–Conventions Used in This Book for loop, R, Conditionals and Loops format() function, R, Number of Messages by Day of the Month FOV (field of vision), Roids fuel economy example, qplot–qplot, Adjustments–Adjustments function class, R, Programming R functions, R, Variables and Functions–Variables and Functions G GAM (generalized addictive model), The Changes gem command, Ruby, Requiring External Libraries .gem file extension, Requiring External Libraries generalized addictive model (GAM), The Changes Gentleman, Robert (creator of R), Introducing R geom_bar() function, R, Interpreting the Data, The Second Simulation, The Final Simulation geom_histogram() function, R, Geometric object geom_line() function, R, Analyzing the Simulation geom_point() function, R, Plot, Interpreting the Data, Generating the Heart Sounds Waveform geom_smooth() function, R, Interpreting the Data ggplot() function, R, Plot ggplot2 package, R, Introducing ggplot2–Adjustments Gini coefficient, Money Git utility, Ruby Version Manager (RVM) Gmail, retrieving message data from, Grab and Parse–Grab and Parse graphics device, opening, Basic Graphs graphics package, R, Basic Graphs graphs, Charting (see charts) Growing Artificial Societies: Social Science from the Bottom Up (Brookings Institution Press/MIT Press), It’s a Good Life H hash mark, curly brackets (#{ }), enclosing Ruby string escape sequences, Strings hashes, Ruby, Arrays and hashes–Arrays and hashes heart, diagram of, Generating the Heart Sounds Waveform heartbeat example, My Beating Heart, My Beating Heart, My Beating Heart, Homemade Digital Stethoscope, Homemade Digital Stethoscope, Homemade Digital Stethoscope–Extracting Data from Sound, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heart Sounds Waveform, Finding the Heart Rate–Finding the Heart Rate, Homemade Pulse Oximeter–Homemade Pulse Oximeter, Homemade Pulse Oximeter–Extracting Data from Video, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate charts for, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate data for, Homemade Digital Stethoscope–Extracting Data from Sound, Homemade Pulse Oximeter–Extracting Data from Video audio from stethoscope, Homemade Digital Stethoscope–Extracting Data from Sound video from pulse oximeter, Homemade Pulse Oximeter–Extracting Data from Video heart rate, My Beating Heart, Finding the Heart Rate–Finding the Heart Rate, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate finding from video file, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate finding from WAV file, Finding the Heart Rate–Finding the Heart Rate health parameters for, My Beating Heart heart sounds, My Beating Heart, My Beating Heart, Homemade Digital Stethoscope, Generating the Heart Sounds Waveform health parameters for, My Beating Heart recording, Homemade Digital Stethoscope types of, My Beating Heart, Generating the Heart Sounds Waveform homemade pulse oximeter for, Homemade Pulse Oximeter–Homemade Pulse Oximeter homemade stethoscope for, Homemade Digital Stethoscope height and weight example, The R Console–Sourcing Files and the Command Line here-documents, Ruby, Strings hex editor, Extracting Data from Sound histograms, Statistical transformation, Geometric object, Money–Money Homebrew tool, Installing Ruby using your platform’s package management tool hyphen (-), Variables and Functions, Variables and Functions -> assignment operator, R, Variables and Functions <- assignment operator, R, Variables and Functions I icons used in this book, Conventions Used in This Book if expression, R, Conditionals and Loops if expression, Ruby, if and unless–if and unless Ihaka, Ross (creator of R), Introducing R ImageMagick library, Extracting Data from Video IMAP (Internet Message Access Protocol), Grab and Parse importing data, R, Importing Data–Importing data from a database inheritance, Ruby, Inheritance–Inheritance initialize method, Ruby, Classes and objects inner product, Roids–Roids installation, Installing Ruby–Installing Ruby using your platform’s package management tool, Installing Shoes–Installing Shoes, Introducing R, Installing packages–Installing packages R, Introducing R R packages, Installing packages–Installing packages Ruby, Installing Ruby–Installing Ruby using your platform’s package management tool Shoes, Installing Shoes–Installing Shoes Internet Message Access Protocol (IMAP), Grab and Parse Internet Message Format, The Emailing Habits of Enron Executives invisible hand metaphor, The Invisible Hand irb application, Running Ruby–Running Ruby J jittering, Adjustments jpeg() function, R, Basic Graphs L Landsburg, Stephen E. (author), How to Be an Armchair Economist Armchair Economist (Free Press), How to Be an Armchair Economist layer() function, R, Plot league table example, Data frames–Introducing ggplot2 left angle bracket (<), Strings, Variables and Functions <- assignment operator, R, Variables and Functions << preceding Ruby string here-document delimiter, Strings length() function, R, Vectors libraries, Requiring External Libraries, Requiring External Libraries–Requiring External Libraries, The First Simulation (see also specific libraries) for Ruby, The First Simulation for Ruby, Requiring External Libraries–Requiring External Libraries library() function, R, Importing Data line charts, Interpreting the Data–Interpreting the Data, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation linear PCM (pulse-code modulation) format, Extracting Data from Sound Linux, Installing Ruby using third-party tools, Installing Shoes, Introducing R, Using R, Basic Graphs installing R on, Introducing R installing Ruby on, Installing Ruby using third-party tools installing Shoes on, Installing Shoes opening graphics device, Basic Graphs R user interface for, Using R list() function, R, Lists lists, R, Lists–Lists Loess algorithm, The Changes loops, R, Conditionals and Loops–Conditionals and Loops loops, Ruby, Loops Lorenz curve, Money, Money–Money Lorenz, Edward (coined "butterfly effect"), The Changes M Mac, Installing Ruby using third-party tools, Installing Ruby using your platform’s package management tool, Installing Shoes, Using R, Basic Graphs installing Ruby on, Installing Ruby using third-party tools, Installing Ruby using your platform’s package management tool installing Shoes on, Installing Shoes opening graphics device, Basic Graphs R user interface for, Using R mail library, Ruby, Grab and Parse Manhattan Project, The Simple Scenario matrices, R, Matrices–Matrices matrix library, Ruby, Roids matrix() function, R, Matrices Matsumoto, Yukihiro (creator of Ruby), Why Ruby max() function, R, Interpreting the Data mean() function, R, The R Console, Interpreting the Data–Interpreting the Data median() function, R, Interpreting the Data–Interpreting the Data merge() function, R, Data frames methods, Ruby, Methods mgcv library, The Changes mixin mechanism, Ruby, Inheritance modules, Ruby, Inheritance Monte Carlo simulation method, The Simple Scenario–The First Simulation movie database example, Statistical transformation–Geometric object N natural selection, Evolution normal distribution, Money O objects, R, Programming R objects, Ruby, Classes and objects–Classes and objects "Occupy Wall Street" movement, Money open classes, Ruby, Roids order() function, R, Data frames output formats, R, Basic Graphs overplotting, Adjustments oximetry, Oximetry–Homemade Pulse Oximeter P package management tool, Installing Ruby using your platform’s package management tool packages, R, Packages–Using packages, MailMiner–MailMiner par() function, R, Plotting charts pdf() function, R, Basic Graphs peppered moth, natural selection of, Evolution plot characters, Interpreting the Data plot() function, R, The R Console, Plotting charts–Plotting charts png() function, R, Basic Graphs Poisson process, The Simple Scenario pulse oximeter, Homemade Pulse Oximeter–Homemade Pulse Oximeter puts statement, Ruby, Running Ruby Pythagoras's theorem, Roids Q %q, preceding Ruby strings, Strings %Q, preceding Ruby strings, Strings qplot() function, R, qplot–qplot quartz() function, R, Basic Graphs question mark (?)

Economics Rules: The Rights and Wrongs of the Dismal Science
by Dani Rodrik
Published 12 Oct 2015

It is not at all evident, on its face, that millions of consumers, workers, firms, savers, investors, banks, and speculators, each of them pursuing strictly their own personal advantage, would collectively arrive at anything other than economic chaos. Yet the model says the outcome is actually efficient. The First Fundamental Theorem of Welfare Economics is colloquially known among economists as the Invisible Hand Theorem. It was Adam Smith, perhaps the father of economics, who first stated it in broad terms. Though he did not use the term “invisible hand” in quite this context, Smith argued that decentralized decision making by individual consumers and producers in a market would nonetheless provide collective benefit. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,” he famously wrote, “but from their regard to their own interest.”2 Smith’s point that price incentives turn markets into a stupendously effective coordination machine running on autopilot was brought home powerfully by Milton Friedman in his popular TV series Free to Choose in 1980, on the eve of a wave of market reforms under the Reagan and Thatcher governments.

…

.Ӡ Even though the Arrow and Debreu articles are foundational, having earned each economist a Nobel Prize, they are rarely read. (I confess I looked at them for the first time as I was writing this.) Economists study them instead from textbooks and other secondhand treatments. The First Fundamental Theorem is a big deal because it actually proves the Invisible Hand hypothesis. That is, it shows that under certain assumptions, the efficiency of a market economy is not just conjecture or possibility; it follows logically from the premises. The payoff from all the mathematics is that we actually have a precise statement. The model shows us exactly how the result is produced.

…

Information has to be complete—meaning, for example, that consumers are knowledgeable about all attributes of a good even before purchasing and experiencing it. We need to rule out monopolistic behavior on the part of producers, increasing returns to scale, and “externalities” (such as pollution or learning spillovers from R&D). Economists from Adam Smith on knew, of course, that such complications might interfere with the invisible hand. But Arrow and Debreu put it all together and made it all explicit and precise. The First Fundamental Theorem is about a purely hypothetical world; it does not claim to describe any actual markets. Taking it to the real world requires judgment, evidence, and further theorizing. How one interprets its relevance for economic policy is a Rorschach test of sorts.

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor
by John Kay
Published 24 May 2004

For example, for James Tobinn the invisible hand is "one of the great ideas of history and one of the most influential." Tobin (1992), 117. 2. Yergin and Stanislaw (1998), 398. More or less the same phrase is found at the beginning of the book, page 24. 3. Leacock (1936). These are not Leacock's own views. 4. Smith (1759), 184-85 For a discussion of the role of the "invisible hand" metaphor in Smith's work, see Rothschild (2001), chapter 5. The original "invisible hand" seems to be found in Shakespeare: { 378} Notes Come seeling night Scarf up the tender eye of pitiful day And with thy bloody and invisible hand Cancel and tear to pieces that great bond Which keeps me pale.

…

No one who has fully understood it ever thinks the same way again. Coordination in Market Economies Adam Smith was the great economist of the Scottish Enlightenment. And his metaphor of the invisible hand is the most famous expression of order without design. Smith had described how the division of labor had fueled economic growth, "the natural progress of opulence." But how was that division of labor organized and coordinated? The answer was the invisible hand. As I shall discuss in chapter 17, I am not sure this interpretation of Smith is right. But whether or not it was Smith's answer, it is a good question. We can imagine Khrushchev in the supermarket posing his own version: "Who is in charge of the supply of groceries to California?"

…

The widely quoted passage is: "By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention." Yet on careful reading Smith does not say that selfish behavior is praiseworthy, is bound to pay, or necessarily promotes the best interests of society. When we join the shortest queue at the supermarket, we intend only our own gain and promote an end that is not part of our intention. It does not follow that our behavior is governed by self-regarding materialism, or that such behavior leads, cumulatively or otherwise, to the overall betterment of society. The passage containing the invisible hand metaphor is not about general equilibrium theory: its purpose is to explain why merchants would continue to buy British products even if tariffs were removed.

Stacy Mitchell
by Big-Box Swindle The True Cost of Mega-Retailers and the Fight for America's Independent Businesses (2006)

HF5468.M58 2006 381
.120973—dc22 2006013818 For Jacob CONTENTS PART ONE PART TWO INTRODUCTION ix ONE CHAIN STORE WORLD 3 TWO FADING PROSPERITY 33 THREE COMMUNITY LIFE 73 FOUR BLIGHTED LANDSCAPE 101 FIVE SOMETIMES LOW PRICES 127 SIX MONOPOLIZED CONSUMERS 138 SEVEN UNCLE SAM’S INVISIBLE HAND 163 EIGHT COMMUNITIES UNCHAINED 192 NINE DECLARATION OF INDEPENDENTS 223 ACKNOWLEDGMENTS 259 NOTES 260 INDEX 299 INTRODUCTION Kepler’s, a fifty-year-old independent bookstore in Menlo Park, California, abruptly shut down. Owner Clark Kepler explained that bookstore chains and Amazon.com had displaced so much of the store’s sales that he could no longer pay the bills.

…

This enthusiasm influences their decisions about what products to stock and the quality standards they expect from manufacturers. It means they often possess a valuable level of expertise and provide a variety of extras—from family game nights to lessons on managing diabetes—that cannot be found at the chains. PART TWO SEVEN UNCLE SAM’S INVISIBLE HAND IT WAS EARLY 2005 WHEN KEVIN OHM, who owns the thirty-three-year-old Ohm’s Appliance store in Brookings, South Dakota, first learned that city o‰cials were planning to grant Lowe’s nearly $3 million in public subsidies to build a superstore in town. “Surprise would be an understatement,” he recalled.

…

GOVERNMENT HANDOUTS Many of the big-box stores and shopping centers that open each year are built with the help of public subsidies. These giveaways take many forms: free or reduced-price land (as in Brookings); property tax breaks; sales tax rebates; free infrastructure and other site improvements; low-interest, tax- UNCLE SAM’S INVISIBLE HAND 165 free loans; and job training credits, to name a few. Most of these subsidies are provided locally by cities and towns, and occasionally counties, though state and even federal tax dollars may be involved. Together they constitute one of the most substantial, and certainly the most overt, means by which government policy fuels corporate retail expansion.

The Inner Lives of Markets: How People Shape Them—And They Shape Us
by Tim Sullivan
Published 6 Jun 2016

“For much of the post–World War II period,” Fourcade writes, “flexing one’s mathematical and statistical muscles and stripping down one’s argument to a formal and parsimonious set of equations was indeed the main path to establishing scientific purity in economics.”3 Radford, writing after the war, found himself in deep conversation with the classical economists of the nineteenth and earlier centuries—even as the profession was on the cusp of its mathematical transformation. Radford’s larger message about the efficiency of markets was, after all, one of the main points of Adam Smith’s metaphor of the invisible hand, an idea that first appeared in Book IV of his epic Wealth of Nations in 1776. To Smith, the power of the market was clear, requiring no formal proof of its veracity or elucidation of the precise circumstances where it would be truer than others. Smith largely asserted that individuals can pursue their own self-interest and make society as a whole better off.4 It was a revelation.

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Building from his calculation that the richest 20 percent of Italians owned 80 percent of the country’s land, Pareto posited that incomes in an economy tend to be distributed according to a “power law.” (Power law distributions will often generate extreme inequality, making Pareto an unlikely hero of the Occupy movement.) Most memorably, though, he used his mathematical skills to extend Smith’s invisible hand arguments, introducing a particular criterion by which economists could assess social well-being.5 This welfare principle, named Pareto efficiency by British economist I. M. D. Little, suggests that we may judge an economic system by whether it’s possible, through some series of trades or exchanges, to make at least one individual better off without making anyone worse off.

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In a sense, Arrow and Debreu’s model was a stress test of the market, an attempt to understand the conditions that would guarantee that a market would arrive at that happy state where society’s means and wants exactly coincide. This may seem an esoteric point. And in a way it is. But think back to Smith’s timeless description of the magic of the invisible hand: in a well-functioning market, each individual acts only in self-interest but nonetheless ends up promoting the public good. He’s describing, essentially, the glories of market equilibrium: there’s no way that the economy’s resources could be put to use so that any one individual is better off without making someone else worse off (that is, market equilibrium is a Pareto optimum).

The Economics Anti-Textbook: A Critical Thinker's Guide to Microeconomics
by Rod Hill and Anthony Myatt
Published 15 Mar 2010

The recent global financial meltdown (discussed in the postscript to this book) illustrates – among other things – the importance of the legal and regulatory framework within which markets operate. Imperfect and asymmetric information creates possible conflicts of interest that allow some people to profit at the expense of others. The invisible hand isn’t supposed to work like that; it is supposed to transform everyone’s selfishness into the greater good. Prasch (ibid.) explains that the invisible hand only works to produce an effi­ cient allocation of resources if the economy consists of certain special kinds of markets. There must be no externalities, but additionally the quality of the product must be known, and exchanges must be instantaneously completed in ‘spot’ markets.

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We agree that the typical text offers a view that ‘idolizes markets’ – usually not in a crude way, but in a subtle way through its choice of themes, and through its emphasis on demand and supply (also called the model of perfect competition) as the central theoretical structure. Most of the standard textbook is spent developing and applying that structure. It describes a world of perfect markets in which given resources are allocated as if by an invisible hand in a way that maximizes the value of total production. The belief that this model approximates how markets operate in the real world is often referred to as ‘market fundamentalism’.3 4 Minimum wage laws, usury laws, truth-in-advertising laws, laws to regulate fraud, health-and-safety codes, anti-discrimination laws, building inspection codes, environmental laws, investor protection rules, and many other rules and regulations have each and severally been breezily, even haughtily, dismissed by market fundamentalists and the many columnists and politicians who invoke their arguments.

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Even when people make their decisions with perfect information, they can still choose not to take into account the effects of their actions on others. Every kind of pollution, from the local to the global, is an example of this. We show in Chapter 7 that externalities are not the afterthought that the textbooks suggest, but are a pervasive problem that render the invisible hand story irrelevant as a description of the world we live in. Questions of power are absent from the texts. Yet in reality sellers try to shape and to influence the preferences of consumers, while consumers may try to exert their power to get producers to produce products in more ethical or environmentally sustainable ways.

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries
by Safi Bahcall
Published 19 Mar 2019

Yet some rules that describe what happens when many people come together to accomplish tasks seem to work pretty well. The rules of efficient markets, invisible hands, and so on. Those have been established and tested beyond any doubt, right? Well, sort of. This is Alan Greenspan, the economist who chaired the US Federal Reserve for nineteen years, writing in the Financial Times in 2011: Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.

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One extended his logic to the analysis of diplomacy: “With notably rare exceptions, Germany remained largely at peace with its neighbors during the 20th century.” Greenspan’s view, however, that efficient markets and invisible hands are fundamental laws that are rarely, if ever, violated is widespread. But it’s a fallacy. That fallacy is a common cause of policy disasters (or investment opportunities, if you are a trader). Neither efficient markets nor invisible hands are fundamental laws. They are both emergent properties. Emergent properties are collective behaviors: dynamics of the whole that don’t depend on the details of the parts, the macro that rises above the micro.

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The terrific thing about the science of emergence is that once we understand a phase transition, we can begin to manage it. We can design stronger materials, build better highways, create safer forests—and engineer more innovative teams and companies. * * * So what does all of this tell us about Mr. Greenspan and the widespread belief in the almighty invisible hand? The confidence in the infallibility of the invisible hand is a consequence, to come back to our Newton-Jobs theme from the prior chapter, of false idolatry. For two hundred years we have been bowing down to the wrong seventeenth-century physicist. To see what I mean, let’s travel back to a summer day in Britain two centuries ago.

The Great Economists: How Their Ideas Can Help Us Today
by Linda Yueh
Published 15 Mar 2018

Smith was, naturally, a product of his times, which witnessed the advent of industrialization that led to an unprecedented increase in incomes and living standards. His 1776 The Wealth of Nations is the seminal work on the subject. Smith’s legacy is evident in nearly every aspect of economics. We still view the economy through the lens he fashioned. So, Adam Smith is the first Great Economist in the book. His idea of the ‘invisible hand’ of market forces – meaning the innate effects of supply and demand, rather than direct intervention by governments or other institutions – is the foundation of economic theory. As I explored in that Radio 4 programme, the British government is trying to rebalance the economy towards making things once again, after the 2008 crisis revealed the downsides of relying too much on financial services.

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America, China and other major economies are also seeking to rebalance their economies so that they can grow in a more sustainable fashion. What would Adam Smith say about these attempts? How would he reconcile his affinity for manufacturing with an aversion to governments intervening in the workings of the ‘invisible hand’? An economist inspired by Adam Smith later became the father of international trade. In 1817 David Ricardo formalized the theory of comparative advantage that shows how every country benefits from free trade. This is true even if that country is worse than every other country in the world at producing everything.

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Still, China is undergoing perhaps the most challenging part of its marketization process. How would Marx judge the trail that the Chinese economy is blazing? On the opposite side of the planning – market spectrum from Karl Marx was his near contemporary Alfred Marshall. Instead of the government running the economy, Marshall formalized how Smith’s ‘invisible hand’ achieves an equilibrium for the economy through market forces. He showed how supply and demand determine the price and quantity of a good. Marshall’s belief in a self-correcting market that moves towards an equilibrium means that we only need a laissez-faire state. There is no imperative for the government to intervene a great deal in the workings of the market economy, for instance, in the ups and downs of a business cycle.

The Greed Merchants: How the Investment Banks Exploited the System
by Philip Augar
Published 20 Apr 2005

Enron is an extreme case, but its journey from being an energy supplier into an energy trader symbolizes the change in corporate values. It remains to be seen whether the markets culture can produce long term companies. Whatever Happened to the Invisible Hand? Adam Smith, the eighteenth-century father of modern economic theory, was not perturbed by the likelihood of collusion in free markets. He believed that the businessman is ‘led by an invisible hand to promote an end which was no part of his intention… By pursuing his own interest he frequently promotes that of society.’17 Adam Smith’s belief that conspiracy and contrivance would result in the public good is neatly summed up by another British economist called Smith, the journalist David Smith: ‘The point was that the market did not let them get away with it, or at least not for long.

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Attempts by groups of firms to fix prices by agreement – forming a cartel – would fail as long as it was possible for new firms to enter the market and undercut them. The invisible hand is the market, and through its operation the best possible or optimum outcome is achieved.’18 Adam Smith’s theories are very popular with the investment banks. They support non-intervention and deregulation, the policies that create the best possible climate for them and justify their prices, profits and place in society. After all, if prices and profits were too high, the market would force them down and if output was poor, the market would drive it up. Supporters have been quick to claim victory for the invisible hand, arguing that the bear market had fundamentally weakened the investment bank’s position.19 This may yet prove to be so, but, given the investment banks’ power and resourcefulness, it would be as well to keep an eye on how they fare compared to other market participants.

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The Trusted Adviser Takes a Fall 2. The Age of Deception PART 2: Is There a Cartel? 3. The Blessing of the Leviathans 4. Heads We Win 5. Tails You Lose 6. The Sound of Silence PART 3: What Really Goes On 7. The Edge 8. Voodoo Management 9. The Big Squeeze PART 4: Whatever Happened to the Invisible Hand? 10. Does It Matter? 11. The Greed Merchants 12. Here’s to the Next Time Notes Index Acknowledgements This book originated in a paper I delivered at a seminar organized by the London School of Economics Financial Markets Group in September 2001. I am grateful to Sir Geoffrey Owen and John Plender for inviting me to speak there, thus getting the ball rolling.

The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)
by Phil Thornton
Published 7 May 2014

Certainly the core concepts he set out regarding the division of labour and the invisible hand and the idea that economic wealth is generated by trade and activity rather than by hoarding money are so embedded in western economic systems that it is easy to forget they originated with Smith. His contempt for monopolies is similarly well entrenched in today’s business environment. However, it is clear that an economy that embraced all of Smith’s tenets without dilution would look very different from the UK or any other European country. While accepting the principle of the free market, many people are keen that governments intervene to check the invisible hand. The use of taxes and regulations to alter the way that markets operate in areas such as domestic energy supply, air and rail travel, polluting industries and housing finances show how far we have moved from Smith.

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The fourth volume criticises the agricultural and mercantile systems and the last one looks at how governments should raise revenue through taxation and what they should spend it on. Out of this long and detailed work there are perhaps six key concepts that have stood the test of time and for which Smith is best remembered and has had the greatest influence. We’ll look at these key ideas now. The invisible hand Wealth of Nations marshals the theories of self-interest first written about in The Theory of Moral Sentiments into a way of looking at how societies prosper. Smith aimed to overthrow the prevailing notion at the time, known as mercantilism. This stated that the only way to prosper was to hoard wealth, which 8 The Great Economists was seen as finite.

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Just as capital will head towards the industry that produces the greatest value, so each worker aims for the job that will make him or her the most money. In each case, as Smith put it, this worker ‘neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is in this led by an invisible hand to promote an end which was no part of his intention.’ Smith is laying out the basis for the free-market mechanism of supply and demand. Smith is in effect laying out the basis for the free-market mechanism of supply and demand. Over time this will become the general equilibrium theory, set out a century later and formalised in greater detail by Paul Samuelson, whom we will meet later (see Chapter 8), and other eminent economists. 

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One
by Meghnad Desai
Published 15 Feb 2015

The complex voluntary cooperation which exists beneath the surface of our daily economic life was called the invisible hand by Adam Smith. It is the interdependence of people far-flung and unknown to each other which is the most difficult thing to grasp about economics. It is wondrous that the myriad separate decisions made by millions of individuals about what to buy and what to sell, what to produce, which job to take and where to study ultimately hang together to ensure that when you go to the shops there are things to buy that you want, that there are jobs to go to for most of us and that the same will be the case tomorrow. It is as if, as Adam Smith said, an invisible hand is guiding us.

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It is as if, as Adam Smith said, an invisible hand is guiding us. The invisible hand is not always benevolent. It may also work adversely. Why else would the bankruptcy of a New York firm, Lehman’s, cause unemployment in Lancashire? Why would we debate the prospect of the eurozone or worry about Chinese growth causing petrol prices to rise? The complex interconnectedness threaded together by myriad independent decisions is central to an understanding of why economics is such a difficult and uncertain subject. Each individual deciding to buy or postpone a purchase, or to take up a job or wait for a better one, acts on their own impulses and it is hoped uses their powers of reasoning as well.

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The subject matter of economics consists of individuals with volition. unlike the subjects of natural science. The economist’s hope is that while individual agents may have their own reasons for behaving any way they like, as a group their behavior will show some regularity and predictability. Devices such as the invisible hand are ways of coping with this complexity so that we can grasp its working. Adam Smith’s other powerful idea was that in order to generate and guarantee prosperity, there should be minimal restrictions on people’s choices. Governments should stick to providing law and order, guarantee secure property rights, create fair and broad-based taxes, spend prudently on matters such as education and infrastructure, and keep the budget in balance.

Why Government Is the Problem
by Milton Friedman
Published 1 Feb 1993

The self-interest of people in government leads them to behave in a way that is against the self-interest of the rest of us. You remember Adam Smith's famous law of the invisible hand: People who intend only to seek their own benefit are "led by an invisible hand to serve a public interest which was no part of" their intention. I say that there is a reverse invisible hand: People who intend to serve only the public interest are led by an invisible hand to serve private interests which was no part of their intention. I believe our present predicament exists because we have gradually developed governmental institutions in which the people effectively have no voice.

The Classical School
by Callum Williams
Published 19 May 2020

When push comes to shove, we recognise “that we are but one of the multitude, in no respect better than any other in it”. People are not inherently selfish, according to Smith, but inherently social. Thy bloody and invisible hand The true meaning of that famous phrase, “invisible hand”, is also interesting. Many pundits use the phrase to encapsulate a supposed “greed is good” philosophy. That argument rests on a number of profound misunderstandings. First things first: Smith mentions the phrase “invisible hand” just three times in his entire published output. On each occasion the phrase is used in a completely different context–and never to mean what it means in the popular understanding.

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Bear in mind the original source of the image–Macbeth, where the protagonist talks about “thy bloody and invisible hand”. Many of those reading Smith would have known that Macbeth utters the phrase when he is planning to murder Banquo, whom he sees as a rival to be King of Scotland. It is hard to believe that Smith would choose such a metaphor to describe something he viewed favourably. So what does Smith mean when he uses the term? Emma Rothschild provides the best analysis of the multiple meanings of “invisible hand”. In Smith’s History of Astronomy he uses “invisible hand” to refer mockingly to the naivety of people in polytheistic societies.

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But none of that matters a jot. If someone can make it seem as though their argument, no matter how arcane, was or would have been supported by one of these thinkers, it carries that bit more weight. Which makes it essential to get a better sense of what these economists really meant. What did Adam Smith mean by the term “invisible hand”? Did Karl Marx predict the end of capitalism? Was John Stuart Mill a utilitarian? Did Thomas Malthus believe that famines were desirable? This book will talk about what the founders of economics actually thought. That involves debunking some popular myths. I will also explain the significance of their ideas in simple language.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
by George A. Akerlof and Robert J. Shiller
Published 1 Jan 2009

These stories, embellished by oft told vignettes of newly successful people, and in their mostly justified enthusiasm for expanded free markets, led to too much economic tolerance. Underlying this revolution is the powerful principle of the “invisible hand”—that market forces should be the fundamental framework of resource allocation. Recognition of this principle has produced the surge of economic growth that has defined our age. And yet, today, with the recent economic crisis, unregulated free markets are being questioned. We believe that the unvarnished invisible hand story, although right in a fundamental way, is wrong at the level of detail and approximation that is necessary to explain what we need to know about macroeconomies.

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Nor are they likely to disagree with us about the most recent such shift, coinciding with the election of Ronald Reagan. At that time the explanation of how the economy worked turned to the conservative image with which we began this book, the “invisible hand.” This shift was, of course, not just an American phenomenon. Britain had elected Margaret Thatcher eighteen months earlier. Other countries, from India to China to Canada, would follow, sometimes zealously so. The story of the “invisible hand” and its consequences gives surprisingly detailed prescriptions regarding the role of government, even pertaining to questions of great specificity. But now people are asking these questions anew.

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Private enterprise needs to be watched quite closely, especially where it is hard to know if toxic waste is being disposed of safely. Indeed, there was so little regulation of financial markets that even today there are no good standard statistics that summarize the volumes of complicated securities traded and, more importantly, still outstanding. People had taken the “invisible hand” too seriously, and enshrined it with a mythology, like that embodied in The Apprentice, that made it central to our culture. To continue the metaphor of the referee at the sports event, they took the good advice that they should not be stopping the game constantly for minor infractions. The game has to go on.

Impact: Reshaping Capitalism to Drive Real Change
by Ronald Cohen
Published 1 Jul 2020

The economist Adam Smith famously introduced the ‘invisible hand of markets’ in The Wealth of Nations at the end of the eighteenth century, to describe how everyone’s striving for profit results in everyone’s best interests. His first book, The Theory of Moral Sentiments, was about the ability of humans to act out of empathy and altruism. Had he known that we would be measuring impact in the twenty-first century, he might well have combined his two books into one, and written about impact as the invisible heart of markets that guides their invisible hand. Chapter 1 THE IMPACT REVOLUTION: RISK–RETURN–IMPACT We must shift impact to the center of our consciousness We cannot change the world by throwing more money at old concepts that no longer work – we need new concepts and approaches.

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Danone has announced that it is linking its impact goals to the SDGs:60 it has committed to be carbon neutral by 2050 and has set intermediate targets for 2030, building on a 50 per cent reduction in emissions from its operations, packaging and logistics between 2008 and 2016.61 Faber has said in an interview that setting ambitious goals with long-term horizons has been essential to the company’s progress: ‘We would never have made as much progress with our carbon dioxide reduction program in 2008 if we had just gone for a 2 per cent reduction per year rather than 30 per cent over five years, which we set ourselves.’62 At a conference in 2014, the year that he became CEO, Faber summarized his philosophy: ‘The economy without the social side is barbarism; the social side without the economy is utopia.’63 As Faber himself put it in his speech at the Consumer Goods Forum in Berlin, ‘Unlike what Wall Street is trying to tell us, there is no invisible hand. In particular, there is no invisible hand when it comes to [doing] the right or the wrong thing.’64 A much younger American yoghurt company, Chobani, is approaching the creation of positive impact by starting to deliver it through its employment. Accountability, Community, Gratitude At the end of 2012, two refugee sisters arrived in the US from the Middle East, seeking a new life.65 Nisa and Amna’s long and arduous journey began with threats of acid attacks and death and included being stowed in the windowless compartment of a truck without air enough to breathe – in fact, one child packed in tight with them died in transit.66 Smugglers had separated the girls from their mother during their journey.

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Under the new social contract that was established, democracy came to protect the rights of the individual in the political realm. Our own generation’s challenge is to protect the rights of the individual in the social and economic realm. As Rousseau was launching his political ideas on the world, Adam Smith introduced the theory of the ‘invisible hand of markets’ in The Wealth of Nations. In his view, ‘the invisible hand’– a metaphor for individuals acting in their own self-interest within a free market economy – created an equilibrium between the supply and demand for goods, which was in everyone’s best interest. His thinking has dominated the economic narrative ever since.

Free to Choose: A Personal Statement
by Milton Friedman and Rose D. Friedman
Published 2 Jan 1980

These developments have been produced by good intentions with a major assist from self-interest. Even the strongest supporters of the welfare and paternal state agree that the results have been disappointing. In the government sphere, as in the market, there seems to be an invisible hand, but it operates in precisely the opposite direction from Adam Smith's: an individual who intends only to serve the public interest by fostering government intervention is "led by an invisible hand to promote" private interests, "which was no part of his intention." That conclusion is driven home again and again as we examine, in the chapters that follow, the several areas in which government power has been exercised—whether to achieve security (Chapter 4) or equality (Chapter 5), to promote education (Chapter 6), to protect the consumer (Chapter 7) or the worker (Chapter 8), or to avoid inflation and promote employment (Chapter 9).

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So far, in Adam Smith's words, "the uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which public and national, as well as private opulence is originally derived," has been "powerful enough to maintain the natural progress of things toward improvement, in spite both of the extravagance of governments and of the greatest errors of administration. Like the unknown principle of animal life, it frequently restores health and vigour to the constitution, in spite, not only of the disease, but of the absurd prescriptions of the doctor."3 So far, that is, Adam Smith's invisible hand has been powerful enough to overcome the deadening effects of the invisible hand that operates in the political sphere. The experience of recent years—slowing growth and declining productivity—raises a doubt whether private ingenuity can continue to overcome the deadening effects of government control if we continue to grant ever more power to government, to authorize a "new class" of civil servants to spend ever larger fractions of our income supposedly on our behalf.

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At a conference of economists from East and West, we once heard a brilliant talk by a Hungarian Marxist economist. He had rediscovered for himself Adam Smith's invisible hand—a remarkable if somewhat redundant intellectual achievement. He tried, however, to improve on it in order to use the price system to transmit information and organize production efficiently but not to distribute income. Needless to say, he failed in theory, as the communist countries have failed in practice. A BROADER VIEW Adam Smith's "invisible hand" is generally regarded as referring to purchases or sales of goods or services for money. But economic activity is by no means the only area of human life in which a complex and sophisticated structure arises as an unintended consequence of a large number of individuals cooperating while each pursues his own interests.

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism
by Jeremy Rifkin
Published 31 Mar 2014

For those who were long skeptical of the operating assumptions of the invisible hand of supply and demand, the approach of a near zero marginal cost society—the optimum efficient state—is “visible” proof that the system first described by Smith did indeed work, in part, although I would add four caveats. First, the invisible hand was often slowed or blocked altogether for long periods of time by the inevitable concentration of monopoly power that continually thwarted innovation in virtually every commercial sector. Second, the invisible hand did little to ensure that the increase in productivity and profits was shared with the workforce that jointly created the largesse.

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Third, while capitalism dramatically improved the lives of everyone inside the system, its track record at the margins of the system, where human resources were, more often than not, ruthlessly exploited to benefit those cocooned inside, was horrendous by any reasonable standard. And fourth, the operating logic of the invisible hand of supply and demand never extended beyond the confines of the market mechanism itself and was, therefore, never able to account for the damage that the capitalist system inflicted on the larger environment from which it drew its raw materials and where it dumped its wastes. Still, Smith’s invisible hand proved to be a formidable social force, but not for the philosophical reasons he put forth. Smith’s theory revolves around the notion that in a market economy each individual pursues his or her own self-interest in the acquisition and exchange of property, without any intention of promoting the public interest, and by doing so, “inadvertently” advances the general well-being of society as a whole.

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The new spirit is less autonomous and more interactive; less concerned with the pursuit of pecuniary interests and more committed to promoting quality of life; less consumed with accumulating market capital and more with accumulating social capital; less preoccupied with owning and having and more desirous of accessing and sharing; less exploitive of nature and more dedicated to sustainability and stewardship of the Earth’s ecology. The new social entrepreneurs are less driven by the invisible hand and more by the helping hand. They are far less utilitarian and far more empathically engaged. While the inherent logic of the invisible hand and the market mechanism helped get us to this critical crossroad of a near zero marginal cost society and the possibility of transforming the human journey from an economy of scarcity to an economy of sustainable abundance, it needs to be said that the entrepreneurs didn’t do it alone.

Giving the Devil His Due: Reflections of a Scientific Humanist
by Michael Shermer
Published 8 Apr 2020

Charles Darwin, On the Origin of Species, 1859 These descriptors – invisible hand and natural selection – are so powerful, and so deeply annealed into our thought and culture, that it is difficult not to think of them as forces of nature, such as gravity and electromagnetism, or as mechanical systems, such as gears and pulleys. But they are not forces or mechanisms, because there is nothing acting on the agents in the system in such a causal manner. Instead, Smith’s invisible hand and Darwin’s natural selection are descriptions of processes that naturally occur in the economies of nature and society. The causal mechanisms behind the invisible hand and natural selection lie elsewhere in the system – within the agents themselves – which is why Smith invested so much work on understanding the natural sympathies of people, and Darwin advanced so much effort toward comprehending the natural tendencies of organisms.

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A decade later, upon his return home from the five-year voyage around the world on HMS Beagle, Darwin revisited these works, reconsidering their implications in light of the new theory he was developing.10 Although Darwin does not reference Smith directly, Darwin scholars are largely in agreement that he modeled his theory of natural selection after Smith’s theory of the invisible hand.11 Compare, by example, these two descriptions from Smith and Darwin: Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Adam Smith, The Wealth of Nations, 1776 It may be said that natural selection is daily and hourly scrutinising, throughout the world, every variation, even the slightest; rejecting that which is bad, preserving and adding up all that is good; silently and insensibly working, whenever and wherever opportunity offers, at the improvement of each organic being in relation to its organic and inorganic conditions of life.

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Browne, Janet. 2000. Voyaging: Charles Darwin. A Biography. New York: Knopf, 36, 366. 11. Carey, Toni Vogel. 1998. “The Invisible Hand of Natural Selection, and Vice Versa.” Biology & Philosophy, 13:3, 427–442. Ghiselin, Michael T. 1974. The Economy of Nature and the Evolution of Sex. Berkeley: University of California Press. Gould, Stephen Jay. 1980. “Darwin’s Middle Road.” In The Panda’s Thumb. New York: W.W. Norton, 59–68. Gould, Stephen Jay. 1993. “Darwin and Paley Meet the Invisible Hand.” In Eight Little Piggies. New York: W.W. Norton, 138–152. Khalil, Elias L. 1997. “Evolutionary Biology and Evolutionary Economics.”

10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less
by Garett Jones
Published 4 Feb 2020

A world of ill-informed voters who have a strong desire to filter reality through their chosen lenses is close to a world where Keynes’s law is true: demand creates its own supply. If people want to see certain types of news stories—perhaps where my team is suffering unjustly and the other team isn’t playing fair—then an invisible hand, an act of entrepreneurship, will create such news stories. And when the invisible hand creates—or just reframes—news events, it never feels like fake news; it feels like a truth deeper than mere news, better than mere history. As the Batman says at the end of Christopher Nolan’s The Dark Knight, “Sometimes the truth isn’t good enough.

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And if there’s one great and wise lesson of economic thinking, it’s French economist Frédéric Bastiat’s from 1848: “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”² So better economic policy choices are possible if there’s some social mechanism, some invisible hand, that spurs politicians to give real attention to invisible effects, effects that are unseen today but potentially foreseen. This chapter points toward such a mechanism—and it relies on voter forgetfulness. Backloading the Pork: A Sign of Voter Amnesia The theory that voters want to see visible results while, simultaneously, politicians try to provide voters with those visible results has been tested more formally and less anthropologically.

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Regardless of how the questions have been phrased in the past decade, both the global IGM panel and the European IGM panel have overwhelmingly agreed that reducing trade barriers is good for the nation that lowers them. Letting foreigners compete in your markets is good for you, partly because you get cheaper goods and partly because the invisible hand will move your nation’s workers over to more productive uses. Here’s a statement from 2016 that the IGM’s economists were asked to disagree or agree with: “Freer movement of goods and services across borders within Europe has made the average western European citizen better off since the 1980s.”⁶ Of the European economists surveyed, 68% strongly agreed and another 24% agreed—just about everybody.

99%: Mass Impoverishment and How We Can End It
by Mark Thomas
Published 7 Aug 2019

Familiarity with these metaphors can mean, however, that we fail to see that they are metaphors. Subconsciously, we feel as if they are describing reality – or at least a desirable future reality. Three widely used metaphors, with particular power to shape our thinking, are: the concept of the invisible hand of market forces; the notion of free markets; and the idea of economic laws. METAPHOR #1: THE INVISIBLE HAND OF MARKET FORCES We owe the concept of the invisible hand of market forces to Adam Smith and his book, An Enquiry into the Nature and Causes of the Wealth of Nations.18 In a much-cited passage, Smith says: As every individual, therefore, endeavours as much as he can, both to employ his capital in support of domestic industry, and so to direct that industry that its produce may be of greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can.

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By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of greatest value he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. The invisible hand of market forces is self-evidently a metaphor – nobody, not even the members of the Adam Smith Society, believes that there is a literal ‘invisible hand’ guiding our economy. Nevertheless, there is a problem: the phrase is so widely used, and so much taken for granted, that it is tempting to assume that the economy does indeed behave as though there were an invisible hand guiding every transaction in such a way as to produce the best possible outcome.

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Nevertheless, there is a problem: the phrase is so widely used, and so much taken for granted, that it is tempting to assume that the economy does indeed behave as though there were an invisible hand guiding every transaction in such a way as to produce the best possible outcome. Specifically, the final sentence suggests that more good is done for society by pursuing self-interest than could be done by actually attempting to do good. This is an extremely convenient line of thought for anybody who is concerned more with self-interest than the interests of society. Not only does it absolve them from guilt, it enables them to claim enormous merit from their actions.

Fool Me Twice: Fighting the Assault on Science in America
by Shawn Lawrence Otto
Published 10 Oct 2011

—LORD CHRISTOPHER MONCKTON, 20101 HOUSTON, WE HAVE A PROBLEM “Whenever the people are well informed,” Thomas Jefferson wrote, “they can be trusted with their own government.”2 This sentiment lies at the heart of the American-style democracy that has for more than two centuries inspired the world. Much like the “invisible hand”3 that guides Adam Smith’s economic marketplace,* so too does the invisible hand of the people’s will guide the affairs of men and women through the democratic process. But today the invisible hand seems confused and indecisive. Congress seems paralyzed, unable to act on many key issues that increasingly threaten the economic and environmental vitality of the nation and the planet. Ideology and rhetoric increasingly guide policy discussion, often bearing little relationship to factual reality.

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In 1776 Smith argued in The Wealth of Nations that in a shared economy, an individual, who “intends only his own gain,” was in effect “led by an invisible hand” to promote the greater public interest, since willing buyers and willing sellers will always arrive at a natural price for things, and the highest value and efficiency will be obtained. “Nor is it always the worse for the society that [the individual’s intention to do social good] was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”2 The argument of the invisible hand was so well made that it has become an axiom of economics: Just get out of the way and let the market work.

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But we may also slip into decline, sliding day by day, almost without notice, into an environmental and economic morass, resentful and angry with each other over what we are losing, not realizing it is because of our own actions. For health and prosperity to continue, science can no longer be separated from policy making, religion, and economics. In this new age of connectivity, these four great houses of power must learn to work more closely together. But can they? THE SILENCE OF THE INVISIBLE HAND Science provides us with increasingly clear pictures of how to solve our great challenges, but policy makers are increasingly unwilling to pursue many of the remedies science presents. Instead, they take one of two routes: Deny the science, or pretend the problems don’t exist. In fact, political and religious institutions the world over are experiencing a reactionary pull-back from science and reason that is threatening planetary stability and long-term viability at the very time we need science the most, and nowhere in the world is this pullback more pronounced than in the United States.

Money Changes Everything: How Finance Made Civilization Possible
by William N. Goetzmann
Published 11 Apr 2016

The two big factors that distinguished Athens from most prior ancient societies were the reliance on maritime trade and the development of a unique governance system. Athens in classical antiquity was quite different from the early Sumerian city-states. Despite its magnificent Acropolis, it was not centered on a temple-based, local, agricultural redistribution system. The overseas grain trade relied in part on the invisible hand to attract risk capital—both wealth and human-risk capital. The invisible hand played an important role in creating an incentive structure to pull grain toward the city to replace the grain it could not produce on its own. That said, Athens was not simply a laissez-faire society. Strict regulatory constraints prevented grain re-exports and the financing of non-Athenian grain trade.

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The economy had to motivate farmers overseas to grow grain for export, to motivate sailors and captains to risk their lives to bring the grain, to motivate investment in ships and trade goods, and to create a system of payment that was robust to uncertainties of international commerce. The solutions involved the invisible hand of the market, financial technologies for dealing with the unpredictability of the sea, and a monetary economy that relied on universally accepted measures of value. Much of what we know about the ancient Athenian financial system comes from surviving judicial orations. The courts themselves were key elements in the financial system.

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Merchants would no longer ship grain to Athens if they could not obtain a fair market price. As the Greek orator Lysias, the author of the prosecutor’s closing argument, put it: If you condemn them you will do what is just and make corn cheaper; if you acquit them you make it dearer.4 His argument was that the crucial flow of grain would shift elsewhere in response to the invisible hand of the market, making corn (i.e., grain) dearer. Investors in the grain trade would no longer make loans on grain voyages if prices at the dock were too low. Captains would have little incentive to brave the risks of sea if they could not sell their cargo at a profit. The text of the trial is incomplete.

Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own
by Garett Jones
Published 15 Feb 2015

And that’s true enough, but you have no influence over whether those other nineteen people bring chips or casseroles, so why not do what’s best for yourself: chips it is. This is one example of the famous “prisoner’s dilemma,” in which individual greed leads to an awful group outcome. Prisoner’s dilemmas are everywhere, and they’re the precise opposite of Adam Smith’s famous “invisible hand,” in which individual greed leads to a positive group outcome. Invisible hands and prisoner’s dilemmas are both at work in the world: sometimes, as Gordon Gekko said in the movie Wall Street, “Greed is good,” and sometimes greed creates misery. In this and the next chapter, we’ll see how greed can create misery, and we’ll see how higher-IQ groups are just a bit more likely to find a way to cooperate, a bit more likely to avoid the prisoner’s dilemma.

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Indeed, human society in every nation today is a form of collective intelligence, in which the accumulated knowledge of the past makes its members richer today, and in which the many small, daily cognitive contributions of millions of their neighbors—in offices, in factories, in the halls of government, and elsewhere—help to make their lives better as if by Adam Smith’s invisible hand. Those millions of small cognitive contributions are what create each nation’s collective intelligence, each nation’s hive mind. Members of society all draw on that collective intelligence, they all get benefits from the hive mind that they never pay for, benefits that, by my lights at least, they don’t deserve.

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Kremer notes that a lot of the modern economy works like this vase company: computer chips with tiny errors are worthless and get thrown out; clothes with small mistakes in stitching get sent to discount stores and sell for a fraction of full price. In an O-ring economy, the clichés are true: a chain is only as strong as its weakest link; for want of a nail a battle can be lost. But Kremer goes beyond these obvious points to draw some surprising conclusions. Perhaps the most important one is that business owners will naturally—by an invisible hand—put highly skilled workers together on the most valuable projects and put lower-skilled workers together on the less valuable projects. The lower-skilled workers will earn lower wages, since they are less productive, but they won’t be just a little less productive: they’ll be a lot less productive.

Reinventing the Bazaar: A Natural History of Markets
by John McMillan
Published 1 Jan 2002

Goods get produced and delivered to the people who want and can pay for them. Self-interest is harnessed to the greater good. Intending only his own gain, a producer or a buyer is “led by an invisible hand,” Smith famously concluded, “to promote an end which was no part of his intention.”10 The metaphor of the invisible hand Smith formulated in 1776 is the classic account of what drives a market economy. It was nearly two centuries before Adam Smith’s insight was taken beyond the metaphor of the invisible hand and given a rigorous theoretical foundation. Are competitive markets able to harmonize the actions of millions? Léon Walras took the first big step toward answering this question in the late nineteenth century, formulating a mathematical model of an economy in which, for each good or service in the economy, there was an equation representing the balance of supply and demand.

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Goldman, Eitan, and Gorton, Gary. 2000. “The Visible Hand, the Invisible Hand, and Efficiency.” Working paper 7587, National Bureau of Economic Research, Washington, D.C. Grafton, R. Quentin, Squires, Dale, and Fox, Kevin J. 2000. “Private Property and Economic Efficiency: A Study of a Common-Pool Resource.” Journal of Law and Economics 43, 679–714. Grafton, R. Quentin, Squires, Dale, and Kirkley, James E. 1996. “Private Property Rights and Crises in World Fisheries.” Contemporary Economic Policy 14, 89–99. Grampp, William D. 2000. “What Did Smith Really Mean by the Invisible Hand?” Journal of Political Economy 108, 441–465.

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The essence of life is infinitely and mysteriously multiform, and therefore it cannot be contained or planned for, in its fullness and variability, by any central intelligence.”6 Some have invoked the supernatural to explain what they find extraordinary: that markets can work with no one in charge. The Reverend Richard Whately, a professor of political economy at Oxford University in the eighteenth century, believed the coherence of the market to be proof that God exists. If no human planner is guiding the market to the optimal outcome, God must be. The invisible hand is the hand of God. A religious fervor characterizes some of today’s fans of the free market. “The true spirit capital of the current capitalist economy is not material. It is moral, intellectual, and spiritual,” declared George Gilder, an evangelist for libertarianism. He also said that entrepreneurship “most deeply springs from religious faith and culture” and that entrepreneurs “embody and fulfill the sweet and mysterious consolations of the Sermon on the Mount.”

Occupy
by Noam Chomsky
Published 2 Jan 1994

However, he went on to say that the merchants and manufacturers would prefer to operate in their own country—what’s sometimes called a “home bias.” So, as if by “an invisible hand,” England would be saved from the ravages of what is now called neoliberal globalization. That’s a pretty hard passage to miss. In his classic Wealth of Nations, that’s the only occurrence of the phrase, “invisible hand.” Maybe England would be saved from neoliberal globalization by an “invisible hand.” The other great classical economist, David Ricardo, recognized the same thing and hoped that it wouldn’t happen—kind of a sentimental hope—and it didn’t for a long time.

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It doesn’t mean that it doesn’t have representatives—it can have, but they should be recallable and under the influence and control of participants. Who’s in favor of a society like that? You can say Adam Smith, for example, who believed—you can question whether his beliefs were accurate, but he believed—that market systems and the “invisible hand” of individual choices would lead to egalitarian societies of common participation. You can question the logic of the argument, but the goals are understandable and they go far back. You can find them in the first serious book of politics that was ever written, Aristotle’s Politics. When Aristotle evaluated various kinds of systems, he felt that democracy was the least bad of them.

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants
by Maurice E. Stucke and Ariel Ezrachi
Published 14 May 2020

A canny, competitive retailer knows when the line has been crossed and doesn’t go there. So, in competitive markets we can expect the invisible hand to deliver the optimal level of choices—whether for gin, tonic, retirement plans, or jams. Not too few, not too many. So far so good. We crave choice, competition delivers the right amount of variety, and we pick what best suits our needs. So, where’s the overdose? Well, here it comes . . . Turns out that the invisible hand—and the retailers it presumably guides in their decisions—doesn’t always know when the line has been crossed. Choice Overload—Too Much of a Good Thing . . .

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(speech, Cambridge University, Cambridge, England, May 1, 2014), Vital Speeches of the Day, 80, no. 7: 243–246. 16.Sheila Bair, Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself (New York: Free Press, 2012); Associated Press, “Greenspan Admits ‘Mistake’ That Helped Crisis,” NBC News, October 23, 2008, http://www.nbcnews.com/id/27335454/ns/business-stocks_and_economy/t/greenspan-admits-mistake-helped-crisis/. 17.Paul Krugman, “Hiding behind the Invisible Hand,” The Conscience of a Liberal (blog), New York Times, March 22, 2008, https://krugman.blogs.nytimes.com/2008/03/22/hiding-behind-the-invisible-hand/. 18.Paul Krugman, “Blindly into the Bubble,” New York Times, December 21, 2007, https://nyti.ms/2N4F1sv. 19.Financial Crisis Inquiry Report, xvii. 20.Associated Press, “Greenspan Admits ‘Mistake.’” 21.Administration of Barack Obama, Weekly Address: Ensuring Our Free Market Works for Everyone, 2016 Daily Comp.

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Let’s start with the famous Scottish economist Adam Smith, known as the patron saint of competition, and the hockey player Craig MacTavish. Part I When Is Competition Toxic? Chapter 1 First Overdose The Race to the Bottom Two centuries after his death, the Scottish economist Adam Smith might still be the most powerful man in the world. Although he only used the term a few times in his writing, Smith’s “invisible hand” became one of social science’s most well-known metaphors, and the foundational principle of a lot of complex economic systems. Everything from the price you pay for an apple at your local bodega to the machinations of multilateral international trade wars is influenced by a key assumption underlying Smith’s theory.

WTF?: What's the Future and Why It's Up to Us
by Tim O'Reilly
Published 9 Oct 2017

Uber’s aggressive tactics have earned them many enemies, and they have ignored one of the key rules of the modern connected company: as O’Reilly Media President and Chief Operating Officer Laura Baldwin is fond of saying, “Your customers are your conscience.” THE INVISIBLE HAND Many simplistic apologists for the capitalist system celebrate disruption and assume that while messy, everything will work out for the best if we just let “the invisible hand” of competition do its work. This is true, if we correctly understand the invisible hand. The law of supply and demand is not describing some magical force, but the way that players of the game fight for competitive advantage. As Adam Smith put it, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

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And that, of course, is also the classical conception of “the market”—the system by which, without any central coordination, prices of goods and labor are set, buyers and sellers are found for all of the fruits of the earth and the products of human ingenuity, guided as if, as Adam Smith famously noted, “by an invisible hand.” But is the invisible hand of a market of self-interested human merchants and human consumers the same as a market in which computer algorithms guide and shape those interests? COLLECTIVE INTELLIGENCE GONE WRONG Algorithms not only aggregate the intelligence and decisions of humans; they also influence and amplify them.

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To be clear, government as a platform most emphatically doesn’t mean outsourcing government programs to the private sector. It does mean strategically identifying what building blocks are essential for government to provide, and providing those services, but not so many that they crowd out opportunity for the marketplace participants. I had read a remarkable paper called “Government Data and the Invisible Hand,” published in the January 2009 issue of the Yale Journal of Law & Technology by David Robinson, Harlan Yu, William P. Zeller, and Edward W. Felten. The paper argues that the government should get out of the business of building websites for citizens. If that call sounds familiar, you’ve probably heard it in the context of critics charging that government is not competent at building technology and would be much better off outsourcing everything to government contractors.

Why Europe Will Run the 21st Century
by Mark Leonard
Published 4 Sep 2000

For France, German containment was the key goal, backed up by the prospects for economic growth which access to German markets and productive capacity offered – what Jacques Delors described as the marriage contract on which the EEC was founded.5 All of these were calculations of national interest, and yet the outcome of their filtering through Monnet’s European institutions was a solution to the problem of European conflict.6 In Europe today, war is not simply undesirable – it is inconceivable. The founder of liberal economics, Adam Smith, developed the evocative idea of the ‘invisible hand’ of the market to explain how a system of perfect liberty, operating under the drives and constraint of human nature and intelligently designed institutions, would give rise to an orderly society rather than a ‘war of all against all’.7 In many ways, Monnet’s genius was to develop a ‘European invisible hand’ that allows an orderly European society to emerge from each country’s national interest. 8 And that is possibly the most powerful element of Monnet’s vision: he did not try to abolish the nation-state or nationalism – simply to change its nature by pooling sovereignty.

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Why Europe Will Run the 21st Century Mark Leonard For Dick, Irène, Miriam and Gabrielle Table of Contents Cover Page Title Page INTRODUCTION The Power of Weakness and the Weakness of Power: Why Europe Will Run the Twenty-First Century CHAPTER 1 Europe’s Invisible Hand CHAPTER 2 ‘Divided We Stand, United We Fall’ CHAPTER 3 Europe’s Weapon is the Law CHAPTER 4 The Revolutionary Power of Passive Aggression CHAPTER 5 The European Way of War CHAPTER 6 The Stockholm Consensus CHAPTER 7 The European Rescue of National Democracy CHAPTER 8 Europe at 50 CHAPTER 9 Brussels and the Beijing Consensus CHAPTER 10 The End of the American World Order CHAPTER 11 The Regional Domino Effect APPENDIX The 109 Countries of the Eurosphere NOTES Acknowledgements About the Author Copyright About the Publisher INTRODUCTION The Power of Weakness and the Weakness of Power: Why Europe Will Run the Twenty-First Century In the middle of Pennsylvania Avenue in Washington a middle-aged woman with a weather-beaten face and a brown wig sits on a milk crate.

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Europe’s power is a ‘transformative power’.7 And when we stop looking at the world through American eyes, we can see that each element of European ‘weakness’ is in fact a facet of its extraordinary ‘transformative power’. Europe doesn’t flaunt its strength or talk about a ‘single sustainable model of progress’. Instead, like an ‘invisible hand’, it operates through the shell of traditional political structures. The British House of Commons, British law courts, and British civil servants are still there, but they have all become agents of the European Union. This is no accident. By creating common standards that are implemented through national institutions, Europe can spread its influence without becoming a target for hostility.

A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Carbon Emissions
by Muhammad Yunus
Published 25 Sep 2017

Many of us have been taught that an “invisible hand” ensures competition in the economy, contributing to equilibrium in the markets and generating social benefits that are automatically shared by everyone. Free markets dedicated solely to profit are supposed to produce improved living standards for all. Capitalism has indeed stimulated innovation and economic growth. But in a world of skyrocketing inequality, more and more people are asking, “Does the invisible hand produce its benefits for everybody in the society?” The answer seems obvious. Somehow the invisible hand must be heavily biased toward the richest—otherwise, how could today’s enormous wealth concentration continue to grow?

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We cannot just sit and watch a whole generation of young people fall through the cracks of economic theory because we are too timid to question the wisdom of our theoreticians. We have to redesign our theory by recognizing the limitless capacity of a human being, instead of relying on the “invisible hand of the market” to solve all our problems. We have to wake up to the fact that the “invisible hand” is invisible because it does not exist—or, if it does exist, it is dedicated to serving the rich, invisibly. In the current economic system, theoreticians have never offered us any better solutions for unemployment than promoting economic growth through investments in infrastructure building or make-work government programs, along with state charity designed to alleviate the suffering of those in need.

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And although my proposal may be viewed as a significant change in the structure of capitalism, I see no option but to address these basic flaws in the structure. In my view, the theoretical framework of capitalism that is widely accepted today is a half-built structure—one that turns Adam Smith’s “invisible hand” into a heavily biased hand that pushes the activities of the market in favor of the richest. One might almost suspect that the “invisible hand” actually belongs to the richest! As I’ve discussed, the present theory of capitalism holds that the marketplace is reserved for those who are interested in profit only—an interpretation that treats people as one-dimensional beings.

Capitalism, Alone: The Future of the System That Rules the World
by Branko Milanovic
Published 23 Sep 2019

So we know that capitalism is stronger than ever, but we do not know if this represents its overall peak, or if it is only a local peak, with further expansion of capitalist relations in the future. APPENDIX B HYPERCOMMERCIALIZATION AND ADAM SMITH’S “INVISIBLE HAND” I discussed in Chapter 5 the interaction between hypercommercialized globalization and our values and behaviors. Here I look at how the same type of issue was addressed, at the time of early capitalism, by Adam Smith, and the place of the “invisible hand” in Smith’s argument. The invisible hand type of argument relies on accepting what were thought, in the pre-Enlightenment, to be the destructive and insatiable passions of power, pleasure, and profit (to use David Wootton’s [2018] classification) as long as, when controlled, they are able to result in a social good.

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The Contours of the Post–Cold War World 2. Liberal Meritocratic Capitalism 3. Political Capitalism 4. The Interaction of Capitalism and Globalization 5. The Future of Global Capitalism Appendix A. The Place of Communism in Global History Appendix B. Hypercommercialization and Adam Smith’s “Invisible Hand” Appendix C. Some Methodological Issues and Definitions Notes References Acknowledgments Index CHAPTER 1 THE CONTOURS OF THE POST–COLD WAR WORLD [The bourgeoisie] compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves.

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That decision meant that left-wing and communist movements in the Third World could legitimately combine social revolution and national liberation in a unique way that was, as I have argued, the key factor that allowed them to gain power. Where the cunning of history was, it was in not “revealing” to them that they were, as if “led by an invisible hand,” bringing in the conditions for the rise of their national capitalisms rather than, as they thought they were doing, ushering in a classless and internationalist communist society. In this context one can see that Lenin’s and the Comintern’s turn toward the “toilers of the East,” along with the division of the world into the two camps of imperialist and colonized countries that it implied, was absolutely decisive for what happened next: not for bringing about communism, but for bringing about capitalism.4 This interpretation allows us to claim—paradoxically, at first sight—that Lenin was probably the most important “capitalist roader” in history, since his idea to connect the proletarian struggle in the West to the movement for national liberation in Africa and Asia both departed from orthodox Western Marxism and unleashed the forces that some fifty or sixty years later would bring indigenous capitalism to countries as diverse as Vietnam, China, Angola, and Algeria.

The Moral Animal: Evolutionary Psychology and Everyday Life
by Robert Wright
Published 1 Jan 1994

War, as we saw in chapter 5, works against social structures that lack certain properties. One property is economic vigor—enough wealth to make weapons and canoes, enough food to let large numbers of men live close together, in formidable density. Thus does war encourage chiefs to do a good job of imitating the invisible hand. And one key to the invisible hand’s success is rewarding people for their labor. That is: return non-zero-sum gains to the workers who produced them, as an incentive to produce more; resist the parasitic temptation. But why worry about the commoners’ incentives? Why not just command them to work harder—since you are, after all, a demigod?

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The costs of finding out what buyer want—and the cost to buyers of finding out what’s available, and at what price—have to be bearable for transaction to ensue. Note that the costs of transport and communication apply not just to the final “purchase” of the robe—at the “retail” level—but to the links in its creation, such as getting cedar bark from the south and copper from the north. At all levels, the movement of Smith’s “invisible hand” gets smoother as information and transportation costs drop. The lower these costs, the more highly non-zero-sum the relationship among the players—the more each can gain via interaction, the more productive, per capita, the web of exchange. How to keep these costs low if your communications and transportation technologies are primitive?

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The difference had been that the Amazonians weren’t getting paid to work overtime. Neither were the Shoshone. The arid Great Basin was even less conducive to thick population than were South American jungles. ADAM SMITH AMENDED Maybe we should amend Adam Smith’s trademark metaphor of the invisible hand. Smith’s point, of course, was that a bunch of far-flung people pursuing individual gain can, without really trying, collectively orchestrate a large-scale social process. The ingredients of a beautiful robe just seem to magically congregate, assemble themselves, and then find a buyer, as if guided from above.

Nonzero: The Logic of Human Destiny
by Robert Wright
Published 28 Dec 2010

War, as we saw in chapter 5, works against social structures that lack certain properties. One property is economic vigor—enough wealth to make weapons and canoes, enough food to let large numbers of men live close together, in formidable density. Thus does war encourage chiefs to do a good job of imitating the invisible hand. And one key to the invisible hand’s success is rewarding people for their labor. That is: return non-zero-sum gains to the workers who produced them, as an incentive to produce more; resist the parasitic temptation. But why worry about the commoners’ incentives? Why not just command them to work harder—since you are, after all, a demigod?

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The costs of finding out what buyer want—and the cost to buyers of finding out what’s available, and at what price—have to be bearable for transaction to ensue. Note that the costs of transport and communication apply not just to the final “purchase” of the robe—at the “retail” level—but to the links in its creation, such as getting cedar bark from the south and copper from the north. At all levels, the movement of Smith’s “invisible hand” gets smoother as information and transportation costs drop. The lower these costs, the more highly non-zero-sum the relationship among the players—the more each can gain via interaction, the more productive, per capita, the web of exchange. How to keep these costs low if your communications and transportation technologies are primitive?

…

The difference had been that the Amazonians weren’t getting paid to work overtime. Neither were the Shoshone. The arid Great Basin was even less conducive to thick population than were South American jungles. ADAM SMITH AMENDED Maybe we should amend Adam Smith’s trademark metaphor of the invisible hand. Smith’s point, of course, was that a bunch of far-flung people pursuing individual gain can, without really trying, collectively orchestrate a large-scale social process. The ingredients of a beautiful robe just seem to magically congregate, assemble themselves, and then find a buyer, as if guided from above.

Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America
by Danielle Dimartino Booth
Published 14 Feb 2017

However, the financial system had undergone deep and treacherous structural changes, negating the fundamental assumptions held by economists about the way the economy worked. “Economists view the world as being the outcome of the ‘invisible hand,’ that is, a world where private decisions are unknowingly guided by prices to allocate resources efficiently,” Gorton said. He’d described the first thing I had ever learned from my father about laissez-faire—the philosophy cherished by all Fed economists—as first described in Adam Smith’s The Wealth of Nations. “The credit crisis raises the question of how it is that we could get slapped in the face by the invisible hand,” Gorton said. (Gorton’s quotes are taken from an updated paper that developed his ideas more fully.)

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I was surprised to learn that he never uses the term “laissez-faire” in the book. “The credit crisis raises”: Gorton, “Slapped in the Face by the Invisible Hand,” 2. “Instead,” Gorton said: Ibid., 10. “A dealer or other holder”: “Money Market: Repos,” Investopedia.com, www.investopedia.com/terms/r/repurchaseagreement.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186. A year later, the price shot up: Gorton, “Slapped in the Face by the Invisible Hand,” 33. And the Fed didn’t have: FRBNY: “About the New York Fed, Purchase and Reverse Purchase Transactions,” 2007, www.newyorkfed.org/aboutthefed/fedpoint/fed04.html.

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CONTENTS TITLE PAGE COPYRIGHT DEDICATION CHAPTER 1: “Groupstink” CHAPTER 2: Who Would Buy That Crap? CHAPTER 3: Saint Greenspan CHAPTER 4: Inside the Black Box CHAPTER 5: The First Tremors CHAPTER 6: Front-running the Fed CHAPTER 7: The Maverick CHAPTER 8: The Inner Sanctum CHAPTER 9: “Luddite!” CHAPTER 10: Helpless CHAPTER 11: Slapped in the Face by the Invisible Hand CHAPTER 12: Heads Must Roll CHAPTER 13: Breaking the Buck CHAPTER 14: Breaching the Zero Bound CHAPTER 15: The Walking Dead CHAPTER 16: Dr. Ben Pulls a Bait and Switch CHAPTER 17: A Turning Point CHAPTER 18: Insider Trading? CHAPTER 19: Spinning Fedwire CHAPTER 20: The Taper Tantrum CHAPTER 21: The New Sheriff in Town CHAPTER 22: Culture Shock ACKNOWLEDGMENTS NOTES INDEX CHAPTER 1 “Groupstink” Never in the field of monetary policy was so much gained by so few at the expense of so many.

The Myth of Capitalism: Monopolies and the Death of Competition
by Jonathan Tepper
Published 20 Nov 2018

Markets have shifted to monopolies and oligopolies when it comes to selling goods, but it is just as bad when you look at the power of companies as buyers. When workers have fewer employers to choose from in their line of work, their bargaining power disappears. Corporate giants can squeeze their suppliers, but the main things companies buy is labor, and they have been squeezing workers. If Adam Smith's invisible hand required many buyers and sellers to find the right price, then the invisible hand has gone missing as we have moved toward oligopolies. Many markets are monopsonies. Monopolies are rare, and so are monopsonies. However, oligopolies are very common across almost all US industries. Consumers can choose from only a very few companies when it comes to buying, and likewise when it comes to finding a job.

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It should be no surprise that a Marketplace and Edison Research poll that found that 70.9 percent of Americans think “the economic system in the U.S. is rigged in favor of certain groups.”80 Given the explosion of spending on lobbying and the vast rewards for doing so, most Americans are entirely right. It is worth remembering that when Adam Smith wrote of “the invisible hand” in The Wealth of Nations, he was not simply praising the free market, but condemning the government acting on the behalf of large merchants who were furthering their own interests. Until lobbying is reformed, there is little hope for reducing barriers to entry for smaller firms to fight it out in the marketplace. There is little chance the invisible hand can work. In the final days of the 2016 election, Donald Trump ran an advertisement showing the face of Goldman Sachs CEO Lloyd Blankfein.

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It is an active participant, granting favors to the wealthy and powerful, looking after the interests of the well connected. It has distorted society towards inequality. Rather than encourage competition and innovation, it has stifled growth. The increase in inequality comes not from Adam Smith's invisible hand, but from the hands of government. It is worth remembering the words of Theodore Roosevelt, who opposed monopolies and trusts: “There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done …”92 While he said these words over 100 years ago, not much has changed.

Losing Control: The Emerging Threats to Western Prosperity
by Stephen D. King
Published 14 Jun 2010

The price mechanism, in turn, is a remarkably efficient way of allowing us to make informed choices about scarcity. If something is expensive, its opportunity cost may be high. If something is cheap, its opportunity cost might be correspondingly low. Adam Smith (1723–1790), one of the economic greats and now deservedly immortalized on the Bank of England £20 note, called the price mechanism the ‘invisible hand’.8 Many people have been seduced by Smith’s ideas, sufficiently so as to claim that free markets are the sole reason behind the West’s ongoing prosperity. Yet markets do not always work very well. They are not very good at identifying the environmental consequences of our actions. They do not cope well when there is a lack of well-established property rights.

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But if inflation moves away from the target by more than 1 percentage point … I shall expect you to send an open letter to me … setting out … the reasons why inflation has moved away from target … the policy action which you are taking to deal with it … [and] the period within which you expect inflation to return to the target.8 In other words, price stability is, like the UK prime minister, first among equals. Even for those central banks with more than one economic objective, price stability is typically the most important. The central bank’s job is thus to safeguard the value of the currency. Price stability matters because Adam Smith’s invisible hand works best free of distortions. But in both the American and British mandates, there is no explicit recognition that inflation is determined not just by domestic policies but also by developments elsewhere in the world, other than by reference to ‘shocks and disturbances’. The rise of the emerging economies appears to be of no significant consequence.

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*This is unashamedly a paraphrase: the actual language used is not fit to print. CHAPTER SEVEN WHO CONTROLS WHAT? THE RISE OF STATE CAPITALISM OVERRULING THE MARKET Globalization creates winners and losers. The benefits and costs of globalization are randomly distributed by the market’s invisible hand across and within sovereign states. State capitalism, arguably, can be seen as an attempt to overrule this process. It offers a chance to exert government control over resources that might otherwise be lost through market forces to higher bidders elsewhere. State capitalism can be used to ensure resources are either retained for domestic consumption or used as bargaining chips in the exertion of global economic and political power.

The Techno-Human Condition
by Braden R. Allenby and Daniel R. Sarewitz
Published 15 Feb 2011

So let us dispose here of a tempting analogy between transhumanist claims (rooted as they are in defense of individual liberty) and Adam Smith's famous "invisible hand." Just as innovation and productivity are optimized as individuals, driven by self-interest, strive for economic benefit, won't society be made better by individuals striving after various enhancements? The analogy would be false. The "invisible hand" is just a recognition of an information-processing mechanism; it integrates decisions made on the basis of individual preference into supply and demand curves that describe the efficient distribution of scarce resources. Unlike central planning, the "invisible hand" is effective with complex adaptive systems (i.e., the economy), in part because it decentralizes decision making across active agents and in part because the only outcome it aims to deliver is efficient allocation of information, prices, and stuff.

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A more socially stable and, yes, advanced (if 98 Chapter 5 still highly imperfect) capitalism evolved only when dampers on rampant market freedom, such as unions, anti-monopolistic policies, and unemployment insurance, were adopted-almost always after bruising political battles and occasional paroxysms of civil unrest. There is no invisible hand to guide society toward more justice and tolerance, with or without radical enhancement of human capabilities. But now there is another possible complication to this story. The invisible hand of the economic market works because we can assume that humans generally behave as they always have: selfishly. Might human-enhancement technologies threaten even that fundamental assumption? (Put another way, could we design "selfishness" out of the human?)

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W von, 189 Goodman, Eo, 122 Google, 96, 118 GOSPLAN, 114, 161 Great Chain of Being, 7,10,84 Green Revolution, 112 Greenland, 121, 122, 183 Gulliver's Travels, 83 Gunpowder, 128 Gunpowder Empires, 129 Halliburton, 141 Harris,]., 19,21 Health care, 46ff, 64 Heffner, Po, 19 Heidegger, Mo, 10, 11, 171 Heine, Ho, 73 Hewlett-Packard,89 Hinduism, 119 Hughes,]., 93, 94 "Human," as cultural construct, 103 Humanity+, 6, 7 Hutchins, Eo, 95, 96 Hydrologic cycle, 10 IBM, 89, 146 IEEE Spectrum, 82 Immortality, 82, 83 India, 99, 129, 139 Industrial ecology, 168 Industrial time, 71 Infant mortality,S 8, 60 Influenza, 68 Information and communication technology (ICT), 8, 80, 179 Institute of Electrical and Electronics Engineers (IEEE), 179 219 Institutional review boards (IRBs),l77 Integrated Vector Management (IVM), 48ff, 53 Integration of human and machine, 20 Intercollegiate Genetically Engineered Machine competition,68 Intergovernmental Panel on Climate Change, l11ff, 122, 124 Internet, 112, 118, 139, 166 Inuit, 183, 186, 187 "Invisible hand," 97, 98 iPhone,l iPod,l Iraq war, 3, 24, 76, 91ff, 94, 127,135,150-153 Jacobs,]., 168 James, W, 81 Japan, 131,133, 150 Jenner, Eo, 16 John Paul II, 101 Joy, W, 68 Kass, L., 21 Kepler,]., 101, 173 Kondratieff waves, 79ff, 192 Koniggriitz, Battle of, 75, 76 Krishna, 119 Kurzweil, Ro, 8, 18,68 Kyoto Protocol, 67, 109, 111, 193 Land mines, 150 Las Vegas, 152 Lawrence Livermore National Laboratory, 89 Leopold, Ao, 181 Libertarian approach to human enhancement,21ff 220 Index Lindblom, c., 93 Long-Term Capital Management,92 "Long waves" of innovation, 79££ Maginot Line, 135 Malaria, 47££, 53 Malaysia, 139 Maoism, 31, 121 Marlboro Man, 135 Marne, Battle of, 76 Marxism, 110, 114, 121, 172 Marx, K., 64, 70, 173 Maslow, A., 33 McKibben,~.,21, 101 McKinsey & Company, 49 McNeill, ].

The End of the Free Market: Who Wins the War Between States and Corporations?
by Ian Bremmer
Published 12 May 2010

Adam Smith, the oft-quoted father of modern capitalism, wrote in The Wealth of Nations (1776) of the unintended benefits that society derived from individual greed:By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.1 Some students of Smith’s writings might qualify this point with a reference to his earlier work, The Theory of Moral Sentiments (1759), in which he argues thatthere are evidently some principles in [man’s] nature which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it.2 Advocates of pure capitalism insist that the “invisible hand” must be allowed to work its magic—and that any effort by government to guide its actions can only burden markets and distort their natural operation.

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During their conversation, Wen provided what amounts to a precisely worded definition of Chinese state capitalism: “The complete formulation of our economic policy is to give full play to the basic role of market forces in allocating resources under the macroeconomic guidance and regulation of the government. We have one important piece of experience of the past thirty years, that is to ensure that both the visible hand and invisible hand are given full play in regulating the market forces.”11 Three decades ago, the invisible hand was truly invisible in China. When Mao Zedong died in 1976, he left behind a society in turmoil, an economy in ruins, and a ruling party in real danger of irrelevance. Within two years, paramount leader Deng Xiaoping and his premier, Zhao Ziyang, overcame considerable resistance from senior Communist Party officials to launch a slow but deliberate plan to experiment with capitalism.

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South Africa’s ruling party has much less domestic political power and many more checks on its ability to direct investment and growth than China’s Communist Party, and South Africa’s relatively unskilled and poorly educated workforce is a long way from competing with its Chinese counterpart. But these factors haven’t kept some within the ANC from charting a more state-capitalist course. In June 2007, delegates to the ANC national policy conference publicly embraced the idea that the state, not the invisible hand, should play the primary guiding role in the economy. The ANC government, it said, should stimulate economic development, by “directly investing in underdeveloped areas and directing private sector investment.” The resolution also called for construction of an “effective, democratic, and developmental state,” which will “intervene in the interest of the people as a whole.”

Dawn of the New Everything: Encounters With Reality and Virtual Reality
by Jaron Lanier
Published 21 Nov 2017

Are we choosing a new kind of government by another name, but one that represents us less? The Invisible Hand on a Multitouch Screen There is an even deeper question to consider. The attempts by the tech companies to battle shitposting comprise a fascinating confrontation between the new order of algorithms and the old order of financial incentives. Old and new have a lot in common. The most enthralled proponents perceive each not merely as technologies invented by people, but as superhuman living things. In the case of financial incentives, the elevation occurred in the eighteenth century, when Adam Smith celebrated the “invisible hand.” In the case of algorithms, something similar occurred in the late 1950s, when the term “artificial intelligence” was coined.

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There is nothing intrinsic to computing that makes it sloppy or unserious. The system for online transactions between banks is reliable, for instance, and nobody has ever hacked or leaked the all-important algorithms that run companies like Google and Facebook. But we chose an unserious network. The Invisible Hand Improves When It Is Made Visible as an Avatar Hand The appeal of weightlessness arose out of a desire to make digital networks into an instant permanent solution to an eternally unsolvable problem. Finally, it would be possible for people to connect without the tedium and annoyance that always must attend cooperation between genuinely free, distinct individuals.

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In the case of algorithms, something similar occurred in the late 1950s, when the term “artificial intelligence” was coined. The prevalence of shitposting and other degradations is fueled by the invisible hand, while the antidote is to be divined by artificial intelligence. So we will witness a new kind of professional wrestling match between the old made-up god and the new one. Let’s first examine how the old demigod, the one with the hand, influences behavior in the online world. The business model that sustains companies like Google, Facebook, and Twitter is called advertising, but it’s really something different.

Nuclear War and Environmental Catastrophe
by Noam Chomsky and Laray Polk
Published 29 Apr 2013

They were sort of aware of this—they didn’t put it in precisely these terms—but if you take a look at Adam Smith’s The Wealth of Nations, the famous phrase “invisible hand” appears once. It appears essentially in a critique of what’s going on right now. What he pretty much says is that, in England, if merchants and manufacturers preferred to import from abroad and sell abroad, they might make profit, but it would be bad for England. He says they’re going to have what sometimes is called a home bias—they’ll prefer to do business at home, so as if by an invisible hand, England will be saved the ravages of a global market.82 David Ricardo was even stronger.

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QH545.N83C56 2013 363.325’5--dc23 2012046137 Printed in the United States 9 8 7 6 5 4 3 2 1 Contents Preface Abbreviations 1. Environmental Catastrophe 2. Protest and Universities 3. Toxicity of War 4. Nuclear Threats 5. China and the Green Revolution 6. Research and Religion (or, The Invisible Hand) 7. Extraordinary Lives 8. MAD (Mutually Assured Dependence) Appendix 1: Conversation between Gen. Groves and Lt. Col. Rea, August 25, 1945 Appendix 2: Flyer for UCPV Event, October 10, 1967 Appendix 3: Scientists Condemn the Destruction of Crops in Vietnam, January 21, 1966 Appendix 4: Nelson Anjain’s Open Letter to Robert Conard, April 9, 1975 Appendix 5: Marshallese Medical Records in Hands of Gensuikin, July 27, 1976 Appendix 6: Memorandum on Iraqi Use of Chemical Weapons, November 1, 1983 Appendix 7: Open Letter to Africa, December 12, 2011 Appendix 8: Anjali Appadurai’s Speech in Durban, December 9, 2011 Appendix 9: Point Hope Protest Letter to JFK, March 3, 1961 Appendix Acknowledgments About the Authors About Seven Stories Press Preface If humans choose to work to minimize the existential threats of our time, perhaps the most improbable aspect of remedy is that we will accept modalities based on collaboration and creative adaptation, rather than perpetual combat and domination.1 It is a stark fact that present and future economies are predicated on a finite energy resource: carbon-based fuels.2 Consensual science on climate change presents another fact: we may only have a few years to make adjustments in the collective carbon load before we are faced with irreversible consequences.

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President’s Council of Advisors on Science and Technology, “Sustaining the Nation’s Innovation Ecosystems,” January 2004. The Bureau of Labor Statistics projects US employment in manufacturing will continue to trend as an area of rapid decline. Richard Henderson, “Industry Employment and Output Projections to 2020,” Monthly Labor Review, January 2012. 6. Research and Religion (or, The Invisible Hand) Laray Polk: Forty percent of the electorate in most states identify as evangelical. Pew Research indicates evangelical Christians largely reject anthropogenic climate change and are skeptical there is even solid evidence that the earth is warming.74 So I think the extreme beliefs of the religious right benefit business interests and vice versa.

Termites of the State: Why Complexity Leads to Inequality
by Vito Tanzi
Published 28 Dec 2017

See Public institutions Intangible property, 94–95, 308 Intellectual property overview, 341 athletes, 204–5, 351–53 attempts to extend protection of, 355–56, 359–60 attorneys and, 366 basic needs and, 351 in China, 347, 358 composers, 203, 349 discovery, effect on, 365 entertainment industry, 345, 348, 353 in EU, 347 executive compensation and, 348, 363–64 fashion industry, 345 forms of, 347–48 government protection of, 94–95, 193–94, 203–4, 308, 356, 358–60, 366 historical background, 355 “idea factories,” 344–45 “image rights,” 347–49 incentives and, 362–63, 365 income inequality, effect on, 343–45 income redistribution and, 193–94, 203–4 Industrial Revolution compared, 346, 357 inventors, 203 in Japan, 347, 358 laissez faire and, 359 marginal tax rates and, 353–54, 357 monopolies and, 345–47, 356, 365 patents, 347, 359, 361 in pharmaceutical industry, 365–66 piracy and, 360 rents and, 353 role of government, 354 social value of, 361–62 in South Korea, 347 technology and, 356–57 theft of, 357–58 trade agreements and, 354 traditional societies compared, 360–61 in UK, 357–58 in US, 176, 193, 204, 347, 357–58, 362 wealth creation and, 349–51 436 Index Intergovernmental Panel on Climate Change, 316 Inter-institutional externalities, 290 International Monetary Fund, 7, 8, 109, 113–14, 296–97, 315–16 Internet, 325–26 Inventors, 203 Investment activity, income redistribution and, 194 “Invisible hand of government,” 199 “Invisible hand of market,” 66, 312–13 Iran hostages, 100–1 Ireland bubbles in, 331 challenges to welfare policies in, 60 contingent liabilities in, 138, 140 famine in, 218 influence of conservatives in, 395 marginal tax rates in, 376 public spending in, 121–22, 162 supply-side economics in, 77 Irrationality consumer protection and, 148–49 effect on market, 79, 83 Friedman on, 141–42 nudges and, 141–42 recessions and, 236 Islam, 218 Italian School, 5–6, 63, 65, 178 Italy allocation of resources in, 188 authoritarian government in, 23 bureaucracy in, 234 Communist Party, 1–2 Constitution, 248–50, 266–71 Constitutional Commission of Eighteen, 267–68 corporatism in, 231 corruption in, 120 Corte dei Conti, 161, 234, 290, 381 economic planning in, 27 fascism in, 23, 231, 266–67 financial accountability in, 291 incentives in, 381 influence of conservatives in, 395 “Keynesian Revolution” in, 269 Labor Charter of 1927, 248 marginal tax rates in, 376 privatization in, 33–34 public ownership in, 135 public spending in, 23 regulations in, 279 sovereign debt in, 241 unions in, 23, 231 welfare policies in, 214 women’s suffrage in, 20 Japan economic planning in, 27 executive compensation in, 364 “fake goods” in, 149 intellectual property in, 347, 358 marginal tax rates in, 376, 377 sovereign debt in, 241 Jefferson, Thomas, 249–50 Jensen, Michael, 363 Johnson, Lyndon B., 43, 56, 58, 229 Journal of Financial Economics, 363 Jouvenel, Bertrand de, 45 Judges, legal rules and, 251 Justice systems, 295–96 Kahneman, Daniel, 79 Keen, Andrew, 325–26 “Keepers of the gate,” 336 Kennedy, John F., 2–3, 55–58, 239 Keynes, John Maynard generally, 7–8 on capitalism, 28–30 on corporatism, 231 countercyclical policy, 61–62 decline in influence of, 86–87 Galbraith and, 46–47 on income inequality, 320 on laissez faire, 31–32 on market, 37, 38 on “new wisdom,” 399–400 pessimism of, 28–30 on public works, 241 on Soviet Union, 27–30, 78 on stabilization policies, 70–71, 189, 237 on taxation, 245 on unions, 230–31 on US, 47 on welfare states, 383 on workers’ rights, 19 “Keynesian Revolution,” 2, 41, 42, 56, 269, 383 King, Melvyn, 113–14, 156, 338 Klein, Lawrence, 42 Klein, Naomi, 29 Kornai, Janos, 26 KPMG International, 376 Krugman, Paul, 240–41, 342–43 Kuznets, Simon, 3 Lady Gaga, 351–52 Laffer Curve, 74–76, 363, 373–74, 377, 379, 394–95, 397 Laissez faire, 15–21 abandonment of, 43 criticism of, 3 in Eastern Europe, 35 Index energy and, 17 entrepreneurs and, 307–8 in Germany, 18 government and, 65 Industrial Revolution and, 16–17 intellectual property and, 359 Keynes on, 31–32 in Latin America, 33 resurgence of, 33–35 role of state, 15–16, 19–20 trade and, 17 in UK, 31 in US, 17–19, 30, 31 workers’ rights and, 18, 19 Landis, James, 57–58 Lange, Oskar, 26 La Porta, Rafael, 263–64 Larosiere, Jacques de, 64 Latin America constitutions in, 250, 271 laissez faire in, 33 public institutions in, 290 Laudato Si' (Francis), 28, 81 Law and Economics, 183–85 Law of public expenditure growth, 51, 87 Laws.

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The paternalistic view would have more in common with what could be called a tutorial role of the state, which is a role now pushed by various economists associated with experimental or behavioral economics that uses nudges to help individuals make better decisions (see Thaler and Sunstein, 2008). All of those categories, to some extent, rejected the laissez-faire view of the government role that, in some not always correct interpretations, implied that the government should minimize its role in the economy and just let the “invisible hand” do its miraculous work. According to some historians, the concept of laissez-faire, which had come to play such a large role in classical economics and which, in modern versions, would return to play a growing role in the 1980s and 1990s, had been promoted in the nineteenth century not so much as an ideology that espoused the ability and the innate virtue of the free market to achieve desirable outcomes, as many economists had come to believe, but more as a view that reflected the lack of trust that people had at that time in the ability of governments to solve problems with their interventions.

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According to some historians, the concept of laissez-faire, which had come to play such a large role in classical economics and which, in modern versions, would return to play a growing role in the 1980s and 1990s, had been promoted in the nineteenth century not so much as an ideology that espoused the ability and the innate virtue of the free market to achieve desirable outcomes, as many economists had come to believe, but more as a view that reflected the lack of trust that people had at that time in the ability of governments to solve problems with their interventions. If the government was not able to solve problems, it was better if it did not even try to. 66 Termites of the State The view that a free and unregulated market economy can perform economic miracles is a relatively recent one, in spite of the frequent references to Adam Smith’s invisible hand over the years. On this important but rarely acknowledged point, it may be worthwhile to cite from an important historical book that discussed in great detail various reforms introduced in the nineteenth century in the United Kingdom. As the author of that book put it: A great deal of the talk about laissez faire [in the nineteenth century] must be discounted, or at least put into its proper context.

Green Swans: The Coming Boom in Regenerative Capitalism
by John Elkington
Published 6 Apr 2020

It’s an ideology whose credibility is fatally compromised because of the perverse outcomes it has engineered: runaway climate change, the biggest inter-generational crime ever committed, and gross inequality—a scar on the conscience of humanity. Capitalism needs to be reinvented for the 21st century. This means discarding the tired reflex that has driven economic development since Adam Smith first proclaimed its utility over two hundred years ago—self-interest—in favor of working for the common good. The famous “invisible hand” has reached its limitations and instead inclusive capitalism is needed to establish a new social contract that truly leaves no one behind. It also requires supercharging inventive models of cooperation, which recognize that you can only deliver real transformational change—at speed, at scale, and with maximum impact—provided you join forces in deep and purposeful collaboration with others.

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As blind both to Black and Gray Swan futures some of those crazy people are warning about as they are to possible Green Swan opportunities. We will explore how new forms of wealth are being created tomorrow by people previously seen as marginal, irrelevant even. Ultimately, the genius of capitalism links to Adam Smith’s “invisible hand,” with the individual self-interest of businesspeople driving the innovation and production that potentially serve the interests of the many. Ideas that start on the margins can push—or be sucked—into the mainstream. Failed experiments are allowed to die, with the most productive capitalist economies allowing for a certain amount of failure.

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Interestingly, the tenth and final theme that O’Reilly flagged was the need to reinvent the discipline of economics, the master discipline of capitalism. Among the books he had been reading were Kate Raworth’s Doughnut Economics, Mariana Mazzucato’s The Value of Everything, and Russ Roberts’s How Adam Smith Can Change Your Life. Just in case his readers thought that the last book was another hymnal to Smith’s “invisible hand,” O’Reilly underscored the fact that the main point of reference in the book was not Smith’s 1776 book, The Wealth of Nations, but The Theory of Moral Sentiments, which Smith had published seventeen years earlier. The key argument in that work was that social norms play a crucial role in reining in self-interest.

The State and the Stork: The Population Debate and Policy Making in US History
by Derek S. Hoff
Published 30 May 2012

I encountered the phrase “market-knows-best demography” in Marc Linder, The Dilemmas of Laissez-Faire Population Policy in Capitalist Societies: When the Invisible Hand Controls Reproduction (Westport, Conn.: Greenwood Press, 1997), 16. Linder uses it to refer specifically to the new household microeconomics, which treats children as consumer durables. I apply it more broadly to a whole constellation of overlapping pro-market and pro–population growth positions. A crucial discussion—and rejection—of these ideas was Paul Demeny’s 1986 Population Association of America presidential address (Paul Demeny, “Population and the Invisible Hand,” Demography 23 [November 1986]: 473–87). 70. Demeny, “Population and the Invisible Hand,” 479. 71. See Albert O.

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The fusion between older concerns about limited resources and newer themes of ecological fragility and finiteness reflected a consensus among natural scientists that population growth was harmful.52 It was the economists, however, who first constructed a more formal new theory of the “limits to growth,” launching a heretical “environmental economics,” followed by its offshoot, “ecological economics,” which rejected the cult of “growthism” and identified limits to the economy and number of inhabitants in a finite and fragile world.53 In its moderate guise, environmental economics implied efforts to integrate environmental concerns into orthodox economic thought and public policy, for example by taxing negative externalities (spillover effects) like pollution so that consumer prices reflect true environmental costs. It also reserved room for beauty and other intangibles. In the memorable phrase of Herman Daly, a leading environmental economist, the trampling “invisible foot” of market activity was as important as the more famous and benign “invisible hand.”54 En- the new environmental state and the zero growth movement 175 vironmental economics quickly gained acceptance in mainstream circles. In a 1967 essay that critiqued but ultimately defended the “aesthetically concerned minority,” political scientist Aaron Wildavsky suggested that the takeoff of the environmental movement was closely associated with a “new economics” of the natural environment in which intangibles were assigned large if imprecise values.55 Environmental economics offered not merely an insistence on market failure but also a powerful attack on core assumptions of neoclassical economics, including the rationality of the consumer and the desirability of letting the market reduce all goods and human activity to commodities.56 The more radical ecological economics offered a fundamental rejection of the compatibility of economic progress—as traditionally defined—and ecological sustainability.

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Fourth, even if a healthy economy amid a stable population is theoretically possible (as SPK insists), the state cannot be relied upon to make the necessary adjustments. Fifth, population growth advances human liberty. The ascendancy of MKBD was in step with the overall withering of Keynesianism during the 1960s and 1970s, but, at the time, it was not the exclusive domain of conservatives. Guided by the central laissez-faire premise that the invisible hand produces socially optimal results, however, the doctrine was constitutive of the political “New Right” and the new classical economics that swept American politics in the 1970s. MKBD articulated many themes amenable to the New Right’s worldview: faith in the market, the importance of innovation, entrepreneurship, and liberty, and unabashed celebration of economic growth.

Globalists: The End of Empire and the Birth of Neoliberalism
by Quinn Slobodian
Published 16 Mar 2018

Kabaser­v ice, Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party, from Eisenhower to the Tea Party (New York: Oxford University Press, 2012), 55. 91. Kim Phillips-­Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009), 56–58. 92. Rick Perlstein, Before the Storm: Barry Goldwater and the Unmaking of the American Consensus (New York: Hill and Wang, 2001), 33. 93. Röpke to Paul Wilhelm Wenger, August 5, 1964, RA, file 89, p. 568. 94. Phillips-­Fein, Invisible Hands, 57, 59. Kim Phillips-­Fein, “Business Conservatives and the Mont Pèlerin Society,” in Mirowski and Plehwe, The Road from Mont Pèlerin, 292. 95.

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Markets buttress the repository of cultural values that are a necessary but not sufficient condition for markets’ continued existence. GENEVA SCHOOL, NOT CHICAGO SCHOOL In 1983 one of Hayek’s students, the leading international economic ­lawyer Ernst-­Ulrich Petersmann, wrote, “The common starting point of the neoliberal economic theory is the insight that in any well-­functioning market economy the ‘invisible hand’ of market competition must by necessity be complemented by the ‘vis­i­ble hand’ of the law.” He listed the well-­k nown neoliberal schools of thought: the Freiburg School, birthplace of German ordoliberalism, and home to Walter Eucken and Franz Böhm; the Chicago School, identified with Milton Friedman, Aaron Director, Richard Posner, and ­others; and the Cologne School of Ludwig Müller-­Armack.

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By observing recurrent lags between ­these three indicators, barometer readers believed they could forecast the change in business conditions over time.21 The meta­phor of the barometer implied that the economy was like the weather, a sphere outside of direct ­human control. One could adapt Adam Smith’s famous meta­phor of the invisible hand to speak of the invisible wind of the market, captured in charts and graphs. The 62 GLOBALISTS The three lines of the Harvard Economic Ser­v ice Barometer. Warren M. Persons, Interpretation of the Index of General Business Conditions (Cambridge, MA: Harvard Economic Ser­v ice, 1922). economic conditions portrayed in three lines ­were experienced as a unity but w ­ ere actually composed of innumerable tiny organic pro­ cesses, of which we could perceive only the effects in the aggregate.

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era
by Gary Gerstle
Published 14 Oct 2022

Sydnor Jr., US Chamber of Commerce]: Attack on American Free Enterprise System,” August 23, 1971, https://law2.wlu.edu/deptimages/Powell%20Archives/PowellMemorandumTypescript.pdf, accessed September 14, 2021; Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009). 2.Quoted in Phillips-Fein, Invisible Hands, 162. 3.Phillips-Fein, Invisible Hands, 169 4.Phillips-Fein, Invisible Hands, 169–173. 5.Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (New York: Anchor Books, 2016) 6.Sidney Blumenthal, The Rise of the Counter-Establishment: The Conservative Ascent to Political Power (New York: Times Books, 1986). 7.Jefferson Cowie, Stayin’ Alive: The 1970s and the Last Days of the Working Class (New York: New Press, 2010), 261–312; Benjamin C.

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Waterhouse, Lobbying America: The Politics of Business from Nixon to NAFTA (Princeton, NJ: Princeton University Press, 2014), 76–139. 8.From 89 to 821, to be exact. Phillips-Fein, Invisible Hands, 185–188. On the history of PACs, see Emily J. Charnock, The Rise of Political Action Committees: Interest Group Electioneering and the Transformation of American Politics (New York: Oxford University Press, 2020). 9.Phillips-Fein, Invisible Hands, 185–188; see also Alice O’Connor, “Financing the Counter-Revolution,” in Bruce Schulman and Julian E. Zelizer, eds., Rightward Bound: Making America Conservative in the 1970s (Cambridge, MA: Harvard University Press, 2008), 148–168. 10.Phillips-Fein, Invisible Hands, 245–246; William E. Simon, A Time for Truth (New York: Reader’s Digest Press, 1978), xi, xv. 11.Phillips-Fein, Invisible Hands, 245–246.

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An economic dimension of liberalism drew on the thought of Adam Smith, the Scottish political economist and philosopher who had published his magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations, in the same year that the Americans had declared their independence from Britain. In Wealth of Nations, Smith stressed the imperative of creating an economy in which people would be free to pursue their economic interests and advantage. Smith believed that individuals so blessed with freedom would work hard and inject into the economy commercial and creative energy. The invisible hand of the market would coordinate the myriad individual pursuits and channel the economic energy generated, thus ensuring that the pursuit of individual well-being would contribute to the common good. Producers would be inventive and innovative, applying the principle that Smith labeled the “division of labor” to break down production processes into their simplest parts, each to be performed by one group of workers performing a single task.

Platform Scale: How an Emerging Business Model Helps Startups Build Large Empires With Minimum Investment
by Sangeet Paul Choudary
Published 14 Sep 2015

Increasingly, many industries that have traditionally been considered non-tech, including retail, transportation, and consumer goods, are opening up APIs to encourage innovation by coalescing an external ecosystem of developer-partners. THE INVISIBLE HAND IS THE NEW IRON FIST The business processes that enabled pipe scale have historically been managed via hierarchies. As value creation in a platformed world moves to networks, we need a new form of management and culture, both inside and outside the organization. Hierarchies are based on rules and compliance, which require a unidirectional flow of information from the top down. This iron fist is giving way to the invisible hand. This is most evident in the rise of on-demand labor platforms where the invisible hand of algorithms and APIs dispatches supply to meet demand.

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This is most evident in the rise of on-demand labor platforms where the invisible hand of algorithms and APIs dispatches supply to meet demand. The invisible hand – typically taking the form of algorithmic decisions – nudges producers to continue creating value on the platform. In a networked age, we are moving from a world of command and control to a self-serve world where user participation is encouraged through an invisible hand powered by data, APIs, and algorithms. PLATFORM SCALE IMPERATIVE A world of pipes creates value through linear processes managed through command-and-control mechanisms, contractual integration, and internal labor and resource allocation. Platforms move away from closed, controlled processes to open, enabled interactions.

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Behavior design is the new loyalty program 11. Data science is the new business process optimization 12. Social feedback is the new sales commission 13. Algorithms are the new decision makers 14. Real-time customization is the new market research 15. Plug-and-play is the new business development 16. The invisible hand is the new iron fist 1.3 THE RISE OF THE INTERACTION-FIRST BUSINESS A Fundamental Redesign Of Business Logic Platforms compete with each other on the basis of their ability to enable interactions sustainably. Platforms do not compete merely on the strength of better features or larger user bases.

The Age of Turbulence: Adventures in a New World (Hardback) - Common
by Alan Greenspan
Published 14 Jun 2007

And the greater the productivity, the greater the prosperity This led Smith to his most famous turn of phrase: individuals who compete for private gain, he wrote, act as if "led by an invisible hand" to promote the public good. The metaphor of the invisible hand, of course, captured the world's imagination—possibly because it seems to impute a godlike benevolence and omniscience to the market, whose workings are in reality as impersonal as natural selection, which Darwin came along and described more than half a century later. The expression "invisible hand" does not seem to have been very important to Smith; in all his writings, he used it only three times. The effect it describes, however, is something he discerns at every level of society, from the great flows of goods and commodities between nations to everyday neighborhood transactions: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."

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The resulting advance of global financial markets has markedly improved the efficiency with which the world's savings are invested, a vital indirect contributor to world productivity growth.* As I saw it, from 1995 forward, the largely unregulated global markets, with some notable exceptions, appeared to be moving smoothly from one state of equilibrium to another. Adam Smith's invisible hand was at work on a global scale. But what does that invisible hand do? Why do we experience extended periods of stable or rising employment and output and only gradually changing exchange rates, prices, wages, and interest rates? Are we fools to trust such stability when we see it in the markets? Or, as a newly anointed finance minister once asked, "How can we control the inherent chaos of unregulated international trade and finance without significant governmental intervention?"

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The spreading of a commercial rule of law and especially the protection of the rights to property has fostered a worldwide entrepreneurial stirring. This in turn has led to the creation of institutions that now anonymously guide an ever-increasing share of human activity—an international version of Adam Smith's "invisible hand." As a consequence, the control of governments over the daily lives of their citizens has lessened; the forces of the marketplace have gradually displaced some significant powers of the state. Much regulation promulgating limits to commercial life has been dismantled. Throughout the early post-World War II years, international capital flows were controlled and exchange rates were in the grip of finance ministers' discretion.

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
by Philip Mirowski
Published 24 Jun 2013

The cynic might say: Leave it to academics to turn a pervasive human disaster into another unsustainable growth industry. What could be the purpose of yet another jokey variation on the metaphor of the “Invisible Hand” on the cover of some text that purports to convince us that a very few select events or principles (usually a prime number) constitute the Rosetta Stone for decoding recent events? The distance from self-help books (Six Things Momma Taught Me to Succeed When Good People Do Bad Things) to crisis prescription books (Dunk That Invisible Hand in Talcum Powder and Snap on the Handcuffs) and get-rich-quick books (Who’s Afraid of the Big Black Swan?) narrows precipitously in the modern marketplace of ideas.

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As usual, reality outpaced satire when the former CEO of AIG, Hank Greenberg, brought suit against the U.S. government for not bailing out AIG at a sufficiently munificent rate.13 Bitter comic mordancy can be ripping fun; but a nagging voice whispers: isn’t it just too easy to make fun of the Invisible Hand? Isn’t there something lazy about Stephen Colbert and Jon Stewart? Is the right response to the nightmare of crisis fatigue to laugh it off? What if the people who helped bring on the crisis were quite literally laughing all the way to the bank as the financial system approached the precipice?

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Paul Krugman, feeling secure in his status, has conveniently confessed to the derangement: The brand of economics I use in my daily work—the brand that I still consider by far the most reasonable approach out there—was largely established by Paul Samuelson back in 1948, when he published the first edition of his classic textbook. It’s an approach that combines the grand tradition of microeconomics, with its emphasis on how the invisible hand leads to generally desirable outcomes, with Keynesian macroeconomics, which emphasizes the way the economy can develop magneto trouble, requiring policy intervention. In the Samuelsonian synthesis, one must count on the government to ensure more or less full employment; only once that can be taken as given do the usual virtues of free markets come to the fore.

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism
by Leigh Phillips and Michal Rozworski
Published 5 Mar 2019

Or sufficiently embarrassing. Willful disregard for the reality of planning is common enough. Adam Smith, the eighteenth-century Scot now considered the father of economics, is famous for introducing the “invisible hand” of the market. By this he meant no mystical force, but the idea that while individuals are making decisions whether to sell or to buy in the pursuit of self-interest, they are “led by an invisible hand to promote an end which was no part of [their] intention”—the welfare of society realized through a market system. Smith’s hand often appears in economics textbooks as proof that markets produce, without any kind of plan, the best possible outcomes.

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While the real world is often one of messy disequilibrium, of prices created by fiat rather than emerging from the competitive ether—and, as we’ll see, one configured by capitalists who plan—it remains one where markets determine much of our economic, and thereby social, life. In general, criticisms of the current way of doing things propose that the market be replaced, or at least reined in. But if allocation does not proceed via the market, then it will occur via economic planning, also known as “direct allocation”—made not by the “invisible hand” but by very visible humans. Indeed, this form of planned allocation already takes place widely in our current system, on the part of elected and unelected individuals alike, by both states and private enterprises, and in centralized and decentralized forms. Even arch-capitalist America is home not only to Walmart and Amazon, but also to the Pentagon: in spite of being incredibly destructive, the US Department of Defense is the single-largest employer in the world, and a centrally planned public sector operation.

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At first, the familiar strategy of merciless, life-destroying post-acquisition cost cutting and layoffs did manage to turn around the fortunes of the merged Kmart-Sears, now operating as Sears Holdings. But Lampert’s big wheeze went well beyond the usual corporate raider tales of asset stripping, consolidation and chopping-block use of operations as a vehicle to generate cash for investments elsewhere. Lampert intended to use Sears as a grand free market experiment to show that the invisible hand would outperform the central planning typical of any firm. He radically restructured operations, splitting the company into thirty, and later forty, different units that were to compete against each other. Instead of cooperating, as in a normal firm, divisions such as apparel, tools, appliances, human resources, IT and branding were now in essence to operate as autonomous businesses, each with their own president, board of directors, chief marketing officer and statement of profit or loss.

Social Life of Information
by John Seely Brown and Paul Duguid
Published 2 Feb 2000

Social friction and "inertia" may usefully dampen volatility and increase stability. De Long and Froomkin even suggest that such frictionlessness might disable the "Invisible Hand." The great classical economist Adam Smith used the image of the invisible hand to describe forces that reconcile the pursuit of private interests through markets with the public good and with what we have called the social fabric. If not actually producing good, at least the invisible hand prevents the pursuit of private interests from doing harm. "Assumptions which underlie the microeconomics of the Invisible Hand," de Long and Froomkin conclude, "fray badly when transported to the information economy."26 Better bots, then, will require a better understanding of human negotiation, the contribution of the social fabric, and the role of human restraint in the functioning of the invisible hand.

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"Assumptions which underlie the microeconomics of the Invisible Hand," de Long and Froomkin conclude, "fray badly when transported to the information economy."26 Better bots, then, will require a better understanding of human negotiation, the contribution of the social fabric, and the role of human restraint in the functioning of the invisible hand. Development will be ill served by people who merely redefine elaborate social processes in terms of the things that bots do well. Page 53 How Autonomous? If human negotiation is a delicate and complex art, it is inevitably more delicate and more complicated when conducted by proxies. And bots are proxies. They act not on their own behalf, but on behalf of others. As such, they also lead us to questions about delegation and representation, which will take us once more to the issue of transparency.

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More significantly, they lack necessary peer support. Consequently, with Page 78 current technology, money-losing futzing, late at night and early in the morning, is endemic to the home office. Lacking the boundaries and structures provided by office life, work spills relentlessly over into private and family life. Invisible Hands Within organizations, this stealth spending is readily hidden from those at the top. Unfortunately, so is the need for such spending. Life at Xerox brought us face to face with this issue, too, this time over the matter of copier design. Xerox has long made usability a critical issue for the design and marketing of its photocopiers.

Socialism Sucks: Two Economists Drink Their Way Through the Unfree World
by Robert Lawson and Benjamin Powell
Published 29 Jul 2019

Adam Smith put it best in his book The Wealth of Nations when he wrote of an “invisible hand” that guided individual economic self-interest to a greater good. As Smith put it: “Every individual . . . neither intends to promote the public interest, nor knows how much he is promoting it . . . he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”5 This “invisible hand” requires two things: freedom and the rule of law.

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Michael, 48 Coyne, Chris, 135 Crisis and Leviathan (Higgs), 136 Cristal (beer), 35 Cuba effects of central planning in, 34–41, 45 health care in, 16, 52–53 import restrictions, 49–50 private businesses in, 42–43, 45–47 travel restrictions, 33 Cuban Revolution, 131 Cúcuta, 17, 25, 30 Cultural Revolution, 75–76, 79 Current Affairs, 137 D Dandong, 61–62, 66 Dean, Andrea, 56 deBoer, Fredrik, 138 demilitarized zone (DMZ), 65, 69 Democratic Party, 9–10, 144 Democratic People’s Republic of Korea, 59 democratic socialism, 2, 9, 16, 32, 126–27, 138–39, 146 Deng Xiaoping, 76, 79 Denmark, 10 Dikötter, Frank, 73–75, 150 Duranty, Walter, 92–95 Duvel Café, 5, 10–11 E Eastern Bloc, 85, 126 economic freedom index, 6, 10–11, 20, 63, 79, 99–100, 110, 136 Economic Freedom Network (EFN), 99, 102 Economic Freedom of the World report, 99, 151 economic freedom, 4, 11, 13, 20, 30, 56, 78–80, 105, 108, 110, 112–14, 117, 150 Ecuador, 17 Egypt, 15 El Guajirito, 45–47 Empresas Polar, 26 Erekle (king), 104 Expert Failure (Koppl), 136 F Federal Reserve, 2–3 Fisher, Michelle, 9 Florida State University, 6 Forbidden City, 72 Foreign Policy, 27 foreign-market prices, 37 Fortune Global 500, 64 Fox News, 134 Fraser Institute, 6 Free Market Institute, 7 free markets, 7, 21, 78, 116, 133, 136 Free the People, 141 free-market prices, 21, 37, 48, 88 FreedomWorks, 142 Friedman, Milton, 6–7, 30, 82, 148 G George Mason University, 7 Georgetown University, 137 Georgia (country) Law on Economic Freedom, 114 liberal reforms in, 99, 106–110, 113 ranking on economic freedom index, 110 Ukrainian government in, 101–102 winemaking in, 111–12 Georgian Soviet Socialist Republic, 105 Ghodsee, Kristen, 96 Gini coefficient, 124 Glover, Danny, 1 Gohmann, Steve, 64 grassroots movements, 141–43 Gray, Francine du Plessix, 96–98 Great Britain, 73 Great Leap Forward, 13, 73–76 Grier, Kevin, 28 gross domestic product (GDP), 2, 12–13, 49, 63, 114, 134 Guardian, The, 94 Guevara, Che, 9, 54 Guiadó, Juan, 31 Gwartney, James, 6 H Hall, Joshua, 11 Han River, 65 Harvard, 8 Harvest of Sorrow, The (Conquest), 95 Haverhill, 6 Hayek, Friedrich, 7, 30, 150 Hierta, Lars Johan, 11–12 Higgs, Robert, 136 Hobbs, Brad, 12 Hotel Caribbean, 44, 47 Hotel Ibis, 77 Hotel Metropol, 92 Hotel Nacional, 34, 71 Hotel Neptuno Tritón, 34 Huangpu River, 77 HuffPost, 53 Human Action (von Mises), 100 Hyundai-Kia, 64 I immigration, 122, 134–35, 146 In Order to Live (Yeonmi Park), 60 Incheon International Airport, 63 Independence Square, 101 International Black Sea University, 112 International Monetary Fund, 109 International Socialist Organization (ISO), 123, 125–26 Intourist Hotel, 107 invisible hand, 21 J Jandieri, Gia, 105, 116 Jones, Gareth, 94 K KGB, 89 khachapuri, 116 Khevsureti, 110 khinkali, 116 Khomassuridze, Archil, 97–98 Khrushchev, Nikita, 73 Kibbe, Matt, 141–48 Kiev, 98–102, 117 Kim Il-Sung, 125 Koppl, Roger, 136 Korean War, 63, 65 Kremlin, 89 L La Cabaña prison, 54 La Habana Vieja (Old Havana), 38, 40 Lada, 38, 50 Le Cabernet, 72 Leeson, Peter, 56 Lenin, Vladimir, 9, 16, 89–91, 114–15, 125, 128, 131 Leningrad, 98 LG, 64 libertarianism, 59, 106, 123, 144–47 Lipovskaya, Olga, 97 Little Havana, 56 Little Red Book, 73 Lujiazui Finance and Trade Zone, 80 Luxemburg, Rosa, 125 M Ma Junjie, 81 Macasa, Diana, 123 Maduro, Nicolás, 30–32, 127 Major, John, 120 Maldonado, Víctor, 25 Malecón, 43, 53 Mao Yushi, 82 Mao Zedong, 9, 73–76, 81, 95, 115, 125 Mao’s Great Famine (Dikötter), 73, 150 Marginal Revolution, 86 market prices, 18, 21, 37, 88 Martin, Sabrina, 24–25 Marx, Karl, 86–88, 122, 125, 131, 139 Marxism alienation, 87 labor theory of value, 86–87 theory of history, 88 means of production, 13, 37, 87–88, 90, 121, 124, 126, 128–29, 137–39, 147 Mediterranean, 103 Mendoza, Lorenzo, 26 Mi Amigo Hugo, 27 Miami, 33, 52, 56–57, 134, 155 millennials, 8–10, 120, 138 Milton Friedman Prize for Advancing Liberty, 82 Mises, Ludwig von, 37, 100, 150 Mont Pelerin Society, 7, 64 Mont Pelerin, 7 Moore, Michael, 1, 13, 27 Moscow, 85, 92, 100, 111, 154 Moskvitch, 50 Muggeridge, Malcolm, 94 N Nation, The, 121 National Assembly (Venezeula), 31 National Bank of Cuba, 55 Nazi Germany, 37 New Economic Policy (NEP), 91, 93 New Economic School, 104–105, 116 New Hampshire, 15 New York Times, 9–10, 30, 92, 94–96 Nobel Prize, 6–7 Norberg, Johan, 11 North American Free Trade Agreement (NAFTA), 133 North Korea border with South Korea, 65 contrast between China and, 59, 69 contrast between South Korea and, 62–63, 69, 124 poverty in, 68 refugees from, 60–61 socialism in, 13, 16, 31, 63, 67, 125 Norway, 10–11 Novotel Beijing Peace Hotel, 72 O O’Neil Center for Global Markets and Freedom, 6 Obama, Barack, 33, 55 Ocasio-Cortez, Alexandria (AOC), 143–44, 147 OECD, 13 Oriental Pearl Tower, 77 Orwell, George, 102 P PanAm Post, 18 Parajanov, Sergei, 111 Park, Yeonmi, 60, 68 Patriots, 7 Paul, Rand, 145 Paul, Ron, 142–47 Peng, Dean, 59, 72 Penn, Sean, 1, 27, 128 People’s Republic of China, 59, 73 Pessin, Haley, 121 Petroleos de Venezuela SA, 31 Peugeot, 51–52 Plaza de la Revolución, 54 Plaza Mayor, 43 private property, 10, 13, 21, 37, 45, 78–79, 87, 108–110, 121, 128, 130, 138–39 proletariat, 88, 92 Pudong, 77–78, 80 Puerto Esperanza, 50, 52 Putin, Vladimir, 102 Pyongyang, 65, 69, 85 R Rand, Ayn, 81 Reagan, Ronald, 120 Red Army, 104 Red Century column, 9, 92, 95 Red Guard, 76 Red Spots, 31 Red Square, 89 Red Terror, 89 Republican Party, 142–44 Reuters, 23, 31 Revolution Brewing, 130 Revolutionary Committee of the Don, 90 Río Táchira, 17 Road to Serfdom, The (Hayek), 30, 150 Robinson, Nathan, 137–38 Romanchuk, Jaroslav, 99 Romero, Denise, 121, 132, 135 Rose Revolution, 105, 113 Russia agricultural collectivization in, 93–95 life for women in Soviet, 96–98 Russian Civil War, 89 Russian famine, 90, 93–95 S Saakashvili, Mikheil (Misha), 101–102, 105–106, 114–15, 117 Salon, 1, 17 Salt Lake City, 7 Samsung, 64 San Jose State University, 7 Sanders, Bernie, 9–10, 17, 28, 137, 143–44, 147 Santander Bridge, 18, 22 Schoolland, Li, 60, 75 Scientific Research Mises Center, 99 Seoul, 62–65, 69 Serralde, Daniel, 120, 131 Shanghai Tower, 77 Shanghai World Financial Center, 77 Shawnee State University, 6 Shcheglov, Lev, 98 Sheng Hong, 83 Sheshelidze, Paata, Simón Bolívar Bridge, 23, Sino-Korean Friendship Bridge, 104–105 Sinuiju, 59, 61, 66 Sirota, David, 1 Smith, Adam, 21, 86, 133 Sobel, Russell, 56 Socialism Conference, 120–22, 125, 128–31, 136–39, 146 Socialist International, 32 South America, 17, 135 South China Morning Post, 82 South Korea, 62–64, 68–69, 123–24 South Ossetia, 113 Southern Methodist University (SMU), 6, 48, 77–79 Soviet Ministry of Health, 97 Soviet Women (Gray), 96 special economic zone (SEZ), 80 St.

The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money
by Steven Drobny
Published 18 Mar 2010

Through another series of interviews, this time with top global hedge fund traders who managed risk well through 2008 and into 2009, the book highlights certain valuable elements of the global macro approach that could be applied to other mandates within money management. The Invisible Hands begins by defining and discussing the importance of real money management. It then discusses the evolution of real money management and raises some important questions about how real money portfolios are constructed. Next, the experts speak for themselves. First, my business partner Dr. Andres Drobny, “The Researcher,” discusses where the global economy is headed. Then, “The Family Office Manager,” Jim Leitner, addresses the lessons he learned in 2008 and offers his own thoughts on rethinking real money. Next, the “Invisible Hands”—10 anonymous global macro hedge fund managers, the Philosopher, the House, the Professor, et al—discuss how they approach money management, how they managed to make money or avoid large losses in the crisis, and how they would address some of the challenges faced by real money managers.

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Focusing on 2007-2008 brings into stark focus the possibility of buying cheap insurance when the market is willing to sell it, before the horse has left the barn. Part Two The Invisible Hands [E]every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

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Table of Contents Title Page Copyright Page Dedication Praise Foreword Preface Part One - REAL MONEY AND THE CRASH OF ‘08 Chapter 1 - Rethinking Real Money I. Why Real Money? II. The Evolution of Real Money III. RETHINKING REAL MONEY—MACRO PRINCIPLES Chapter 2 - The Researcher Chapter 3 - The Family Office Manager Part Two - The Invisible Hands Chapter 4 - The House Chapter 5 - The Philosopher Chapter 6 - The Bond Trader Chapter 7 - The Professor Chapter 8 - The Commodity Trader Chapter 9 - The Commodity Investor Chapter 10 - The Commodity Hedger Chapter 11 - The Equity Trader Chapter 12 - The Predator Chapter 13 - The Plasticine Macro Trader Part Three - FINAL WORD Chapter 14 - The Pensioner Conclusion Acknowledgements Bibliography About the Author Index Copyright © 2010 by Steven Drobny.

Misbehaving: The Making of Behavioral Economics
by Richard H. Thaler
Published 10 May 2015

When most people think about Adam Smith, they think of his most famous work, The Wealth of Nations. This remarkable book—the first edition was published in 1776—created the foundation for modern economic thinking. Oddly, the most well-known phrase in the book, the vaunted “invisible hand,” mentioned earlier, appears only once, treated with a mere flick by Smith. He notes that by pursuing personal profits, the typical businessman is “led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it.” Note the guarded language of the second sentence, which is rarely included (or remembered) by those who make use of the famous phrase, or invoke some version of the invisible handwave.

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Firms may not have an incentive to debias consumers since under some circumstances, firm profits are increasing in the degree of naiveté: credit card late payment fees (Heidhues and Kszegi, 2010); gym memberships (DellaVigna and Malmendier, 2006); printer cartridges and hotel room shrouded fees (Gabaix and Laibson, 2006). 51 Adam Smith’s invisible hand: For a thoughtful take on how to think about the concept of the invisible hand, see Ullmann-Margalit (1997). 52 transform people into rational agents: The study of how profit-maximizing firms interact with Human consumers is the subject of the exciting field of behavioral industrial organization. For a textbook treatment see Spiegler (2011).

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“Suppose there were people doing silly things like the subjects in your experiments, and those people had to interact in competitive markets, then . . .” I call this argument the invisible handwave because, in my experience, no one has ever finished that sentence with both hands remaining still, and it is thought to be somehow related to Adam Smith’s invisible hand, the workings of which are both overstated and mysterious. The vague argument is that markets somehow discipline people who are misbehaving. Handwaving is a must because there is no logical way to arrive at a conclusion that markets transform people into rational agents. Suppose you pay attention to sunk costs, and finish a rich dessert after a big dinner just because you paid for the dessert.

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

“They do not understand that all parts of society hold together,” he wrote in 1883 in one of a series of Harper’s articles later bundled into the classic tract What the Social Classes Owe to Each Other, “and that forces which are set into action act and react throughout the whole organism, until an equilibrium is produced by a readjustment of all interests and rights.”10 The concept of equilibrium, in which competing influences balance each other out, lends itself naturally to mathematical treatment (all it takes is an equal sign) and was crucial to the early development of chemistry and physics. Hints of it had already appeared in economics—Scotsman Adam Smith’s notion of an “invisible hand” steering selfish individuals toward societally beneficial results was the most famous example11—but attempts to build a unified theory of economics around it had foundered upon the imprecision of the field. Economists were long stuck, for example, on the crucial question of what gave a product value.

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The abstract high point of the economic theorizing enabled by such simplifying assumptions came from two young scholars who had worked at the Cowles Commission, Kenneth Arrow and Gerard Debreu.9 In one paper written together and in several separate works in the 1950s, the two men rebuilt economic equilibrium theory from the ground up. What has since come to be known as “Arrow-Debreu equilibrium” (or the “Arrow-Debreu framework,” the “Arrow-Debreu paradigm,” or just plain “Arrow-Debreu”) amounted to a mathematical proof of the existence of Adam Smith’s invisible hand. This version was far more logically consistent and mathematically sophisticated than its predecessors. Crucially, it made room for economic actors who couldn’t see perfectly into the future. What was needed to achieve equilibrium under uncertainty was what Arrow termed a “complete” securities market, in which one could bet on or insure against every possible future state of the world.

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“It changed our view of the entire world.”18 Many of Director’s students went on to make his economics teachings the focal point of their careers. An academic movement had been launched. Director’s main message was that things happened in the business world for a reason, and that when one looked hard enough one would usually find Adam Smith’s invisible hand at work—even at General Motors. “In each of the various practices he has analyzed (tie-in sales, patents, resale price maintenance, etc.) he has sought the profit-seeking reason that led businessmen to adopt the practice,” wrote Chicago economist and kindred spirit George Stigler. “Sometimes the reason was the exercise of monopoly power, but other times an important efficiency was achieved by the practice.”19 As a result, Director argued, there was far less need for antitrust laws, or consumer protection regulations, than was commonly believed.

Stealth of Nations
by Robert Neuwirth
Published 18 Oct 2011

A century later, here’s what Adam Smith had to say about inequality in The Theory of Moral Sentiments, his first book, which he published in 1759: The rich … consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same division of necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants; and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. This was Smith’s first use of “invisible hand,” the phrase that would become his most captivating, most enduring, and most controversial literary creation. It’s a great economic fantasy: the master unwittingly shares everything equally with his slaves; lords and ladies with their servants; royalty with the plebes; bosses with their workers; and capitalism is really communism.

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Even in his time, the rich didn’t restrict their consumption to little more than the poor (King George II received an annual allotment of almost £900,000 from the national treasury to support his retinue, while the average clerk at a joint stock company earned perhaps £200 a year and the average laborer more likely on the order of £50) and, left to their own devices, didn’t ensure that the necessities of life were apportioned equally among all (otherwise there would have been no need for the aristocracy to pass the Poor Laws, which treated unemployment and poverty as crimes rather than as consequences of other people’s economic decisions). Perhaps this was why Smith lowered the profile of the invisible hand the single time he mentioned it in The Wealth of Nations. Sixty years after Smith died, the French journalist and utopian thinker Pierre-Joseph Proudhon articulated a revolutionary plan to spur growth and reduce inequality based on superabundant credit (Proudhon proposed forcing interest rates down to between one-fourth and one-half of 1 percent), and increasing local control (his plan called for the creation of a massive number of cooperative associations to manage the economy based on reciprocity, voluntary contract, and buying and selling at a just price).

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It encourages illegal migrants—like the recycler from Henan province—to build a future in a place they are not allowed to live (and, perhaps, over time, to emerge as a constituency that can organize against restrictive rules like the five-decade-old houkou system). There’s no doubt that it’s hard to reconsider or reformulate cherished notions like Adam Smith’s invisible hand. But, as Kuznets pointed out in his Nobel speech, if those notions simply don’t fit reality, and if the things the market has tried so far have not ameliorated the problem—if they had, lack of employment and income inequality would not continue to plague the world—then it’s not too much to suggest that we at least should ask why the dominant economic theories and conventional market institutions are not working.

Bourgeois Dignity: Why Economics Can't Explain the Modern World
by Deirdre N. McCloskey
Published 15 Nov 2011

This: Smith had two invisible hands, two outcomes of (in his uncharacteristically clumsy phrase) “the obvious and simple system of natural liberty.”14 One was the invisible hand of the marketplace, whose effects are occasionally noted in The Wealth of Nations. For example, to mention Smith’s most original economic contribution, the marketplace in labor equalizes the wage-plus-conditions in Scotland with those in England, within social and legal limits, because people move from one place to the other until it is so, as though directed by an invisible hand. Likewise the invisible hand gently pushes people out of their solipsistic cocoons to consider what is valued in trade by other people.

…

He concludes that the private person “is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention,” namely, the nation’s modest prosperity—and, though it was no part of Smith’s intention, accidentally promoting something entirely new, the Great Enrichment. The passage is not (as imagined by recent economists, having read one or two excerpts from The Wealth of Nations, and back-projecting from later theorizing) merely a poor approximation to our modern understanding of the pretentiously named First and Second Theorems of Welfare Economics.18 And especially Smith’s invisible hand does not mean, as Mandeville had asserted in 1705, that “Thus every part was full of vice, / Yet the whole mass a paradise.”

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But aside from overlawyered definitions of so-called intellectual property, for the most part it has been.10 The mechanism that raised up the poor is not a trickle down of expenditures from rich people. One hears such an argument from the right—even, alas, from Adam Smith on a rare bad day, in one of merely two uses in his published writings of the phrase “invisible hand.”11 One hears too a Keynesian form of trickle up from the left, as from the well-meaning Robert Reich in the Nation magazine: “If consumers don’t have adequate purchasing power, businesses have no incentive to expand or hire additional workers [note Reich’s desideratum: jobs]. Because the rich spend a smaller proportion of their incomes than the middle class and the poor, it stands to reason that as a larger and larger share of the nation’s total income goes to the top, consumer demand is dampened.”12 Reich’s reasoning supposes that the point of an economy is jobs, jobs, jobs, and that spending assures jobs.

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right
by Jane Mayer
Published 19 Jan 2016

Carrying out this attack: In The Rise of the Counter-establishment: From Conservative Ideology to Political Power (Times Books, 1986), Sidney Blumenthal made the term “counter-establishment” famous and for the first time told much of the early intellectual history of the movement. “Attack on American Free Enterprise System”: For more on the origins and impact of Lewis Powell’s memorandum, see Phillips-Fein, Invisible Hands, 156–65. “We didn’t have anything”: Piereson’s comments were made in a panel discussion with Gara LaMarche at an Open Society Institute forum, Sept. 21, 2006. “lay siege to corporations”: Staughton Lind, quoted in Phillips-Fein, Invisible Hands, 151. Powell’s defense of the tobacco companies: See Jeffrey Clements, Corporations Are Not People (Berrett-Koehler, 2012), 19–21. Income in America: Isaac William Martin, Rich People’s Movements, 155.

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Hayek’s ideas arrived in America during the post-Depression years, when conservative businessmen were scrambling to salvage the credibility of the laissez-faire ideology that had been popular before the 1929 market crash. Since then, Keynesian economics had taken its place. Hayek’s genius was to recast the discredited ideology in an appealing new way. As Kim Phillips-Fein writes in her book Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan, rather than describing the free market as just an economic model, Hayek touted it as the key to all human freedom. He vilified government as coercive, and glorified capitalists as standard-bearers for liberty. Naturally, his ideas appealed to American businessmen like Charles Koch and the other backers of the Freedom School, whose self-interest Hayek now cast as beneficial to all of society.

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In August, Powell delivered a seething memo that was nothing less than a counterrevolutionary call to arms for corporate America, warning the business community that its very survival was at stake if it didn’t get politically organized and fight back. The five-thousand-word memo was marked “confidential” and titled “Attack on American Free Enterprise System.” A virtual anti–Communist Manifesto, it laid out a blueprint for a conservative takeover. As Kim Phillips-Fein describes it in her history, Invisible Hands, Powell’s memo transformed corporate America into a “vanguard.” Also heeding the battle cry were the heirs to some of America’s greatest corporate fortunes, including Scaife, who were poised to enlist their private foundations as the conservative movement’s banks. Foundations had several advantages for both the donors and the recipients of this largesse.

Sleeping Giant: How the New Working Class Will Transform America
by Tamara Draut
Published 4 Apr 2016

.: Princeton University Press, 2012), p. 361. 26. Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade Against the New Deal (New York: W. W. Norton & Company, 2010), p. 153. 27. Ibid., pp. 151–56. 28. Lewis Powell, “Attack on American Free Enterprise System,” August 23, 1971. The Washington and Lee University School of Law, which Lewis Powell attended, maintains an archive of his writing and work. The complete text of the Powell Memorandum is available on the website http://law2.​wlu.​edu/​powell​archives/​page.​asp?​pageid=​1251, and from many other sources on the Internet. 29. Phillips-Fein, Invisible Hands, p. 154. 30. Jacob S.

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Hacker and Paul Pierson, Winner-Take-All-Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class (New York: Simon and Schuster, 2010), p. 116. 31. Powell, “Attack on American Free Enterprise System.” 32. Phillips-Fein, Invisible Hands, pp. 166–70. 33. Ibid., p. 188. 34. Hacker and Pierson, Winner-Take-All-Politics, p. 117. 35. Ibid., p. 119. 36. Ibid. 37. Ibid., p. 121. 38. Phillips-Fein, Invisible Hands, p. 187. 39. Alyssa Katz, The Influence Machine: The U.S. Chamber of Commerce and the Corporate Capture of American Life (New York: Spiegel & Grau, 2015), p. 15. 40. Lee Drutman, The Business of America Is Lobbying: How Corporations Became Politicized and Politics Became More Corporate (New York: Oxford University Press, 2015), pp. 8–9. 41.

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CEOs passed the memo along to each other, and in short order several rich capitalists stepped up to respond to the call, establishing and generously funding what are now the dominant conservative think tanks in America: the Heritage Foundation, the American Enterprise Institute, the Manhattan Institute, and the Cato Institute.32 It didn’t take long for Powell’s call to arms to be realized. Kim Phillips-Fein catalogs in Invisible Hands the growing army that was assembled to advance the free enterprise idea. The number of corporate PACs grew from 89 in 1974 to 821 in 1978. These PACs quickly became a giant tributary of political campaign funding, rapidly outpacing the number of union PACs, which stabilized at 250.33 The business lobbying brigade was also formed during the 1970s, mushrooming from only 175 companies employing lobbyists in 1971 to over 2,500 by 1982.34 Meanwhile, the Chamber of Commerce grew exponentially, doubling in membership and tripling its budget between 1974 and 1980, while the National Federation of Independent Businesses doubled its membership over the same time.35 The membership of these two groups covered a wide range of American small and midsized businesses.

What's Wrong With Economics: A Primer for the Perplexed
by Robert Skidelsky
Published 3 Mar 2020

Sociology is partly responsible for economists’ neglect of it. The demand for sociology as a science of society may have weakened, but there is also a problem with the supply. Contemporary sociologists have, by and large, left the economy to the economists, even though the economists’ image of a world in which the ‘invisible hand’ of the market guarantees social stability is profoundly opposed to the sociological standpoint. Sociology, writes Wolfgang Streeck, must rediscover political economy.9 The choice between the individual and the social is not straightforward. One strong defence can be offered for methodological individualism: it guards against treating individuals simply as members of groups, deprived of agency.

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Since scarcity of time can never be overcome, the day when efficiency will no longer be needed will never arrive. To give the devil her due, economic reasoning is a useful antidote to politicians who promise today what they know cannot be paid for tomorrow. Economists have typically believed that the most efficient mechanism for achieving coordination of production and consumption decisions is the ‘invisible hand’ of the market. To this day, this insight remains the single most important contribution of economics to the economy. Although economic choices are hard, economic life need not be a zero-sum – winner take all – game. This is because economics assumes that no voluntary trade will occur unless both sides see an advantage in doing so.

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The two contrasting methods of modelling economic life reflect different views of reality. Both can be criticised for ignoring important aspects of that reality. Structuralists were alert to the distribution of power in the world economy, but blind to the absence of a competent state to deliver the results promised by their ‘big push’ policies. Globalisers put their faith in the ‘invisible hand’ of the market, but paid far too little attention to the fact that successful marketisation requires entrepreneurs. Both approaches thus neglected two vital institutional requisites for economic growth: a strong, relatively uncorrupt state and a commercial middle class. Most of East Asia had these; most of Latin America and Africa did not; hence the different results.

Reinventing Discovery: The New Era of Networked Science
by Michael Nielsen
Published 2 Oct 2011

It’s a type of property rights in ideas, leading to an economy based on reputation, and establishing an invisible hand for science that strongly motivates scientists to share their results. The foundation for this reputation economy is a set of very strong social norms: scientists must credit other people’s work; they cannot plagiarize; and scientists judge other scientists’ work by their record of publishpapers. But these norms focus on just one way of sharing scientific knowledge: the scientific paper. If we could establish similar norms and a reputation economy that encourages broader sharing of scientific knowledge, then the invisible hand of science would become stronger, and the process of science would be greatly accelerated.

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I agree with Polanyi’s concerns—indeed, it’s tempting to write a follow-up essay on “The Oligarchy of Science”—but the point of the current discussion is, of course, to find best actions in the world we find ourselves in, not in some idealized world. p 193: On property rights in ideas and the invisible hand in science, see [172,48]; an interesting general article on invisible hand explanations is [230]. I don’t know where the term “reputation economy” originates; it has been in wide use since the 1990s (and perhaps earlier), but the idea is much older. p 194: SPIRES is at http://www.slac.stanford.edu/spires/. The physics preprint arXiv is, as previously noted, at http://arxiv.org.

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Jon Udell’s Radio blog, March 4, 2002. http://radio-weblogs.com/0100887/2002/03/04.html. [229] UK Medical Research Council policy on data sharing and preservation. http://www.mrc.ac.uk/Ourresearch/Ethicsresearchguidance/ Datasharinginitiative/Policy/index.htm. [230] Edna Ullmann-Margalit. Invisible-hand explanations. Synthese, 39(2): 263–291, 1978. [231] Vernor Vinge. Rainbows End. New York: Tor, 2007. [232] Steven S. Vogt, R. Paul Butler, Eugenio J. Rivera, Nader Haghighipour, Gregory W. Henry, and Michael H. Williamson. The Lick-Carnegie Exoplanet Survey: A 3.1 M_Earth planet in the habitable zone of the nearby M3V star Gliese 581. eprint arXiv:1009.5733, 2010

The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us
by Robert H. Frank, Philip J. Cook
Published 2 May 2011

Wall Street money manager George Soros is not quite a celebrity, yet there is no denying the power of his $ 1 . 1 billion 1993 income to capture the imaginations of ambitious col­ lege students. 15 It is easy to think of examples of the relative handful who have made it big, but much harder to summon individual exam­ ples from the multitudes of anonymous individuals who have not; and hence, in part, the biased perception in favor of success. The invisible-hand theory says that we get socially optimal career choices when people make well-informed, self-serving decisions on the basis of market incentives. But it also says, by implication at least, that if people generally overestimate their prospects in winner-take-all markets, the resulting career choices will not be socially (or even indi­ vidually ) optimal.

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If our goal, as before, is to maximize society's total income, we should keep investing in performance enhancement as long as the last dollar invested yields at least a dollar's worth of extra performance. (If the last dollar invested had yielded less than an extra dollar's worth, it would have been better to invest less. ) Does an invisible hand lead contestants to invest in accordance with this criterion? Unfortunately, the answer seems to be no. The dif­ ficulty is that whereas from society's point of view we want invest­ ments to be driven by their effect on the value of the final product, the primary concern from each contestant's point of view is their effect on who will be the winner.

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TIlls cost­ benefit test presumes that the value of what can be bought with extra income is independent of what others buy, which implies that the pri­ vate and social incentives regarding work are one and the same. But when satisfaction-or the likelihood of promotion-depends not only on absolute but also on relative effort, the invisible hand breaks down. At the individual level, for example, each worker's goal may be to en­ hance her odds of promotion by working a little longer. The logic of this strategy, economist Lotte Bailyn explains, follows from the fact that it is much easier for the employer to measure and reward a work­ er's hours than to measure the amount she actually produces.36 But if all workers pursue this strategy, they are destined to be frustrated, for no matter how much they work, there are only so many slots for pro­ motion.

Animal Spirits: The American Pursuit of Vitality From Camp Meeting to Wall Street
by Jackson Lears

It is no accident that this quotation from Wealth of Nations appears prominently on the Web page of the Liberty Fund, a libertarian think tank: By preferring the support of domestick to that of foreign industry, [the individual] intends only his own security; and by directing that industry in such a matter as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. By the time Smith published these words in 1776, the invocation of an invisible hand or its equivalent was a familiar rhetorical move in natural history as well as social, economic, and political thought. Enlightenment thinkers were keenly aware of the foundational (or anti-foundational) role of chance in the cosmos—the capacity of fortune to undermine rational order and systems.

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The last stage of the process, the transformation of private into public wealth, was left largely unarticulated—except by passages like this one from Smith’s Theory of Moral Sentiments, which revealed a kind of invincible innocence: The rich … divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessities of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interests of the society, and afford means to the multiplication of the species. While Smith’s invisible hand was one of many instruments of self-organization imagined by eighteenth-century thinkers, his particular version of the trope met a peculiarly urgent ideological need, at least for moral philosophers like himself—the need to provide moral legitimacy for the life of trade, to make commerce seem like more than an amoral scramble.

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“extremely small bodies”: René Descartes, cited in John Sutton, Philosophy and Memory Traces: Descartes to Connectionism (1998), 103. “always include a force”: Pierre Gassendi, cited in Jonathan Sheehan and Dror Wahrman, Invisible Hands: Self-Organization and the Eighteenth Century (2015), 28. “moving animal spirits”: Thomas Willis, The Practice of Physick (1684), 36. “Magically and Sympathetically”: Ralph Cudworth, The True Intellectual System of the Universe (1678), 162. “there must be something more”: Sheehan and Wahrman, Invisible Hands, 168. declared the only legitimate prayer to be spontaneous: Lori Branch, Rituals of Spontaneity: Sentiment and Secularism from Free Prayer to Wordsworth (2006), chap. 1.

The Ages of Globalization
by Jeffrey D. Sachs
Published 2 Jun 2020

While greed by itself might be unappetizing and seem to be antisocial, the unleashing of greed could in fact lead to the common good. Thus was born the idea that Adam Smith would crystalize as the “invisible hand”—the idea that the pursuit of self-interest by each person promotes the common interest of society as a whole as if by an invisible hand. Smith himself was a moralist and a believer in personal virtues, self-restraint, and justice. Yet Smith’s concept of the invisible hand quickly became an argument to let market forces play out as they might, no matter the distributional consequences. The first statement of this counterintuitive idea came not from Smith but from a London-based pamphleteer and poet at the start of the eighteenth century, Bernard Mandeville, in an ingenious poem called “The Fable of the Bees.”

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See information and communications technologies Ieyasu, Tokugawa, 150 illiteracy, of countries, 164, 164–65 impartial spectator, 124 imperialism, 107 India, 148–49 Indian Ocean, 97, 102–4 indigenous people, 102, 116–20 Indo-European language, 50, 64–65 Industrial Age, 2, 4, 7, 11, 195; Britain entering, 133; globalization in, 129; lessons from, 167–68; steam engine in, 16–17, 131–34, 132 industrialization, 5, 7–9; of Britain, 135–38, 142–43, 155; coal in, 27–28, 145; colonial era ending and, 163–64; economic divergence in, 144, 144; Europe’s diffusion of, 141–43; global patterns of, 145–46; of Japan, 150; self-sustaining, 137–38; stages of, 141 industrial production, 14 Industrial Revolution, 17, 138 inequalities, 196–97; challenges from, 185–86; economic, 184; gender, 199; technological changes for, 30 Influence of Sea Power Upon History, 1660–1783, The (Mahan), 112 information, 169 information and communications technologies (ICTs), 141 information technologies, 4–5 infrastructure development, 161 innovative designs, 138–41 In Praise of Folly (Erasmus), 105 input layer, 174 inquiry, age of, 104–6 institutions, 1, 17, 18, 19–20 integrated circuits, 171–72 intelligent technologies, 141 internal combustion engines, 4 International Monetary Fund, 161, 178 investments, 183 invisible hand, 114 iron, 61–62 irrigation, 47 Isabella (queen), 99, 108 Islam, 78, 85–88 Iwakura Mission, 151 James II (king of Britain), 122 Japan: China invaded by, 147; feudal structure of, 151; geography of, 150; industrialization of, 150; as military powerhouse, 146; population of, 150; Russo-Japanese War and, 151; Sino-Japan War and, 151 Jaspers, Karl, 70–71 Jeopardy (game show), 175 Jesuit Order of the Catholic Church, 106 Jin Dynasty, 90 job losses, 185 Judaism, 67 Jurchen horsemen, 90 Kant, Immanuel, 207, 212 Kasparov, Garry, 175–76 Kelekna, Pita, 62, 81 Kennedy, John F., 30–31, 200, 211, 213–14 Kenya-Somalia border, 190, 191 Keynes, John Maynard, 155–56, 158 Kievan Rus, 92 Kilby, Jack, 171 kingdoms, of Egypt, 66 King William’s War, 122 knowledge, advancements in, 105–6 Koch, Alexander, 102 Kondratiev, Nikolai, 139 Kondratiev waves, 139–41, 140 Köppen-Geiger climate system, 22–23, 23, 218 Köppen-Geiger Mediterranean climate zone, 79 Kuhn, Dieter, 90 Kurki, Sofi, 139, 141 land areas, 228n10 land-based empires, 3–4, 73–76 land grants (encomiendas), 117 land power (tellurocracy), 72 land use, 103, 188, 222–23 language, 38, 167; book writings with, 71; in China, 72; from Europe, 50, 64–65; Indo-European, 50, 64–65.

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See Sustainable Development Goals sea level rise, 192, 192 sea power (thalassocracy), 72–73 secondary sectors, 14–16 Second Opium War, 147 Security Council, 209, 210 sedentism, 41, 43–45 Sedol, Lee, 176 Seleucid Empire, 77 self-driving trucks, 186 Seljuk group, 65 semiconductors, 171 Seven Years’ War, 122, 148 Shandong, China, 191 Shang Dynasty, 48 Shannon, Claude, 171 shared reality, 214 ships, cannon-laden, 104 Silk Road, 24, 84, 85, 98 Sino-Japan War, 151 skilled workers, 186 slavery: from Africa, 118, 118–19; indigenous people and, 116–20; North America plantations with, 119; Saint-Domingue rebellion of, 121; for sugar plantations, 120; in temperate zone, 119 smallpox, 102 smart machines, 202 Smith, Adam, 98; global empires summation by, 124–26; invisible hand from, 114; Wealth of Nations by, 26, 124, 131, 196 Social Conquest of Earth, The (Wilson, E.), 170 social democracy, 202 social-democratic ethos, 201–3 social institutions, 19–20 societies: Eurasia with horse-based, 62–63, 65; Greek, 76–79; hierarchical structure of, 39; horse-based, 59; human, 38–40 soil nutrients, 19 Song Dynasty, 88–91, 89, 104 Soviet Union, 30, 161–62, 207 Spain, 97, 108–11, 110 state law, 71 steam engine, 4; global trading of, 137; in Industrial Age, 16–17, 131–34, 132; Watt patenting, 17 steel, 139 steppes: of Asia, 53; climate zones of, 53; Eurasian, 24, 54; horse domestication in, 59; migration from, 64 subsidiarity doctrine, 196, 203–4 sugar, 119–20 sugar plantations, 120 Summa Theologica (Aquinas), 78 Sun Yat-Sen, 147 sustainable agriculture, 13 sustainable development, 31, 183–85, 196–200; economic growth from, 187; governance of, 200; public goods for, 204–5; religious leaders on, 211–12; U.N. goals of, 198, 201–2 Sustainable Development Goals (SDG), 178, 198, 202 syphilis, 102 tabula rasa (blank-slate learning), 176 Taiping Rebellion, 147 tea infusion, 152 technologies, 1–2, 11, 18, 70; digital, 181; digital revolution and, 166; economic development from, 21; environmental impact of, 188–90; Eurasian advances in, 49; of farm villages, 45; geography and, 18; of Han Empire, 82; horses distributing, 64; inequalities and changes in, 30; information, 4–5; innovative designs for, 138–41; institutions and, 17; intelligent, 141; lucky latitudes innovations in, 50–51; military, 29–30; naval, 96; North America cut off from, 51–52; Old World, 21; for poverty reduction, 177; upheavals from, 130; U.S. advances in, 160; wireless, 181 tellurocracy (land power), 72 temperate zones: advantages to, 22–25; empires, 51; of Eurasia, 48; slavery in, 119 territorial competition, 28 tertiary sectors, 14–16 textile industry, 134; of Britain, 121; of India, 149; robots in, 186 thalassocracy (sea power), 72–73 theileria parva (equine piroplasmosis), 55 Thirty Years’ War, 156–57 Thucydides, 75 Timurid Empire, 83, 93, 93–94 tin mines, 61 tobacco, 119–20 Tokugawa Shogunate, 150 trade, 67 Trajan (emperor), 79 transistors, 171, 172 transnational cooperation, 205 transoceanic empires, 4 transportation vehicle, 54 transport systems, 203 Treaty of Tordesillas (1494), 109–10 Treaty of Versailles, 157 Treaty of Zaragoza (1529), 109–10 triangular trade, 119 tropical vector-borne diseases, 49, 117 tropical zones, 22–23 trucks, self-driving, 186 trypanosomiasis disease, 50 tsetse flies, 56, 152 Turing, Alan, 170, 173 Turing machine, 170 Turkish tribes, 88 Turse, Nick, 162 U.K.

How to Fix the Future: Staying Human in the Digital Age
by Andrew Keen
Published 1 Mar 2018

That can only be good news for those of us, like Steve Case or Margrethe Vestager, who want to flatten the winner-take-all landscape and build a fairer world. Not everyone, I’m guessing, will agree that the best way to fix the future is through legislation. There will be those who say that rather than Case’s visible hand, it’s actually what Adam Smith called the “invisible hand” of the free market that remains the best guarantor of innovation. Perhaps. To test this theory, let’s return to where we began this journey—to the Alte Teppichfabrik, that industrial relic in Berlin, where some of Germany’s most innovative free market digital entrepreneurs are attending the “Encrypted and Decentralized” conference.

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Those “values,” however, aren’t just ethical—they are also the values of the free market. As the event’s keynote speaker, Brad Burnham—the cofounder and managing partner at the New York City–based venture capital firm Union Square Ventures—tells the Berlin audience, “The great thing about capitalism is that it’s the only choice.” And so, according to Burnham at least, it’s the invisible hand of the market rather than the visible hand of Vestager’s EU that can now reinvent the digital economy. “We are now living in a world resembling 1995,” Burnham explains. “It’s a world of smaller companies, a new age of innovation from below.” As I’ve already suggested, there really aren’t any original ideas in tech.

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Moreover, the online advertising industry—with its myriad layers of brokers and agencies and its byzantine systems for the automated buying and selling of ads—is, according to the Financial Times’ business columnist John Gapper, “bafflingly complex.” It’s so complex, in fact, he says, that even “regulators are failing to block fraudulent ads.”10 So, rather than with the visible hand, the solution may lie in the invisible hand of the market, in the consumer demand for digital cleaning services such as Adblock Plus that, at the click of a mouse, banish the trash from our screens. Schumacher is perfectly serious when he claims that Adblock Plus is establishing a healthy new publishing ecosystem for the internet. Many publishers, however, completely disagree—arguing that this ad-blocking product is actually destroying their advertising-supported businesses.

Capital Ideas Evolving
by Peter L. Bernstein
Published 3 May 2007

Barclays Global Investors: “It Was an Evangelical Undertaking” 11. The Yale Endowment Fund: Uninstitutional Behavior 12. CAPM II: The Great Alpha Dream Machine: We Don’t See Expected Returns 13. Making Alpha Portable: “That’s Become the New Mantra” 14. Martin Leibowitz: CAPM in a New Suit of Clothes 15. Goldman Sachs Asset Management: “I Know the Invisible Hand Is Still There” 127 148 165 179 196 214 PART IV: CAPITAL IDEAS TOMORROW 16. Nothing Stands Still 237 Notes Bibliography Acknowledgments Index 247 252 261 263 bern_a03fpref.qxd 3/23/07 8:43 AM Page ix Preface Theorists can always resist facts; for facts are hard to establish and are always changing anyway, and ceteris paribus can be made to absorb a good deal of punishment.

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If he had only given us thirty-three articles in the Financial Analysts Journal and nineteen in The Journal of Portfolio Management— Dayenu! If he had only given us all the wonders I have omitted—Dayenu! If he had only been the nicest, the most generous, the most entertaining friend all of us are honored to have—Dayenu! bern_c15.qxd 3/23/07 9:11 AM Page 214 15 Goldman Sachs Asset Management “I Know the Invisible Hand Is Still There” ischer Black moved from MIT to Goldman Sachs in 1984. Shortly after his arrival in New York, Black expressed one of his most enduring observations: “The market appears a lot more efficient on the banks of the Charles River than it does on the banks of the Hudson.” Black’s quip was welcome news to his associates at Goldman.

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“We do not shun risk, because, along with Fischer, we are convinced that expected returns vary directly with risk—that is what Fischer meant and what I mean when I refer to ‘equilibrium.’ This belief is at the core of all our strategies. Equilibrium, and the notion of the world moving toward equilibrium, is at the heart of the way we think about the world. I know the Invisible Hand is still there.”  Day-to-day portfolio management has to go forward, and Litterman recognizes you cannot just sit back and let the forces of equilibrium run the show: “We are determined to keep volatility under tight control so that it does not exceed the clients’ specifications as to how much benchmark risk and tracking error they can tolerate.

A Small Farm Future: Making the Case for a Society Built Around Local Economies, Self-Provisioning, Agricultural Diversity and a Shared Earth
by Chris Smaje
Published 14 Aug 2020

Though farming and food production has never been as industrialisable as manufacturing, much the same occurred: corporate plantation agriculture in tropical colonised countries and agribusiness models of the kind pioneered in Chicago, where cowboys and small-scale prairie farmers were the initial feedstock for an increasingly mechanised global distribution system of meat and grain that ultimately dispensed with them in the Global North.116 A common image we still have of capitalism is the innovative entrepreneur opening up a new and lucrative market niche (the alternative farming sector has its own versions of this) with the invisible hand of the market delivering public benefit (supply matching demand) out of private vice (profit-motivated self-interest).117 The idea is still routinely invoked as a justification of modern capitalism, but it’s out of date. A more apposite image nowadays for financialised, corporate capital is the visible – though sometimes velveted – fist, aimed at anyone who contests its logic, and many of those who don’t.

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This lesson is written into our concept of utopia – an improved or perfected society of ideal well-being, which we correctly view as an impossibility (a ‘no-place’ in its Greek etymology). And yet we’ve come to think that the pursuit of private, individual self-interest creates ever-compounding public benefit through mystical concepts like Adam Smith’s invisible hand of the market.149 In service of such concepts we restrict the ability of our political communities to limit private accumulation through markets, instead combusting ever more fossil fuels that imperil the ability of Earth to sustain its current complement of life in order to produce mass consumer goods and possibilities for endless travel that we think will improve our happiness.

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If there’s no place in your utopia for providing these for yourself, you’ll have to consider what you can offer people who are willing to provide them for you, and weigh the implications of your extreme dependence on their goodwill. Against that background, I’d suggest that Nozick’s framework implicitly generates something like a small farm future of widespread material self-provision. This is especially so once we’ve jettisoned, as I think we must, all the fanciful metaphors – the downward trickles, rising tides and invisible hands – by which the global wealthy convince themselves that the pursuit of the wealth accruing mostly to themselves is actually a help to the poor. Of course, in the real world nobody gets to sit down and choose their individual utopia. Small farm utopias have been thin on the ground historically because control of land and its agricultural potential has been monopolised by centralising elite power.

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis
by Anatole Kaletsky
Published 22 Jun 2010

Hoping that “something will turn up” may sound like deluded wishful thinking, but it is really just an extension into politics and macroeconomics of Adam Smith’s arguments about the self-organizing dynamics of the capitalist economy. Smith showed how the “invisible hand” of competitive markets automatically coordinates the actions of millions of individuals pursuing their own self-interest so that they satisfy each other’s needs, despite the fact that no one is thinking consciously about the common good. This same invisible hand steers individual initiative and creativity toward solutions of society’s collective problems, provided two conditions are satisfied. First, the process of spontaneous self-organization must be given enough time to produce new adaptations after each of capitalism’s periodic crises.

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Smith observed that a market economy, although it involves millions of unconnected individuals who work at highly specialized and narrow tasks, is a naturally self-organizing mechanism provided a few simple rules of commerce and mutual trust are generally obeyed and enforced. This self-organizing system produces mutually satisfactory outcomes as if it were guided by an “invisible hand,” but without the need for supernatural or divine intervention. And individuals, as long as they act predictably within this mutually agreed social framework, can satisfy each other’s material needs simply by pursuing their own self-interest. To provide useful services to other people, we do not need to know them, love them, or anticipate their desires.

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What set off this dynamic megatrend was the interaction between three historic events described in the last chapter—the breakup of the Soviet bloc, the opening up of China, and the end of proxy wars between communism and capitalism in the developing world. The result was that almost the entire world’s population found their lives guided for the first time by the invisible hand of market forces, instead of being ruled by the iron fists of communism and feudalism or the clumsy robotic grip of central planning. Two, globalization transformed almost every economic activity in every country, as the principles of market competition, private enterprise, and free trade won universal acceptance after the breakdown of central planning and state ownership.

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas
by Janek Wasserman
Published 23 Sep 2019

On unemployment, see 148–49. His discussion of “security against privation” defends the ideas of a universal minimum income and minimum provisions of food, shelter, and clothing in developed countries. 42. Ibid., 238. 43. Ibid., 20–23. 44. Phillips-Fein, Invisible Hands, 15–19, 41–42. The Hayek quotation appears in Road, 20. 45. Phillips-Fein, Invisible Hands, 27–34, 42–43; Nik-Khah and Van Horn, “Inland Empire.” 46. Morgenstern, Diaries, October 25, 1943, Box 13, OMP; Morgenstern, Diaries, April 19, 1945, Box 14, OMP. 47. Morgenstern, Diaries, July 12, 1941, Box 13, OMP, also quoted in Leonard, Von Neumann, 225.

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Friedman and Friedman, Two Lucky People, 161. 33. Quoted in Hülsmann, Mises, 799, 802. For Mises’s financial status, see Bilo, “Mises in NYC.” 34. Quoted in Hülsmann, Mises, 823. On NAM, see Phillips-Fein, Invisible Hands, 56–60. 35. On California conservatism, see Olmsted, California; McGirr, Suburban Warriors. See also Nash, Conservative, especially 13; and Phillips-Fein, Invisible Hands, 34–51. 36. Hazlitt, “Capitalism,” 70. On Human Action, see Hülsmann, Mises, 884–87, 893–95. On Rand and Mises, see Burns, Goddess, 141–43. 37. Mises, Human Action, 3. 38. Ibid., 32. On Hayek-Mises, see Caldwell, Hayek’s Challenge, 119–26, 193–96.

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On the MPS and the World Economic Forum, see Carroll and Sapinski, “Neoliberalism.” 3. On the MPS, see Walpen, Die offenen Feinde; Mirowski and Plehwe, Mont Pèlerin; Burgin, Great Persuasion. The official history of MPS is also helpful: Hartwell, History. For a list of the first participants, see Walpen, Die offenen Feinde, 391–92. Phillips-Fein, in Invisible Hands, 41–51, details the involvement of anti–New Deal businessmen. 4. On economics imperialism, see Lazear, “Economic Imperialism”; Nik-Khah and Van Horn, “Inland Empire.” 5. Lionel Robbins drafted the preamble. On US social science, see Cohen-Cole, Open Mind. On the transition of the Austrian civilizational project, see Dekker, Viennese Students, 141–50, 176–80.

The Evolution of Everything: How New Ideas Emerge
by Matt Ridley

As so often, Smith got there first, saying in The Wealth of Nations: ‘The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.’ Invisible hands This decentralised emergence of order and complexity is the essence of the evolutionary idea that Adam Smith crystallised in 1776. In his famous metaphor, Smith made the guiding hand invisible: each person ‘intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention’. Yet when Smith wrote his Wealth of Nations, there was little good evidence for his central idea that free exchange of goods and services would produce general prosperity.

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Gradually, by trial and error, a child discovers what behaviour leads to mutual sympathy of sentiments, and therefore can make him or her happy by making others happy. It is through everybody accommodating their desires to those of others that a system of shared morality arises, according to Smith. An invisible hand (the phrase first appears in Smith’s lectures on astronomy, then here in Moral Sentiments and once more in The Wealth of Nations) guides us towards a common moral code. Otteson explains that the hand is invisible, because people are not setting out to create a shared system of morality; they aim only to achieve mutual sympathy now with the people they are dealing with.

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And that, churchmen aside, is where all the disagreement about markets comes from. Fine in theory, useless in practice – so goes the verdict of most right-thinking people on the topic of markets. The question then becomes whether commerce only works if it is perfect. Are semi-free markets better than none? The economist William Easterly is in no doubt that the invisible hand is not Utopia: ‘It is the process of driving out of business the incompetent in favour of the mediocre, the mediocre in favour of the good, and the good in favour of the excellent.’ A glance at economic history makes clear that countries run by and in the interests of merchants have not been perfect, but they have always been more prosperous, peaceful and cultured than countries run by despots.

Prosperity Without Growth: Foundations for the Economy of Tomorrow
by Tim Jackson
Published 8 Dec 2016

‘It is not from the benevolence of the butcher, the brewer and the baker that we expect our dinner, but from their regard to their own self-interest’, Smith famously wrote in An Inquiry into the Nature and Causes of the Wealth of Nations. Everyone is continually exerting himself in his own self-interest, said Smith. ‘It is his own advantage, indeed and not that of the society, which he has in view’, but ‘he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention’.31 The metaphor of the invisible hand turned out to be an extraordinarily powerful one and it has been central to modern economics. Even though Smith himself wrote passionately about the dangers of corporate interests and the indispensable role for government in curbing these, this one single metaphor has motivated a ferocious defence of the virtues of an unbridled ‘free market’ in which self-interest is given full rein.

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If selection takes place at the level of the individual, it should, in the long run, favour the evolution of individuals who exhibit only selfish (i.e., self-preserving) behaviour. Selfishness attained not just a legendary but an evolutionary status. It is interesting to note the parallels between early economics and nineteenth-century evolutionary thought. Just as the self-interest of economic agents is supposed to lead ‘as if by an invisible hand’ to the most favourable outcome for society, so the self-interest of individuals is supposed to lead through ‘the survival of the fittest’ to the most favourable outcome for species. Economics has continued to ‘borrow’ credibility for the centrality of self-interest from the theory of evolution ever since.

…

The collapse of communism in the 1990s did nothing to persuade ordinary people that an active, interventionist state can be a good thing. The historical weaknesses of communism – the corruption of power, the erosion of autonomy, the destructive nature of its economic model – appear to underline the same message. Big government is bad for prosperity. Quite often justification for this position is sought in the metaphor of the ‘invisible hand’ and the writings of Adam Smith. But it’s useful to recall (Chapter 7) that Smith himself was intensely aware of the distorting power of corporate interests, and argued specifically that government was essential to keep these in check. The bigger the interests, the greater the power needed by government, to protect society against corruption and capture, according to Smith.2 By the middle of the twentieth century, two almost diametrically opposed conceptions of governance lay at the heart of debates about economics.

The Entrepreneurial State: Debunking Public vs. Private Sector Myths
by Mariana Mazzucato
Published 1 Jan 2011

‘me too’ 64–7; see also pharmaceutical companies (‘pharma’); specific drugs Duhigg, Charles 173–4 DuPont 178–9 economic crisis: boosting clean technologies 142–3; causes of 12, 182; public sector blamed for 15, 17; varied impact of in EU 41 Economist, view on State and enterprise 16 ‘ecosystems’: see innovation ecosystems electric cars/vehicles 108, 123, 124, 133 Electric Power Research Institute (EPRI) 151 Elias, John 102–3 email 104 End of Laissez Faire, The (Keynes) 4, 194 endogenous growth theory: see ‘new growth’ theory energy crisis 137, 144–5; see also green industrial revolution Energy Frontier Research Centers (EFRCs) 133 Enron 148 ‘enterprise zones’ 54 ‘entrepreneurial’ State: building of 54, 196–7; growth and inequality in 183; risk assumption and vision of 24; role of 6, 10, 21, 23; see also State Entrepreneurial State, The (report) 2, 3 entrepreneurs: DARPA’s brokering role with 77; financing of 57; investment choices of 136; myth of in Silicon Valley 63; risk types and 58–9; SBIR funding to 80, 188 EPA (Environmental Protection Agency) 150 equitable growth 13, 177, 185 European Organization for Nuclear Research (CERN) 101 ‘European Paradox’ 53 European Union: approach to green initiatives 124; ‘Big State’ behind innovation in 166; feed-in tariffs in 153; ‘fiscal compact’ of 42, 197; green transition targets in 115n2; gross R&D spending as percentage of GDP 43; growth producing spending in 196; investment in renewable energy 120, 121; public sectors in 17–18; R&D targets of 41; weaknesses of countries in 52–3 Evans, Peter 4 Evergreen Solar 151–2, 162 Evolutionary Theory of Economic Change, An (Nelson and Winter) 34–5 ‘evolutionary theory’ of production 34–5 ‘exogenous growth theory’ 34 externalities 4, 7, 21, 168; see also Apple Fadell, Tony 100n8; see also Apple Fairchild Semiconductor 76 fast Fourier transform (FDT) algorithm 109 feed-in tariffs: in energy technology 114; in European markets 153; German 122, 138, 149, 156; policy changes in 125n7; UK 124 Fert, Albert 96 Fiegerman, Seth 171n3 finance firms 182 financialization 25–8 FingerWorks 103 Finland 120n4, 121, 190 First Solar (formerly Solar Cells Inc.) 128–9, 151, 159–60; see also green industrial revolution Fiscal Investment Loan Program (Japan) 40 flat panel display (FPD) industry 106 Florida, Richard 107 Forbes on WuxiSuntech 153 ‘Fordist’ model of production in 38–9 Foxconn 170–71 France 61, 120, 120n4, 121 Freeman, Chris 193 Fuchs, Erica 133 Funding a Revolution: Government Support for Computing Research 63 G4S, security company 16 game theory 36 GDP, balance in categories of 30 Gedser turbine 145 Genentech Inc. 57, 69, 81 General Electric (GE) 125, 137, 147–8, 160–61, 174n5 general purpose technologies (GPTs) 62, 83 Genzyme 81, 181 Germany: feed-in tariffs 122, 138, 149, 156; government energy R&D spending 121; green revolution in 115n2, 116, 120, 122; long-term support provided by 158; public R&D spending in 61, 144–6; solar resources of 144; State investment bank 190; systems of innovation in 37; wind energy and R&D projects in 144–6, 149, 156 Ghosh, Shikhar 127 giant magnetoresistance (GMR) 96–7 GlaxoSmithKline 66–7, 82 Global Wind Energy Council (GWEC) 138–9 Goldwind 149 Goodenough, John B. 108 Google 20, 174–5 government energy R&D spending 121, 121 GPS (global positioning system) 105, 105n12 Great Transformation, The (Polanyi) 194–5 Greece, R&D/GDP 52 Green, Martin 152 green industrial revolution: ARPA-E 133–5; ‘carbon lock-in’ 117; China’s ‘green’ 5 year plan 122–4; climate change 117, 123, 135; development banks funding of 139–40, 139n14; DoE role in 132–3; Economist on 16; financial commitment for 116; funding of 116–19; global new investment in renewable energy 120; government energy R&D spending 121; government support to 114–15, 119, 129, 141–2; hurdles to 138, 156, 160; leaders in 11–12, 126; national approaches to 119–22; ‘No More Solyndras Act’ 130–31n12; patient capital 138–40; policies impacting 113–15, 119; pushing green development 136–7; renewable energy credits (RECs) 115n1; smart grid technology in 115, 118; sustainability 117, 119, 123; UK’s approach to 124–6; US approach to 126–35; venture capital in 127–9, 128n9; venture capital subsectors in 128; see also clean technology; solar power; wind power Green Investment Bank 125n7 Gronet, Chris 151 growth: economy-wide 62; effect of venture capital on 49; of firms and R&D benefit 44; firm size relationship to 45–6; ‘inclusive’ 167, 183, 195; inequality and 31, 54, 177; innovation as key source of 9, 177; measures of 33; myths about innovation and 10; national debt relationship to 18; ‘smart’ 167, 183; and technology 33–4; theories of 33–4; variables important for 18; see also equitable growth Grünberg, Peter 96, 97 Grunwald, Michael 113, 136 Haltiwanger, J 45 Hamilton, Alexander 73 Hanwha Group 157 hard disk drives (HDD) 96–7, 109 Harrison, Brian 154 Harrod, Roy F. 33 Haslam, Karen 171n3 Heymann, Matthias 145 Hoffman Electronics 150, 150n4 Hopkins, Matt 129n10, 160 House of Commons Energy and Climate Change Committee 125 Hsieh, Chang-Tai 46 HTTP/HTML 103–5, 109 Hughes, Alan 45 Hurst, Samuel 101 IBM 50, 97, 104, 107 ‘iGesture Numpad’ 103 Ill Fares the Land (Judt) 1 Immelt, Jeffrey 126 income-contingent loans and equity 189–90 income distribution 30n1 India 45–6, 120 industrial policy: challenges to 13; decentralized 78; in ‘rebalancing’ of economies 27; recent US history of 10, 21; redistributive tools needed in 167; State led 40; see also ‘picking winners’ inequality: as debilitating economic issue 177; growth impacted by 31; reducing 166, 186; shareholders as source of 183; tax cut impact on 54 information and communications technology (ICT) 50, 118 Information Processing Techniques Office (DARPA’s) 76 Innovalight 158 innovation: collective character of 183–7, 193; ‘culture’ of 87; as cumulative 167, 187; Death Valley stage of 47, 48, 122; development banks fostering 139–40; development of 3, 41–2; and distribution 186; economic growth driven by 9; firms resisting pressure for 77; global process of 155; government support for 31; in Japan 37–8; macro models on 44; myths about 10, 22; myths of R&D being about 44; ‘open innovation’ model of 25, 27; patent increase relationship to 50–51; process in energy technology 114; Schumpeterian innovation economics 5; State as a force in 5, 166; State leading in risky 62–4; stock market speculation and 49–50; tax policy impact on 51; threatened in US 24; undermining of in US 53, 183, 187; US 24; see also ‘systems of innovation’ approach innovation ecosystems: cumulative innovation curve in 167–8; open systems 193; socioeconomic prosperity dependence on 179; symbiotic vs. parasitic 23–5, 155, 162–3, 179; types of 2; see also actors ‘innovation fund’ 189 innovation networks 36, 40 innovation policy 22–3, 44, 46, 54, 167 Inquiry into the Nature and Causes of the Wealth of Nations, An (Smith) 1; see also ‘Invisible Hand’ Institute for Fiscal Studies (IFS) 51–2 institutional change, assessment of 36 integrated circuits 98, 98n6 Intel 130n11 intellectual property protection 110 intellectual property rights 174 International Bank for Reconstruction and Development (IBRD) 5 Internet: Apple’s use of 109; commercialization of 22; DARPA’s role in 76; and HTTP/HTML 103–5, 109; origin of 63; public funding behind 105 interventionist policy 83 investment returns, social vs. private 3–4 ‘Invisible Hand’ 30 iOS mobile operating system 89–90 iPad 102, 105, 109, 111n14 iPhone 101–3, 105–6, 109 iPlayer 16 iPod 95–6, 100–102, 105, 109, 110 Ireland 120n4, 121, 121 IRS 529 plans 111, 111n15 Italy 17, 39, 41, 52, 121 Jacobs 149 Janeway, William H. 49–50 Japan: Apple entering market of 110; computer electronics competition by 97, 98, 98n7, 106–7; economic growth of 37–8; finance system coordination by 40; flat panel display (FPD) industry of 106; government energy R&D spending 121; lithium-ion battery perfection by 108; MITI 37–8, 40; public R&D spending in 61; systems of innovation in vs.

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(Lent and Lockwood 2010, 7) This is the view that asks little of government other than correcting market failures – such as through investment in basic science, education and infrastructure. The ‘appropriate’ role of the State is not a new debate, but it is one that benefits from a broader understanding of the academic literature on the role of innovation in creating economic growth. Over two hundred and fifty years ago, when discussing his notion of the ‘Invisible Hand’, Adam Smith argued that capitalist markets left on their own would self-regulate, with the State’s role being limited to that of creating basic infrastructure (schools, hospitals, motorways) and making sure that private property, and ‘trust’ (a moral code) between actors, were nurtured and protected (Smith 1904 [1776]).

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‘Information Management: A Proposal’. CERN. Available online at http://info.cern.ch/Proposal.html (accessed 22 January 2013). Block, F. L. 2008. ‘Swimming against the Current: The Rise of a Hidden Developmental State in the United States’. Politics and Society 36, no. 2 (June): 169–206. _____. 2011. ‘Innovation and the Invisible Hand of Government’. In State of Innovation: The U.S. Government’s Role in Technology Development, edited by F. L. Block and M. R. Keller. Boulder, CO: Paradigm Publishers. Block, F. L. and M. R. Keller, eds. 2011a. State of Innovation: The U.S. Government’s Role in Technology Development. Boulder, CO: Paradigm Publishers. _____. 2011b.

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
by Brink Lindsey
Published 12 Oct 2017

The missing narrative is that government has contributed actively to inequality, not just by failing to restrain naturally inegalitarian market forces but by distorting market forces in an inegalitarian direction. The rise of inequality is, to a significant extent, a function of state action rather than the invisible hand. And this state action, by suppressing and misdirecting entrepreneurship and competition, has rendered our economy less innovative and dynamic as well as less fair. II BIPARTISAN BLIND SPOT Recognition of this possibility has been slow in coming because of an ideological blind spot shared by left and right alike.

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In the ideal market economy, the rules of the game are set so that the desire for private gain is channeled into bettering the lives of others. In the ideal democracy, the mechanisms of government are devised so that the clash of contending opinions and interests is converted into policies that serve the common good. To the extent that rent-seeking holds sway, the invisible hand of capitalism degenerates into the grasping hand of crony capitalism, and the lofty pursuit of the public interest devolves into a feeding frenzy of special interests. Free markets depend, paradoxically for some, on the existence of a state strong enough to enforce the rules of the game in an impartial, public-spirited fashion.

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See also copyright/patent law benefits of protecting, 64–65 concentrated benefits and, 131 costs of expansion of, 75–81 digital era and, 70–71 European views on, 65, 76, 195n32 information imbalance and, 139–40 institutional bias and, 149 market failure and, 68–69, 74 monopolies and, 85 morality of, 84–89, 195n32 policy image and, 141–45 rent-seeking and, 64 interest rates, 40, 51–54, 59 International Monetary Fund (IMF), 60 Internet. See digital era/information technology intolerance, 2–3 invisible hand, 6, 18 Islam, Roumeen, 61 Issa, Darrell, 176 IT. See digital era/information technology Jones Act, 33 judicial review, 170–75 Keating, Charles, 54 Kelo v. New London, 135 Kimball, David, 132 Kleiner, Morris, 94–95, 99, 105 “kludgeocracy”, 129 Krueger, Alan, 95 Kwak, James, 142 land-use regulations, 32–33, 109–26, 159, 208n14.

Wealth and Poverty: A New Edition for the Twenty-First Century
by George Gilder
Published 30 Apr 1981

By focusing on incentives rather than on information, free market economists have encouraged the idea that capitalism is based on greed. But greed, in fact, prompts capitalists to seek government guarantees and subsidies that denature and stultify the works of entrepreneurs. Greed, as I put it in Wealth & Poverty, leads as by an invisible hand to an ever-growing welfare state—to socialism. It is not the enlargement of incentives and rewards that generates growth and progress, profits for the entrepreneur and revenues for the government, but the expansion of information and knowledge. The competitive pursuit of knowledge is not a dog-eat-dog Darwinian struggle.

…

But Suzy Saintly, Barack Obama, and Dan Bricklin are neither improvident nor necessarily less brilliant than Mark. All these arguments are beside the point. The distributions of capitalism make sense, but not because of the virtue or greed of entrepreneurs, nor as inevitable byproducts of the invisible hand. The reason capitalism works is that the creators of wealth are granted the right and burden of reinvesting it. Warren Buffett worries that his average personal tax rate of 17 percent is “unfair” when his secretary pays more. The accuracy of his 17 percent calculation aside (it ignores the 39 percent corporate rate and 55 percent inheritance and other levies), the reason Buffett pays 17 percent has nothing to do with “fairness.”

…

The dilemma was resolved, however, at the very beginning of the industrial revolution by the leading philosopher of classical liberal economics. Adam Smith was at once an intellectual who shared all the typical prejudices against the business class and a libertarian conservative who knew the value of freedom and enterprise. His solution was to locate the source of wealth not in the creative activities of businessmen but in the “invisible hand” of the market. Smith believed that capitalism worked not because of the virtues of capitalists but because of the “great machine” of exchange that converted their apparent greed and vices into economic value. Businessmen may be vulgar and avaricious, full of “childish vanities” and selfish indulgences, said Smith, and “seldom do they gather but to conspire against the public.”

Evil Geniuses: The Unmaking of America: A Recent History
by Kurt Andersen
Published 14 Sep 2020

But in the real world, where humans operate businesses somewhere in the large range between break-even and maximum profitability, they always have leeway to be unnecessarily and uneconomically fair, trustworthy, decent, and responsible—that is, to take slightly smaller profit margins for the sake of good values and virtuous norms. Friedman, and fellow free-market purists ever since, constantly refer to Adam Smith, who came up with the “invisible hand” idea in the 1700s. But they distort him. Smith also argued in favor of sensible government intervention to improve and optimize free markets. Within a few years of the Friedman Doctrine, elite executives-in-training internalized and felt free to espouse it. Asked in a class in the late 1970s at Harvard Business School about a hypothetical CEO who discovers his product could kill customers, young Jeff Skilling said he “would keep making and selling the product.

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See, if you pay less in taxes—and only if you pay less in taxes—America’s economic prosperity and stability will be restored. It’s not selfishness, it’s patriotism. It’s not sleight of hand, or what Reagan’s vice president had derided during his primary campaign against him as “voodoo economics.” It’s the miraculous invisible hand of the market. So what if millionaires would start paying a little less too? So what if big business was relieved of some of the government red tape everybody hates? And as for cutting government programs, people understood that Reagan was only going to get rid of the things that didn’t benefit them—all the waste and fraud, all the foreign aid, all the giveaways for all the lazy bums and welfare queens.

…

A problem with leveraged buyouts and other private equity takeovers, and with financialization in general, is that so often the main point isn’t to create enterprises of lasting value, enabling particular businesses (or American capitalism or American citizens) to prosper for the long term. It is to obtain those fees, the vigorish, and to score by making this deal, and then another deal, and another, because greed is good, kill them all, and let the invisible hand sort it out. As I was beginning this book in 2017, I noticed that big, familiar retail chains were all going under—Toys “R” Us, Payless, The Limited, Gymboree, and many more. Then I noticed that each of them had been subjected to a leveraged buyout, finally choked and smothered by debt piled on by temporary private equity owners.

Nudge: Improving Decisions About Health, Wealth, and Happiness
by Richard H. Thaler and Cass R. Sunstein
Published 7 Apr 2008

Indeed, some of those who are most suspicious of governments think that the only responsibility of private managers is to maximize share prices. As we have emphasized, the invisible hand will, in some circumstances, lead those trying to maximize profits to maximize consumer welfare too. But when consumers are confused about the features of the products they are buying, it can be profit maximizing to exploit their confusion, especially in the short run but possibly in the long run too. The invisible hand works best when products are simple and purchased frequently. We worry very little about consumers being ripped off by their dry cleaners.

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2 We agree that government officials, elected or otherwise, are often captured by private-sector interests whose representatives are seeking to nudge people in directions that will specifically promote their selfish goals. That is one reason that we want to maintain freedom of choice. But if private-sector interests are just following the invisible hand in furthering the interests of their customers, what’s the problem?3 The more serious point is that we should be worried about all choice architects, public and private alike. We should create rules of engagement that reduce fraud and other abuses, that promote healthy competition, that restrict interest-group power, and that create incentives to make it more likely that the architects will serve the public interest.

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We would love to see similar principles used to monitor governments. Require government officials to put all their votes, earmarks, and contributions from lobbyists on their Web sites. Require those determining the future of energy policy (to cite a random example) to reveal which profit-maximizing firms were invited to lend their all-too-invisible hands to the process of designing the rules. Require those determining the future of educational policy to reveal which interest groups, and which unions, gave them money in the most recent campaign. Require government agencies, not merely the private sector, to disclose their contributions to air and water pollution, and their greenhouse gas emissions.

Who Rules the World?
by Noam Chomsky

In Adam Smith’s defense, it should be added that he recognized what would happen if Britain followed the rules of sound economics, now called “neoliberalism.” He warned that if British manufacturers, merchants, and investors turned abroad, they might profit but England would suffer. But he felt that they would be guided by a home bias, so that as if by an “invisible hand” England would be spared the ravages of economic rationality. The passage is hard to miss. It is the one occurrence of the famous phrase “invisible hand” in The Wealth of Nations. The other leading founder of classical economics, David Ricardo, drew similar conclusions, hoping that what is called “home bias” would lead men of property to “be satisfied with the low rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations”—feelings that, he added, “I should be sorry to see weakened.”16 Their predictions aside, the instincts of the classical economists were sound.

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Torture is hideous enough; the invasion of Iraq was a far worse crime. Quite commonly, selective atrocities have this function. Historical amnesia is a dangerous phenomenon not only because it undermines moral and intellectual integrity but also because it lays the groundwork for crimes that still lie ahead. 4 The Invisible Hand of Power The democratic uprising in the Arab world has been a spectacular display of courage, dedication, and commitment by popular forces—coinciding, fortuitously, with a remarkable uprising of tens of thousands in support of working people and democracy in Madison, Wisconsin, and other U.S. cities.

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Patrick Cockburn, “Torture? It Probably Killed More Americans than 9/11,” Independent (London), 6 April 2009. 28. Rajiv Chandrasekaran, “From Captive to Suicide Bomber,” Washington Post, 22 February 2009. 29. Chomsky, Hopes and Prospects, 266. 30. Ibid., 267. 31. Ibid., 268. 4. THE INVISIBLE HAND OF POWER   1. Tareq Y. Ismael and Glenn E. Perry, The International Relations of the Contemporary Middle East: Subordination and Beyond (London: Routledge, 2014), 73; Noam Chomsky, Hegemony or Survival: America’s Quest for Global Dominance (New York: Metropolitan Books, 2003), 150; Daniel Yergin, The Prize: The Epic Quest for Oil, Money and Power (New York: Free Press, 1991).   2.

The Limits of the Market: The Pendulum Between Government and Market
by Paul de Grauwe and Anna Asbury
Published 12 Mar 2017

This mechanism explains why capitalism is a system in which there is constant technological progress, forming the basis for spectacular advances in material prosperity. The dynamics of the market system led the great eighteenth-century Scottish economist Adam Smith to the conclusion that there was effectively an ‘invisible hand’ ensuring that firms’ efforts to promote their own interests automatically lead to the promotion of general well-being. The baker who gets up at four in the morning to bake bread is not acting out of altruism; it is to increase profits. This individual calculation ensures that we have fresh bread each morning, in other words that the consumer’s well-being is served.

…

Yet he had an interesting theory about why capitalism was in trouble and would be overtaken by a new system of organizing the economy. Schumpeter’s idea, which was developed in his book Capitalism, Socialism and Democracy, stressed the hostility of the intellectuals vis-à-vis a decentralized market system. As Adam Smith made clear in his celebrated ‘invisible hand’ analysis, the market system works in a decentralized way to bring about equilibrium between demand and supply, and does so without a central intellect guiding this quest towards the equilibrium. The self-interest of producers and consumers in competitive markets is all you need. It is a system that does not need to be centrally guided.  OUP CORRECTED PROOF – FINAL, 27/10/2016, SPi R I S E A N D F A L L : LINEAR OR CYCLICAL ?

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.  Gini coefficients b global capitalism b global financial crisis ()  immigration – imperialism  import protection  income, share of total going to top % f,   INDEX income distribution –b, , , –,  income equality and economic growth trade-off , f,  income inequality , f, , , ,  reformist scenario  United Kingdom and United States  income per capita , f income redistribution policies  income tax f, ,  on highest incomes , , –, , , – productivity, labour costs and public sector  in selected countries f India five-year plans  gross domestic product (GDP) per capita f individual rationality and collective rationality –, –, ,  environment (external limit)  external limits of governments  industrial production, worldwide  inequality –,  assets – reduction  and social and political instability , f wealth ,  world –b see also income inequality inflation and lender of last resort –b insolvency/bankruptcy , ,  interbank market  interest rates , –, – on Spanish and British ten-year government bonds f internal contradictions of capitalism –,  internal limits of capitalism – internal limits of free market system –, , ,  internal limits of government – winner-takes-all phenomenon – International Monetary Fund (IMF) ,  investment boom  in eurozone  projects (efficiency)  public  as share of GDP  ‘invisible hand’ ,  Ireland eurozone government bond spreads, ten-year f global financial crisis ()  labour costs, gross hourly f Italy eurozone government bond spreads, ten-year f gross domestic product (GDP) per capita f labour costs, gross hourly f social security spending as percentage of government spending f Jacobson Schwartz, A.

When More Is Not Better: Overcoming America's Obsession With Economic Efficiency
by Roger L. Martin
Published 28 Sep 2020

They have been encouraged in this endeavor—and, more generally, in their beliefs—by the contributions of a handful of influential thinkers. Adam Smith It is an interesting and important historical coincidence that Adam Smith’s The Wealth of Nations was published in 1776, the same year that America declared its independence from Britain. In it, Smith provides two important underpinnings for a model of efficiency. First is the “invisible hand” of an unfettered market of buyers and sellers that produces, without explicit organization, a price that generates efficient use of resources to provide the optimal quantity of goods. Second, he uses a pin factory to illustrate the technique for enhancing efficiency of production. The inefficient approach is to staff a factory with workers who independently fabricate entire pins.

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A full 28 percent of American libraries from 1777 to 1790 held The Wealth of Nations.18 Hamilton made specific reference to the benefits of the division of labor in his 1791 Report on the Subject of Manufactures, lauding the “greater skill and dexterity naturally resulting from a constant and undivided application to a single object” and arguing that it “has the effect of augmenting the productive powers of labor, and with them, the total mass of the produce or revenue of a country.”19 Both Smith’s invisible hand and division of labor were embraced as the economic policy of the US was formulated in this seminal period. Markets were largely left free to establish efficient prices and quantities, and as US businesses grew, they used the division of labor to produce goods ever more efficiently for those unfettered markets.

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David Ricardo Four decades after Smith, David Ricardo took the efficiency idea further with his theory of comparative advantage, arguing in On the Principles of Political Economy and Taxation that, since it is more efficient for Portuguese workers to make wine, thanks to their natural endowment of sunny weather, and English workers to make cloth, due to the cooler climate in which they operate, each would be better off were they to focus on their area of advantage and trade with the other.20 The insights of Smith and Ricardo both reflected and drove the Industrial Revolution, which was as much about innovations in processes that reduced waste and increased productivity as it was about the application of new technologies. While America immediately embraced Smith’s invisible hand and division of labor, especially as the country’s manufacturing sector grew in size and scale during the nineteenth century, the United States was much slower to embrace Ricardo’s push for the efficiency boost that comes from freer trade. During the nineteenth century, the southern states, which were big agricultural-product exporters, wanted freer trade to make sure they had markets for their exports, while the northern states wanted protection for their nascent manufacturing industries.

Tomorrow's Capitalist: My Search for the Soul of Business
by Alan Murray
Published 15 Dec 2022

He quoted his own book Capitalism and Freedom, where he wrote that in a free society “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”3 As a graduate student at the London School of Economics in the late 1970s, I had studied economic history and read the works of Adam Smith, who laid the foundation for Friedman’s view of a market economy. Smith wrote of an “invisible hand” that ensured the self-interested strivings of individuals combined for the greater good. “By pursuing his own interests, he frequently promotes that of the society more effectually than when he really intends to promote it,” Smith wrote. “I have never known much good done by those who affected to trade for the public good.”4 Friedman’s warnings—and Smith’s—about the consequences of companies pursuing social good particularly resonated in the 1970s, when the economy was stalling, and both inflation and unemployment were rising.

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When I was in college, my father would clip articles out of Fortune magazine and send them to me, fearful I might be led astray by left-leaning professors (and never imagining I might one day run the company that produced his favorite magazine!). He once sent me a book called The Incredible Bread Machine, which put Smith’s invisible hand into simplistic, almost cartoonish language, to make sure I didn’t miss the point. But the truth is, he need not have worried. Any remaining sympathy I, or others, might have had for alternative economic systems pretty much evaporated in the final decades of the twentieth century. Inflation and slow growth took their toll in the 1970s and early 1980s, and the need for a market-based revival became more than apparent.

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Wealth for the fortunate who kept their savings in the market soared. Wealth for the unfortunate whose only asset was their house plummeted. Trust in business, and in all institutions, also plummeted. And capitalism got a second look. People had experienced the painful effects of markets gone haywire. The invisible hand had developed serious arthritis. And as the economy recovered, everyone looked around and saw an enormous and widening gap between the very rich and the working poor, between the ample rewards going to the owners of capital and the stagnating wages being paid to labor, between the plight of the protected few and the vulnerable many.

Visions of Inequality: From the French Revolution to the End of the Cold War
by Branko Milanovic
Published 9 Oct 2023

The top classes may be subject to expressions of derision in The Theory of Moral Sentiments, but their right to be on top is never questioned, nor are the origins of their fortunes ever examined. The quasi-religious acceptance of a hierarchy of wealth is strikingly illustrated in the passage where, for the first time in his work, Smith mentions the workings of the invisible hand in the economy. 36 Referring to the consumption habits of the vain and rapacious rich, he writes: They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.

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Stigler, “Smith’s Travels on the Ship of State,” History of Political Economy 3, no. 2 (1971): 265–277. 35 . Sen, “Uses and Abuses of Adam Smith,” 267. Sen quotes Adam Smith, Lectures on Jurisprudence, ed. R. L. Meek, D. D. Raphael, and P. G. Stein (Oxford: Clarendon Press, 1978; repr. Indianapolis: Liberty Classics, 1982), 104. 36 . There is an earlier mention of the invisible hand in Smith’s treatise on astronomy, but that does not concern us here. 37 . Adam Smith, The Theory of Moral Sentiments (1759; London: Alex. Murray, 1872), Part IV.i.10. 38 . Consider two different positions. In one, each of ten people owns land of equal size, and each person earns 10 units.

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Martin Bronfenbrenner, Income Distribution Theory (Chicago: Aldine-Atherton, 1971). 6 . Of the Pareto optimum, Offer writes that “its main effect is to provide legitimacy, and protection for the existing distribution of property, however acquired and however unequal.” Avner Offer, “Self-interest, Sympathy, and the Invisible Hand: From Adam Smith to Market Liberalism,” Oxford Economic and Social History Working Paper 101, Department of Economics, University of Oxford, August 2012. 7 . Milton Friedman with the assistance of Rose D. Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962), 161–162. 8 .

Austerity: The History of a Dangerous Idea
by Mark Blyth
Published 24 Apr 2013

Indeed, the new instruction sheet was designed to keep the state as far away from market processes as possible. Morality was present to be sure, but it was an upturned morality where the naked self-interest of financial market actors was taken to be the most positive virtue because its pursuit led to optimal outcomes despite moral intention. Smith’s invisible hand had just given the public the finger. These new ideas were indeed a kind of morality play, but of a very odd type. But what mattered fundamentally was the failure of a set of ideas that justified finance doing whatever it liked because whatever it did was by definition the most efficient thing that could be done.

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He identifies both the problem and the solution. To solve the problem of debt we should embrace the principal of austerity—otherwise known as the parsimony of the Scots. Smith’s economics are a bit like Shakespeare—often quoted, seldom read. From his notes on the division of labor in the eponymous pin factory to the “invisible hand” guiding selfish actions to common purposes, Smith’s sound bites are well known. The details of what Smith said about the economy are far less well known and quite surprising. Smith brought together much of the scattered work of early economists on the nature of money, economic growth, the role of capital and labor, and a host of other issues, and then had the good sense to put it in one accessible place: The Wealth of Nations.25 As Albert Hirschman observed, this book was no academic project.

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First, he showed that although any worker can accept a wage cut to price himself into employment, if all workers did this, it would in the aggregate lower consumption and prices, and thus increase the real wage (the wage-minus-price effects), leaving the worker who “adjusted” poorer and just as unemployed.106 Second, he showed that under conditions of uncertainty about the future, it is irrational for any investor to invest rather than sit on cash, with the result that if investors look to each other for signals about what to do, they all sit on cash and no one will invest.107 Thus we bring about, by our collective self-interested actions, the very depression we are individually trying to avoid. Smith’s invisible hand may well have arthritis, and austerity may make it worse. Keynes showed that decisions to save and invest were temporally separate, and that savings did not necessarily lead to investment. Saving could just as easily lead to hoarding and reduced consumption. The job of the state was, then, to alter the investors’ investment expectations by raising prices so that profits could be made, thereby making it rational to begin hiring workers again and, by doing so, to get out of the slump.

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions
by Dan Ariely
Published 19 Feb 2007

Most famous among these are that all economic agents (consumers, companies, etc., are fully rational, and that the so-called invisible hand works to create market efficiency). To rational economists, these assumptions seem so basic, logical, and self-evident that they do not need any empirical scrutiny. Building on these basic assumptions, rational economists make recommendations regarding the ideal way to design health insurance, retirement funds, and operating principles for financial institutions. This is, of course, the source of the basic belief in the wisdom of deregulation: if people always make the right decisions, and if the “invisible hand” and market forces always lead to efficiency, shouldn’t we just let go of any regulations and allow the financial markets to operate at their full potential?

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I wish I could tell you that I would often persuade my conversational partner to accept my point of view, but in almost all cases it would become very clear that neither of us was going to be converted to the other’s viewpoint. Of course, I ran into the biggest difficulties when arguing for irrationality with card-carrying rational economists, whose disregard of my experimental data was almost as intense as their nearly religious belief in rationality (if Adam Smith’s “invisible hand” doesn’t sound like God, I don’t know what does). This basic sentiment was expressed succinctly by two fabulous Chicago economists, Steven Levitt and John List, suggesting that the practical usefulness of behavioral economics has been shown to be marginal at best: Perhaps the greatest challenge facing behavioral economics is demonstrating its applicability in the real world.

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What is it about circumstances involving money and competition that might make people more rational? Do the defenders of rationality believe that we have different brain mechanisms for making small versus large decisions and yet another yet another for dealing with the stock market? Or do they simply have a bone-deep belief that the invisible hand and the wisdom of the markets guarantee optimal behavior under all conditions? As a social scientist, I’m not sure which model describing human behavior in markets—rational economics, behavioral economics, or something else—is best, and I wish we could set up a series of experiments to figure this out.

The Locavore's Dilemma
by Pierre Desrochers and Hiroko Shimizu
Published 29 May 2012

Monocultures Overspecialization and Food Security Locavorism and Military Security Peak Oil and Locavorism Climate Change, Locavorism, and Food Security Chapter 6 - Myth #5: Locavorism Offers Tastier, More Nutritious, and Safer Food The Changing Human Body Taste Nutrition Food Safety Chapter 7 - Well-Meaning Coercion, Unintended Consequences, and Bad Outcomes A Brief Historical Overview of Government Intervention in Food Markets Public Food Reserves Food Export Restrictions and Bans Price Floors Price Ceilings On Appointing “Good” Czars Unleashing the Invisible Hand CONCLUSION EPILOGUE NOTES INDEX Copyright Page To Ferenc (“Ferko”) Csillag (1955–2005), dear friend and mentor. You are sorely missed. [T]he time has arrived . . . when the various portions of the earth will each give forth their products for the use of each and of all; that the over-abundance of one country will make up for the deficiency of another; the superabundance of the year of plenty serving for the scant harvests of its successor . . .

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Perhaps this is because, as Adam Smith observed more than two centuries ago, it is typically “the industry which is carried on for the benefit of the rich and powerful that is principally encouraged” by the political system “while that which is carried on for the benefit of the poor and the indigent is too often either neglected or oppressed.”43 In other words, the poor and middle-class can’t afford top lobbyists while the path of least resistance for politicians has always been the creation of new programs rather than the phasing out or redirecting of existing ones. If history is again any guide, however, beneficial change can sometimes happen in the wake of a crisis (although plenty of bad things can happen, too . . . ), as we will now discuss. Unleashing the Invisible Hand For nearly a century and a half, food activists and small producers of all kinds have argued that unbridled competition will destroy family farms and empower “monopolistic” corporations. True, in a free market inefficient firms are continuously being driven out of business while the most efficient ones are rewarded by consumers and growth as long as there are economies of scale to be realized—but only until the day they stop providing the best alternative available and are themselves driven out of business or absorbed by more efficient competitors.

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Human body agribusiness and changing evolution of Human intellect Hundred Years War Hunger See also Famine; Food shortage Hunter, William Wilson Hurst, Blake Hybridization Imperfections Imports rice urbanization and India Initiatives, local food economic depression and history of support wartime(photo) Inner cities Innovation Integrated Regional Information Networks Intermediaries Invasive species Invisible hand Irish potato famine Jacks, Graham Vernon Jacobs, Jane Japan famine in World War II and Jefferson, Lorian P. Jeffrey, Clara Jensen Farms Johnson, Paul Juche The Jungle (Sinclair) Junk food Kautsky, Karl Kenyan exports King, Clyde Lyndon Kingsolver, Barbara Know Your Farmer, Know your Food program Ladies’ Home Journal (magazine) Land abandoned grabs management urban Land use debate over trade-off Landsburg, Steven Latitude LCA.

How Much Is Enough?: Money and the Good Life
by Robert Skidelsky and Edward Skidelsky
Published 18 Jun 2012

One is the famous passage in The Theory of Moral Sentiments describing how the vices of the wealthy redound to the benefit of society as a whole. (This, incidentally, is the first time Smith uses the metaphor of the “invisible hand.”) Though the rich, he writes, mean only their own conveniency, though the sole end which they propose … be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society.”18 Here Smith reverts openly to the old moral language of rapacity, vanity and insatiability.

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His French contemporary Montesquieu talked of the douceur of commerce.14 Once money-making had been stripped of its ethical opprobrium, it became open to treatment in terms of cause and effect. Hume’s friend, the Scottish philosopher Adam Smith, took the lead. The Wealth of Nations, his masterpiece of 1776, presents humans as driven by a natural desire for self-improvement, which under conditions of free competition leads them “as if by an invisible hand” to promote the public well-being. Newton’s mechanical science of nature was thereby extended to economic relations, with self-interest in the role of gravity. This was a revolutionary invention. Traditional morality had conceived of society as an enterprise devoted to the common good. For Smith, by contrast, it is a purely causal nexus of self-regarding individuals.

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Edmund Burke sounded the classic conservative lament: “But the age of chivalry is gone; that of sophisters, economists, and calculators has succeeded, and the glory of Europe is extinguished forever.”16 Resistance to commercialism also came from the American and French revolutionaries who harked back to the agrarian “Republican virtues” of pre-Caesarist Rome. Smith took himself to have refuted “the selfish system” of Mandeville, but he had not in fact left it all that far behind.17 Mandeville’s central mechanism—the utilization of vice for public benefit—lives on in his invisible hand, purged of its demonic flavor by the simple expedient of redefining “vice” as an innocuous natural quality. With a few exceptions, this has been the strategy of economics ever since. The value-neutral language of “utility” and “preferences” renders capitalism’s Faustian bargain necessarily invisible.

The Trouble With Billionaires
by Linda McQuaig
Published 1 May 2013

Hall (ed.), Inflation and its Effects (Chicago: University of Chicago Press, 1982), p. 261. ‌19 Cockett, Thinking the Unthinkable, pp. 25–34. ‌20 Timmins, The Five Giants, p. 167. ‌21 Cockett, Thinking the Unthinkable, pp. 102–3. ‌22 Hayek note, cited in ibid., p. 104. ‌23 Ibid., p. 122. ‌24 Fisher quoted in ibid., pp. 123–4. ‌25 Quoted in ibid., p. 176. ‌26 Quoted in ibid., p. 174. ‌27 Ibid., p. 307. ‌28 Quoted in Kim Phillips-Fein, The Invisible Hand (New York: W. W. Norton & Company, 2009), p. 119. ‌29 Dwight D. Eisenhower, in L. Galambos & D. van Ee, ‘The Papers of Dwight David Eisenhower’, doc. 1147. ‌30 Phillips-Fein, The Invisible Hand, p. 165. ‌31 Lee Edwards, The Power of Ideas (Ottawa, IL: Jameson, 1997), p. 9. ‌32 Phillips-Fein, The Invisible Hand, pp. 169–72. ‌33 Yasha Levine & Mark Ames, ‘Charles Koch to Friedrich Hayek: Use Social Security!’, The Nation, 27 September 2011. ‌34 Harry G.

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Rather than seeing depression and high rates of unemployment as an aberration, Keynes saw them as a natural and recurring state of affairs. Capitalism, left on its own, was far from self-correcting. On the contrary, said Keynes, it was inherently unstable. Something else was needed. When humans were nervous and uncertain, as they are during a recession, it wasn’t enough to rely on the unpredictable ‘invisible hand’ of supply-and-demand forces in the marketplace. A strong, highly visible hand was needed, one that would be seen injecting money directly into the economy, into the pockets of consumers and business owners. But whose hand would this be? Individual entrepreneurs were understandably obsessed with their own financial survival and were unlikely to be able to rise above their fears.

Big Business: A Love Letter to an American Anti-Hero
by Tyler Cowen
Published 8 Apr 2019

Unfortunately, however, many of the virtues of business and markets are hard to show on the screen. Adam Smith wrote of “the invisible hand” as a core mechanism through which profit-seeking behavior can cause businesspeople to act in the greater interest of society, yet without their necessarily feeling any benevolence. A balancing of profit and loss goes on behind the scenes, and resources are removed from one set of uses and moved to another. The thing about the invisible hand is that it is, well, invisible. It also requires some level of conceptual understanding, and much of the American public doesn’t know enough economics to follow invisible-hand reasoning on the screen. Furthermore, in popular culture, viewers tend to judge individuals by their intentions, and intentions are often easier to show on the screen than the final results of actions.

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Many employers go out of their way to make their companies sources of worker dignity and satisfaction, most of all because workers and potential workers, especially among the relatively young, value such things. The more a company is viewed positively, the easier it is to recruit talented workers. The desire to attract and keep talent is the single biggest reason companies try to create pleasant, tolerant, stimulating atmospheres. That is yet another example of how Adam Smith’s invisible hand leads greedy corporations to take costly actions in the social interest. ALL IS NOT PERFECT As I have been writing this book, sexual harassment in the workplace has emerged as one of the major issues in the public eye, and I am seeing an increasing number of appalling scandals being brought to light, including in the corporate arena.

Restarting the Future: How to Fix the Intangible Economy
by Jonathan Haskel and Stian Westlake
Published 4 Apr 2022

But lobbying for an obscure deduction or loophole can be done more subtly, even if the net effect—to reduce the tax paid by the rich and increase the burden on everyone else—is the same. What’s more, those who benefit from existing institutions are likely to continue supporting them. The economic historian Bas van Bavel elaborates on this idea in The Invisible Hand, arguing that “holders of economic power consolidate their economic and later political domination and acquire formal, legal power as well, which they use to sustain the market institutions that benefit them or develop new institutions that consolidate their dominant position in markets.”46 Van Bavel provides a number of vivid case studies of economies that grew richer but failed to develop the institutions they needed to operate effectively at a higher economic level; as a result, they stagnated or declined.

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A society that has the right institutions to thrive in the technological landscape of one time period may not be well positioned to thrive in the next technological era. Indeed, its historical success may render its institutions resistant to change. Bas van Bavel discusses this issue in his book The Invisible Hand.4 This analysis seems relevant to our current situation. In chapter 2 we showed that the five symptoms of our economic malaise have their origins in a large, gradual change in the capital stock of rich-world economies. Specifically, we have seen a shift from physical, tangible capital to intangible capital, consisting of knowledge, relationships, and expressive content, which behave differently from an economic point of view.

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The Politics of Innovation: Why Some Countries Are Better than Others at Science and Technology. Oxford: Oxford University Press. Traina, James. 2018. “Is Aggregate Market Power Increasing? Production Trends Using Financial Statements.” Available at SSRN, https://doi.org/10.2139/ssrn.3120849. Van Bavel, Bas. 2016. The Invisible Hand? How Market Economies Have Emerged and Declined since AD 500. New York: Oxford University Press. Van Zandt, David E. 1993. “The Lessons of the Lighthouse: ‘Government’ vs. ‘Private’ Provision of Goods.” Journal of Legal Studies 22 (1): 47–72. Vollrath, Dietrich. 2020. Fully Grown: Why a Stagnant Economy Is a Sign of Success.

The Economics of Enough: How to Run the Economy as if the Future Matters
by Diane Coyle
Published 21 Feb 2011

One answer, the one many people would have given until recently, is that this challenge is best left to markets. Markets automatically reflect information widely dispersed through the economy and also the preferences of countless individuals, and aggregate all of that to match supply with demand, “as if by an invisible hand,” to use Adam Smith’s famous phrase. For a generation—certainly for the twenty years after the end of the Cold War and fall of communism—relying on market mechanisms seemed the obvious way to ensure the economy delivered for all. Questions of value and values fell out of fashion. For obvious reasons, the earlier big ideological questions of communism versus capitalism seemed to have been settled by history.

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Galbraith, in one of his most famous works, The Affluent Society (1958), challenged the assumption that the continual increase in material production was a sign of economic and societal health. Because of this he is considered to be one of the first postmaterialists. Fred Hirsch, in The Social Limits to Growth, argued that Adam Smith’s invisible hand was no longer operative in developed economies. He argued that the luxuries of one generation became necessities for the next as if society were a column moving steadily forward with the rich tasting the fruits that would eventually be conveyed to the rest of humanity. He predicted a future of increasing personal competition in an ever more vicious rat race and that such a process would have a detrimental impact on the moral fabric of society.

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New York: Oxford University Press. Corrado, Carol, Charles Hulten, and Daniel Sichel. 2006. “Intangible Capital and Economic Growth.” Working Paper No. 11948. Cambridge, MA: Na: National Bureau of Economic Research. Cosmides, Leda, and John Tooby. 1994. “ Better than Rational: Evolutionary Psychology and the Invisible Hand.” The American Economic Review 84:2, pp. 327–32. Coyle, Diane. 1996. The Weightless World. Oxford: Capstone. ———. 2001. Paradoxes of Prosperity. New York: Texere. ———. 2003. “Corporate Governance, Public Governance, and Global Governance: The Common Thread.” Manchester, UK: University of Manchester, Institute of Political and Economic Governance. ———. 2007.

Rummage: A History of the Things We Have Reused, Recycled and Refused To Let Go
by Emily Cockayne
Published 15 Aug 2020

William Crookes, ‘Chemical Products – the Application of Waste’, Popular Science Review, 2:5 (January 1863), p. 59. 69. The arguments that profits gained from by-products outweighed the costs of production were disputed at the same time: see Desrochers, ‘Does the Invisible Hand Have a Green Thumb?’ Geographic Journal, 175:1, 2009, pp. 7–12. 70. [Wynter], ‘The Use of Refuse’, p. 346. 71. Pierre Desrochers has detailed the interplay between legislative demands to clean up and the urge to find creative ways to maximise profit: ‘win-win outcomes’: ‘Does the Invisible Hand Have a Green Thumb?’, at pp. 12–13. See also Pierre Desrochers, ‘Promoting Corporate Environmental Sustainability in the Victorian Era’, V&A Online Journal, 3 (Spring 2011). 72.

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[Edwin Chadwick], An Inquiry into the Sanitary Condition of the Labouring Population of Great Britain (London, 1842), p. 381. 49. Desrochers, ‘Does the Invisible Hand?’, pp. 8–11. 50. Simmonds, Waste Products, p. 460. 51. Bashley Britten, ‘Utilisation of Blast-Furnace Slag for the Manufacture of Glass’, British Architect & Northern Engineer, 6:13, 29 September 1876, p. 201. 52. Simmonds, Waste Products, pp. 2, 464–5; Greenwood, ‘The Utilisation of Waste IV’, p. 840; James Winter, Secure from Rash Assault (Berkeley, CA, 1999), pp. 146–7. 53. Britten, ‘Utilisation of Blast-Furnace Slag’, p. 201; Desrochers, ‘Does the Invisible Hand?’, pp. 9–11; Thomas Greenwood, ‘The Utilisation of Waste IV’, Leisure Hour, 35, December 1886, p. 840. 54.

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John Haggard, Reports of Cases Argued and Determined in the Consistory Court of London, 2 vols (London, 1822), vol. 1, pp. 409–14. 16. ‘Much Excitement’, Evening Mail, 22 January 1836, p. 6; London Metropolitan Archives, MJ/SP/C/W/1730, Coroner’s report Henry Kirkman, Westminster district, St Pancras no. 33, 22 January 1836. 17. OB, t18250113–200, 13 January 1825. 18. Desrochers, ‘Does the Invisible Hand?’, pp. 5–6; Charles Slack, Noble Obsession (London, 2002), p. 61. 19. London Metropolitan Archives, CLC/W/JB/044/MS01018/001, St Dunstan in the West precinct: registers of presentments of the Wardmote Inquest, 2 vols, 1558–1870, vol. 1, fol. 200. Presentment of William Sturt, 1814. 20. Peter Thorsheim, ‘The Paradox of Smokeless Fuels: Gas, Coke and the Environment in Britain, 1813–1949’, Environment and History, 8:4 (2002), pp. 381–401. 21.

To Serve God and Wal-Mart: The Making of Christian Free Enterprise
by Bethany Moreton
Published 15 May 2009

Individual academicians were sponsored by corporations like Bristol-Â�Meyers, Caterpillar, Dupont, and Westinghouse.7 Read wrote “I, Pencil: My Family Tree as Told to Leonard E. Read,” in 1958, laying out the theory of the invisible hand of the market in the first-Â�person voice of a humble pencil. The lesson I have to teach is this: Leave all creative energies uninhibited. Merely orÂ�gaÂ�nize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-Â�hows freely to flow. Have faith that free men and Â�women will respond to the Invisible Hand. This faith will be conÂ�firmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth. 8 Friedman’s example on the nationally broadcast Free to Choose thus adapted the former public relations man’s homily aimed at schoolchildren.

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Many sources contributed to the late-twentieth-century prestige of neoliberalism, or the belief that individual entrepreneurship, vigorous private property rights, and minimal barriers to trade best provide for personal freedom and well-being.2 The economists who coined the term in the years around World War II blended the free-market enthusiasm of some nineteenth-century political economists with Adam Smith’s classic image: the invisible hand of the market that mysteriously guided the most venal human concerns into the collective good. Thus neoliberalism envisions the economy as a sphere inÂ�deÂ�penÂ�dent of other social institutions and relationships. It understands the market to operate by natural laws that will, if left to their own devices, optimize the conditions of human existence.

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The pencil arose from miners in Ceylon who dug up the graphite, and the people who made the string that tied the sacks in which the graphite was shipped, and those who loaded the sacks onto boats, and so forth, at exhaustive length. The miracle in this proÂ�cess was said to lie in the ab193 TO SERVE GOD AND WAL - Â�M ART sence of any central mastermind, or even any intent to make a pencil on the part of most of those implicated in the proÂ�cess. So what brought it all together? SIFE’s answer was clear: The invisible hand of the market. The Harding students who toured with their giant pencil referred to themselves as followers of Milton Friedman, the passionate laissez-Â�faire economist and 1976 Nobel Prize winner. Soon after retiring from his teaching duties at the University of Chicago in the late 1970s, Friedman and his wife, fellow economist Rose Friedman, were approached by the renegade CEO of a Public Broadcasting Service (PBS) affiliate in Erie, Pennsylvania.

The Rational Optimist: How Prosperity Evolves
by Matt Ridley
Published 17 May 2010

The more interdependent and well-off we all become, the more population will stabilise well within the resources of the planet. As Ron Bailey puts it, in complete contradiction of Garrett Hardin: ‘There is no need to impose coercive population control measures; economic freedom actually generates a benign invisible hand of population control.’ Most economists are now more worried about the effects of imploding populations than they are about exploding ones. Countries with very low birth rates have rapidly ageing workforces. This means more and more old people eating the savings and taxes of fewer and fewer people of working age.

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Even John Stuart Mill, conceding that returns were showing no signs of diminishing in the 1840s, put it down to a miracle, innovation, he said, was an external factor, a cause but not an effect of economic growth, an inexplicable slice of luck. And Mill’s optimism was not shared by his successors. As discovery began to slow, so competition would drive the profits of enterprise out of the increasingly perfect market till all that was left was rent and monopoly. With Smith’s invisible hand guiding infinite market participants possessed of perfect information to profitless equilibria and vanishing returns, neo-classical economics gloomily forecast the end of growth. It was a description of an entirely fictional world. The concept of a steady final state, applied to a dynamic system like the economy, is as wrong as any philosophical abstraction can be.

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Chapter Eleven The catallaxy: rational optimism about 2100 In this book I have tried to build on both Adam Smith and Charles Darwin: to interpret human society as the product of a long history of what the philosopher Dan Dennett calls ‘bubble-up’ evolution through natural selection among cultural rather than genetic variations, and as an emergent order generated by an invisible hand of individual transactions, not the product of a top-down determinism. I have tried to show that, just as sex made biological evolution cumulative, so exchange made cultural evolution cumulative and intelligence collective, and that there is therefore an inexorable tide in the affairs of men and women discernible beneath the chaos of their actions.

Goddess of the Market: Ayn Rand and the American Right
by Jennifer Burns
Published 18 Oct 2009

Rand and libertarianism more generally are given a thorough, albeit brief, treatment by John Kelley in Bringing the Market Back In: The Political Revitalization of Market Liberalism (1997). As historians have begun to locate the origins of conservatism in reaction against the New Deal and thereby accord more weight to business libertarianism, Rand has emerged as a figure of greater consequence. In Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (2009), Kimberly Phillips-Fein asserts the centrality of libertarian businessmen to the conservative renaissance, an important new line of interpretation that is being followed by a host of emerging scholars. Phillips-Fein notes Rand’s popularity among businessmen and describes her early political activism.

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Recently historians have begun to trace the connections between this Old Right and the postwar conservative movement. See Gregory L. Schneider, The Conservative Century: From Reaction to Revolution (New York, Rowman and Littlefield, 2008); Donald Critchlow, The Conservative Ascendancy: How the GOP Right Made Political History (Cambridge, MA: Harvard University Press, 2007); Kimberly Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Ronald Reagan (New York: Norton, 2009); Joseph Lowndes, From the New Deal to the New Right (New Haven, CT: Yale University Press, 2008). 28. Although it did not become widely used until the 1950s, “libertarian” was in circulation prior to the New Deal.

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Read’s influence and the libertarian climate of southern California more generally is described in Lisa McGirr, Suburban Warriors: The Origins of the New American Right (Princeton, NJ: Princeton University Press, 2001), 34. 6. The national business movement against the New Deal is described in Kimberly Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009). For state activities, see Elizabeth Tandy Shermer, “Counter-Organizing the Sunbelt: Right-to-work Campaigns and Anti-Union Conservatism, 1943–1958,” Pacific Historical Review 78, no. 1 (2009): 81–118.

Debunking Economics - Revised, Expanded and Integrated Edition: The Naked Emperor Dethroned?
by Steve Keen
Published 21 Sep 2011

The critics were right: society is more than the sum of its individual members, and a society’s behavior cannot be modeled by simply adding up the behaviors of all the individuals in it. To see why the critics have been vindicated by economists, and yet economists still pretend that they won the argument, we have to take a trip down memory lane to late eighteenth-century England. The kernel Adam Smith’s famous metaphor that a self-motivated individual is led by an ‘invisible hand’ to promote society’s welfare asserts that self-centered behavior by individuals necessarily leads to the highest possible level of welfare for society as a whole. Modern economic theory has attempted, unsuccessfully, to prove this assertion. The attempted proof had several components, and in this chapter we check out the component which models how consumers decide which commodities to purchase.

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The second amounts to assuming that there is only one commodity – since otherwise spending patterns would necessarily change as income rose. These ‘assumptions’ clearly contradict the case economists were trying to prove, since they are necessarily violated in the real world – in fact, they are really a ‘proof by contradiction’ that Adam Smith’s invisible hand doesn’t work. Sadly, however, this is not how most economists have interpreted these results. When conditions (a) and (b) are violated, as they must be in the real world, then several important concepts which are important to economists collapse. The key casualty here is the vision of demand for any product falling as its price rises.

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TABLE 4.3 Sales and costs determine the level of output that maximizes profit It’s no wonder, then, that, despite all the criticisms leveled at it, neoclassical economists cling to the model of the ‘perfect’ competitive market. In a competitive market, since marginal revenue equals price, profit-maximizing behavior leads to an output level at which price equals marginal cost. This is the embodiment of Smith’s ‘invisible hand’ metaphor about the capacity of market economy to reconcile private interest and public virtue, and that is the real message of the ‘Totem of the Micro.’8 Perfect competition The main distinguishing feature of the perfectly competitive market is the number of firms in it. Whereas a monopoly has just one firm – which therefore has the entire market demand curve to itself – a perfectly competitive market has many little firms, each competing for a tiny slice of total demand.

The Toaster Project: Or a Heroic Attempt to Build a Simple Electric Appliance From Scratch
by Thomas Thwaites
Published 27 Sep 2011

Therefore, in theory, the manufacturers could save themselves a bit of money in the end if, in the first place, they designed their products so that they could easily dismantle them and sort all the components and materials into nice separate piles that could be reused or recycled. Thus while acting entirely in the interests of saving themselves some money, the invisible hand of the market would guide these companies to make products that were less environmentally harmful. This led to lots of interesting ideas about how you could design things to be easily and quickly (and therefore cheaply) disassembled. For example, Nokia made a mobile phone that would spring itself apart in the right conditions, and screws were developed that would actually unscrew themselves if heated to the right temperature.

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I even have one of his iPhones, which at the moment I quite like (though strangely it does make me feel like a bit of an idiot when everyone else in the room has one too—like going to a party and everyone’s wearing the same “fashionable” top—but that’s the point of fashion right?). However, before we get too chummy with Adam Smith and his invisible hand, it seems that the need to buy more stuff to stimulate our economy, and the need to consume less to save our environment, are on a collision course. So while the £1187.54 price of my toaster doesn’t really include all that it cost to make it, £3.94 isn’t really what the Argos Value version cost either.

Company: A Short History of a Revolutionary Idea
by John Micklethwait and Adrian Wooldridge
Published 4 Mar 2003

In the nineteenth century, the gains to be had from integrating mass production with mass distribution were enormous—as Alfred Chandler, the doyen of business historians, puts it, the “visible hand of managerial direction” replaced “the invisible hand of market mechanisms.” In the twenty-first century, technology and globalization are helping to reduce barriers to entry—and thus helping to unbundle the corporate package. At the touch of a button, a mere journalist can get access to more information than a corporate giant could amass a decade ago. The fashion nowadays is for virtual companies—for airlines that do not own their own planes, for banks that do not have branches, for the invisible hand to claw back ground from the visible one. That should not imply that the company is beginning a slow, inevitable decline.

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Even the parsimonious Andrew Carnegie, whose writings included The Advantage of Poverty, owned a Scottish castle, Skibo, with a staff of eighty-two and a New York mansion with sixty-four rooms.5 FIRST CAME THE RAILROADS Why did these extraordinary organizations take off when they did? Alfred Chandler has provided the classic answer: “Modern business enterprise” became viable “only when the visible hand of management proved to be more efficient than the invisible hand of market forces.” For that to happen, a new system of transport and communication was necessary. The railroads were not just great enablers for modern business; they were also the first modern businesses.6 It took gigantic quantities of capital—much of it from Britain—to build 31,000 miles of railroad, as America had in 1860 (let alone the 240,000 miles it had by 1910).7 Railroads had equally little choice about being the first firms to employ large armies of full-time managers.

The Second Curve: Thoughts on Reinventing Society
by Charles Handy
Published 12 Mar 2015

Let us be clear from the start: Adam Smith did not say that the ‘invisible hand’ would allow self-interest to work for the good of all. He only mentioned that metaphor once in his book The Wealth of Nations, and that was to suggest that an invisible hand would incline a merchant to invest at home rather than in foreign lands. His exact words are: By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Emergence
by Steven Johnson

This is one reason why the destruction of rain forests is so wasteful: the soil left behind is largely sterile.” Ibid., 122. “This acceleration in”: Ibid., 29. Some critics, such: Wright sees “group brains” even in low-tech societies, even using the term as an alternative to “invisible hands.” “Hands aren’t very cerebral, after all; guiding any invisible hand there must be an ‘invisible brain.’ Its neurons are people. The more neurons there are in regular and easy contact, the better the brain works—the more finely it can divide economic labor, the more diverse the resulting products. And, not incidentally, the more rapidly technological innovations take shape and spread.

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Thirty years after the two researchers first sketched out their theory on paper, slime mold aggregation is now recognized as a classic case study in bottom-up behavior. Keller’s colleague at MIT Mitch Resnick has even developed a computer simulation of slime mold cells aggregating, allowing students to explore the eerie, invisible hand of self-organization by altering the number of cells in the environment, and the levels of cyclic AMP distributed. First-time users of Resnick’s simulation invariably say that the on-screen images—brilliant clusters of red cells and green pheromone trails—remind them of video games, and in fact the comparison reveals a secret lineage.

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* * * The pattern-seeking algorithms of emergent software are already on their way to becoming one of the primary mechanisms in the great Goldberg contraption of modern social life—as familiar to us as more traditional devices like supply and demand, representational democracy, snap polls. Intelligent software already scans the wires for constellations of book lovers or potential mates. In the future, our networks will be caressed by a million invisible hands, seeking patterns in the digital soup, looking for neighbors in a land where everyone is by definition a stranger. Perhaps this is only fitting. Our brains got to where they are today by bootstrapping out of a primitive form of pattern-matching. As the futurist Ray Kurzweil writes, “Humans are far more skilled at recognizing patterns than in thinking through logical combinations, so we rely on this aptitude for almost all of our mental processes.

Running Money
by Andy Kessler
Published 4 Jun 2007

Wet hemp, Jamaica’s finest, was the sealant of the day. The professor in charge of Watt at Glasgow University, Dr. Joseph Black, was teaching courses, theorizing about a concept known as latent heat, starting back in 1761. Another professor at U of G around the same time was Adam Smith (of the invisible hand). In fact, Smith and Black were good friends. Latent heat is the reason a watched pot never boils or why you put ice cubes in soda. Latent heat means you can add heat to a pot of water, but it won’t boil and give off steam until the entire pot of water is at 212° Fahrenheit. And no matter how much heat is applied by the hot sun at a baseball game, all the ice has to melt before a soda increases in temperature, right before the kid behind you spills it on your shoes.

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If I learned nothing else from running money, that is it. Running money is supposed to be unemotional. Get conviction Why It’s Imperative to Drive a Beemer 279 on things others don’t or can’t know about and find future returns. But the stock market is also a force of change. It is the embodiment of Adam Smith’s invisible hand. It funds growth and starves dying businesses and pushes progress. Not always, I suppose, but enough. With intellectual property and the margin surplus the U.S. is running, the stock market plays a key role in balancing payments and currencies and how the world now works. In an odd way, being a player in the stock market is a form of activism, albeit indirect and invisible activism, in pushing a model that increases living standards.

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It’s about finding waterfalls that create massive growth and monster markets and change for the better to the status quo. One hundred thousand or more people running money all day, every day, most staring at their screens, doing trades, providing access to capital, sloshing capital around. Whether we realize it or not, we are all driving progress, not individually, but collectively. Adam Smith’s invisible hand? If you like. That’s what a stock market does. But in this postindustrial, intellectual property world, it’s more like Doug Engelbart’s visible hands, clasped together, rising up, scaling knowledge, augmenting humans. > > > Ghana a Goner This virtuous model of the margin surplus creating jobs and a middle class in the developing world at the same time it increases wealth in the U.S. and other intellectual property economies is pretty counterintuitive.

Reskilling America: Learning to Labor in the Twenty-First Century
by Katherine S. Newman and Hella Winston
Published 18 Apr 2016

John Hildebrand, “Regents: High School Students Can Seek Waiver of One History Exam,” Newsday, January 12, 2015, http://www.newsday.com/long-island/regents-high-school-students-can-seek-waiver-of-one-history-exam-1.9800090. 4. What Industry Needs 1.   Joleen Kirschenman and Kathryn M Neckerman, “‘We’d Love to Hire Them, But…’: The Meaning of Race for Employers,” Urban Underclass 203 (Washington, DC: Brookings Institution, 1991), 203–32. 2.   Deirdre Royster, Race and the Invisible Hand: How White Networks Exclude Black Men from Blue-Collar Jobs (Berkeley: University of California Press, 2003). 3.   Rosenbaum, Beyond College for All, 136. 4.   Despite the bad name that standardized tests have garnered, especially for bias of various kinds, in employment it has been shown that firms making use of tests are fairer in their hiring decisions than those that rely on interviews.

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Deirdre Royster’s work shows that even when black and white students are trained in the same vocational programs, the homegrown, kinship, and neighborhood-based networks of whites advantage them in job seeking. This is why institutions need to step in and cultivate employer connections. Royster, Race and the Invisible Hand. 6.   John H. Bishop and Ferran Mañe, “The Impact of School-Business Partnerships,” in The School-to-Work Movement: Origins and Destinations, ed. William J. Stull and Nicholas Sanders (Westport, CT: Praeger, 2003), 189–202. 7.   The report touted public-private partnerships as a way of creating new schools that would be better aligned with opportunities in the job market and set forth a list of broad and vague recommendations for improvement, including: defining core competencies all students need to succeed; expanding beyond core competencies to skills and knowledge needed for successful postsecondary transitions; empowering industry to define sector-specific skills; creating innovative courses and programs of study; and putting more students on a path to success.

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National Assessment of Career and Technical Education: Interim Report (Washington, DC: US Department of Education, Office of Planning, Evaluation and Policy Development, Policy and Program Studies Service, 2013), https://www2.ed.gov/rschstat/eval/sectech/nacte/career-technical-education/interim-report.pdf. 8.   Royster, Race and the Invisible Hand. 9.   Sandra Susan Smith, Lone Pursuit: Distrust and Defensive Individualism Among the Black Poor (New York: Russell Sage Foundation, 2010). 10.    “Two Unamalgamated Worlds,” Economist (London), April 3, 2008, http://www.economist.com/node/10958534. 11.    Hermann Nehls, personal communication. 12.    

When the Money Runs Out: The End of Western Affluence
by Stephen D. King
Published 17 Jun 2013

This was a reaction to the excess inflation of the 1970s, a period during which central banks were too often required to do the bidding of their political masters. For a while, inflation was endemic, leading to losses for those on fixed monetary incomes – most obviously pensioners – and huge distortions to the price mechanism – Adam Smith's ‘invisible hand’. By making central banks independent, and thus no longer subject to the temptations of the electoral cycle, the hope was that inflation would eventually be brought back under control, leaving the world a much happier place. The financial crisis has destroyed this separation of monetary church from state.

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The first is for the central bank to buy a much wider range of assets – not just government paper but also asset backed-securities, corporate bonds, foreign currency or maybe even equities. Central banks have dabbled in all of these areas in the past and many continue to do so today.14 There is, however, an obvious drawback. A central bank simply doesn't have the resources to manage credit risk. Allocating capital is supposed to be the job of the invisible hand, not the long arm of the central banker. Widening the range of assets to be purchased turns a central bank slowly but surely into the financial equivalent of a state planner. It is not an edifying vision. The second option is to dig holes or to send for the helicopters. Quantitative easing is designed to bypass the banking system in a bid to put cash directly in people's pockets.

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Collective undertakings of any kind, not merely governmental, become difficult or impossible not only because A may betray B but because even if A wants to trust B he knows that B is unlikely to trust him.11 The loss of trust witnessed in recent years – from within the financial system – has been nothing short of extraordinary. Pre-crisis, faith in the power of the market – and its invisible hand – was sky high. That faith, however, depended on the idea that the market could somehow be trusted to deliver not just outcomes better than under any alternative system of resource allocation but also outcomes that were genuinely good for all. Yet, slowly but surely, trust has been chipped away, so much so that financial markets are no longer capable of delivering the outcomes of old.

Leading From the Emerging Future: From Ego-System to Eco-System Economies
by Otto Scharmer and Katrin Kaufer
Published 14 Apr 2013

The evolution of economic coordination mechanisms began with 1.0, central planning (in the lower left quadrant). It moved from there to 2.0, markets and competition (in the lower right). Both the visible hand of central planning and the invisible hand of decentralized markets have one thing in common: They do not require the individual decision-maker to consider the well-being of the whole. If the individual or the organization meets the targets (of central planning) or pursues their own self-interest (in the market), then the visible or invisible hand will magically take care of the whole. TABLE 4 Four Economic Coordination Mechanisms: A Journey of Interiorizing the Whole That’s what the theory said!

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The challenges we are dealing with as a society force us to rethink this mental model, and to include the impact of our actions on the environmental, social, and cultural context in which we are operating. The Death of Economic Monotheism Another important building block of contemporary economic thought concerns the bias toward an economic monotheism that puts the primacy of one coordination mechanism atop all economic activities: the invisible hand of the market.2 This mechanism is omnipotent in the sense that it isn’t limited by other coordination mechanisms, as we saw in the deregulated financial markets before the 2008 crisis. It is omnipresent through its ever-increasing penetration of all sectors and systems of society. And it is omniscient in its assumed access to all information.

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See Income inequality Infrastructures for co-evolving, 188 to co-initiate, 187–188 to co-inspire, 188 for co-sensing, 188 for prototyping, 188 Ingerslev, Karen, 207 Innovation hubs, 244, 246 Institutional innovations, 76 Institutional inversion, 192–195 Institutional transformation, sectors of current, 196t, 197 Intention, 236 connecting to it as an instrument, 170 Interest groups, organizing around, 54–55 International Monetary Fund (IMF), 27 Internet, 120, 136 Inversion (Umstülpung), 192 institutional, 192–195 See also Conversation(s) Inversion journey, 240 Invisible hand of the market, 70, 122 Jacob, Gail, 156, 161–163, 168 Jandernoa, Beth, 179, 180, 190 Japan, 59–60 Jaworski, Joseph, 17–18 Jews. See Holocaust Jobless growth, 85 Jobs, Steve, 86, 114, 115, 170, 227 Johnson, Simon, 32, 71, 94, 100 Joy, Bill, 105, 106 Judgment, 172 suspension of old habits of, 146 Kabat-Zinn, Jon, 163–169 Kahane, Adam, 224 Kalungu-Banda, Martin, 180–182 Katjivena, Bertha, 206 Kegan, Robert, 214 Kelly, Dave, 114 Kimmitt, Robert, 93 Klatzky, Antoinette, 158, 161–163 Krugman, Paul, 71, 100 Kuhn, Thomas, 73 Kwak, James, 94 Labor, 75, 77, 241 division of, 57, 83 relinking jobs with purpose, 82–89 Labor theory of property, 130–131 Landshare project, 135 Lau, Lawrence, 5 Leaders in an organization, multiple, 112 Leadership, 75, 77, 241 is about creating and communicating a vision, 113 as a distributed or collective capacity in a system, 112 essence of, 110, 114–115 myths about, 112–113 the only real leadership issue, 111–112 origin of the term, 110 shifting the locus from the center to the periphery, 191–192 the tao of, 143–145 See also specific topics Leadership disconnect, 46 Leading from the emerging future, 19–20 Leal, Guilherme, 222, 227 Learning journeys, 224–225 individualized lifelong, 244–245 Legitimacy, 128 Lehman Brothers, bankruptcy of, 12, 27 Letting come, 29 Letting go, 29, 146, 148t going to the edge of, 162–163 Levine, Mark, 134 Lewin, Kurt, 253 Liberation myth, debunking the, 106–107 Lietaer, Bernard, 95 Life-centric technology, 104–106, 110.

No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy
by Linsey McGoey
Published 14 Apr 2015

Indeed, one might say it’s the founding kernel of modern political economy, apparent at least since the writings of Bernard Mandeville, James Steuart, and Adam Smith, each of whom advanced the idea that individuals labouring to meet their own self-interested economic goals naturally contribute to the common good.26 Bishop and Green’s Philanthrocapitalism offers only two cursory references to Smith’s work, neither developed in depth. Perhaps attempting to underscore the originality of their own argument, they gloss over the similarities between their own notion and Smith’s concept of the invisible hand, the idea that ‘by pursuing his own interest [the individual] frequently promotes that of the society more effectively than when he really intends to promote it’.27 Felix Salmon, a former Reuters journalist, has queried this historical amnesia. Criticizing the purported novelty of the notion of philanthrocapitalism, Salmon points out that the ‘realization that business has the capacity to create as well as destroy social value is known as “economics”, and goes back at least as far as Adam Smith.

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There’s nothing new about it, and nor is there anything new about economists using this insight to assuage the guilt of the rich’.28 The philosopher Slavoj Žižek has also noted the strange déjà vu that pervades the rhetoric of philanthrocapitalism enthusiasts, suggesting that their maxims are like a ‘postmodernized version of Adam Smith’s invisible hand: the market and social responsibility are not opposites, but can be reunited for mutual benefit … their goal is not to earn money, but to change the world (and as a by-product, make even more money)’.29 Both Salmon and Žižek make witty and persuasive points. But two things are new about philanthrocapitalism.

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‘Generosity’, in Mauss’s words, ‘is an obligation’.12 ‘The Gift’ illuminates the economic usefulness of seemingly selfless acts of charity and friendship. Whether in isolated regions such as the Trobriand Islands or in the dense enclaves of today’s most cosmopolitan global cities, charity is a key source of both social and economic power. ‘The gift cycle’, the anthropologist Mary Douglas suggested, ‘echoes Adam Smith’s invisible hand: gift complements market in so far as it operates where the latter in absent. Like the market it supplies each individual with personal incentives for collaborating in the pattern of exchanges’.13 Work by Mauss, Douglas, and, more recently, the Oxford economic historian Avner Offer has underscored the economic usefulness of philanthropic gestures to the donors of gifts.

Strangers in Their Own Land: Anger and Mourning on the American Right
by Arlie Russell Hochschild
Published 5 Sep 2016

Also see Miriam Diemer, “Energy and Natural Resources: Industry Influence in the Climate Change Debate,” OpenSecrets.org, last updated January 29, 2015, https://www.opensecrets.org/news/issues/energy. 13to direct $889,000,000 to help right-wing candidates and causes in 2016 alone Fredreka Schouten, “Koch Brothers Set $889 Million Budget for 2016,” USA Today, January 27, 2015, http://www.usatoday.com/story/news/politics/2015/01/26/koch-brothers-network-announces-889-million-budget-for-next-two-years/22363809. In Invisible Hands, Kim Phillips-Fein traces contributions from David and Charles Koch and Rupert Murdoch to the Tea Party. See Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade Against the New Deal (New York: W.W. Norton & Company, 2007). 13“from idea creation to policy development to education to grassroots organizations to lobbying to litigation to political action” Jane Mayer, “Covert Operations,” New Yorker, August 30, 2010.

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Americans’ Responses to the Great Recession,” American Sociological Review 78, no. 5 (2013): 727–48. 93Blacks turn to black neighbors without them Nancy DiTomaso develops this thesis in The American Non-Dilemma: Racial Inequality Without Racism (New York: Russell Sage Foundation, 2013). Also see Deirdre Roysler, Race and the Invisible Hand: How White Networks Exclude Black Men from Blue Collar Jobs (Berkeley: University of California Press, 2003). Also see Appendix C. 93“Good idea,” Hardey says This came in the form of outright payments, tax write-offs, and publicly funded services. 93Louisiana was a poor state Richard Thompson, “Giving Away Louisiana: Industrial Tax Incentives,” The Advocate, December 11, 2014, http://blogs.theadvocate.com/specialreports/2014/12/03/giving-away-louisiana-industrial-tax-incentives. 95advised them not to put their hands in local water if they had open wounds The advisory reads: “The germs, bacteria and parasites in the State’s natural waterways, such as rivers, lakes, marshes and the Gulf of Mexico can make you sick and sometimes may be fatal.

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Oilprice.com (September 4, 2014). http://oilprice.com/Energy/Natural-Gas/Sasol-Clears-Major-Hurdle-to-Build-Americas-First-GTL-Plant.html. Phillips, Justin. “Calcasieu, Cameron Areas ‘on Bubble’ with EPA for Air Quality.” American Press (July 11, 2014). http://www.americanpress.com/news/local/Air-quality. Phillips-Fein, Kim. Invisible Hands: The Businessmen’s Crusade Against the New Deal. New York: W.W. Norton & Company, 2007. Piketty, Thomas. Capital in the Twenty-First Century. Boston: Harvard University Press, 2014. Piketty, Thomas, and Emmanuel Saez. 2007 Average Incomes, U.S. 1980–2012 (in real 2014 dollars). The World Top Incomes Database. http://topincomes.g-mond.parisschoolofeconomics.edu.

Who Owns the Future?
by Jaron Lanier
Published 6 May 2013

As we approach abundance, we will overpopulate and overconsume, or otherwise screw up, until catastrophe strikes. The Malthusian humor suggests a fatal, deterministic ineptitude in politics. • Rousseau: Technology is the means to spiritual malaise. As we approach Abundance, we become inauthentic and absurd. • Invisible Hand: Information technology ought to subsume politics. Adam Smith sketched a character known as the “Invisible Hand,” who can serve as a figurehead for subsuming politics under information technology. Markets (or more recently, other, fundamentally similar algorithms) make decisions instead of human, political deliberations. This humor either ignores or rejects Abundance, for markets become absurd as supply approaches infinity

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People might turn into information rather than be replaced by it. This is why Ray Kurzweil can await being uploaded into a virtual heaven. Turing brought metaphysics into the modern conversation about the natural future. Turing’s humor also provides a destination, or an eschatology that the Invisible Hand’s humor lacks. Turing’s algorithms could inherit the world in a way that the Hand could not. This is because we can imagine software, improperly, I’ll argue, operating without the need for human operators, and even in an era of Abundance depopulated of people. Abundance kills the hand, but not Turing’s ghosts

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• Nelson: Information technology of a particular design could help people remain people without resorting to extreme politics when any of the other, creepily eschatological humors seem to be imminent. Ted Nelson, in 1960, came up with a brand-new, still-emerging humor, which suggests information as a way to avoid excesses of politics even as we approach an inevitably imperfect Abundance. It essentially proposes a consilience between the Invisible Hand and Abundance. This is the humor I am hoping to further with this book. Each humor captures a distinct hypothesis about how politics, what it means to be human, and technology are related. They all concern the role of politics and the human will, or intentionality, in ever higher-tech futures.

The Black Box Society: The Secret Algorithms That Control Money and Information
by Frank Pasquale
Published 17 Nov 2014

Of course, as Richard Bronk observes, “Hayek’s analysis falls short by ignoring the role of dominant narratives, analytical monocultures, self-reinforcing emotions, feedback loops, information asymmetries and market power in distorting the wisdom of prices.” Richard Bronk, “Hayek on the Wisdom of Prices: A Reassessment,” Erasmus Journal for Philosophy and Economics 6, no. 1 (2013): 82–107. 6. Lee H. Fang, “The Invisible Hand of Business in the 2012 Election,” The Nation, November 19, 2003, http://www.thenation .com /article /177252 /invisible-hand-business-2012-election. 7. In philosophy, the term is also polysemic. For example, if enough people simply accept the outputs of a given process as valid, it is a quite useful black box. Some aspects of reality are simply assumed to be true, without need for further investigation.

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“Unknown unknowns,” “black swans,” and “deep secrets” are popular catchphrases for our many areas of social blankness.3 There is even an emerging field of “agnotology” that studies the “structural production of ignorance, its diverse causes and conformations, whether brought about by neglect, forgetfulness, myopia, extinction, secrecy, or suppression.” 4 2 THE BLACK BOX SOCIETY Gaps in knowledge, putative and real, have powerful implications, as do the uses that are made of them. Alan Greenspan, once the most powerful central banker in the world, claimed that today’s markets are driven by an “unredeemably opaque” version of Adam Smith’s “invisible hand,” and that no one (including regulators) can ever get “more than a glimpse at the internal workings of the simplest of modern financial systems.” If this is true, libertarian policy would seem to be the only reasonable response. Friedrich von Hayek, a preeminent theorist of laissez-faire, called the “knowledge problem” an insuperable barrier to benevolent government interventions in the economy.5 But what if the “knowledge problem” is not an intrinsic aspect of the market, but rather is deliberately encouraged by certain businesses?

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We can imagine a future in which the power of algorithmic authority is limited to environments where it can promote fairness, freedom, and rationality. We do not have to live in a world where hidden scores determine people’s fates, or human manipulations of the stock market remain as inscrutable as the “invisible hand.” We should not have to worry that the fates of individuals, businesses, and even our fi nancial systems are at the mercy of hidden databases, dubious scores, and shadowy bets. The same technological and legal revolutions that have so far eviscerated personal privacy can be used to protect it and to advance, rather than curtail, our freedoms and our understanding of the social world.

Jihad vs. McWorld: Terrorism's Challenge to Democracy
by Benjamin Barber
Published 20 Apr 2010

Their common thread is indifference to civil liberty. Jihad forges communities of blood rooted in exclusion and hatred, communities that slight democracy in favor of tyrannical paternalism or consensual tribalism. McWorld forges global markets rooted in consumption and profit, leaving to an untrustworthy, if not altogether fictitious, invisible hand issues of public interest and common good that once might have been nurtured by democratic citizenries and their watchful governments. Such governments, intimidated by market ideology, are actually pulling back at the very moment they ought to be aggressively intervening. What was once understood as protecting the public interest is now excoriated as heavy-handed regulatory browbeating.4 Justice yields to markets, even though, as Felix Rohatyn has bluntly confessed, “there is a brutal Darwinian logic to these markets.

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The circuits—satellite links, undersea cables and land lines—are purchased from telecommunications carriers.16 The virtual corporation also exists in the labor market as an employer of “virtual” rather than actual laborers. The ideal virtual laborer is a robot: an interactive, “intelligent,” fully programmed worker capable of working twenty-four hours a day with no sustenance and minimal upkeep. What a poignant marriage: in McWorld’s chilly new cyberspace, yesterday’s invisible hand reaches out to grasp the invisible body of tomorrow’s newly born virtual corporation to guide its spasmodic newborn movements toward an eternity of profits, almost entirely without the intervention of a visible human hand. Many modern nation-states have generated national industrial policies aimed at strategic coordination of economic policy and domination of international markets by their business corporations on the theory that the nation’s citizens will somehow be benefited by supporting corporations even if corporations decline to return the favor.

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For there is no international state and thus no guarantor or discoverer of an international good. The international dis-order remains a kind of state of nature among nations and it is marked by a “war of all against all”—the “quest for power after power that ceaseth only in death” portrayed by Thomas Hobbes in his Leviathan more than three hundred years ago. The invisible hand thus takes on new significance in the setting of invisible cyberspace, where virtual corporations defeat real nations. Now the space in which they operate is as invisible as the market’s phantom hands. I underscore the importance of these new market hyperrealities here for two reasons: because the free market ideology they rehabilitate is a battering ram against the walls of the nation-state, exposing McWorld’s antagonism to nationalisms of every kind; and because they challenge and ultimately rewrite the traditional account of markets in terms of free trade in raw materials, manufactured goods, and services.

People, Power, and Profits: Progressive Capitalism for an Age of Discontent
by Joseph E. Stiglitz
Published 22 Apr 2019

The first step to answering this question is to recognize that markets are not an end in themselves, but a means to an end: a more prosperous society. Thus, the central question is, when do markets deliver prosperity, not just for the top 1 percent but for society as a whole? Adam Smith’s invisible hand (the notion that the pursuit of self-interest leads as if by an invisible hand to the well-being of society) is perhaps the single most important idea in modern economics, and yet even Smith recognized the limited power of markets and the need for government action. Modern economic research—both theory and experience—has enhanced our understanding of government’s fundamental role in a market economy.

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But the laws of economics are different from those of physics: markets are shaped by public policy, and most markets are far from competitive. Public policy shapes, in particular, who has how much market power. The advocates of free markets like to cite Adam Smith and his argument that in the pursuit of their own self-interest, individuals and firms are led as if by an invisible hand to the advancement of societal interest. They forget Smith’s admonishment that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”11 It was the recognition of this ever-present danger that led Congress some 125 years ago to pass antitrust laws that forbade conspiracies to reduce competition and restricted anticompetitive practices.12 The national income pie can be thought of as being divided into labor income, the return to capital, and everything else.

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Their high prices and excess profits, of course, mean that there is less money to fund research.87 Conclusions The idea that markets are a powerful way of organizing the production of goods and services has been deeply influential. It has provided the intellectual underpinnings of capitalism. But two centuries of research have now brought us to a better understanding of why Adam Smith’s invisible hand can’t be seen: because it’s not there.88 More often than not, firms’ incentives are to create market power, not just better products—and we’ve seen that American firms have excelled in doing so. They’ve used this market power to exploit their consumers, their workers, and the political system, in ways that have resulted in lower growth, even in a supposedly innovative economy.

The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street
by Robert Scheer
Published 14 Apr 2010

Early in the campaign, Obama had shown a sophisticated grasp of the causes of the crash, and one in line with the central thesis of this book. Speaking at Manhattan’s Cooper Union on March 27, 2008, the Democratic Primary candidate provided what still stands as one of the best analyses of the extent and causes of the economic crisis:The American experiment has worked in large part because we have guided the market’s invisible hand with a higher principle. Our free market was never meant to be a free license to take whatever you can get, however you can get it. That is why we have put in place rules of the road to make competition fair, and open, and honest. We have done this not to stifle—but rather to advance prosperity and liberty.

…

Companies like Enron and WorldCom took advantage of the new regulatory environment to push the envelope, pump up earnings, disguise losses, and otherwise engage in accounting fraud to make their profits look better—a practice that led investors to question the balance sheet of all companies, and severely damaged public trust in capital markets. This was not the invisible hand at work. Instead, it was the hand of industry lobbyists tilting the playing field in Washington, an accounting industry that had developed powerful conflicts of interest, and a financial sector that fueled over-investment. A decade later, we have deregulated the financial services sector, and we face another crisis . . .

…

Department of the Treasury, November 12, 1999, www.ustreas.gov/press/releases/ls241.htm. 56 “In the 1930s, at the trough of the Depression”: Ibid. 57 “a nation of whiners”: Patrice Hill, “McCain Adviser Talks of ‘Mental Recession,’” Washington Times, July 9, 2008. 57 “I think we will look back in ten”: David Leonhardt, “Washington’s Invisible Hand,” New York Times, September 26, 2008. 57 “Citigroup threatens no one”: “A Monster Merger.” 58 “Sandy suddenly suggested, ‘We should call Clinton’”: Monica Langley, Tearing Down the Walls: How Sandy Weill Fought His Way to the Top of the Financial World . . . and Then Nearly Lost It All (New York: Simon & Schuster, 2003), 5593-5598, Kindle2 2. 60 “I would compartmentalize the industry”: Bob Ivry, “Reed Says ‘I’m Sorry’ for Role in Creating Citigroup,” Bloomberg, November 6, 2009, www.bloomberg.com/apps/news?

Humankind: Solidarity With Non-Human People
by Timothy Morton
Published 14 Oct 2017

One very obvious instance of explosive holism is the concept of the invisible hand, developed in Adam Smith’s theory of capitalism and first promulgated by Bernard de Mandeville in The Fable of the Bees, the subtitle of which is Private Vices, Public Benefits. That difference between private and public is a metaphysical difference between parts and wholes that is also a difference between lesser and greater. The invisible hand has evident theistic overtones, conjuring up images of divine providence. Capitalist ideology has relied strongly on explosive holism. The invisible hand concept is emergent and teleological. A benevolent group telos is said to emerge from the selfish actions of individuals.

A Beautiful Mind
by Sylvia Nasar
Published 11 Jun 1998

As his longtime friend Mäler put it, “Assar never controlled with commands.”18 In an article Lindbeck wrote on the economic prize in the mid-1980s, he bragged: “So far the proposals of the prize committee to the Academy have been unanimous. A consensus has in fact developed quite ’automatically’ within the committee, as if by some kind of invisible hand, after intensive discussions.”19 The invisible hand, of course, was his own. “You could put it that way,” said Lofgren, laughing. “You can say it’s unanimous… . But he’s a dominating person. We don’t vote officially. You agree.”20 Kerstin Fredga, the president of the Swedish Academy of Sciences, said at one point, “Very few people have ever dared say no to Assar.”21 Ironically, by December 1994, when Fredga made the remark, it was no longer true.

…

The Nash equilibrium, once it is explained, sounds obvious, but by formulating the problem of economic competition in the way that he did, Nash showed that a decentralized decision-making process could, in fact, be coherent — giving economics an updated, far more sophisticated version of Adam Smith’s great metaphor of the Invisible Hand. By his late twenties, Nash’s insights and discoveries had won him recognition, respect, and autonomy. He had carved out a brilliant career at the apex of the mathematics profession, traveled, lectured, taught, met the most famous mathematicians of his day, and become famous himself. His genius also won him love.

…

Since 1950, the Prisoner’s Dilemma has spawned an enormous psychology literature on determinants of cooperation and defection.23 On a conceptual level; the game highlights the fact that Nash equilibria — defined as each player’s following his best strategy assuming that the other players will follow their best strategy — aren’t necessarily the best solution from the vantage point of the group of players.24 Thus, the Prisoner’s Dilemma contradicts Adam Smith’s metaphor of the Invisible Hand in economics. When each person in the game pursues his private interest, he does not necessarily promote the best interest of the collective. The arms race between the Soviet Union and the United States could be thought of as a Prisoner’s Dilemma. Both nations might be better off if they cooperated and avoided the race.

Remix: Making Art and Commerce Thrive in the Hybrid Economy
by Lawrence Lessig
Published 2 Jan 2009

But the giants always fall to a better way of making money. And the RO culture that digital technologies will support will provide lots of new ways for content producers to make money. “As if by an invisible hand,” this market will radically change the nature of access to culture in the next ten years. As a result, our children will be unable to understand a world where Thursday at 10 p.m. was more significant in cultural terms than Friday at 5 a.m. By invoking Adam Smith’s “invisible hand,” I don’t mean to say that policy makers have nothing to worry about here. Smith’s 80706 i-xxiv 001-328 r4nk.indd 49 8/12/08 1:54:46 AM 50 REMI X Wealth of Nations teaches us about the phenomenal power of markets to adjust.

…

Policy makers must assure that rights are not allocated in a way that distorts or weakens competition. A costly overlay of spectrum rights, for example, or an inefficient market of copyrights, can stifle competition and drive markets to unnecessary concentration. These factors must be regulated by policy makers. They will not be “solved” by an invisible hand. But for my purposes here, the most important policy mistake is one that stifles the Sousarian instinct: a policy driven by the view that the only way to protect RO culture is to render RW culture illegal. That choice is a false choice. In the next chapter, I want to sketch a future for RW culture that might motivate us to see just why we should avoid this false choice. 80706 i-xxiv 001-328 r4nk.indd 50 8/12/08 1:54:46 AM FOUR RW, REVIVED O ne of my closest (if most complicated) friends at college was an English major.

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Department of, 39 commercial economies, 116, 118, 119–43, 176, 177 80706 i-xxiv 001-328 r4nk.indd 320 IND E X crossovers and, 227–28 hybrid economies and, 177–78, 225, 228–31; see also hybrid economies on Internet, 119, 121–43 Little Brother and, 132–37, 143 Long Tail principle in, 42, 128–32, 143 parallel economies and, 225–26 sharing economies and, 145–51, 177–78, 225–26, 252 success in, 141–43 tools signaling, 226 commercial vs. noncommercial use, 55, 254 communities, 184–85, 213–20, 221, 222–24 remixes and, 77–80 Young on, 180 community spaces, 186–96 competition, 49, 56, 89–90, 270 CompUSA, 180 Congress, xviii, xxii, 33, 101, 102, 103, 109, 110, 253, 255, 259, 263, 266–69, 271–73, 279, 293 civil rights and, 257 Constitution, U.S., 260, 275 “Content Is Not King” (Odlyzko), 89 Convergence Culture (Jenkins), 28 copies, 98–102, 255, 276–77, 290–91 decriminalization of, 268–71, 279 copyright law, 96, 97, 244–45, 276–77, 289–94 Baker on, 89 clear title in, 260–65 commercial vs. noncommercial use and, 55, 254 competition and, 90, 270 decriminalizing copies and, 268–71, 279 decriminalizing file sharing and, 271–72 decriminalizing youth and, 248–49, 283, 293 de minimis exception to, 104 deregulating amateur creativity and, 254–59 destructive and self-defeating aspects of, 109–14 externalities and, 289, 291, 292–93 fair use and, 91, 99, 100, 103, 123, 255–56, 260, 266–67 8/12/08 1:56:30 AM IND E X history of, 100–101, 103, 262–63, 268–69 hybrid economies and, 248–49 importance of limits in, 31–33, 56 licenses and, see licenses as opt-in system, 262–63 as opt-out system, 263 proper function of, 85 property law and, 264–65 reforming, 253–73, 278, 279 registration and, 262–65 RO culture and, 97–100, 105 RW culture and, 97, 100–105, 108 simplification of, 266–68 Sousa and, 23–27, 31–33 work for hire and, 244 copyright wars, xv–xxii, 34, 39–40, 293–94 collateral damage in, 17–18 Corely, Eric, 2 “Cornucopia of the Commons, The” (Bricklin), 132–34, 173 corruption, 283, 293, 294 craigslist, 187–91, 195 Creative Commons (CC), 15–17, 172, 192, 226, 227, 228, 244, 277–79 creativity, 18, 19 amateur, see amateur creativity cultures of, see culture(s) Long Tail and, 130, 131 original, 91–92, 93, 95 Cult of the Amateur, The (Keen), 90–91 cultural literacy, 81, 107 cultural references, 74–75 culture(s), 18 access to, 43–49, 67, 106, 255, 261, 291 diversity of, 42 found, 75 RO, see RO culture RW, see RW culture Sousa’s view of, 24–29, 32–33, 35, 36, 50 standards in, 96–97 Currier, Frank Dunklee, 32 Cuse, Carlton, 213 Daily Prophet, 206 Daley, Elizabeth, 80 Danger Mouse, 255 80706 i-xxiv 001-328 r4nk.indd 321 321 Dash, Anil, 233 Dean, Howard, 62 defamation, 275 del.icio.us, 59, 60, 233 democracy, 27, 67, 142, 249, 282 democratization, 25, 52–53, 54–55, 90, 107, 140–41, 252 De Sola Pool, Ithiel, 96 Dickens, Charles, 94–95 Diebold, 62 Digg, 59 Digital Rights Management (DRM), 41, 42, 47–48, 67, 98, 99, 235, 290–91 Digital Sky Project, 170–71 Digital Storytelling project, 80–81, 261–62 digital technologies, 38–43, 69, 83, 84, 98–100, 103, 252, 253, 262 and access to media, 46–49 advertising and, 48 Disney, 55, 102, 122 distributed computing, 167–68 Distributed Proofreaders, 167 diversity, 185, 186, 231, 252 Dogster, 186–87, 213 doujinshi, 79, 80 Doyle, Michael, 11–12 Duffy, Kevin Thomas, 53–54 DVDs, 2, 30, 37, 38, 94, 124, 129, 144–45 DVRs, 44 economies, 116, 117–18, 225–49 commercial, see commercial economies crossovers in, 227–28 hybrid, see hybrid economies parallel, 225–26 sharing, see sharing economies spillovers and, 229–31 tools to signal types of, 226–27 value in, 88–90 education, 85–86, 274 legal, 86 remixes and, 80–82 Einstein@Home, 167–68 election of 2004, 62–63 Electronic Frontier Foundation (EFF), 3, 271 Ellis, Jim, 57 8/12/08 1:56:30 AM 322 eMusic, 12, 42 Everything Bad Is Good for You (Johnson), 93–94 Ewing, Marc, 181, 182 externalities, 289, 291, 292–93 eyeVio, 249 fair use, 91, 99, 100, 103, 123, 255–56, 260, 266–67 Fake, Caterina, 191–92, 233 fan cultures, 205–13, 245–48, 258–59, 276 Fight Censorship, 197 file sharing, see peer-to-peer file sharing films, see movies Fisher, William, 109, 271, 272 Flickr, 191–94, 233 found culture, 75 fourstones, 95 Fox, 71, 227 Franks, Charles, 167 “free” content, 47–48 Free Culture (Lessig), xvi–xvii, 80, 89, 113 Future of Ideas, The (Lessig), xvi Gansky, Lisa, 192 Geilhufe, David, 191 Ghosh, Rishab, 173 Gift, The (Hyde), 147–48, 149 gifts, 147–48 GigaOmniMedia, 232 Gil, Gilberto, 66–67, 256 Gillis, Gregg, 11–15 Girl Talk, 11–13, 17, 18, 69–70, 104 global warming, 292, 293, 294 GNU, 162, 163, 182, 184, 240–41 Goddard Space Flight Center, 180 Godwin, Mike, 156 Goethe Institute, 92 Gomes, Lee, 130 Google, 127–28, 141, 142, 190, 197, 224, 234, 241 books digitized by, 260–61 Little Brother and, 132, 136–37 mash-ups, 138 YouTube acquired by, 194 Google Application Programming Interfaces (APIs), 128, 137, 138 80706 i-xxiv 001-328 r4nk.indd 322 IND E X Gore, Al, 293 Gracenote, 134, 237–39 Green, Rich, 232 Grokster, xxi, 110 Guggenheim, Davis, 275 “Hard Working George” (Sadler), 72–73 Harry Potter, 206–12, 245, 246, 258–59 Hart, Michael, 166, 167 Hastings, Reed, 124 Hollywood, 205–13, 291, 292, 294; see also movies Hosler, Mark, 70, 71, 75, 76, 81, 107 Hurley, Chad, 194 Hurricane Katrina, 189–91 Hutchinson, Thomas, 147 hybrid economies, 34, 35, 116, 118, 119, 177–224, 225, 252, 253, 274, 294 collaboration spaces and, 196–213 communities and, 213–20 community spaces and, 186–96 decriminalizing youth and, 248–49 fairness in, 231–43 free software, 163–66, 172, 173–75, 179–85, 219, 220, 240–43, 291 incentives for commercial entities to become, 228–31 Internet, 116 sharecropping in, 243–48 Hyde, Lewis, 147–48, 149 IBM, 241–42 ideas, 290 innovation, 25, 221, 228–29 LEGO-ized, 137–41, 143 spillovers and, 229–31 Innovator’s Dilemma, The (Christensen), 143 integrity, 87, 92 International Federation of the Phonographic Industry, 39 Internet, 30, 34, 40, 58, 68, 69, 102–3, 116, 163, 230, 252 commercial economies and, 119, 121–43 hybrid economies and, 116, 177, 178; see also hybrid economies Keen on, 90–91 8/12/08 1:56:31 AM IND E X LEGO-ized innovation and, 137–41, 143 Little Brother and, 132–37, 143 sharing economies and, 119, 155–72 Internet Archive, 168, 175, 232, 236 Internet Movie Database (IMDb), 239–40 “invisible hand,” 49–50 iPod, 41, 46, 47, 88 Iraq, 281–82 Ito, Joi, 200, 218–19 Ito, Mimi, 78, 79, 80 iTunes, 41–42, 134 Girl Talk and, 12, 13 Jackson, Andrew, 275 Jackson, Michael, 5 Jarvis, Jeff, 233–34 Jay-Z, 255 Jefferson, Thomas, 27, 106, 131–32, 262, 290–91 Jenkins, Henry, 28, 78, 81, 94, 206–7, 212, 276 Jobs, Steve, 40 Johnson, Mark, xiv Johnson, Steven, 93–94 Jones, Scott, 238 Joyce, Don, 54, 70, 71, 272–73 Jupiter Research, 110 juries, 87 Kahle, Brewster, 58, 168, 232, 236–37, 239 Kan, Ti, 237–38 Karim, Jawed, 194 Kasem, Casey, 13, 75 Keen, Andrew, 90–91, 127 Kelly, Kevin, 59 Kerry, John, 72 Kind, Jonathan, 149 Kodak, 192 Kollock, Peter, 174 Lakoff, George, xiv, xv Lasica, J.

Team of Teams: New Rules of Engagement for a Complex World
by General Stanley McChrystal , Tantum Collins , David Silverman and Chris Fussell
Published 11 May 2015

Emergence has been used as a paradigm for exploring everything from the crystalline beauty of a snowflake, to the explosive development of cities,* to the capricious behavior of economic markets. Adam Smith’s “invisible hand” of the market—the notion that order best arises not from centralized design but through the decentralized interactivity of buyers and sellers—is an example of “emergence” avant la lettre. It stands in direct contrast to what Alfred Chandler dubbed the “visible hand” of management—the reductive planning that has dominated most organizations for the past century. Smith’s invisible hand, like the leaderless ant colony, illustrates the core insight of emergence as it relates to our study of teams: in situations defined by high levels of interaction, ingenious solutions can emerge in the absence of any single designer; prices can settle without a central planner; complex operations can be executed without a detailed plan.

…

This is not to say that simply throwing more computers or Navy SEALs at a problem is the answer; the key lies not in the number of elements but in the nature of their integration—the wiring of trust and purpose. Parallel computing, joint cognition, and the oneness of a team all work toward the same goal: building a network that allows you to solve larger, more complex problems. The creation and maintenance of a team requires both the visible hand of management and the invisible hand of emergence, the former weaving the elements together and the latter guiding their work. Programs like BUD/S are designed to foster emergent intelligence that can thrive in the absence of a plan. This was exactly what the aviation industry had in mind when it set out to solve problems like the crash of United 173.

…

Years later, in what Chandler referred to as “the Managerial Revolution,” the specialized businesses were reunited when they merged into large, vertically integrated corporations with dozens of departments and hundreds of offices. Many functions were consolidated under centrally managed entities, instead of the sea of small actors responding independently to the forces of the market (Chandler dubbed this force “the visible hand” in contrast to Adam Smith’s description of market forces as “the invisible hand”). The number of people working in “professional services” rose from 750,000 in 1860 to 2.16 million in 1890, and to 4.42 million by 1910, but the number of firms that employed them dropped: 4,000 firms collapsed into 257 combinations between 1897 and 1904. But consolidation did not signal a return to the shared space and understanding of countinghouse culture.

Rage Inside the Machine: The Prejudice of Algorithms, and How to Stop the Internet Making Bigots of Us All
by Robert Elliott Smith
Published 26 Jun 2019

In 1776, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations, in which he wrote: It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Thus, one of the founding principles of economics is self-love, and what we now call Smith’s ‘Invisible Hand’, the idea that societal good emerges not from attempts to control an economy, but from the actions of a population of self-interested individuals. Thus, individual action, self-improvement and self-love were seen as the motivating forces towards personal and social improvement in religion, politics, philosophy and economics.

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As a result, over the last 250 years, we have conceived of and created an economy in the image of a giant factory or machine that runs on the classical economic model of self-regulating markets, governed by supposedly natural laws of production and exchange, where prices and profits tend to a general equilibrium, famously captured by Scottish economist and philosopher Adam Smith’s (1723–90) metaphor of the ‘invisible hand’. We talk of ‘market mechanisms’, ‘supply’ and ‘demand’, and the image we hold in our heads of what the economy looks like was captured by economist Paul Samuelson in his 1948 Circular Flow diagram, whereby labour and capital go in one end and goods and services come out the other. Engineer and economist Bill Phillips even built a hydraulic machine called MONIAC (the Monetary National Income Analogue Computer), complete with transparent water tanks and circular pipes, to demonstrate how money flowed around Samuelson’s system like fluids in a hydraulic mechanism.

…

On 2 March 1812, The Morning Chronicle published Byron’s ‘An Ode to the Framers Bill’: Men are more easily made than machinery Stockings fetch better prices than lives Gibbets on Sherwood will heighten the scenery, Showing how Commerce, how Liberty thrives Mechanization evolved to handle tasks outside of textiles, and spread quickly throughout industries and the world, nearly uniformly displacing jobs and degrading workers’ rights along the way. Three decades after Vaucanson’s marrying automata tech to industry, Adam Smith wrote The Wealth of Nations, the book which not only created the notion of the ‘invisible hand’, but foresaw the economic effects that mechanization would accelerate: specialization, and its inevitable consequence, the division of labour. Imagine the making of a fine, eighteenth-century leather purse. A single person, working alone to make such a purse would have to know how to raise grain, feed livestock, slaughter them, skin them, tan those skins, and make tools to sew and work the leather (not to mention the finishing work).

Superminds: The Surprising Power of People and Computers Thinking Together
by Thomas W. Malone
Published 14 May 2018

Even if you are just selling mustard ice cream to make more money for yourself, you are also—unwittingly—helping to use all the milk, sugar, human labor, and other resources of your whole society in a way that makes more people happy. Smith called this almost mystical property of markets their “invisible hand.” But markets don’t just have invisible hands; they are invisible minds. In fact, they’re superminds. Superminds are all around us all the time, but to see them, you have to know how to look. Some superminds, like companies, are usually pretty easy to see. Others, like ecosystems, are much harder. I sometimes play a little game with myself: How many superminds can I see while walking down the street?

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And the book will conclude with some reflections on how we can use our global collective intelligence to make choices that are not just smart but also wise. Part I What Are Superminds? CHAPTER 1 Would You Recognize a Supermind If You Saw It on the Street? When Adam Smith wrote The Wealth of Nations, in 1776, he said that buyers and sellers in a market who do what’s best for themselves are often “led by [the] invisible hand” of the market to also do what’s best for society. For instance, if you can make more profit for yourself by selling mustard ice cream instead of mocha from your ice cream truck, then that’s also the way your business can contribute more economic value to society.1 Of course, there are certainly situations where maximizing your own profit isn’t what’s best for society.

…

But the real point is that, in a certain sense, we can let the market decide what kind of retailers are most effective. The companies that work well—whether they are fully automated, semiautomated, or not automated at all—will make money. Those that don’t work well will go broke. And over time, the invisible hand of the market will continually redirect resources to the places that are—at that moment—most effectively providing what customers want. Of course, it’s not quite this simple. There are many situations where markets don’t perform in practice the way they should in theory. But markets do have a very important ability to continually adapt to changing situations, including changes in what can and cannot be automated at any given time.

Making It in America: The Almost Impossible Quest to Manufacture in the U.S.A. (And How It Got That Way)
by Rachel Slade
Published 9 Jan 2024

The Friedmans repackaged Smith’s so-called invisible hand, a divine force that led humans to act selfishly, which paradoxically would lead them down the most beneficial path. In fact, Smith mentions the invisible hand only three times. Most importantly, he uses it only to refer to domestic industries, not international trade. Smith argued that when entrepreneurs are bound to place, they keep their money in their community. Local banks, for example, have a natural incentive to lend locally, spurring investment in the people and businesses that in turn drive the bank’s revenue. That marks the extent of the invisible hand in Smith’s world.

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Warren, Westbrook, Maine, 262, 262n Seroka, Gene, xii Shaw, Thomas, 212 Sheetmetal Workers Local 17, 217 Sherman Antitrust Act, 56 Shivakumar, Sujai, 297 Singer, Isaac, 145 Sintex Industries, India, 156 Skinner, Tracy and Bill, 153, 155 Smith, Adam “invisible hand” and, 12 trade regulation and, 12, 13, 14 Wealth of Nations, 11–12, 13 Smith, DeMaurice, 288, 289 Smith, Gary, 130 socialism, 11, 71, 71n, 76, 185, 204 Allende in Chile and, 72 Sourcing Journal, xii South Africa, 125, 126, 284 Spiro, Arthur, 46 Springsteen, Bruce, 95 Wrecking Ball (album), 93 Staker, Judy, 59 Stanley Woolen Company, Uxbridge, Massachusetts, 100–103 Steinbeck, John, Grapes of Wrath, 59n Sullivan, Evan, 236, 240, 248–52, 254, 264–65, 272–73, 278, 279–81, 293 Sullivan, Jeff, 158–59 Summers, Larry, 256, 257 Sundback, Gideon, 145–46 supply chain, 12–13 China and the cotton market, 231–34, 235 container ship pileup, California ports, xi–xiii Covid pandemic and, 211, 212, 234–35 for pharmaceuticals, 299 rebuilding domestic supply chain, 140 shipping costs and, 237–38 Suez Canal blocked and, 237–38 SWOC (Steel Workers’ Organizing Committee), 59 T Taft, William, 108 Taher, Hanya Al, 179 Tai, Katherine, 275 Target, 143 Tariff Act of 1789, 7 Tariff Act of 1930, 68 tariffs, 7, 8, 11, 13, 16, 46, 68, 196, 198, 275, 286n.

Homo Deus: A Brief History of Tomorrow
by Yuval Noah Harari
Published 1 Mar 2015

This relentless flow of data sparks new inventions and disruptions that nobody plans, controls or comprehends. No one understands how the global economy functions or where global politics is heading. But no one needs to understand. All you need to do is answer your emails faster – and allow the system to read them. Just as free-market capitalists believe in the invisible hand of the market, so Dataists believe in the invisible hand of the data flow. As the global data-processing system becomes all-knowing and all-powerful, so connecting to the system becomes the source of all meaning. Humans want to merge into the data flow because when you are part of the data flow you are part of something much bigger than yourself.

…

Modernity accordingly inspired people to want more, and dismantled the age-old disciplines that curbed greed. The resulting anxieties were assuaged to a large extent by free-market capitalism, which is one reason why this particular ideology has become so popular. Capitalist thinkers repeatedly calm us: ‘Don’t worry, it will be okay. Provided the economy grows, the invisible hand of the market will take care of everything else.’ Capitalism has thus sanctified a voracious and chaotic system that grows by leaps and bounds, without anyone understanding what is happening and where we are rushing. (Communism, which also believed in growth, thought it could prevent chaos and orchestrate growth through state planning.

…

Yet the fact remains that humankind is today not only far more powerful than ever, it is also far more peaceful and cooperative. How did humans manage that? How did morality, beauty and even compassion survive and flourish in a world devoid of gods, of heaven and of hell? Capitalists are, again, quick to give all the credit to the invisible hand of the market. Yet the market’s hand is blind as well as invisible, and by itself could never have saved human society. Indeed, not even a country fair can maintain itself without the helping hand of some god, king or church. If everything is for sale, including the courts and the police, trust evaporates, credit vanishes and business withers.6 What, then, rescued modern society from collapse?

How to Be a Liberal: The Story of Liberalism and the Fight for Its Life
by Ian Dunt
Published 15 Oct 2020

The profit motive encouraged cheaper production, driving down costs and maximising national output. Importantly, this was not achieved by planning. It flowed naturally from people’s self-interest. Each individual, Smith said, in the single most famous metaphor in all of economics, was ‘led by an invisible hand to promote an end which was no part of his intention.’ This system operated at peak efficiency when it was the natural product of people’s instinctive economic behaviour. Whenever officials tried to interfere with it, they simply ended up jamming unnecessary material into its cogs. The best thing for everyone was that it was left well alone.

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In the wake of the French Revolution, this notion seemed more powerful than ever before. After all, the attacks on the individual rights of refractory priests had begun after the confiscation of church lands. The lunacy of the Terror had coincided with the introduction of the maximum. But Smith’s notion of the invisible hand introduced a second argument. By interfering with property rights, the state was undermining the efficiency of the market and reducing the wealth of everyone in society. Writing decades after The Wealth of Nations was published, Constant accepted that the state did have a right to interfere with property.

…

They were within the protective shield of individual life that no-one should interfere with. The state had limited powers to tax people or restrict their economic activity. Constant had taken this further and defended property rights on an instrumental level. In other words, they were valuable on the basis of what they accomplished. The invisible hand mechanism, which led from self-interest to competition in a free market, increased productivity and gave people more advantages than they would have were the state to intervene. Mill took this instrumental view of property and started asking searching questions of it. Was uncontrolled competition providing the goods?

The Asian Financial Crisis 1995–98: Birth of the Age of Debt
by Russell Napier
Published 19 Jul 2021

The price of commodities is headed lower and the collapse in demand in Asia is already impacting capacity utilisation rates from the dairy sheds of New Zealand to the paper mills of Alabama. Of course, such disruptions are perfectly normal and through the ‘invisible hand’ of price, such imbalances are corrected. Of course, as equity owners in Asia are finding out, that correction process which reads so quaintly in the textbook is actually a great rending destruction of capital when the current status is an oversupply of capital. Of course, the ability of the ‘invisible hand’ of the market to produce such equilibrium really depends upon whether the market is allowed to work properly. The history of the 20th century has been one of concerted efforts by governments to corral markets for political ends.

…

In a clear message to his shareholders, who value his equity capital at US$13bn, he has told them that his capital will be used for the service of ‘society’ rather than shareholders. The point of quoting Mr Aikawa is not to suggest that he is either wrong or right, but to point out the very dangerous dynamics for the world economy when the ‘capitalists’ of the world’s second-largest economy ignore the ‘invisible hand’ of the market in an overcapacity situation. So obviously when prices fall, the marginal producers see their cash flows squeezed and the viability of their business questioned. In due course, prices fall to a level where these producers have to close capacity or are bankrupted. Of course, if there are some players in the market who prefer to target other goals apart from returns on capital, then the road to equilibrium may be long and hard.

…

If Japanese capital views the world from this perspective, then the adjustments in supply dictated by price will all be forced upon the rest of the global economy, where returns on capital rather than full capacity utilisation are the key target. Of course, the inability or unwillingness of Japan’s capital to be triggered into adjustment by the mechanism of price is nothing new. However, we have reached a stage in the global economy when such intransigence to the ‘invisible hand’ of price is extremely dangerous. The death of communism has unleashed powerful new productive forces which at this stage are adding to the problems of oversupply. Theoretically, such lower prices will trigger rises in consumption. This mechanism still works even if Japan refuses to play by its rules.

Investing Demystified: How to Invest Without Speculation and Sleepless Nights
by Lars Kroijer
Published 5 Sep 2013

It simply can’t be done. The beautiful shortcut – follow the crowd But here is the beautiful thing. If you generally believe in efficient markets, you don’t need to worry about the portfolio theory above or collecting millions of correlations and thousands of risk-return profiles. The market’s ‘invisible hand’ has already done all that for you. We don’t think we are able to reallocate between securities in such a way that we have a higher risk/return profile than what the aggregate knowledge of the market provides. Buying the entire market is essentially like buying the tangency point T. To some people it will seem like too bold an assumption that capital has seamlessly flowed between countries and industries in such a way that world markets are efficiently allocated.

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If you invest in a combination of the minimal-risk asset and broad-listed equity markets in a cheap and tax efficient way, you are doing better than most. If you are willing to add a bit of complexity there’s a lot of merit in adding other government and corporate bonds to your portfolio (see later). Summary The ‘invisible hand’ of the markets has optimised the values of the investments available. We should celebrate this simplicity and buy the whole market. We don’t think we can reallocate between securities to get a better risk/return profile. Combine the world equity markets with investing in the minimal risk asset to get to the kind of risk profile you want.

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Index accountants active managers compared with index trackers, 2nd performance over time active personal portfolio management adding up the costs of advisory charges age life stages of financial planning and risk profile AIG allocations see investment allocations alternative investments alternative weightings ‘angel’ investing, 2nd annuities IRR (internal rate of return), 2nd apocalypse investing avoiding fraud and financial disasters and gold as security assets asset classes to avoid concentration risk customisation and noninvestment growth of, and overpayment of fees and institutional investors intangible and liabilities and portfolio theory in the rational portfolio, assets split tangible see also minimal risk assets avoiding fraud banks bailouts cash deposits with and financial disaster and gold as security and property investment Barclays US High Yield index Bernstein, William The Intelligent Asset Allocator bid/offer spread black swan events, 2nd, 3rd Bogle, John bonds bond indices, 2nd dollar domination of ETFs, 2nd and financial planning income from coupon payments indices and the rational portfolio adding other bonds to risk preferences, 2nd rebalancing your portfolio ‘risky’ bonds and liquidity shortterm, 2nd see also corporate bonds; government bonds; minimal risk assets Brazil government bonds broad-based portfolios and liquidity world equities, 2nd, 3rd, 4th, 5th Buffett, Warren, 2nd fee structure capital gains tax (CGT), 2nd, 3rd and gifts car insurance Case-Shiller House Price index, 2nd cash deposits deposit insurance government guarantees risk of CGT see capital gains tax (CGT) civil unrest collectibles commercial property market commodities, 2nd returns form company shares comparison sites, 2nd enhanced independent Contagion (film) corporate bonds adding to minimal risk assets, 2nd, 3rd and financial planning and credit quality ETFs, 2nd and financial planning liquidity of and minimal risk assets and portfolio theory, 2nd and the rational portfolio, 2nd, 3rd adjusting allocations, 2nd risk preferences real return expectations world corporate debt yields, 2nd costs see fees and expenses CRB Commodity index CRB Total Return index, 2nd credit ratings government bonds, 2nd, 3rd, 4th adding to minimal risk assets currency and government bonds, 2nd, 3rd, 4th matching and world equities currency-hedged investment products custody charges customisation Cyprus defined benefits pension schemes defined contribution pension schemes diversification and assets benefits of and corporate bonds, 2nd and equity market risk geographical and government bonds, 2nd and the rational portfolio, 2nd and world equities, 2nd Dow Jones index Industrial Average recovery from losses drop dead allocation early savers edge over the markets see investment edge efficiency frontiers EIS (Enterprise Investment Schemes) Elton, Edwin Modern Portfolio Theory and Investment Analysis emerging market companies listed on Western exchanges Enterprise Investment Schemes (EIS) equities and government and corporate bonds performance and portfolio theory and property investment and the rational portfolio allocations risk preferences, 2nd rebalancing your portfolio risk of diversification and false sense of security recovering from large losses standard deviation, 2nd, 3rd view that markets will always bounce back see also world equities equity risk premium and financial planning ETFs (exchange traded funds), 2nd, 3rd, 4th advantages to owning buying bonds, 2nd, 3rd commodity trading customisation fees and expenses in global property and gold trading implementing and index funds leveraged maturities and minimal risk bonds, 2nd physical or synthetic rebalancing your portfolio and taxes total expense ratio (TER) tracking errors European Union bonds, 2nd expenses see fees and expenses fat tails fees and expenses, 2nd adding up costs alternative investments benefits of paying lower fees and comparison websites financial advisers index trackers compared with active managers and investment edge pension plans and performance impact over time mutual funds, 2nd and the rational investor and the rational portfolio, 2nd rebalancing your portfolio Ferri, Richard All About Asset Allocation financial advisers, 2nd and comparison websites financial crisis 2008–09 and commodities trading and currency matching and government bonds yields and high risk preferences and liquidity and longterm financial planning, 2nd and market risk, 2nd, 3rd, 4th financial planning building your savings and the financial crisis 2008–09, 2nd and investment allocations, 2nd, 3rd and life stages and risk, 2nd risk surveys rules of thumb to consider supercautious savers financial software packages France government bonds fraud, avoiding frequent trading FTSE All-Share index FTSE All-Share Tracker fund FTSE NAREIT Global index, 2nd, 3rd fund pickers future performance mutual funds GDP and corporate bonds and world equity market value, 2nd Germany government bonds gifts and capital gains tax gold, 2nd as security Goldman Sachs government bonds adding to minimal risk assets, 2nd and financial planning and bank deposits banks and government defaults buying in base currency, 2nd credit ratings, 2nd, 3rd, 4th and diversification earnings ETFs, 2nd and the financial crisis (2008) and financial planning inflationprotected liquidity of longerterm maturity minimal risk and world equities, 2nd, 3rd and portfolio theory, 2nd, 3rd and the rational portfolio, 2nd, 3rd adjusting, 2nd, 3rd allocations, 2nd risk preferences real return expectations time horizons yields Greece government debt and bond yields hedge funds, 2nd, 3rd, 4th Japanese government bonds and liquidity high risk preferences home markets overinvestment in Icelandic banks income tax index funds, 2nd and ETFs and government bonds implementing maturities and minimal risk bonds, 2nd total expense ratio (TER) tracking errors index-tracking products, 2nd and active managers adding bonds to a portfolio compared with active managers, 2nd comparison sites, 2nd enhanced independent costs of fund changes and taxes future product development implementing license fees for and liquidity and mutual funds and the rational portfolio, 2nd, 3rd different risk preferences total expense ratio (TER), 2nd versus mutual fund returns over time world equities, 2nd see also ETFs (exchange traded funds); index funds India government bonds inflation earnings from minimal risk bonds inflation-adjusted government bonds inflation-protected bonds returns on world equities information/research costs institutional investors insurance buying deposit insurance schemes intangible assets interest rates cash deposits in banks government bonds, 2nd international investment investment allocations adding other government and corporate bonds and financial planning, 2nd, 3rd flexibility of financial goals life stages rebalancing your portfolio, 2nd investment edge, 2nd absence of, 2nd adding up the costs asset classes to avoid and commodities trading, 2nd and the competition different ways of having and expenses and performance picking your moment and private investments and the rational portfolio reconsidering your edge and world equities ‘invisible hand’ of the market IOUs (promissory notes) IRR (internal rate of return) annuities, 2nd iShares, 2nd Ishikawa, Tets How I Caused the Credit Crunch Japan commodities trading government bonds Nikkei index jewellery leverage ETFs and mortgages portfolios liabilities and the rational portfolio life insurance, 2nd life stages and financial planning liquidity equity portfolio and ‘risky’ bonds and ETFs minimal risk and private investments and the rational portfolio, 2nd, 3rd returns on illiquid investments selling your investment, 2nd localised risks avoiding and noninvestment assets Madoff, Bernie market capitalisation and world equities, 2nd market efficiency and inefficiency Mexico government bonds Microsoft investors, 2nd, 3rd and liquidity, 2nd mid-life savers minimal risk assets, 2nd adding other bonds to corporate bonds, 2nd, 3rd government bonds, 2nd adjusting the risk profile asset classes to avoid buying and diversification and equity markets ETFs and financial planning 50/50 split with world equities, 2nd, 3rd allocations government bonds earnings inflation-protected time horizons of inflationprotected bonds and liquidity as optimal portfolio and portfolio theory, 2nd in the rational portfolio, 2nd, 3rd, 4th, 5th, 6th real return expectations and world equities, 2nd Morgan Stanley mortgages and currency matching and leverage MSCI World Index, 2nd, 3rd, 4th mutual funds fees and performance, 2nd and index trackers national economies and equity market risk OEICs (openended investment companies) oil trading, 2nd optimal portfolio theory minimal risk asset past performance and future performance Paulson, John pension funds, 2nd, 3rd benefits and charges defined benefits schemes underfunded performance and fees index trackers versus active managers versus mutual funds portfolio theory and government bonds optimal and the rational investor price impact private equity capital, 2nd private investments, 2nd and liquidity privatisations and world equities professional investment managers property market investments, 2nd avoiding and financial disasters institutional investors and liquidity and the rational portfolio US subprime housing markets, 2nd, 3rd rational investing, 2nd core of ongoing tasks of rational portfolio adding other bonds to adjusting allocations and equity risk return expectations asset classes to avoid assets and liabilities assets split checklist corporate bonds, 2nd diversification financial benefits of and financial disasters geographical diversification government bonds, 2nd, 3rd, 4th, 5th implementation incorporating other assets and investment edge key components of a and liquidity, 2nd, 3rd and pension plans and portfolio theory and risk preferences risk/return profile, 2nd, 3rd, 4th tailoring to specific needs and circumstances tax adjustments tax benefits of holding and tax efficiency, 2nd, 3rd, 4th world equities, 2nd, 3rd, 4th see also minimal risk assets rebalancing your portfolio ticket size REITs (Real Estate Investment Trusts) residential property market retirees investment allocation retirement annuities and financial planning risk cash deposits credit risk and corporate bonds of equity markets equity risk premium high risk preferences and longterm financial planning, 2nd and the optimised market and the rational portfolio, 2nd, 3rd asset split risk preferences risk expertise websites risk surveys risk/return profile equity markets and financial planning, 2nd, 3rd and long-term financial planning minimal risk assets adding government and corporate bonds to pension plans and portfolio theory and the rational portfolio, 2nd, 3rd, 4th, 5th rebalancing your portfolio world equities riskless investment choice, 2nd S&P 500 index and the CRB Commodity index Index Tracker Portfolio standard deviation stocks volatility savings ‘doing nothing’ with and long-term financial planning life stages SD see standard deviation (SD) selling investments and liquidity software packages Spain government bonds standard deviation (SD) building your savings and equity market risk, 2nd, 3rd synthetic ETFs Taleb, Nassim Nicholas The Black Swan, 2nd tangency points tangible assets tax efficient proxies tax wrappers, 2nd taxes, 2nd advisers or accountants questions to ask benefits of the rational portfolio capital gains tax (CGT), 2nd, 3rd, 4th creating trading lots and financial disaster and pension plans, 2nd rational portfolio adjustment realising losses against tax advice websites tax efficiency and the rational portfolio, 2nd, 3rd, 4th tax schemes tax-sheltered or optimised products transaction tax, 2nd technology-focused funds, 2nd TER (total expense ratio), 2nd This Time is Different: Eight Centuries of Financial Folly (Reinhart and Rogoff) total expense ratio (TER), 2nd transaction taxes, 2nd, 3rd transfer charges turnover costs unit trusts, 2nd United Kingdom bank deposits and credit guarantee equities government bonds credit rating earnings from sterling investors United States corporate bonds, 2nd Dow Jones index, 2nd equity market, 2nd risk, 2nd, 3rd and total expense ratio government bonds credit ratings dollar investors earnings from versus property investment sub-prime housing market, 2nd, 3rd Vanguard, 2nd, 3rd, 4th, 5th, 6th FTSE AllShare index venture capital, 2nd Virgin FTSE All-Share Tracker fund volatility and financial planning predicting future Waal, Edmund de The Hare with Amber Eyes world equities adjusting the rational portfolio alternative weightings defining diversification benefits, 2nd, 3rd ETFs expected returns and financial planning 50/50 split with minimal risk assets, 2nd, 3rd investment allocation and high risk preferences indices liquidity of market value and minimal risk assets, 2nd overweighing ‘home’ equities and portfolio theory and the rational portfolio, 2nd, 3rd, 4th allocations risk preferences real return expectations US market, 2nd ‘Investing Demystified delivers, with great clarity and lucidity, the best possible advice you can get when it comes to personal investments and financial planning.’

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations
by David Pilling
Published 30 Jan 2018

One author lists some of the activities that are not part of the economy as “giving birth to babies, raising children, cultivating a garden, cooking food for her siblings, milking the family cow, making clothes for her relatives or taking care of Adam Smith so he can write The Wealth of Nations.”13 Even the woman whose housework freed up time for the economist Adam Smith to write his most famous work contributed nothing to the economy, as we define it. Smith is known for his concept of the “invisible hand,” which describes the market forces and pricing signals that are supposed to make economies work smoothly without a central plan. He wrote less about the invisible sex.14 In Jonathan Franzen’s novel The Corrections Enid’s husband, Al, is irritated that she has not cleared up magazines and jars from the top of the stairs.

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If markets are functioning properly, this benefits not only themselves but also society at large. This interpretation borrows heavily from the physical sciences. The victory of mechanism over moralism, it takes as a starting point the notion that markets function best when individuals are left alone. In this Bentham’s utility merges with Adam Smith’s invisible hand to form a view of the world in which rational actors produce the best possible outcome under given constraints. “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner,” wrote Smith, “but from their regard to their own interest.” Bentham’s utility is the mechanism by which individual decisions add up to a greater whole.

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You might call it a nanny state. You might call it Scandinavia. Layard does not blush at either suggestion. Indeed, he says, Scandinavia has done a much better job of promoting what he sees as healthier, happiness-enhancing values. These are not founded excessively on Darwin’s survival of the fittest or on Smith’s invisible hand, what Layard calls the two doctrines underpinning Anglo-Saxon societies. Rather they are based on a feeling of common purpose and shared endeavor. He cites a study in which 77 percent of Swedish children aged eleven to fifteen supported the assertion “Most of the students in my class are kind and helpful.”

Small Change: Why Business Won't Save the World
by Michael Edwards
Published 4 Jan 2010

The Wealth of Nations describes how economic forces will produce the greatest common good under conditions of perfect liberty and competition, maximizing the efficient allocation of productive resources and bringing the economy into equilibrium — “the ideal balance between buyers and sellers, and firms and workers, such that rates of return to a resource in various uses will be equal.”1 The “invisible hand” makes only one 63 64 small change appearance in the 1,264 pages of my edition (it’s on page 572), perhaps because Smith didn’t believe that social welfare would be maximized through the uncoordinated (i.e., “invisible”) actions of self-interested individuals. It was later economists like Milton Friedman who claimed that the efficient operation of the market would always create more social value than would altering or redistributing the surplus it produced through philanthropy or government intervention.

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Yet he was unable to integrate these two books into one coherent philosophy, sparking a conversation between efficiency and welfare that continues still today. Will philanthrocapitalism finally resolve Adam Smith’s dilemma? In conventional market thinking, “the social responsibility of business is to increase its profits,” as Milton Friedman famously declared almost forty years ago in the pages of the New York Times. That is because the invisible hand is supposed “to be beneficial for the people it orders,” maximizing social welfare as a by-product of self-interested but unconscious interactions, with some light regulation to ensure that business operates inside a framework of agreed-upon social rules.2 One of the virtues the high cost of mission drift 65 of markets is that, at least in theory, they can ensure that each resource is used where returns are highest and is combined with other resources in the most efficient way, even though producers and consumers do not coordinate their decisions.

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World
by Jeremy Rifkin
Published 27 Sep 2011

And here is where we are running up against a wrong-headed idea of how economic revolutions occur that borders on the delusional. HOW ECONOMIC REVOLUTIONS ARE REALLY MADE Many Americans have long harbored the notion that the great economic advances are always the result of the government getting out of the way and allowing the invisible hand of capitalism free reign in an unfettered market. Europeans, and other societies around the world, are far less convinced of the virtues of wide-open, libertarian capitalism and have historically shown a preference for proactive government involvement in the economic process in order to maintain a more balanced social market model.

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Early on, every school-child is introduced to Newton’s three laws, which state that A body at rest remains at rest and a body in motion remains in uniform motion in a straight line unless acted upon by an external force; the acceleration of a body is directly proportional to the applied force and in the direction of the straight line in which the force acts; [and] for every force, there is an equal and opposite force in reaction.1 Anxious to ground their musings in the mathematical certainties of physics, Adam Smith and his contemporaries argued that just as the universe, once set in motion, acts automatically like a well-balanced mechanical clock, so too does the marketplace. While God is the prime mover of the universe, man’s innate competitive self-interest is the prime mover of the marketplace. Just as the laws of gravity govern the universe, an invisible hand rules over the affairs of the marketplace. Picking up on Newton’s observation that “for every action there is an equal and opposite reaction,” Smith and others argued that the self-regulating market operated in the same fashion, with supply and demand continually reacting and readjusting to one another.

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Despite the incontrovertible fact that all economic activity creates only temporary value, at the expense of the degradation of the resource base on which it depends, most economists don’t look at the economic process from a thermodynamic perspective. Enlightenment philosophers, by and large, came to believe that the pursuit of economic activity is a linear process that invariably leads to unlimited material progress on Earth, if only the market mechanism is left uninhibited so that the “invisible hand” can regulate supply and demand. French Enlightenment philosopher and revolutionary Marquis de Condorcet captured the euphoria of the new age of progress when he proclaimed, No bounds have been fixed to the improvement of the human faculties . . . the perfectibility of man is absolutely indefinite; . . . the progress of this perfectibility, henceforth above the control of every power that would impede it, has no other limit than the duration of the globe upon which Nature has placed us.16 Giddy over the prospect of creating a material cornucopia on Earth, the classical economists, with the exception of Thomas Malthus, were united in their belief that human industriousness could create a utopian paradise.

Complexity: A Guided Tour
by Melanie Mitchell
Published 31 Mar 2009

In terms of profitability or consumer satisfaction, if someone is made better off, someone else will be made worse off. The process by which markets obtain this equilibrium is called market efficiency. The eighteenth-century economist Adam Smith called this self-organizing behavior of markets the “invisible hand”: it arises from the myriad microscopic actions of individual buyers and sellers. Economists are interested in how markets become efficient, and conversely, what makes efficiency fail, as it does in real-world markets. More recently, economists involved in the field of complex systems have tried to explain market behavior in terms similar to those used previously in the descriptions of other complex systems: dynamic hard-to-predict patterns in global behavior, such as patterns of market bubbles and crashes; processing of signals and information, such as the decision-making processes of individual buyers and sellers, and the resulting “information processing” ability of the market as a whole to “calculate” efficient prices; and adaptation and learning, such as individual sellers adjusting their production to adapt to changes in buyers’ needs, and the market as a whole adjusting global prices.

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We know that to decrease entropy, work must be done. Who or what is doing the work of creating and maintaining living systems and making them more complex? Some of the world’s religions propose that a deity is responsible, but in the mid-1800s, Charles Darwin proposed that instead, the history of life has resulted from the invisible hand of evolution via natural selection. No idea in science has been more threatening to humans’ conceptions about themselves than Darwin’s theory of evolution; it arguably has been the most controversial idea in the history of science. But it is also one of the best ideas. The philosopher Daniel Dennett strongly affirms this: If I were to give an award for the single best idea anyone has ever had, I’d give it to Darwin, ahead of Newton and Einstein and everyone else.

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Malthus’s essay was about human population growth, but Darwin would adapt these ideas to explain the evolution of all living organisms via a continual “struggle for existence.” Darwin also read Adam Smith’s free-market manifesto, The Wealth of Nations (1776). This book exposed him to Smith’s notion of the invisible hand in economics, whereby a collection of individuals acting in their own self-interest produces maximum benefit for the entire community. From his own observations in South America and elsewhere, Darwin was acutely struck by the tremendous variation among living beings and by the apparent adaptation of different species to their environments.

Nomad Citizenship: Free-Market Communism and the Slow-Motion General Strike
by Eugene W. Holland
Published 1 Jan 2009

For it turns out that spontaneous order is not the only thing that can emerge unplanned from complex systems: something like spontaneous collective intelligence or distributed decision making can emerge from free mar­ kets as an unplanned consequence of the interactions of multiple agents, in much the same way. Of course, communism must intervene here, in turn, and modify certain features of the so-called free market: after all, a kind of distributed intelligence has been attributed to markets at least since the notorious invisible hand of Adam Smith, with results that bear no resemblance whatsoever to communism.37 Construction of a viable concept of free-market communism will thus depend on spelling out the conditions—both positive and negative—under which truly free markets can be expected to generate an acceptable approximation of the Common Good immanently, from the bottom up.

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But the main task for the concept of free-market communism will be to draw careful distinctions between markets and capitalism, for the potential benefits of market organization are almost completely offset by the command and control that private capital exercises over them. The suprahuman decision­ making abilities of the market as a paragon of collective or distributed intelligence have long been touted, from Adam Smith’s invisible hand to Friedrich von Hayek’s notion of catallaxy.1 But insufficient attention is paid by most such champions of the market to the dynamics and effects of capital accumulation, for specifically capitalist markets are not often vehicles for distributed decision making or collective intelligence but rather exercises in collective stupidity, as the effects of advertising, overconsump­ tion, and the looming environmental crisis make patently clear.

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Yet despite all this, his analysis of the market as a mechanism for distributed decision making is too valuable to dismiss as mere right-wing cant (regardless of how much of this it may have inspired). Taking up a position made popular centuries earlier by Adam Smith with his image of the providential but invisible hand of the market, von Hayek both updates Smith’s notion for the information age and uses it to attack the centralized planning models typical of State socialism. Given the his­ torical context of emerging capitalist hegemony, Smith’s model had been aimed against traditional collective or corporatist values such as noblesse oblige: instead of respecting traditional obligations to act for the Com­ mon Good of the whole society, Smith’s market agents were to act strictly out of self-interest.

When Free Markets Fail: Saving the Market When It Can't Save Itself (Wiley Corporate F&A)
by Scott McCleskey
Published 10 Mar 2011

Don’t try to read the book, unless you enjoy spending five hours with Smith’s unhealthy fascination with how nails are made. The good news is that people have read the book over the last two centuries and distilled from it the essence of Smith’s economic theory. The bad news is that they overdid it and boiled it down to two words: invisible hand. For the ensuing 200-odd years, economic practitioners then reversed the process and expanded those two words into an economic dogma faithful to the original, they think. A lot of nuance was lost in the process. The Wealth of Nations was written at a time when government intervention in the markets didn’t mean pesky regulations here and paperwork there.

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But, as I argue in the following chapters, we have reached the E1FPREF 06/16/2010 xx 11:31:42 n Page 20 Preface point where markets are too complex to absorb and process all of the relevant information. The market collapsed in 2008 in spite of all of its efficiency. The problem with invisible hands, then, is that they are invisible. If we simply assume that the markets are invisibly regulating themselves, we abdicate our responsibility to confirm that they are in fact doing so. That is the story of the last decade, and how the Great Recession began. REGULATION VERSUS JUSTICE A recurrent theme in this book, and indeed in the regulatory reform debate, is that the financial crisis has left us with a sense of failed justice as well as failed markets.

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The consequence may be good or bad, intended or unintended, but people will follow the path of self-interest paved by incentive compensation. And so the same mechanism that drives behavior in the marketplace also drives behavior in the workplace. But there is a critical difference between the two. Smith’s ‘‘invisible hand’’ is the operation not just of self-interest, but of competing self-interests that act in the long run to balance each other out and move prices toward equilibrium. Office politics aside, interests within an organization are not so efficiently balanced. For every person incentivized to increase profits, there is often no countervailing person with an interest to restrain activities.

When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants
by Steven D. Levitt and Stephen J. Dubner
Published 4 May 2015

Peter Leeson is an economist at George Mason University and author of The Invisible Hook: The Hidden Economics of Pirates. Leeson agreed to answer some important piratical questions for us: Q. The Invisible Hook is more than just a clever title. How is it different from Adam Smith’s invisible hand? A. In Adam Smith, the idea is that each individual pursuing his own self-interest is led, as if by an invisible hand, to promote the interest of society. The idea of the invisible hook is that pirates, though they’re criminals, are still driven by their self-interest. So they were driven to build systems of government and social structures that allowed them to better pursue their criminal ends.

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.: and bin Laden bounty, 57–59 and IRS, 12–14 tax code written by, 158–60 conspicuous consumption, 184–85 contests, 91 addictions, 92–94 motto for U.S., 96–99 rigged, 136 Twitter, 94–96 Cook, Phil, 246 Cope, Myron, 215, 216 corporate sponsorships, 81 cover-ups, 121, 157 Cowen, Tyler, 329, 331–33 Cowher, Bill, 218 Craig, Larry, 45 crime: and abortion, 288 bank robberies, 223–26 “broken windows” theory of, 163 burglary, 242 child abduction, 133 in China, 226–28 gun deaths, 245–51 and gun laws, 243–45 intruders, 241–43 priming criminals, 228–29 prison sentences, 128, 224, 242, 245, 248, 260 street gangs, 229–36, 246–47, 248–49 and The Wire, 229–33 volatile rates of, 244 Cuban, Mark, 329, 333 cyclists, Tour de France, 151–53 Cyrus, Miley, 306 Daily Show, The, 273–74 Dal Bó, Ernesto, 33–34 Daly, John, 277 dangerous activities: horseback riding, 101–3 obesity as result of, 116–19 walking drunk, 101 Daschle, Tom, 158, 160 Dawkins, Richard, 286 decision making, 120–21, 208–9 democracy, alternative to, 29–31 Dennett, Daniel, 286 dental wisdom, 275–76 diapers, cloth vs. disposable, 167 diminishing marginal returns, 203 disasters, and charitable giving, 324–28 discrimination, statistical, 321–22 divorce, statistics on, 345 Dohmen, Thomas, 212 Doleac, Jennifer, 320–21 Donohue, John, 288 doomsday prophets, 109–10 doping, in Tour de France, 151–53 driving: and the environment, 166–67 incivility in, 161–64 drugs, prescription, prices of, 51–54 Duke, Annie, 188 Duncan, Arne, 103–4 Duskiewicz, Bernie, 348–49 ecological invalidity, 335 economics: behavioral, 120, 122, 206, 308–9 invisible hand in, 315 morality vs., 288 visible hand in, 319–22 writing about, 287–88 Edlin, Aaron, 88 Ehrenreich, Barbara, 329, 333–34 Ehrlich, Paul, 109, 114 Eikenberry (funeral director), 46 Endangered Species Act, 165–66 Engelberger, Perfect, 40 environment: cloth vs. disposable diapers, 167 and conspicuous consumption, 184–85 and driving, 166–67 eating meat, 179–84 Endangered Species Act, 165–66 global warming, 87–89, 179–84 greenhouse gas (GHG) emissions, 171–72, 177, 180 locavores, 168–72 and packaging, 175–78 paper vs. plastic bags, 167 petroleum extraction, 109–16 Prius “green halo,” 185 and profitability, 172–74 saving the rain forest, 174–75 veganism, 179–84 Ericsson, Anders, 199, 201 escort (high-end call girl), 261–67 evaluation function (EV), 197 experts, ten thousand hours of practice, 199, 201–2 Fanning, Dakota, 305 fear of strangers, 130–33 Feinstein, Dianne, 53 Feldman, Paul, 69 feminist movement, 346–47 Ferraz, Claudio, 33 films, animated, 305–7 Finan, Frederico, 33 first-grade data hound, 219–20 fishing, 348–49 flight attendants, 19–20 food: chicken wings, 75–77 decayed, 177 deliciousness of, 170 kiwifruits, 77–80 locavores, 168–72 nutritional value of, 170 and obesity, 116–18 packaging of, 175–78 poor service, 272–73 rancid chicken, 307–11 shrimp, 341–44 transportation inefficiencies of, 170–72 wasting, 177–78 football: Immaculate Reception, 216 loss aversion, 206–9 Pittsburgh Steelers, 212–19 rookie symposium, 239–41 Fox, Kevin, 253 Frakes, Michael, 117 Frankfurt, Harry, 276 Freakonomics (Levitt & Dubner), 1–2, 37, 40, 54, 69, 101, 105, 135, 160, 223, 253–4, 261, 274, 277, 280, 297–98, 305, 322, 351 Freakonomics.com, 1–4, 8, 233 Freakonomics radio, 268–69 Frederick, Shane, 341–43 Freed, Pam, 342 Friedman, Milton, 23 Frost, Robert, 218 Fryar, Irving, 239–40 Fryer, Roland, 228, 288, 328–29, 337, 339 Fuller, Thomas, 194–95 Gacy, John Wayne Jr., 39 Gagné, Éric, 149 gambling: on athletes, 73 backgammon, 195–98 blackjack, 189–91 on horse racing, 191, 220–22 how not to cheat, 153–55 Internet poker, 127–30, 157 on newspaper circulation, 233 one card away from final table, 192–95 Rochambeau (Rock, Paper, Scissors), 188–89 on teams, 125–26 unbreakable record, 192 World Series of Poker, 187–88, 192–95 GAME (Gang Awareness Through Mentoring and Education), 248–49 gas, moratorium on, 311–14 gas prices, 86–90 Gates, Bill, 16 Geiger, Bernice, 224 Geithner, Tim, 158 gender identity, 228 Gladstone, Bernard, 258, 259 global warming, 88–89, 179–84 Gly-Oxide, 275–76 God, in book titles, 285–87 Goeree, Jacob, 31 Goldstein, Dan, 335 golf, 198–206 Goodall, Chris, 167 Good to Great (Collins), 283–84, 285 Goolsbee, Austan, 160 Gordon, Phil, 187–89, 192, 193 Goss, Pat, 200–201 government: and gambling income, 129 paying politicians, 32–36 voting mechanisms, 29–31 Greatest Good, 28, 300–301 Greene, Mean Joe, 216 greenhouse gas (GHG) emissions, 171–72, 177 Grossman, Michael, 116 Gruber, Jonathan, 117 Grzelak, Mandi, 268–69 guns: anonymous tips about, 247 athletes carrying concealed weapons, 240–41 concealed weapons laws, 242 D.C. ban on, 243–45 deaths from, 245–51 illegal use of, 245 ownership of, 245 shooting intruders with, 241–43 Hagen, Ryan, 314–19 happiness, 122–23, 344–47 Harold’s Chicken Shack, 75–77 Harris, Franco, 216 Hatcher, Teri, 305 hate mail, cost of, 49–51 health care: British National Health Service, 26–29 decisions in, 122 Hemenway, David, 249–50 Henderson, Kaya, 160 herd mentality, 143–46 Hitchens, Christopher, 286 hoaxes, 282–83 Holmes, Santonio, 214–16 home, building your own, 170 home field advantage, 209–12 homelessness, 330–31 horseback riding, 101–3 horse racing, 220–22 housing prices, 67–69 Hurricane Katrina, 42–43, 325–28 Hussein, Saddam, 58 identity, concept of, 162–63 Immaculate Reception, 216 impure altruism, 328 incentives, 17, 32–36, 65, 95–96, 110, 113, 122, 136, 166, 337–40 inefficiencies, transportation, 170–72 INS (Immigration and Naturalization Service), Form N-400, 237–38 In Search of Excellence (Peters and Waterman), 284 Internet poker, 127–30, 157 iPad, 124–25 Irfan, Atif, 130–32 irrational decisions, 120–21 IRS, 11–14, 159–60, 257 Jackson, Vincent, 215 Jacob, Brian, 160 Jagger, Mick, 74 Jarden Zinc, 63 J.F.K. airport, 21–22 Jines, Linda Levitt: brother’s eulogy for, 297–301 father’s interventions, 289–97 and Freakonomics, 277, 297–98 Jingjing Zhang, 31 Johnson, Larry, 207 Johnston, David Cay, 11–12 Kaczynski, Ted (Unabomber), 287 Kahneman, Daniel, 3, 119–24, 206 Katrina (popular name), 42–43 Kennedy, Bobby, 279 Kentucky Derby, 220–22 Keyes, Alan, 279 KFC, 272–73 Killefer, Nancy, 158 kiwifruits, 77–80 Kormendy, Amy, 169 Kranton, Rachel, 162 Kulkarni, Ganesh, 140–41 Laffer curve, 72 LaGuardia Airport, 21–23 LaHood, Ray, 21, 103–6 Lake George, boat accident on, 118–19 Lancaster, Barbara, 219 Landsburg, Steven, 259 Lane, Mary MacPherson, 173 Las Vegas: blackjack, 189–91 poker, 127–30, 153–58, 187–89, 192–95 risk aversion in, 126–27 Lee, Jennifer 8., 41 Lee Hsien Loong, 32 Leeson, Peter, 314–19 Levitt, Michael, “When a Daughter Dies,” 289–97 libraries, public, 14–16 lies of reputation, 137–40 Limberhand (masturbator), 45–46 List, John, 125, 165, 228, 327–28, 338 lobbyists, 62–63 locavores, 168–72 loss aversion, 206–9 Loveman, Gary, 127 ludicity (ludic fallacy), 335 Ludwig, Jens, 246–48 Maass, Peter, 109, 114 Madoff, Bernie, 133 Malthus, Rev.

Affluence Without Abundance: The Disappearing World of the Bushmen
by James Suzman
Published 10 Jul 2017

This was because, among foraging Ju/’hoansi, self-interest was always policed by its shadow, jealousy, and jealousy in turn ensured that everyone got their fair share. Jealousy was the “invisible hand” of the Ju/’hoan social economy. Yet it exerted its influence very differently from the “invisible hand” famously imagined by Adam Smith in The Wealth of Nations. For Smith, man “intends only his own gain,” but in doing so he is guided by an invisible hand “to promote an end which was no part of his intention.” And this, according to Smith, is to promote the interests of society more effectively than man could, even if he had intended to.

Emotional Labor: The Invisible Work Shaping Our Lives and How to Claim Our Power
by Rose Hackman
Published 27 Mar 2023

Gina Clayton et al., Because She’s Powerful: The Political Isolation and Resistance of Women with Incarcerated Loved Ones (Los Angeles and Oakland, Calif.: Essie Justice Group, 2018), 95. 16.  Jamil Zaki, The War for Kindness: Building Empathy in a Fractured World (New York: Crown, 2019). 17.  F. Eugene Heath, “Invisible Hand,” Britannica, accessed March 27, 2022, https://www.britannica.com/topic/invisible-hand. 18.  Juliana Menasce Horowitz, Ruth Igielnik, and Rakesh Kochhar, 1. Trends in Income and Wealth Inequality, Pew Research Center, January 9, 2020, https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/. 19.  

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But there are theoretical problems too. As a society, misconceptions based in conjectures have mistakenly become absorbed as fact, one of the biggest and most damaging of which is the idea, driven by mainstream economics, that people are naturally, inherently selfish, and that selfish people get ahead. The “invisible hand” theory in economics posits that left to their own devices, and fueled by the self-interested, competitive nature of man, financial markets will regulate themselves and create great prosperity.17 Such a philosophy justified, over the last forty years, government divestment from public goods and social safety nets, and has led to ever increasing income and wealth inequality.18 The problem?

Winner-Take-All Politics: How Washington Made the Rich Richer-And Turned Its Back on the Middle Class
by Paul Pierson and Jacob S. Hacker
Published 14 Sep 2010

During his tenure as CEO, Fuld made $490 million (before taxes) cashing in stock options and stock he received as compensation.”68 Friends in High Places The myth of America’s winner-take-all economy is that government does not have much to do with it. Skyrocketing gains at the top are simply the impersonal beneficence of Adam Smith’s “invisible hand,” the natural outcome of free-market forces. Listen to Sanford Weill, the former chairman of Citigroup: “People can look at the last twenty-five years and say this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built.”69 Weill may not have relied on “somebody else” during this “unique period.”

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The real story, however, is what our national political elites have done for those at the top, both through their actions and through their deliberate failures to act. We have our suspect. The winner-take-all economy was made, in substantial part, in Washington. Yet identifying the main suspect only makes the core mystery more perplexing: How could this happen? No one expects the invisible hand of the market to press for equality. Yet there are good reasons for thinking that the visible hand of government will. Indeed, as we shall see in the next chapter, a long line of thinkers has argued that popular representation through democratic government creates powerful pressures for greater equality, as less-advantaged majorities use their political power to offset the economic power of those at the top.

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Shep Melnick, “From Tax-and-Spend to Mandate-and-Sue: Liberalism After the Great Society,” in The Great Society and the High Tide of Liberalism, Sidney Milkis and Jerome Mileur, eds. (Amherst, MA: University of Massachusetts Press, 2005). 3 Lewis Powell, “Confidential Memorandum: Attack on the Free Enterprise System,” August 23, 1971, quoted in Kim Phelps-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009), 158, 160. 4 Thomas Byrne Edsall, The New Politics of Inequality (New York: Norton, 1984), 114. 5 Vogel, Fluctuating Fortunes, ch. 8. 6 Calculated from http://www.bea.gov/national/xls/gdplev.xls. 7 Ibid., 198. 8 Vogel, Fluctuating Fortunes, 198; John Judis, The Paradox of American Democracy: Elites, Special Interests, and the Betrayal of Public Trust (Pantheon: New York, 2000), 121. 9 Quoted in Sidney Blumenthal, The Rise of the Counter-Establishment: From Conservative Ideology to Political Power (New York: Times Books, 1986), 80. 10 Quoted in Leonard Silk and David Vogel, Ethics and Profits: The Crisis of Confidence in American Business (New York: Simon & Schuster, 1976), 65. 11 Blumenthal, Rise of the Counter-Establishment, 78. 12 Taylor E.

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated)
by Charles Wheelan
Published 18 Apr 2010

It was a money-losing proposition in the short run; the East German currency was still worthless—scraps of paper to the rest of the world. But it was a brilliant business decision made faster than any government body could ever hope to act. By 1995, per capita consumption of Coca-Cola in the former East Germany had risen to the level in West Germany, which was already a strong market. In a sense, it was Adam Smith’s invisible hand passing Coca-Cola through the Berlin Wall. Coke representatives weren’t undertaking any great humanitarian gesture as they passed beverages to the newly liberated East Germans. Nor were they making a bold statement about the future of communism. They were looking after business—expanding their global market, boosting profits, and making shareholders happy.

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Fisheries managed with transferable quotas were half as likely to collapse as fisheries that use traditional methods.14 Two other points regarding incentives are worth noting. First, a market economy inspires hard work and progress not just because it rewards winners, but because it crushes losers. The 1990s were a great time to be involved in the Internet. They were bad years to be in the electric typewriter business. Implicit in Adam Smith’s invisible hand is the idea of “creative destruction,” a term coined by the Austrian economist Joseph Schumpeter. Markets do not suffer fools gladly. Take Wal-Mart, a remarkably efficient retailer that often leaves carnage in its wake. Americans flock to Wal-Mart because the store offers an amazing range of products cheaper than they can be purchased anywhere else.

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Anybody who has suffered a 12-hour flight with a bawling baby in the row immediately ahead or a bored youngster viciously kicking their seat from behind, will grasp this as quickly as they would love to grasp the youngster’s neck. Here is a clear case of market failure: parents do not bear the full costs (indeed young babies travel free), so they are too ready to take their noisy brats with them. Where is the invisible hand when it is needed to administer a good smack?”2 Mobile phone use is under stricter scrutiny, both in public places, such as restaurants and commuter trains, where the behavior is fabulously annoying, but also in vehicles, where it has been linked to a higher rate of accidents. Texting is the second-most dangerous thing you can do while driving a car, next to driving drunk.

Capital Ideas: The Improbable Origins of Modern Wall Street
by Peter L. Bernstein
Published 19 Jun 2005

Though this hypothesis was developed by others during the 1960s, Samuelson gave it its embryonic prologue in his 1957 paper on the theory of speculation. He mentioned the idea again, calling it “Balanced Ignorance,” upon becoming a member of the American Philosophical Society. “My pearls were well received,” he recalls.23 The views of the classical economists underlie the rationale for the invisible hand that guides the free-enterprise system of competitive markets and private ownership of the means of production, propelled by workers, employers, and customers free to seek their own self-interest. In theory, at least, this system is more likely to arrive at optimal outcomes and bring greater satisfaction to a larger number of people than any other economic system.

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In no other market, regardless of product, structure, or institutional arrangement, is competition as free, as vigorous, as effective as here. In no other market do prices convey so much information about what people are buying and selling. Harry Markowitz himself, in a recent address to his students, reminded them that. “Granted that the invisible hand is clumsy, heartless, and unfair, it is ever so much more deft and impartial than a central planning committee.”4 This is what fascinated the instigators of the revolution in finance. It was not the fun and games of investing that caught their fancy. It was the purity of the free market dynamics, the best that the study of economics can offer.

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See also Portfolio insurance Insurance companies, investments of Intelligent Investor, The (Graham) Interactive Data Corporation (IDC) Interest/interest rates corporate debt junk bonds and payments risk-free stock indexes and stock prices and stock valuations swaps International Flavors and Fragrances Intertemporal capital asset pricing model Institute for Quantitative Analysis in Finance Investment Company Institute (ICI) Investors active vs. passive corporate/institutional equity individual response of to risk Invisible hand market theory “Is American Business Worth More Dead Than Alive?” (Graham) Journal of the American Statistical Association Journal of Business Journal of Finance Journal of the History of Ideas Journal of Political Economy (JPE) Journal of Portfolio Management, The Journal of the Royal Statistical Society Kidder Peabody Law of the Conservation of Investment Value Law of One Price: see Arbitrage Leland O’Brien Rubinstein Associates, Inc.

Samuelson Friedman: The Battle Over the Free Market
by Nicholas Wapshott
Published 2 Aug 2021

Friedman contended that, just as Adam Smith81 had suggested in The Wealth of Nations, self-interest was the constant factor that ensured that society worked well for the maximum number. “As Adam Smith wrote over 200 years ago,” Friedman wrote, “in the economic market, people who intend to serve only their own private interests are led by an invisible hand to serve public interests where there was no part of their intention to promote.”82 But for Samuelson, Smith was a creature of his place and age—eighteenth-century Scotland during the Enlightenment. By the mid-twentieth century, Smith’s notions about the role of self-interest and the application of the marketplace no longer applied.

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Pragmatically, Smith would, if he were alive today, favor the [antimonopoly] Sherman Act84 and stronger antitrust legislation, or even public utility regulation generally.”85 In a gentle reprimand to Friedman and other conservatives who liked to invoke Smith, Samuelson continued, “One hundred per cent individualists skip these pragmatic lapses into good sense and concentrate on the purple passage in Adam Smith where he discerns an Invisible Hand that leads each selfish individual to contribute to the best public good.”86 While Friedman, citing Smith, argued that everything in an economy was driven by—or should be driven by—individual self-interest, Samuelson suggested that for a nation to be truly civilized it would need more to guide it than the unhindered free market.

…

Keynes makes a strong case in A Tract for the need to manage economies to iron out the vicissitudes of the business cycle, with its ebb and flow of money and concomitant rise and fall in prices. The notion that an economy could and should be managed was—and to some conservative economists remains—a controversial notion. Managing an economy elevated the importance and power of public officials and economists, pitting their competence and judgment against the invisible hands of market forces. Friedman agreed with Keynes that an economy could be managed by government, and it was his belief that prices not only could but should be managed—by the central bank controlling the amount of new money entering the system—that caused many free marketeers, including Hayek, to sputter.

The Great Delusion: Liberal Dreams and International Realities
by John J. Mearsheimer
Published 24 Sep 2018

Their ultimate aim is to create a world where economics overshadows politics.19 This line of thinking, clearly reflected in the writings of John Locke, was pushed forward in its most comprehensive form by Adam Smith. He argues for doing as much as possible to keep the government from interfering in the economy so that individuals can pursue their own self-interest, which he claims will ultimately work to the benefit of the entire society. The “invisible hand,” he maintains, will guide the market to create increasing abundance, whereas the state, if it tried to guide the economy, would be more of a hindrance than a help. It is no exaggeration to say that capitalism and liberalism go hand in hand. Liberals understand that there will always be serious political disputes between individuals and between factions.

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Given these and other hugely consequential developments, the state had no choice but to get seriously involved in managing various aspects of society, including the economy.66 Given the sheer size of the relevant enterprises, the speed at which technology changes, and the global nature of industrial capitalism, the necessary levels of planning and regulating were far beyond the capacities of local governments. Much to the chagrin of modus vivendi liberals, relying on the invisible hand to work its magic in the economy is not a feasible strategy. Liberal countries might be wedded to capitalism and a market economy, but that does not prevent the interventionist state from closely regulating not only its own economy but the international economy as well.67 These tasks involve making and implementing policies that unavoidably affect individual rights.

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As John Stuart Mill notes, utilitarianism is “grounded on the permanent interests of man as a progressive being.”83 The state’s principal role in utilitarianism is to manage the bargaining process. The government must be concerned with important matters like determining how wealth and resources are distributed and which rights should be privileged over others. This is not a laissez-faire state that depends on the invisible hand to produce favorable outcomes: the hand here is visible, interventionist, and actively engaged in social engineering. Utilitarians, however, do not place much emphasis on the state acting as a night watchman, mainly because they do not believe there are profound differences about what constitutes the good life.

Moon Shot: The Inside Story of America's Apollo Moon Landings
by Jay Barbree , Howard Benedict , Alan Shepard , Deke Slayton and Neil Armstrong
Published 1 Jan 1994

In his mind he saw the 105’s speed brakes. They’re right there, he told himself. Right there on this plane’s ass. Right where they’ll— He hit the control for the speed brakes. Four huge metal panels splashed outward in the form of a beautiful metal flower that slowed the plane. It felt as if a giant invisible hand had slapped the airplane. The sudden drag threw Deke against his seat and banged the aircraft’s nose toward the desert floor. The violent oscillations eased and then stopped. The world was no longer racing before his eyes. He smiled. He was back in control. Well, almost. He was still spinning, but the nose was down and the controls were responding.

…

But within Freedom Seven’s contained atmosphere they exerted pressure, and that pressure came to him as thuds, dimmed bangs carrying wonderful satisfaction. His ship was obeying its autopilot-commanded flight plan, turning on schedule, rotating into a position that would assure the blunt end of the capsule facing in the direction of reentry. Reality reached in through the capsule’s titanium shell, an invisible hand to tap him on the shoulder. Shepard grinned with the realization that this sense of comfort and freedom, the humming sounds of the spacecraft, had blanked out the fact that he was zinging along high above the planet’s atmosphere. But there was nothing by which to judge speed. You need relative comparison for that—a tree, a building, passing spacecraft.

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“You people have just been missed by the rocket that carried the first American astronaut into space.” “Rocket?” “Affirmative.” “Astronaut?” Sturniola grinned. “That’s right. This is Grand Bahama Island, and astronaut Alan Shepard will be arriving here shortly.” “Okay this is Freedom Seven . . . my g-build-up is three . . . six . . . ” His voice faltered as a great invisible hand squeezed him with brutal force. “Nine . . . ” he grunted, using the proven system of body tightening and muscle rigidity to force the words through a tortured throat. Words still spoken under control. Grunt talk that worked. “Rog.” Deke didn’t want to miss a word from the plunging spacecraft.

Dopesick: Dealers, Doctors and the Drug Company That Addicted America
by Beth Macy
Published 4 Mar 2019

American companies would theoretically be able to export products to China’s growing consumer class, an argument Wall Street championed when stock prices climbed with every new plant-closing announcement. Corporate shareholders and CEOs ate up Clinton’s prediction, a cheery best-case version of Adam Smith’s eighteenth-century “invisible hand.” As the economists described it, Chinese peasants would better their lot by making chairs in factories, while dislocated American workers would retrain for more fulfilling, advanced jobs. But with ill-designed training for displaced Americans based on a lumbering federal program created in the 1960s, the second part of that equation very rarely came to pass.

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The global economy created winners and losers, Bassett Furniture CEO Rob Spilman told me, explaining the dismissal of some eight thousand furniture workers from his payroll. “It was that or perish,” he said. “At the end of the day, we are not a social experiment.” In rural counties decimated by globalization, automation, and the decline of coal, the invisible hand manifested in soaring crime, food insecurity, and disability claims. In Martinsville and surrounding Henry County, unemployment rates rose to above 20 percent, food stamp claims more than tripled, and disability rates went up 60.4 percent. What those numbers looked like on the ground, as I began reporting on the recession in 2008 for the Roanoke Times and later for my first book, Factory Man (published in 2014), could be distilled in two images I observed but did not fully, at the time, comprehend: The first was of adults—black and white, old and young—arriving at area food pantries two hours before the doors opened, the older among them clutching canes or leaning on walkers.

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We in Roanoke had heard opioid abuse was seeping into distressed factory towns like those in Henry County, but very rarely did our newspaper report on it. We were safe in our ignorance, or so we thought—content to stereotype drug addiction as the affliction of jobless hillbillies, a small group of inner-city blacks, and a few misguided suburban kids. But another invisible hand was upon us. Heinrich Dreser’s drug moved seamlessly across city and county lines, with zero regard for politics, race, neighborhood, or class. * I didn’t understand the connection between rural poverty, disability, and opioid addiction until I learned more about the accidental Bassett Furniture arsonist.

The Relentless Revolution: A History of Capitalism
by Joyce Appleby
Published 22 Dec 2009

Smith presented a brilliantly detailed explanation of the causes of the unparalleled wealth in Great Britain. (After the Scottish and English crowns were joined in 1706, England was called Great Britain or the United Kingdom.) Building on the new conception of human beings as responsibly pursuing their own interest, he advocated a system of “natural liberty” because he thought that the “invisible hand” of the market would function better if left free of most regulation. With few opportunities to choose among options, men and women had appeared as fickle, impulsive, and given over to their passions. From the Christian point of view, they were also bathed in sin. With such a picture of human nature, it would have been a form of madness to leave them free to do as they wished with their resources.

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The inventions that culminated in industrialization had hardly begun when Smith wrote, but there had been enough improvements for him to divine the future. Integral to Smith’s theorizing was the law of unintended consequences, an arresting insight of the Scottish philosophers that explained how acts could be willed by self-interested individuals but still turn out to be beneficial to a larger group. The most famous example of course was the invisible hand of the market that used competition to convert the profit motive into a force for good. As Smith explained, it is “not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regards to their own interest.”51 Here was a concept that contributed to the strong impression that reality was often obscured by appearances.

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Smith was responding to the developments of his lifetime, 1723–1790, when it was still relatively easy for an ambitious young baker to get the money to set himself up to compete effectively with established competitors. Later the concentration of capital took a lot of the optimizing agility out of the “invisible hand.” Smith and his fellow Scots proposed a conjectural history of mankind that traced human society from hunters and gatherers to herders, then to sedentary farmers, and finally to commercial society. The discovery of indigenous peoples of South and North America still hunting and gathering helped anchor the Scots’ hypotheses in observable facts.

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order
by Benn Steil
Published 14 May 2013

But we were not handled in a way which made apprehension easy.”26 A strange strain of optimism seemed to suffuse Keynes’s economic thinking in late March and early April. Writings and conversations now pointed toward “the invisible hand” as a possible way out of Britain’s huge financial problems27—an “invisible hand which I had tried to eject from economic thinking twenty years ago,” Keynes noted. This was, observed former Bank of England economist Henry Clay in a letter to now-retired Montagu Norman, “an interesting confession for our arch-planner.” “I think he relied on intellect, which perhaps means that he ignored the ‘invisible hand,’” Norman responded, “and I guess he was led astray by Harry White. But surely it is easy to arrange a loan if you ignore its repayment, and is there any hope of that, unless there is to be such an inflation across the Atlantic as will affect their claims and provide an easy way out?”

…

British visions of, 301–5; architecture of, 301; Articles of Agreement and, 216, 290, 339; Article VIII and, 332; bancor alternative and, 335; beginning operations of, 316; Bernstein and, 356; capital outflows and, 218; Coe and, 358; day-to-day organization of, 303; delegation issues over, 226–28, 288; exchange parity and, 331; financial assistance requests and, 316; fund articles amendments and, 316–17; resistance to, 342; Schweitzer and, 337–39, 366; Special Drawing Right (SDR) and, 335–36, 344–45, 404n18; symbolism of location of, 301–2; Taft and, 367; “Text of Address by Truman Explaining to Nation His Actions in the White Case” and, 352; Triffin model and, 335; U.S. hegemony and, 334; Washington base for, 300; White and, 7, 127–28, 214, 216, 297–99, 315–17, 324, 331–32, 348, 357, 368; Witteveen and, 339, 369 invasion currency, 155, 388n1 invisible hand, 305 Iron Battalion, 19 Iron Curtain, 306–7 isolationism: Kennedy and, 105–6; Neutrality Act and, 106; “Quarantine the Aggressors” speech and, 47; Roosevelt and, 47; United States and, 40, 47, 99, 105–6, 121, 176, 184, 206, 255, 259–60, 306 Italy, 43, 47, 49, 70, 101, 172 Jamaica, 102 Japan, 43; Atlantic Charter and, 127; Battle of the Coral Sea and, 129; Hiroshima bombing and, 276; Hull and, 54; Kurusu and, 54–55; modus vivendi and, 54–55; Morgenthau and, 58–59; Nagasaki bombing and, 276; Nomura and, 54–55; occupation of China and, 47–48, 55–58, 377n103; Operation Snow and, 56–58; Pearl Harbor and, 53–58, 126; postwar policy and, 266; Saipan Island and, 216; Stalin and, 56; Ten-Point Note and, 55; ultimatum to, 55–56; yen and, 337–38, 377n103 Jews, 3, 17–18, 20, 27, 79, 112, 174, 201–2, 288, 306–8, 356, 359 Jinnah, Mohammad Ali, 308 Johnson Act, 106 Joint Statement by Experts of United and Associated Nations on the Establishment of an International Stabilization Fund, 175–85, 187, 191 Joint Statement of Principles, 198, 210, 215, 248 J.

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Churchill and, 77; The Economic Consequences of the Peace and, 71, 73, 77, 369; Economic Journal and, 64–65; education of, 61–62; Egyptian borrowing and, 305–6; exchange rate and, 73, 76, 139–41, 143, 150, 162, 166–67, 171, 173, 193–94, 196, 217, 289, 331; financial speculation of, 79, 88; as First Baron Tilton, 142, 204; first meeting with White and, 112; foreign policy and, 66–68; free trade and, 65–66, 74, 82–83, 141, 160, 278; General Theory and, 3, 5, 46, 73, 80, 84, 88–95, 365–66, 381n95; gold standard and, 64–65, 75–76, 131, 133, 137–47, 252; Grand Design negotiation and, 289; Halifax and, 4; Harrod and, 63, 146, 152, 168, 171, 173, 361; Hayek and, 85–86; health of, 61–62, 93, 95, 218–19, 278–80, 304; Henderson and, 81–83, 93, 141, 177–78, 361, 380n63; homosexuality of, 63; Hopkins and, 113–14; hotel room number of, 372n12; House of Lords speech of, 169; How to Pay for the War and, 95–96; IMF issues and, 301–4; inaugural encounter with Morgenthau, 112; Indian Currency and Finance and, 64; intelligence of, 61–64; Inter-Ally Council and, 69; International Clearing Bank (ICB) and, 143–53; internationalism and, 140–41; “in the long run we are all dead” aphorism of, 62; invisible hand and, 305; Jewish quips of, 174–75; Kahn and, 81, 86, 282, 302, 362; legacy of, 4; Lend-Lease and, 14, 110–19, 123–24, 180, 190–91, 261, 279–80; Liberal politics and, 65–66, 74, 82–83, 85, 88, 93, 95; lingering Bretton Woods issues and, 251–54, 258–67, 276–83, 285–89; Lloyd George and, 70–72, 362, 379n32; Lopokova and, 11–12, 73, 111, 283, 300, 363; McKenna and, 66, 68, 70; Macmillan Committee and, 81; marginalization of, 85; mathematical skill of, 1; The Means to Prosperity and, 86–87; Moggridge and, 304, 392n6; monetary duel of, 187–88; monetary reform and, 64–65, 75, 137; Morgenthau and, 369; Mosley and, 85; “National Self-Sufficiency” and, 87; New Deal and, 6, 87, 89, 113; New Statesman article and, 94; no-interest American loan and, 279–80; “Notes on the War for the President” and, 96–97; output of newspaper articles of, 73; Phillips and, 97–98, 159, 163, 165, 168, 170–71, 176; “Post War Currency Policy” and, 142; postwar global peace and, 1; “Proposals for an International Currency Union” and, 142; protectionism and, 74, 82–83, 87; quotas and, 230–31, 237, 243–47; “Recent Economic Events in India” and, 64; Robbins and, 12, 31, 82–83, 140, 170, 192–93, 203, 205, 218–19, 224, 279, 282–83, 392n6; on role of government, 77–85; Roosevelt and, 26, 96–97, 114; Rueff and, 73, 91–93; Say’s Law and, 90, 366; siting of International Monetary Fund and World Bank buildings and, 221–26; stabilization and, 3, 31–32, 65, 75–76, 89, 97, 138–40, 147, 149–51, 159–60, 166–67, 170, 173, 175–76, 179, 188, 193–94, 260, 340; sterling-dollar peg and, 68–69; style of, 3–4, 65–73, 113, 159–60, 173–76, 194, 208, 252–53; Supranational Bank and, 81; theory refinement of, 85–93; Treasury strategy and, 97; A Tract on Monetary Reform and, 75–76, 80, 137; Treatise on Money and, 79–81, 85, 91–92, 137, 142; on unemployment, 73–74, 78, 80–93, 142, 151, 186; U.S. dollar and, 3, 149–53, 169–73, 176–77, 180, 184, 188, 195–96, 212, 214, 252, 262, 301–3, 305, 310; U.S.

Public Places, Urban Spaces: The Dimensions of Urban Design
by Matthew Carmona , Tim Heath , Steve Tiesdell and Taner Oc
Published 15 Feb 2010

Adam Smith famously referred to this as the ‘invisible hand’ – that is, the invisible hand of competitive market processes, or as Desai (2002) describes: ‘… deep structures of interconnectedness beneath the seemingly chaotic and uncoordinated individual actions.’ Smith considered that, despite individuals pursuing their own advantage, the greatest benefit to society as a whole was achieved by their being free to do so, with each individual being ‘lead by an invisible hand to promote an end which was no part of his intention’. It is, as Varoufakis (1998: 20) suggests, ‘… as if an invisible hand forces on those who act shamelessly a collective outcome fit for saints.’

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The organicist view, prevalent prior to the twentieth century, sees society as a self-organising process – that is, as a dynamic and adaptive process in that systems acquire and maintain structure and that no external agency controls. It defies human control and is, at best, moderately tameable. Adam Smith’s metaphor of the invisible hand is itself derived from an organic conception, whereby the outcome of myriad individual actions is essentially benevolent:‘… there is a harmony between the individual and the aggregate established by the “Invisible Hand” which is another name for deep structures of interconnectedness beneath the seemingly chaotic and uncoordinated individual actions.’ (Desai 2002) In this view, driven by an incessant search for profits, the market is a process of search and signalling, involving dynamic uncertainty, innovation and discovery.

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It involves deregulating private activities and companies, the privatisation of previously ‘state’ or ‘collective’ services, the undermining of the collective powers of workers and providing the conditions for the private sector to find ever new sources of profitable activity.’ Elevating market exchanges over and above all other sets of connections between people, neo-liberalism seeks to minimise the role of the State and to allow Adam Smith’s invisible hand to do its work. Based on public choice critiques of government, the reduced role for the State was both because‘… it is presumed that states will always be inferior to markets in “guessing” what is necessary to do and because states are thought to be easily corruptible by private interest groups.’

Debt: The First 5,000 Years
by David Graeber
Published 1 Jan 2010

Newton had represented God as a cosmic watchmaker who had created the physical machinery of the universe in such a way that it would operate for the ultimate benefit of humans, and then let it run on its own. Smith was trying to make a similar, Newtonian argument.2 God—or Divine Providence, as he put it—had arranged matters in such a way that our pursuit of self-interest would nonetheless, given an unfettered market, be guided “as if by an invisible hand” to promote the general welfare. Smith’s famous invisible hand was, as he says in his Theory of Moral Sentiments, the agent of Divine Providence. It was literally the hand of God.3 Once economics had been established as a discipline, the theological arguments no longer seemed necessary or important. People continue to argue about whether an unfettered free market really will produce the results that Smith said it would; but no one questions whether “the market” naturally exists.

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Newton himself was in no sense an atheist—in fact, he tried to use his mathematical abilities to confirm that the world really had been created, as Bishop Ussher had earlier argued, sometime around October 23, 4004 bc. 3. Smith first uses the phrase “invisible hand” in his Astronomy (III.2), but in Theory of Moral Sentiments IV.1.10, he is explicit that the invisible hand of the market is that of “Providence.” On Smith’s theology in general see Nicholls 2003:35–43; on its possible connection to Medieval Islam, see chapter 10 below. 4. Samuelson 1948:49. See Heinsohn and Steiger 1989 for a critique of this position; also Ingham 2004. 5.

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One much-repeated story held that the Prophet himself had refused to force merchants to lower prices during a shortage in the city of Medina, on the grounds that doing so would be sacrilegious, since, in a free-market situation, “prices depend on the will of God.”82 Most legal scholars interpreted Mohammed’s decision to mean that any government interference in market mechanisms should be considered similarly sacrilegious, since markets were designed by God to regulate themselves.83 If all this bears a striking resemblance to Adam Smith’s “invisible hand” (which was also the hand of Divine Providence), it might not be a complete coincidence. In fact, many of the specific arguments and examples that Smith uses appear to trace back directly to economic tracts written in Medieval Persia. For instance, not only does his argument that exchange is a natural outgrowth of human rationality and speech already appear both in both Ghazali (1058–1111 ad), and Tusi (1201–1274 ad); both use exactly the same illustration: that no one has ever observed two dogs exchanging bones.84 Even more dramatically, Smith’s most famous example of division of labor, the pin factory, where it takes eighteen separate operations to produce one pin, already appears in Ghazali’s Ihya, in which he describes a needle factory, where it takes twenty-five different operations to produce a needle.85 The differences, however, are just as significant as the similarities.

Why Nudge?: The Politics of Libertarian Paternalism
by Cass R. Sunstein
Published 25 Mar 2014

Choice Architecture and Inevitable Nudges We have seen an immediate objection to the rule-consequentialist suggestion, and it cannot be repeated often enough, simply because it is so often ignored (and so please forgive the italics): Choice architecture is inevitable. The social environment influences choices, and it is not possible to dispense with a social environment. This point holds whether the social environment is a product of self-conscious designers or of some kind of invisible-hand mechanism. There can be (and often is) choice architecture without choice architects.36 Default rules are omnipresent, and they matter. Do we have an opt-in design or an opt-out design? Whenever there is an answer, there is an effect on outcomes. Does this mean that paternalism is also unavoidable?

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See Glaeser, supra note 10; Wright & Ginsburg, supra note 5. 34. See Glaeser, supra note 10, which has a rule-consequentialist flavor, but which is qualified through a recognition that (optional) nudging is justified in identifiable cases. 35. Mill, supra note 2. 36. For a valuable discussion, see Edna Ullmann-Margalit, Invisible Hand Explanations, 39 Synthese 263 (1978). 37. For discussion, see Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (2008). Richard Thaler et al., Choice Architecture, in Behavioral Foundations of Policy 428, 428–31 (Eldar Shafir ed. 2012). I am bracketing here the potential effects of the kinds of choice architecture that are established by the basic rules of contract law, property law, tort law, and criminal law. 38.

Profit Over People: Neoliberalism and Global Order
by Noam Chomsky
Published 6 Sep 2011

Adam Smith’s praise of division of labor is well known, but not his denunciation of its inhuman effects, which will turn working people into objects “as stupid and ignorant as it is possible for a human creature to be,” something that must be prevented “in every improved and civilized society” by government action to overcome the destructive force of the “invisible hand.” Also not well advertised is Smith’s belief that government “regulation in favour of the workmen is always just and equitable,” though not “when in favour of the masters.” Or his call for equality of outcome, which was at the heart of his argument for free markets. Other leading contributors to the classical liberal canon go much further.

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According to some specialists, half of US trade worldwide consists of such centrally managed transactions, and much the same is true of other industrial powers,35 though one must treat with caution conclusions about institutions with limited public accountability. Some economists have plausibly described the world system as one of “corporate mercantilism,” remote from the ideal of free trade. The OECD concludes that “oligopolistic competition and strategic interaction among firms and governments rather than the invisible hand of market forces condition today’s competitive advantage and international division of labor in high-technology industries,”36 implicitly adopting a similar view. Even the basic structure of the domestic economy violates the neoliberal principles that are hailed. The main theme of the standard work on US business history is that “modern business enterprise took the place of market mechanisms in coordinating the activities of the economy and allocating its resources,” handling many transactions internally, another large departure from market principles.37 There are many others.

Imperial Ambitions: Conversations on the Post-9/11 World
by Noam Chomsky and David Barsamian
Published 4 Oct 2005

If you go back to Adam Smith, whom we’re supposed to revere but not read, he assumed that sympathy was the core human value, and society should therefore be constructed so that this natural human dedication to sympathy and mutual support will be satisfied. In fact, his main argument for markets was that they would, under conditions of perfect liberty, lead to perfect equality. In fact, Smith’s famous phrase “the invisible hand,” which everyone totally misuses, appears only once in The Wealth of Nations, in the context of an argument against what we now call neoliberalism.5 He says that if English manufacturers and investors imported from abroad and invested overseas, rather than here, it would be harmful to England.

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He said, however, there was no reason to worry about that because “upon equal or nearly equal profits, every wholesale merchant naturally prefers the home-trade to the foreign trade of consumption.” That is, British capitalists will individually prefer to use domestically produced goods and to invest at home. So, therefore, as if “led by an invisible hand to promote an end which was no part of his intention,” the threat of what’s now called neoliberalism will be avoided. The economist David Ricardo made a rather similar argument. Smith and Ricardo both realized that none of their theories would work if you had free capital movement and investment.6 At one time, the principle of solidarity was taken for granted.

The Master Switch: The Rise and Fall of Information Empires
by Tim Wu
Published 2 Nov 2010

“The vicious acts associated with aggressive competition are responsible for much, if not all, of the present antagonism in the public mind to business, particularly to large business.”5 Adam Smith, whose vision of capitalism is sacrosanct in the United States, believed that individual selfish motives could produce collective goods for humanity, by the operation of the “invisible hand.” But Vail didn’t buy it. “In the long run … the public as a whole has never benefited by destructive competition.” Smith’s key to efficient markets was Vail’s cause of waste. “All costs of aggressive, uncontrolled competition are eventually borne, directly or indirectly, by the public.” In his heterodox vision of capitalism, shared by men like John D.

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From industry’s perspective, the invention may inspire other dissatisfactions: a threat to the revenues of existing information channels that the new technology makes less essential, if not obsolete; a difficulty commoditizing (i.e., making a salable product out of) the technology’s potential; or too much variation in standards or protocols of use to allow one to market a high quality product that will answer the consumers’ dissatisfactions. When these problems reach a critical mass, and a lost potential for substantial gain is evident, the market’s invisible hand waves in some great mogul like Vail or band of them who promise a more orderly and efficient regime for the betterment of all users. Usually enlisting the federal government, this kind of mogul is special, for he defines a new type of industry, integrated and centralized. Delivering a better or more secure product, the mogul heralds a golden age in the life of the new technology.

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Thus if everything is entrusted to a single mind, its inevitable subjective distortions will distort, if not altogether disable, the innovation process. By contrast, Nelson and Winter argued, the most rapid or efficient innovation typically results when the widest range of variations are proposed and the invisible hand of competition, as proxy of the future, picks among them. It is rather like Darwin’s idea of the relative fitness of individuals in determining the evolution of species, and like natural selection it depends on the power of accidents.10 Hush-A-Phone was a forerunner in this latter-day approach to innovation.

Year 501
by Noam Chomsky
Published 19 Jan 2016

From the point of view of policy choices, Great Britain was not an entity. “The wealth of nations” is no concern of the “architects of policy,” who, as Smith insists, seek private gain. The fate of the common people is no more their concern than that of the “mere savages” who stand in the way. If an “invisible hand” sometimes provided others with benefits, that is merely incidental. The basic focus on “wealth of nations” and what “Great Britain derives” is faulty from the start, undermined by illegitimate idealization, though at least it is qualified and corrected in Smith’s fuller discussion. The crucial qualifications have commonly been dropped, however, as they enter contemporary ideology in the hands of Smith’s latter-day disciples.

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That being so, “the man whose life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding...and generally becomes as stupid and ignorant as it is possible for a human creature to be...But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.” Society must find some way to overcome the devilish impact of the “invisible hand.” Other major contributors to the classical liberal canon go much further. Wilhelm von Humboldt, who inspired John Stuart Mill, described the “leading principle” of his thought as “the absolute and essential importance of human development in its richest diversity,” a principle that is not only undermined by the narrow search for efficiency through division of labor, but by wage labor itself: “Whatever does not spring from a man’s free choice, or is only the result of instruction and guidance, does not enter into his very nature; he does not perform it with truly human energies, but merely with mechanical exactness”; when the laborer works under external control, “we may admire what he does, but we despise what he is.”19 Smith’s admiration for individual enterprise was tempered still further by his contempt for “the vile maxim of the masters of mankind”: “All for ourselves, and nothing for other people.”

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The phenomenon is a well-known concomitant of the integration of the South into the world order in the service role; reports of sale of children are, in fact, some of the more benign that are familiar to those who do not choose to shield themselves from the wrong kind of facts. The “side effects” of the subjection of the South to market forces are not in the least unexpected, except to the laser-like vision of the trained ideologue. “Unexpected side effects” of the invisible hand have also been found in Russia, again eliciting much surprise. A front-page New York Times headline reads: “The Russians’ New Code: If It Pays, Anything Goes.” “It is not just a matter of crime, corruption, prostitution, smuggling, and drug and alcohol abuse,” all on the rise: “There is also a widespread view that...people are out for themselves and anything goes”—unlike the United States, where pursuit of “the vile maxim of the masters” is unknown, or the Third World domains that have been subject to our helping hand.

Making Globalization Work
by Joseph E. Stiglitz
Published 16 Sep 2006

Globalization is the field on which some of our major societal conflicts—including those over basic values—play out. Among the most important of those conflicts is that over the role of government and markets. It used to be that conservatives could appeal to Adam Smith’s “invisible hand”—the notion that markets and the pursuit of self-interest would lead, as if by an invisible hand, to economic efficiency. Even if they could admit that markets, by themselves, might not engender a socially acceptable distribution of income, they argued that issues of efficiency and equity should be separated. In this conservative view, economics is about efficiency, and issues of equity (which, like beauty, so often lies in the eyes of the beholder) should be left to politics.

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Today, the intellectual defense of market fundamentalism has largely disappeared.2 My research on the economics of information showed that whenever information is imperfect, in particular when there are information asymmetries—where some individuals know something that others do not (in other words, always)—the reason that the invisible hand seems invisible is that it is not there.3 Without appropriate government regulation and intervention, markets do not lead to economic efficiency.4 In recent years we have seen dramatic illustrations of these theoretical insights. As I described in my book The Roaring Nineties, 5 the pursuit of self-interest by CEOs, accountants, and investment banks did not lead to economic efficiency, but rather to a bubble accompanied by massive misallocations of investment.

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The annual Economic Report of the President in the early years of the Clinton presidency articulated these views, relating what the government should do closely to the limitations of the market. 3.The quest for understanding the circumstances under which Adam Smith’s idea that markets do or do not lead “as if by an invisible hand” to economic efficiency has been at the center of economic research for two centuries. Kenneth J. Arrow and Gerard Debreu won Nobel Prizes for their rigorous mathematical analyses. They defined the ideal conditions under which Smith was right, but also identified the numerous instances of market failures, where he was not—when, for instance, there are externalities (like pollution) where the actions of one individual have effects on others for which they are not compensated.

Crisis Economics: A Crash Course in the Future of Finance
by Nouriel Roubini and Stephen Mihm
Published 10 May 2010

Much of mainstream economics, by contrast, is obsessed with showing how and why markets work—and work well. This preoccupation arguably dates back to the origins of the profession of economics, beginning with the Scottish thinker Adam Smith. In his Wealth of Nations, he advanced the now-famous metaphor of the “invisible hand” to capture the seemingly miraculous process by which the selfish and divergent interests of individual economic actors somehow coalesce into a stable, self-regulating economic system. Out of the chaos of innumerable individual choices comes order. Smith, however, did not acknowledge capitalism’s many vulnerabilities.

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.”: Alan Greenspan, remarks to the Federal Reserve System’s Fourth Annual Community Affairs Research Conference, Washington, D.C., April 8, 2005, online at http://www.federalreserve.gov/boarddocs/speeches/2005/20050408/default.htm. 33 slashing the rate: Jean Claude Trichet, “Activism and Alertness in Monetary Policy,” lecture to “Central Banks in the 21st Century” conference, Madrid, June 8, 2006, online at http://www.ecb.int/press/key/date/2006/html/sp060608_1.en.html. Chapter 2: Crisis Economists 39 “Practical men, who believe . . .”: Keynes, General Theory, 383. 40 “invisible hand”: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: Charles Knight, 1835), 3:112; Robert L. Heilbroner and Lester C. Thurow, Economics Explained (New York: Touchstone, 1987), 25-31. 40 economists refined and reworked: Denis P. O’Brien, “Classical Economics,” in Warren J.

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Online at http://imf.org/external/pubs/ft/spn/2009/spn0908.pdf. Ghosh, B. N., ed. Global Financial Crises and Reforms: Cases and Caveats. London: Routledge, 2001. Gorton, Gary. “Banking Panics and Business Cycles.” Oxford Economic Papers 40 (1988): 751-81. ____. “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007.” Paper delivered at the Federal Reserve Bank of Atlanta’s 2009 Financial Markets Conference “Financial Innovation and Crises,” May 11-13, 2009. Online at http://www.frbatlanta.org/news/conferen/09fmc/gorton.pdf. Gross, Daniel. Pop! Why Bubbles Are Great for the Economy.

Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom
by Grace Blakeley
Published 11 Mar 2024

A firm that developed a powerful production technique should be able to charge higher prices than its competitors for a while to make sure the entrepreneur was fairly compensated for the investment undertaken in developing the innovation. If that meant that the most innovative firms sometimes became monopolies, so be it. Entrepreneurs needed to be rewarded for their brilliance, or they wouldn’t innovate and capitalism would stagnate. In place of Adam Smith’s invisible hand regulating supply and demand through the price mechanism, we find the grasping fist of the entrepreneur, pulling everyone else forward by their bootstraps. But Schumpeter did believe that the rewards of monopoly power would—or, more accurately, should—always be temporary. If a firm did not continue to innovate once it had reached a market-dominating position, then it would eventually be outcompeted by other firms.

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Conservative statesman Edmund Burke referred to the EIC as the “state in the disguise of a merchant.”158 An Indian lawyer later observed that the English monarch had granted to the EIC many of the characteristics of sovereignty that would ordinarily be reserved for a state.159 The company could “dispose of and alienate land, draw rents and assess taxes… appoint and dismiss governors and make laws.”160 Adam Smith saw this situation as a “strange absurdity.”161 States and markets were supposed to be separate entities; the latter governed by the clean, natural laws of economics—which Smith famously conceptualized using the metaphor of the invisible hand—the former governed by the mucky, conflictual realm of politics. And the East India Company has been seen as something of an aberration of the capitalist mode of production ever since. Yet as recently as 2017 Erik Prince, founder of private military company Blackwater and close ally of US president Donald Trump, was calling on the US government to create an “American South Asia Company,” based on the “East India Company model,” to govern Afghanistan.162 Seeing corporations like the East India Company and G4S as sovereign jars with mainstream political and economic theory.

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Adam Smith, one of the founders of the discipline that came to be known as political economy, drew on many areas of Locke’s thought to write his well-known work The Wealth of Nations, which remains a foundational text in mainstream economics.31 If Locke was the father of liberalism, then Smith was the “father of capitalism.”32 The role of government, in Smith’s view, was to protect free markets and private property—at home and abroad. Smith believed the best way for the state to protect free trade was to limit government intervention in the market, attacking mercantilists (a group we will meet in the next chapter) who sought state protection. Monopolies, tariffs, quotas, and subsidies were all enemies of Smith’s invisible hand. He railed against the “special interests”—from bankers, to landowners, to trade unions—that attempted to capture state policy and bend it to their ends. Locke’s political philosophy and Smith’s political economy both rest on two common assumptions: the idea that states and markets are separate entities, and that it’s up to the state to ensure the market functions most effectively.

Undoing the Demos: Neoliberalism's Stealth Revolution
by Wendy Brown
Published 6 Feb 2015

re v isin g f o u c au lt 83 Moreover, the idea and practice of responsibilization — forcing the subject to become a responsible self-investor and self-provider — reconfigures the correct comportment of the subject from one naturally driven by satisfying interests to one forced to engage in a particular form of self-sustenance that meshes with the morality of the state and the health of the economy.20 Thus, neoliberalism differs from classical economic liberalism not only in that there ceases to be what Smith formulated as an “invisible hand” forging a common good out of individual, self-interested actions, 21 and not only because the naturalism is replaced by constructivism, although both of these are the case. Equally important, reconciling individual with national or other collective interests is no longer the contemporary problem understood to be solved by markets.

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This citizen releases state, law, and economy from responsibility for and responsiveness to its own condition and predicaments and is ready when called to sacrifice to the cause of economic growth, competitive positioning and fiscal constraints. Thus, again, does a political rationality originally born in opposition to fascism turn out to mirror certain aspects of it, albeit through powers that are faceless and invisible-handed and absent an authoritarian state. This is not to say that neoliberalism is fascism or that we live in fascist times. It is only to note convergences between elements of twentieth-century fascism and inadvertent effects of neoliberal rationality today. These convergences appear in the valorization of a national economic project and sacrifice for a greater good into which all are integrated, but from which most must not expect personal benefit.42 They appear as well in the growing devaluation of politics, publics, intellectuals, educated citizenship, and all collective purposes apart from economy and security.

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See, for example, The First Amendment, Democracy, and Romance (Princeton: Princeton University Press, 1990) where he argues: “A . . . commitment to sponsoring dissent does not require a belief that what emerges in the ‘market’ is usually right or that the ‘market’ is the best test of truth. Quite the contrary, the commitment to sponsor dissent assumes that societal pressures to conform are strong and that incentives to keep quiet are 256 notes often great. If the marketplace metaphor encourages the view than an invisible hand or voluntaristic arrangements have guided us patiently, but slowly, to Burkean harmony, the commitment to sponsoring dissent encourages us to believe that the cozy arrangements of the status quo have settled on something less than the true or the just. If the marketplace metaphor encourages the view that conventions, habits, and traditions have emerged as our best sense of the truth from the rigorous testing ground of the marketplace of ideas, the commitment to sponsoring dissent encourages the view that conventions, habits, and traditions are compromises open to challenge.

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
by Arun Sundararajan
Published 12 May 2016

Capitalist economies have at least two ways of organizing economic activity. There are markets, in which individuals buy and sell from other individuals and invest their time and money into producing goods and services using their own equipment, sometimes perhaps financed by others who lend money. Markets are where Adam Smith’s famed “invisible hand” determines the prices that balance supply and demand. And then there is the “visible” hand—the “hierarchies” that we typically think of as firms or organizations (or government entities). These entities contain within them a set of operating units that are managed by a hierarchy of salaried employees.

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Organizations would be the dominant feature of the landscape. A message sent back home, describing the scene, would speak of “large green areas interconnected by red lines.” It would not likely speak of “a network of red lines connecting green spots.”4 The transition of economies from market transactions governed by Adam Smith’s “invisible hand” to the ones we observe today has been gradual. In The Visible Hand,” a book I cite in the introduction and for the epigraph to this chapter, the economic historian Alfred Chandler traces this transition from the early 1800s through the late 20th century, documenting how although the United States in Adam Smith’s time was largely a market economy, there began a steady transition to hierarchies of increasing complexity as a consequence of a series of technological changes spanning 200 years.5 Chandler chronicles the creation of plantations, the emergence of textile mills, the use of armories, the revolutions in transportation and communication induced by the railroad and the telegraph in the mid-19th century, followed by the emergence first of mass distribution and then of mass production.

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In chapter 2, I used a technology-centric lens, drawing on an evolving understanding of digital technologies to help you think about the future of capitalism as shaped by its digital and trust determinants. In chapter 3, you encountered the lens of transaction costs, of markets and hierarchies, thinking through what kinds of institutions this blurring of boundaries between the visible and invisible hands might yield. In chapter 4, through a short discussion about the new wave of digital enablers as well as their historical precedents, I hope you have a better lens through which to view how the decentralized peer-to-peer revolution unfolds, and, despite the surrounding idealism, recognize the significant possibility for value re-aggregation by large intermediaries.

Grave New World: The End of Globalization, the Return of History
by Stephen D. King
Published 22 May 2017

Importantly, following Thatcher’s lead with her very early decision to abolish exchange controls, capital markets were to be subject to the discipline provided by international investors. There was to be no hiding place from the market and, by implication, no hiding place from international finance. This collection of beliefs began to spread like wildfire. Those who attempted to head off in a different direction were, all too often, humbled by the invisible hand of international capitalism. In the early 1980s, President Mitterrand tried to impose his brand of socialism on the French economy: a vast array of companies were nationalized, the minimum wage was raised, a solidarity wealth tax was introduced and social benefits were increased. The intention was to reduce unemployment.

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With the collapse of the Soviet Union, there is no longer a binary choice between what might loosely be described as US-style free-market capitalism and Moscow-inspired communism. Managing an increasingly integrated global economy under these circumstances is incredibly difficult. For a while, it seemed as though the system might be self-regulating, through the wonders of the invisible hand. With the onset of the global financial crisis, that view was clearly wrong. And, in the absence of a self-regulating mechanism, it appears that our existing arrangements – based primarily on national self-interest and the occasional prod from various Washington-based institutions – may be inconsistent with an ever more integrated global economy.

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But there is an obvious disadvantage: governments and central banks would be free to dip into people’s bank accounts at will, using negative interest rates as a technical – and largely non-democratic – alternative to a wealth tax to penalize those who have held onto their savings for a rainy day. The biggest loser from central banks’ experimental activities is, however, international capitalism itself. As central banks choose to purchase an ever-wider range of assets in a bid to stabilize the system as a whole, the allocation of capital is likely to deteriorate: Adam Smith’s invisible hand is slowly being dismembered, one digit at a time. Mario Draghi’s commitment to ‘do whatever it takes’ to preserve the euro has forced the European Central Bank to become a ‘lender of last resort’ to sovereign governments, effectively freeing them from the market discipline that might have encouraged some of them to deliver more in the way of fiscal consolidation or structural reform.

The Impulse Society: America in the Age of Instant Gratification
by Paul Roberts
Published 1 Sep 2014

As Adam Smith argued more than two centuries ago, when individuals freely pursue their own self-interests—presumably, even their most trivial desires—the aggregate effect is an economy that most efficiently and naturally delivers the most benefits to the greatest majority. (In Smith’s famous phrasing, by pursuing our own self-interests, it’s as if we “are led by an invisible hand to promote an end that was no part of [our] intention.”) And the truth is our self-centered economy delivers a lot of benefits. It generates a lot of wealth, a lot of innovation, and, perhaps most important, a lot of individual adaptability, which you and I can use to shape our lives, our feelings, and our very identities.

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.† For advocates of “shareholder value” theory, it was this very idea of social obligations (that business somehow owed workers, or any other part of society, anything beyond efficient operations) that led so many firms to fail in their real social obligation: maximizing the wealth upon which all social progress depends. As economist Milton Friedman argued in a much-quoted article in The New York Times, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” Here was the corporate variation on Adam Smith’s “invisible hand.” Companies turned loose to maximize their own wealth would improve society’s fortunes far more efficiently than would any government-induced strategy based on an ideal of social responsibility. By the 1980s the logic of efficient markets and shareholder value had expanded into a political philosophy.

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From the very beginnings of the Industrial Revolution, it was understood that “commercial society,” as Adam Smith called capitalism, would need constant poking and prodding and nudging to ensure that its massive efficiencies benefited as wide a public as possible. As Smith wrote in The Wealth of Nations,1 “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” Today, conservatives routinely invoke Smith and his invisible hand to argue for unfettered markets. But in fact, Smith recognized that markets needed occasional fettering—he favored, among other things, a progressive tax on the wealthy and, especially, hefty regulation of finance to prevent the consolidation of economic power in the hands of the few. Such regulatory intrusions, Smith readily acknowledged, were “in some respect a violation of natural liberty” of bankers and others with economic power.

Capitalism: Money, Morals and Markets
by John Plender
Published 27 Jul 2015

By preferring the support of domestic to that of foreign industry, he intends only his own security, and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. That reference to the invisible hand is perhaps the most celebrated positive example of the law of unintended consequences. While the expression is original, the thought is not. Similar ideas had been articulated not only by Hugh of St Victor but by Pascal in the mid-seventeenth century and by the Italian political philosopher Gianbattista Vico in his Scienza Nuova of 1725.

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To finance the scheme and pay the workers, he uses paper money created by the emperor who rules over the territory. Where Goethe, who had been finance minister to the Duke of Saxe-Weimar, shows particular foresight is in identifying unintended consequences of capitalist enterprise – consequences that, unlike those associated with Adam Smith’s invisible hand, are far from positive. Environmental damage results from the creation of Faust’s dyke because he failed to provide an outlet for putrid water. His land consequently becomes a foetid quagmire that has to be drained. His insatiable desire for more land leads him to drive out long-standing residents of the dunes.

We Need New Stories: Challenging the Toxic Myths Behind Our Age of Discontent
by Nesrine Malik
Published 4 Sep 2019

In 2017, progress towards gender parity shifted into reverse. So even if one were to cite inexorable improvement in the world’s only superpower and the land of the free, and in aggregate on a global basis, it would appear that progress does not have its own momentum. It is not fuelled by the principles of the Enlightenment and oiled by the invisible hand of capitalism. It is a tentative and fragile state which is sustained by the effort of constant activism and vigilance, both on the ground and on the ideological battlefield. An appeal for context, to point out that the overall pattern is one of improvement, is an appeal for quietism. And the complacency of progress does not account for the reactionary backlash that progress often triggers, which makes it doubly difficult for the dermal layer to be treated, for ‘the wound to heal’.

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At the heart of this is the kind of biological determinism that assumes that just because some things occur in nature, e.g. suspicion of other races due to group self-preservation instincts, that means that they should be accepted. This argument, strangely, is rarely made about violent crime or child abuse, both things that have occurred in nature since record keeping began. Related to that, there is also something unavoidably free market capitalist about the anti-PC animus. Just as the invisible hand regulates the market, so shall it regulate human interaction. The unintended accrued social benefits of an individual’s self-interested actions, with no intervention, will not just create the fairest economy, but the fairest society. When I spoke to Lola Olufemi, she had in her brief experience of PC scam media culture already developed a jaundiced attitude towards such quarters of the left.

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The marketplace of ideas model of free speech holds that what is true factually, and what is good morally, will emerge after a competition of ideas in a free, unmoderated and transparent public discourse, a healthy debate where the truth will prevail. Bad ideas and ideologies will lose out and wither away as they are vanquished by superior ones. The problem with the marketplace of ideas theory (as with all ‘invisible hand’ type theories) is that it does not account for a world in which the market is skewed and not all ideas receive equal representation, because the market has monopolies and cartels. David Uberti, a contributor to Columbia Journalism Review who has written on false equivalence in the media since Donald Trump’s election, spoke to me about inherent imbalances in the American media, which render it less a marketplace of ideas and more a sort of prison tuck shop or commissary that provides few and overpriced goods to captive consumers.

The Weightless World: Strategies for Managing the Digital Economy
by Diane Coyle
Published 29 Oct 1998

The next few chapters explore the most obvious manifestation of the weightless world and its risks and challenges: unemployment, new patterns of work and inequality. They are all features of the transition to weightlessness. Notes 1. 2. 3. 4. 5. Statistical Abstract for the United Kingdom 1871-1885, facsimile edition HMSO 1986. Interview in The Independent, London, 24 October 1996. In The Invisible Hand and the Weightless Economy, LSE, March 1996. OECD Communications Outlook, 1996. Published by the BIS, July 1996. The Weightless World 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 25 Computer Industry Almanac, Glenbrook, Nevada, December 1996. ‘We’d better watch out’, New York Times Book Review, 12 July 1978.

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In Geography and Trade, MIT Press 1991. In Scientific American, February 1990. In Justice, Nature and the Geography of Distance. ‘Transeconomics’ in The Transparency of Evil. Conference speech in London, May 1995. In City of Bits. In ‘The Weightless Economy’ column in Centrepiece, February 1997. In The Invisible Hand and the Weightless Economy, CEP discussion paper, March 1996. In the New York Times magazine, October 1996. After the Nation State. See, for example, Making Sense of Subsidiarity, Begg et al. Speech at Future London conference, 11 December 1996. Chapter Ten. Redesigning Government The opinions of the philosopher Jean-Jacques Rousseau, one of the early architects of democratic thought, are as fresh now as they were two and a half centuries ago.

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Diego Puga (February 1997) ‘The rise and fall of regional inequalities’, Discussion Paper 1575, Centre for Economic Policy Research, London. Robert Putnam (1993) Making Democracy Work: Civic Traditions in Modern Italy, Princeton University Press, Princeton, NJ. Bibliography 241 Robert Putnam (January 1995) ‘Bowling alone: America’s declining social capital’, Journal of Democracy, 6 (1). Danny Quah (March 1996) ‘The invisible hand and the weightless economy’, Centre for Economic Performance working paper, London School of Economics, London. Danny Quah (July 1996) ‘Twin Peaks: growth and convergence in models of distribution dynamics’, Economic Journal. Danny Quah (October 1996) Discarding Non-stick Frying Pans for Economic Growth, Centrepiece, Centre for Economic Performance, London School of Economics, London.

Global Inequality: A New Approach for the Age of Globalization
by Branko Milanovic
Published 10 Apr 2016

Simon Caney (2002) presents such an argument in terms of Rawls’s implicit “domain restriction”: civil and political rights and distributive justice apply to the domestic realm, but not to international affairs. It is not self-evident why this would be the case, though. Almost a century ago, the British economist Edwin Cannan, in his discussion of Adam Smith’s invisible hand, asked this question: “if … indeed, it [is] true that there is a natural coincidence between self-interest and the general good, why … does not this coincidence extend, as economic processes do, across national borders?”22 To maintain Rawls’s position, one must also show that national self-determination plays a fundamentally different role than individual “self-determination” does, that is, a person’s free will.

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Moscow: Verlag für Fremdsprachige Literatur, 1939. Marx, Karl. 1973. Grundrisse: Foundations of the Critique of Political Economy. Translated and with an introduction by Martin Nicolaus. London: Penguin Classics. McGuire, Martin C., and Mancur Olson. 1996. “The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force.” Journal of Economic Literature 34(1): 72–96. Meadows, Donella H., Dennis L. Meadows, Jørgen Randers, and William W. Behrens III. 1972. The Limits to Growth: A Report for the Club of Rome’s Project on the Predicament of Mankind. New York: Universe Books. Mendershausen, Horst. 1946.

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See also methodological nationalism; rich people and money (including one-percenters) inflation, 43, 64, 218 infrastructure spending, 181 inheritance, 186–187, 219, 221, 250n36 institutions, 64, 73 intergenerational transfers, 141 international development policies, 99 international dollars, 15 International Labor Day, 86 International Migration Outlook (2013) (OECD), 262n41 intersectoral inequality, 259n17 “invisible hand,” 142 Iraq, 158, 163, 164 Islam, 192–193, 261n31 Islam, fundamentalist, 164, 203 Israel, 144–146, 158, 256n24 Jayadev, Arjun, 197 justice, 131, 137, 139–140, 141, 143 Kanbur, Ravi, 106 Karabarbounis, Loukas, 181 Katz, Lawrence, 47, 94, 252n49 Kearney, Melissa S., 252n49 Keynes, John Maynard, 95 King, Gregory, 248n19 Kraus, Michael W., 203 Krugman, Paul, 252n49 Kuznets, Simon: on Great Leveling, 53, 246n7; on wars, 97, 98; on income gap reductions, 148; role of, 245n1; Gini points and, 250n34; on liberal profession incomes, 263n5 Kuznets curves: technological changes (1980s) and, 54; super, 69; literature on, 245n1; Prokopovitch and, 245n1; Industrial Revolution and, 248n25.

Extreme Money: Masters of the Universe and the Cult of Risk
by Satyajit Das
Published 14 Oct 2011

Schumpeter saw the Great Depression as part of the adjustment that would wipe out unsustainable debts and poor investments, allowing economic renewal. Keynesian economics was legitimizing interference in the natural process. For many politicians and economists, the severity of the Great Depression, the inability of markets to restore full employment and the rising human cost highlighted the failure of the invisible hand. Keynes gained credence and, for the next four decades, dominated economic thinking and policy. The ability of governments and central banks to fine-tune the economy through a judicious mix of budgetary and monetary policy as well as regulation became accepted faith. In the 1960s, the University of Chicago’s Milton Friedman challenged Keynes as the foremost public figure in economics of the twentieth century.

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Free markets were considered better at regulating competing forces, allocating resources, and meeting consumer demand. The role of government was to remove impediments to and ensure the proper institutional framework for free and competitive markets. Harvard economist and U.S. Treasury Secretary Lawrence Summers “tried to leave [his] students with...the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That’s the consensus among economists.”25 Tony Blair’s New Labour government’s unalloyed support for the City reflected this belief. Upon succeeding Blair as the UK prime minister, Gordon Brown even invited Thatcher to No. 10 Downing Street for tea, seemingly to lend authority to his economic credentials.

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Thomas Frank in One Market, One God captured this spirit: Efficient markets theory holds that stock markets process economic data quickly and flawlessly...commentators...believe that stock markets perform pretty much the same operation with general will, endlessly adjusting and modifying themselves in conformity with the vast and enigmatic popular mind.38 American Nobel-prize-winning economist Joseph Stiglitz dissented: “[Adam Smith’s] invisible hand often seems invisible [because] it is often not there.”39 Nineteenth-century Danish philosopher Søren Kierkegaard differentiated between objective truths and subjective truths. Objective truths are filtered and altered by our subjective truths. Financial economics, in its prioritization of evidence and its models, converted objective truths into subjective truths consistent with the Chicago Interpretation.

Owning the Earth: The Transforming History of Land Ownership
by Andro Linklater
Published 12 Nov 2013

With the sweep of imagination that gave lasting value to his ideas, Smith lifted this oscillation between altruism and selfishness into a universal context, quoting with approval the Stoics’ belief that “the vices and follies of mankind were as necessary [to the overall happiness of the world] . . . as their wisdom and virtues.” From this he derived the argument that people could not help contributing to the greater good even at their most selfish, because they “are led by an invisible hand . . . and thus without intending it, without knowing it, advance the interest of the society.” What Smith emphasized in The Theory of Moral Sentiments was that the “invisible hand” grew out of an awareness of other people’s opinions, and the desire for general happiness. It could not operate in a moral vacuum. “Justice is the main pillar that upholds the whole edifice,” he insisted.

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A shortage of supply, for example, should result in higher prices that encourage greater produce and reduce demand; exchange rates ought to adjust to equalize the value of two different currencies; and cheaper production through division of labor will create increased market share until canceled out by rising wages and costs of distribution. This was the “invisible hand” at work, which led to growing prosperity so long as individuals were left free to pursue their own interests with the chance to maximize their gains and minimize their losses. There was, however, the same caveat as in the Theory, that the self-righting capacity of the hand only operated in the context of a concern for the general welfare.

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Freedom exercised at the expense of someone else’s liberty became a form of tyranny. It had to be equal and inclusive. Consequently it was fundamental to Smith’s description of the free-market system that everyone, rich and poor, should have an equal opportunity to profit from their labor. Because there was no mechanism more effective in regulating wages and prices than the “invisible hand” of the free-market, it was incumbent on government to maintain open and equal access to it. Morality and efficiency coincided. The same reasoning required the laws of justice to underpin the system of private property. Perhaps surprisingly, the strongest modern advocate of this approach was the libertarian Robert Nozick.

Money and Government: The Past and Future of Economics
by Robert Skidelsky
Published 13 Nov 2018

Chapter 7 ends with an account of the ‘New Consensus’ – a mixture of ‘new’ classical and ‘new’ Keynesian economics, which was in turn brought down by the collapse of 2008. 9 I n t roduc t ion Following the theoretical twists and turns of this economic saga, no one can fail to be impressed by the persistence in economic theory of the core idea that an unimpeded market system tends to full employment equilibrium, unless obstructed by ‘spanners in the works’, generally thrown by governments. First suggested by Adam Smith’s metaphor of the ‘invisible hand’, this insight was formalized in the general equilibrium theory of Leon Walras in 1874. Much later, as late as in our own day, the microeconomics of Walras begat new classical macroeconomics. The main storyline has been heavily modified and qualified in face of disconfirming events, but has always re-emerged, in more or less unchanged form.

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This important feature of the efficient market hypothesis postulates that markets are self-correcting and thus self-regulating, with government attempts to improve on this bound to be distorting.13 In this way, the efficient market hypothesis is essentially the modern manifestation of Adam Smith’s ‘invisible hand’. There is a paradox here. On the one hand, the theory says that 312 w h at wa s w rong w i t h t h e b a n k s? there is no point in trying to profit from speculation, because shares are always correctly priced and their movements cannot be predicted. But on the other hand, if investors did not try to profit, the market would not be efficient because there would be no self-correcting mechanism.

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Keynes invented macroeconomics, raising it to co-equal status with microeconomics. Keynes’s fundamental claim was that there was no automatic realignment of disturbed economic particles, either in the short-run or in the long-run. It made no sense, therefore, to deduce macro outcomes from micro constructions like ‘the invisible hand’, where the play of individual self-interest of many agents ensures optimal market equilibria. Keynes argued repeatedly that the future was radically uncertain; it could not be reduced to known probability distributions. We make our own future in ways too complex to be grasped by a precise logic.

Buffett
by Roger Lowenstein
Published 24 Jul 2013

A decade after its war with the Courier-Express, the News reached three-fourths of the households in Buffalo—the highest such ratio of any metropolitan paper in the country.51 But Buffalo was the poorer for having one newspaper instead of two, and total newspaper readership in the city was much less than when the Courier-Express had been alive.52 Certainly, Buffett had every right, and also every reason, to start a Sunday paper. And given what has occurred in other cities, there was little chance that two papers could have survived even had Buffett not come to town. In effect, he had merely given the Invisible Hand a push. Still, a paper had been buried and jobs had been lost. And in some remove of “the unfathomable human mind,” Buffett must have suspected, even in court, that it would turn out that way. Consider his words to a colleague on the survival prospects of second newspapers: In years past, hundreds of newspaper owners, putting up their own money, as well, I am sure, as most of the “experts”, felt that large cities would sustain more than one healthy newspaper.

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Yet now that the raiders were in the ascendant, he was deeply troubled. CEOs were now his peers—in many cases, his friends. At a visceral level, he was uneasy with the raiders’ confrontational style. But his concerns went deeper. I had this idea that some sort of economic Darwinism would work and that if offers were made, it was the invisible hand working and that it would improve the breed of managers. And then over the years I’ve been troubled by two things I’ve observed—and I don’t know exactly where this leads me—I’ll just tell you what bothers me. The first thing is that over a good many [years] the very best-managed companies I know of have very frequently sold in the market at substantial discounts from what they were worth that day.… Takeovers, in theory, were a curative, the system’s method of pruning corporate deadwood.

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Whenever news about a stock became public, traders pounced, buying or selling until its price reached equilibrium. Underlying this truism was an assumption that the old price had been as “wise” as traders could make it. Therefore, the new price—and each succeeding new price—would be wise as well. The traders merely did the work of Adam Smith’s Invisible Hand. Since everything worth knowing about a company was already in the price, most security analysis was, to cite a popular text, “logically incomplete and valueless.”2 The future course of a stock would depend on new (as yet unknowable) information. A stock, then, was unpredictable; it followed a “random walk.”

The Accidental Theorist: And Other Dispatches From the Dismal Science
by Paul Krugman
Published 18 Feb 2010

Indeed, if you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God. But putting Greenspan (or his successor) into the picture restores much of the classical vision of the macroeconomy. Instead of an invisible hand pushing the economy toward full employment in some unspecified long run, we have the visible hand of the Fed pushing us toward its estimate of the noninflationary unemployment rate over the course of two or three years. To accomplish this, the board must raise or lower interest rates to bring savings and investment at that target unemployment rate in line with each other.

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But there is also a deeper cause—an odd sort of tacit agreement between the Left and the Right to pretend that exotic global forces are at work even when the real action is prosaically domestic. Many on the Left dislike the global marketplace because it epitomizes what they dislike about markets in general: the fact that nobody is in charge. The truth is that the invisible hand rules most domestic markets, too, a reality that most Americans seem to accept as a fact of life. But those who would like to see us revert to a more managed society in all ways hope that popular unease over the economic influence of people who live in far-off places and have funny-sounding names can be used as the thin end of an ideological wedge.

Present Shock: When Everything Happens Now
by Douglas Rushkoff
Published 21 Mar 2013

They seemed to self-regulate even though no one was aware of anyone else’s intentions. This “invisible hand” of the marketplace ensured that as individuals try to maximize their own gains in a free market, prices find the appropriate levels, supply meets demand, and products improve. But Smith only got so far as to argue that, through the market, competition channels individual ambitions toward socially beneficial results. The mechanisms through which that happened were still poorly understood and expressed. In 1945 famed Hungarian economist Friedrich Hayek came up with a new way of talking about the “invisible hand” of the marketplace. Instead of seeing some magical, inexplicable method through which markets solved its problems fairly, Hayek saw markets working through a more systemic process.

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(FAA), 89 Federal Reserve, 5, 148 feedback: apocalypto and, 263; definition of, 207; fractalnoia and, 205–19, 220, 221, 222, 224–25, 226–27, 236; speed of, 208, 209 Feldmar, Andrew, 156 Ferriss, Timothy, 95 field hospitals, 191 Filippi, Mark, 103–6 “filter failure,” 116–17 financial markets: algorithmic-driven, 178–79, 180; apocalypto and, 8, 257, 264; black box trading and, 179, 180; commodity trading and, 185–86; crashes in, 181, 230; dark pools for, 182; digiphrenia and, 1, 99–100; fractalnoia and, 201–2, 203, 226–27, 229–30; free, 226, 227; high-frequency trading in, 181–82; “invisible hand” of, 226–27; “meet me” room for, 180; narrative collapse and, 11–12; new “now” and, 5; overwinding and, 7, 8, 136, 173, 175–80, 181–83, 184, 185–86; physicial location of network and, 179–80; time as money and, 173, 175–80 flash pictures, 71 flashbacks, 28, 29 flow: apocalypto and, 265; of information, 141–42, 145–49; overwinding and, 189, 192, 194; of time, 141–42, 145–49 Forrest Gump (movie), 29–30 fox and hedgehog prototypes, 232–33, 235 Fox News, 49, 55–56 fractalnoia: “always-on” philosophy and, 211; apocalypto and, 245–46, 264; change and, 224, 235–37; chaos and, 202, 209, 219–30; choices and, 202, 215, 227; conversations and, 211; cybernetics and, 224–26, 227; definition/characteristics of, 201, 240–41; everything is everything concept and, 197, 199, 204, 205, 210, 212, 213, 228; feedback and, 205–19, 220, 221, 222, 224–25, 226–27, 236; game theory/gaming and, 220–21, 222–23, 224; impact of, 209–10; as manifestation of present shock, 7, 197–241; narrative collapse and, 212; patterns and, 197–205, 209, 216, 217–19, 229, 230–41; sharing and, 203–4; systems theory, 226–28.

Winners Take All: The Elite Charade of Changing the World
by Anand Giridharadas
Published 27 Aug 2018

This idea that self-love trickles down to others is an early ancestor of win-win-ism. In his Theory of Moral Sentiments, Smith elaborates on the idea with his famous metaphor of the “invisible hand.” The rich, he writes, in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society.

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“Business is the ultimate positive-sum game, in which it is possible to create a Win for all the stakeholders of the business,” John Mackey, the chief executive of Whole Foods Market, and Raj Sisodia write in a book that has become a bible of the win-win faith, Conscious Capitalism: Liberating the Heroic Spirit of Business. The new win-win-ism is arguably a far more radical theory than the “invisible hand.” That old idea merely implied that capitalists should not be excessively regulated, lest the happy by-products of their greed not reach the poor. The new idea goes further, in suggesting that capitalists are more capable than any government could ever be of solving the underdogs’ problems. An influential statement of this new creed is found in the book Philanthrocapitalism: How the Rich Can Save the World.

Essential: How the Pandemic Transformed the Long Fight for Worker Justice
by Jamie K. McCallum
Published 15 Nov 2022

Home healthcare aides in Paradise, California, for instance, served as first responders when the historic Camp Fire hit, wheeling their patients’ beds away from the encroaching flames.22 During Hurricane Harvey, nursing home workers in Texas sent out a call for help and rescued their elderly clients from historic levels of flooding.23 As the so-called invisible hand of the market attempts to push us off an ecological cliff, it’s the invisible hands of the behind-the-scenes care workers that are propping up our care infrastructure. Unions and labor rights organizations like the National Domestic Workers Alliance, Caring Across Generations, and the SEIU have been advocating for the rights of home care workers for years.24 Creating better jobs in this sector would benefit the elderly and disabled too because it would allow them to age and recover in their own homes.

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That spirit was on full display during the early days of the pandemic through the creation of mutual aid networks. College students banded together to share resources as they quickly shipped home from school. A Minnesota group called COVIDsitters matched willing volunteers with the children of essential workers and was replicated across the country. A group called Invisible Hands formed a network in New York City to provide groceries to at-risk people who couldn’t shop in person, and many such networks popped up elsewhere. Others offered free routers to expand Wi-Fi access, peer-to-peer mental health support, and homemade hand sanitizer and face coverings. I helped form a group in my little corner of Vermont.

The Alternative: How to Build a Just Economy
by Nick Romeo
Published 15 Jan 2024

Economist Luis Garicano, to whom the queen had directed her question, told the Guardian that “the main answer is that people were doing what they were paid to do, and behaved according to their incentives, but in many cases they were being paid to do the wrong things from society’s perspective.”8 His remark is a precise inversion of the dynamic described by Adam Smith’s “invisible hand,” where individuals striving to maximize their own wealth create positive social outcomes. It was good of the economists to apologize to the queen, but as the favorite poet of an earlier Queen Elizabeth wrote, “Though thou repent, yet I have still the loss / The offender’s sorrow lends but weak relief / To him that bears the strong offense’s cross.”9 It’s not surprising that people trying to enrich themselves by any means do not automatically contribute to the welfare and flourishing of society.

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Adam Smith gave a plausible, influential account of how individuals pursuing their own interest could benefit society as a whole: “by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”18 We don’t need to revive a medieval vocabulary of sin and guilt, but it’s equally mistaken to dissolve all moral considerations into the bland broth of “interest” and “advantage.” Certain lending practices are accurately described as “predatory,” and the extravagant compensation packages many executives receive are fairly criticized on ethical grounds.

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Omarova sees the NIA not as a replacement for infrastructure spending but as a supplement that would catalyze a larger deployment of capital to a broader range of projects. Nor does support for an NIA entail any position on tax rates. “It’s not a partisan project,” she told me. “This isn’t about big government interference in the market. Nor is it about the public subsidizing private investors and giving them all the benefits. It’s not all invisible hands and no government, and it’s also not saying ‘let’s just nationalize everything.’” The proposal assumes the desirability of some profit-seeking behavior by private investors and companies, but it uses a public mechanism to channel those investments into activities with long-term public benefits.

The Scandal of Money
by George Gilder
Published 23 Feb 2016

—turn out to harbor “biases” and habitual modes of thought, “anchoring” on previous inputs and prices, over-projecting from past experience into the future, overreacting to losses, succumbing to misleading contextual cues. (Did no one know this before?) All these behaviors cause economic players to make bad decisions, undermining their utility for the great machine. The biases, fixations, overreactions, and manias skew markets and perpetuate perilous disequilibria. The great machine sputters, the invisible hand jitters spastically, and recessions, crashes, panics, and depressions ensue. In such markets, justice and growth together fail. Justice, therefore, must be enforced by outside experts, popes, and professors, who much of the time reduce it to a matter of equal distribution determined by envy. None of these theories has anything very useful to say about technological innovation.

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Justice is an effect not of the “spontaneous order” that is thought to emerge from free markets but of the constitutional order that is a planned effect of political leadership under the law. Unless citizens believe that the distributions of the market are just, they will not impose on themselves the discipline, devote the hours, or endure the risks and hardships of learning and growth. Self-interest will lead them as by an invisible hand to collaborate with government in pursuit of special privileges. Greed is the lust for unjust gains. It impels a drive for guaranteed outcomes in an ever-expanding welfare state—socialism not capitalism. At the same time, without growth, citizens will find their horizons close in on them in a zero-sum world in which they can win only by preying on others.

End the Fed
by Ron Paul
Published 5 Feb 2011

Those who have, on principle, correctly argued against the tax-collecting tactics of our government and the unconstitutionality of our monetary system find that their punishments can be even harsher than that of rapists and murderers. As the iron fist grows in size and the invisible hand influence on the market is diminished, we will see a transformation of America that spells the end of a grand experiment in human liberty. All the actions of Congress, the administration, and the Federal Reserve to run the economy are designed to promote the public good, and the results are a disaster. None of the ongoing bailout programs could exist without the Federal Reserve. This process represents an iron fist. A hands-off attitude represents a more sensible approach—allowing the invisible hand of free markets to function and correct the imbalances.

How Will You Measure Your Life?
by Christensen, Clayton M. , Dillon, Karen and Allworth, James
Published 15 May 2012

Christensen, James Allworth, and Karen Dillon Contents Cover Title Page Dedication Prologue 1 Just Because You Have Feathers … Section I Finding Happiness in Your Career 2 What Makes Us Tick 3 The Balance of Calculation and Serendipity 4 Your Strategy Is Not What You Say It Is Section II Finding Happiness in Your Relationships 5 The Ticking Clock 6 What Job Did You Hire That Milkshake For? 7 Sailing Your Kids on Theseus’s Ship 8 The Schools of Experience 9 The Invisible Hand Inside Your Family Section III Staying Out of Jail 10 Just This Once … Epilogue Acknowledgments About the Authors Also by Clayton M. Christensen Credits Copyright About the Publisher Dedication To our families PROLOGUE ON THE LAST day of the course that I teach at Harvard Business School, I typically start by telling my students what I observed among my own business school classmates after we graduated.

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It would be a mistake, however, to neglect the courses your children need to equip them for the future. Once you have that figured out, work backward: find the right experiences to help them build the skills they’ll need to succeed. It’s one of the greatest gifts you can give them. CHAPTER NINE The Invisible Hand Inside Your Family Most of us have—or had—an idyllic image of what our families would be like. The children will be well-behaved, they’ll adore and respect us, we’ll enjoy spending time together, and they’ll make us proud when they are off in the world without us by their side. And yet, as any experienced parent will tell you, wishing for that kind of family and actually having that kind of family are two very different things.

Fighting Traffic: The Dawn of the Motor Age in the American City
by Peter D. Norton
Published 15 Jan 2008

In 1926 the editor of The American City surveyed leading national traffic experts and found them in agreement that “streets are primarily provided for general public use” and that therefore “the rights of the different classes of traffic to unlimited use of the streets” were “subject to the public and civic welfare.”67 The New American Economics Beyond the courts, developments in economics contributed to this widening field of action, and engineers found justification for their work in the economists’ writings.68 The invisible hand seemed unable to restrain railroads and other “center” firms, and their excesses gave the progressives’ new political and legal views a receptive audience. The discoveries that monopolies corrupt free enterprise, and that they can be a normal consequence of a largely unregulated advanced economy, contributed to the popularity of progressivism at least as much as “the discovery that business corrupts politics.”69 These trends were shadowed by a decline in the influence of British classical economics in America, as institutional and marginalist economic ideas spread.

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Streets as Public Utilities 119 Neoclassical economists continued to take their cue from Britain, but by the turn of the century their new master was not Mill but Alfred Marshall, described as “perhaps the most eminent and widely influential economist” of his time in “the English-speaking world.”79 To save classical economics, Marshall and his American followers accepted considerable amendments to its principles, sacrificing its neatness to preserve its applicability to an advanced industrial economy.80 They agreed with the institutional economists that the pure competition upon which Smith’s analysis depended could not exist, and that in many exchanges the unassisted invisible hand did not fashion the optimum result. Even the neoclassical economists allowed room for positive regulation.81 Natural Monopolies Mill’s modification of classical economics came on the eve of a great surge in the category of enterprises that did not behave according to the price law Smith had expounded.

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In the 1920s, Herbert Hoover’s Notes to Chapter 4 309 rapid success was due in part to the assumption that as an engineer, he would be an expert administrator. 42. Taylor, Principles, 7, 16. For general treatments of the trend toward formalization and organization in politics, business, and social reform, see especially Robert H. Wiebe, The Search for Order, 1877–1920 (Hill and Wang, 1967), chapters 5–7 (111– 195); Guy Alchon, The Invisible Hand of Planning: Capitalism, Social Science, and the State in the 1920s (Princeton University Press, 1985), chapter 1 (8–20); Alfred D. Chandler, The Visible Hand: The Managerial Revolution in American Business (Belknap, 1977), 377–500; Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities (Cambridge University Press, 1982); Morton Keller, Regulating a New Economy: Public Policy and Economic Change in America, 1900–1933 (Harvard University Press, 1990). 43.

Radical Uncertainty: Decision-Making for an Unknowable Future
by Mervyn King and John Kay
Published 5 Mar 2020

16 Recognition of the importance of social and cultural evolution long precedes Darwin; it certainly can be found in the work of the thinkers of the Scottish Enlightenment. ‘Nations stumble upon establishments, which are indeed the result of human action, but not the execution of any human design,’ wrote Adam Ferguson in 1782. 17 And Adam Smith’s contemporaneous observation that ‘man is led by an invisible hand to promote an end which was no part of his intention’ is widely quoted today by people who know nothing else of economics. 18 These eighteenth-century Scottish Enlightenment figures had realised that social and cultural practices were themselves the product of evolutionary processes. Societies have established moral codes or religious practices to discourage non-cooperative behaviour.

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In the early 1950s, an American, Kenneth Arrow, and a Frenchman, Gerard Debreu, used fixed point theorems (drawn from the latest advances in topology) to prove, under certain assumptions, the existence and efficiency of an equilibrium of a competitive market economy. 9 But although their mathematics is complicated, the conclusions are not; the authors provided a clear statement of the conditions under which a decentralised economy could successfully match supplies and demands, and offered a further expression of the conditions under which that equilibrium might be in a certain sense efficient. For many people, Arrow and Debreu provided the formal mathematical underpinning to Smith’s narrative of the ‘invisible hand’. 10 More than lemons Offensive though it may have been to the Retail Motor Federation, Akerlof’s work was followed by the development of many models, some useful, some not, of markets characterised by asymmetric information. Michael Spence explained how the prices of complex goods did not simply equate supply and demand, but were used to signal information about product characteristics. 11 Joseph Stiglitz emphasised the inherent contradiction in the efficient market hypothesis: if all information was ‘in the price’, why would anyone invest in obtaining information in the first place?

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Humans are social animals and there is more to the behaviour of the group than the aggregate of independent individual decisions. Expectations need to be studied at both individual and aggregate level. Completeness and the grand auction Ever since the eighteenth century, when Adam Ferguson described ‘spontaneous order’ and Adam Smith supposedly lauded the ‘invisible hand’, the notion that decentralised markets might allocate resources more efficiently than central planning had been a theme of economic analysis. In the nineteenth century, Leon Walras, a French economist working at the University of Lausanne, attempted to express in a system of equations the idea that the uncoordinated decisions of millions of people might produce aggregate outcomes that were not only coherent but efficient. 10 But Walrasian analysis only reached fruition when, as described in chapter 14 , new and powerful mathematical tools were applied to economics by Kenneth Arrow and Gerard Debreu. 11 For some devotees of laissez faire, this was the analysis they had been waiting for – a rigorous mathematical demonstration of the maxim that ‘you can’t buck the market’.

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by George R. Tyler
Published 15 Jul 2013

With fears of the expansionist Soviet Union providing a wind at his back, Monnet evolved unification bit by bit, beginning with Europe’s coal and steel industries. He built his castle on the philosophy of Adam Smith, relying on the invisible hand of the market to allocate resources most efficiently. As Mark Leonard, director of foreign policy at the Centre for European Reform, explained in 2005: “Monnet’s genius was to develop a ‘European invisible hand’ that allows an orderly European society to emerge from each country’s national interest…. He did not try to abolish the nation-state or nationalism—simply to change its nature by pooling sovereignty.”8 The Emergence of Family Capitalism The genius of Adam Smith was not in his depiction of the age-old market process for allocating resources, but the much more nuanced melding of human nature and careful government regulation to sketch how markets can best be corralled and exploited to nourish mankind.

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He endorsed placing the prosperity of families above the interests of the self-absorbed business community in the clearest possible language, explaining that “the welfare of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”37 As much as we identify the concept of the invisible hand with capitalism, Smith’s most seminal contribution to economics was to channel Aristotle in clarifying that the goal of market capitalism is to enrich families at the expense of the business community. And one of the sharpest lessons offered by this book is that Reaganomics abandoned Smith’s goal, even as the family capitalism countries tightened their embrace of it.

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The history of capitalism has been a process of learning and relearning this lesson.”4 DANI RODRIK, Harvard University, 2011 “Take it from a conservative economist who prefers less to more government: if markets are not competitive, or if they are otherwise failing to function properly, it takes the long arm of government to protect the invisible hand.”5 IRWIN STELZER, Director, Economic Policy, Hudson Institute It was the most extraordinary departures in memory from the genteel and courteous language at the hushed senior level of America’s central bank. Perhaps because it was delivered in Atlanta during the New Year’s holiday in 2010, away from the spotlight in Washington, the accusation attracted little attention.

Seriously Curious: The Facts and Figures That Turn Our World Upside Down
by Tom Standage
Published 27 Nov 2018

That may not extend lifespans, but it can help people make the most of their remaining years. Why do companies exist? The idea of the price mechanism is central to the study of economics. Market prices convey information about what people want to buy and what others want to sell. Adam Smith used the metaphor of the “invisible hand” to describe how the economy is governed by price signals. In 1937 a paper published by Ronald Coase, a British economist, pointed out a flaw in this view: it did not explain what goes on within firms. When employees switch from one division to another, for instance, they do not do so in response to higher wages, but because they are ordered to.

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Workers have little incentive to invest in firm-specific skills, so productivity suffers. The supply chains for complex goods, such as an iPhone or an Airbus A380 superjumbo, rely on long-term contracts between firms that are “incomplete”. Coase was the first to spot an enduring truth: economies need both the benign dictatorship of the firm and the invisible hand of the market. Millennial Americans are just as loyal to their employers as previous generations It is often claimed that millennials (people born between 1982 and 1999) are fickle employees, changing jobs frequently and reluctant to commit themselves to a single employer for the long term.

Cheap: The High Cost of Discount Culture
by Ellen Ruppel Shell
Published 2 Jul 2009

He reasoned that the common good was best served not by government regulation but by individuals making economic decisions that served their own interests. Given this, he said that good would be done as if by an “invisible hand.” In his words:Every individual intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

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Smith’s hero was the prudent man who behaved virtuously even when it was in his material interest to do otherwise. A prudent man, a practitioner of “frugality, and even some degree of parsimony” would likely not squander $7.99 a pound at the Whole Foods salad bar. But that doesn’t mean he has no interest in where his food is grown or in his community, or is out of reach of the “invisible hand.” Rather, a prudent man is likely to shop where his interests are best served. In Boston, for example, he might be at the Haymarket, a raucous open-air market favored by foodies on a budget. Every Friday afternoon and Saturday morning fifty or so vendors vie for business by hawking fruit, vegetables, and fish from ramshackle stalls.

Phishing for Phools: The Economics of Manipulation and Deception
by George A. Akerlof , Robert J. Shiller and Stanley B Resor Professor Of Economics Robert J Shiller
Published 21 Sep 2015

That means that they have brought the consequences of the monkeys to center stage. But, curiously, to the best of our knowledge, they have never interpreted their results in the context of Adam Smith’s fundamental idea regarding the invisible hand. Perhaps it was just too obvious. Only a child, or an idiot, would make an observation like that and expect anyone to notice. But we will see that this observation, simple as it may be, has real consequences. Especially so, because, as Adam Smith might say, as if by an invisible hand, others out of their own self-interest will satisfy those monkey-on-the-shoulder tastes. Thus we may be making only a small tweak to the usual economics (by noticing the difference between optimality in terms of our real tastes and optimality in terms of our monkey-on-the-shoulder tastes).

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So, in the absence of some curbs on markets, we reach an economic equilibrium where the monkeys on the shoulder are substantially calling the shots. The Alleged Optimality of a Free-Market Equilibrium There is a perhaps surprising result that, indisputably, lies at the very heart of economics. Back in 1776, the father of the field, Adam Smith, in The Wealth of Nations, wrote that, with free markets, as if “by an invisible hand … [each person] pursuing his own interest” also promotes the general good.16 It took a bit more than a century for Smith’s statement to be precisely understood. According to the modern version, commonly taught even in introductory economics, a competitive free-market equilibrium is “Pareto optimal.”17 That means that once such an economy is in equilibrium, it is impossible to improve the economic welfare of everyone.

Money: The Unauthorized Biography
by Felix Martin
Published 5 Jun 2013

Their love of luxury had made them encourage the monetisation of their feudal rents: “thus, for the gratification of the most childish, the meanest and the most sordid of all vanities, they gradually bartered their whole power and authority.”31 Smith’s metaphor for Mandeville’s paradoxical process—the “invisible hand” which ensures that “by pursuing his own interest [the individual] frequently promotes that of the society more effectually than when he really intends to promote it”—is so famous that it has long ago taken on a life of its own.32 Smith also emphasised that this pleasing outcome is a feature not so much of the individual’s decisions, as of the system itself: the individual “generally, indeed, neither intends to promote the publick interest, nor knows how much he is promoting it.”33 Smith articulated a vision of society in which economic value had become the measure of all things, and static traditional social relations were being replaced by dynamic monetary ones.

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The more widespread that belief in the economists’ story of monetary society’s miraculous ability to regulate itself became, the greater became the capacity for moral disaster when policy-makers succumbed to the simplistic charms of its Looking-Glass world. The story of one of the most shameful episodes in the history of economic policy-making testifies to quite how bad things could get. THE INVISIBLE HAND IN ACTION In 1845, Ireland had been a full constituent nation of the United Kingdom for more than four decades, and an accessory of the British economy and polity, if often by force, for several centuries before that. Yet in its religion, politics, and language, Ireland retained a quite distinct culture from its neighbour: economically and socially speaking, it was almost of another era.

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De Rubys, C. (1604), Histoire Veritable de la Ville de Lyon. Lyon. Dickson, P. (1967), The Financial Revolution in England: A Study in the Development of Public Credit, 1688–1756. London: Macmillan. Douglas, C.H. (1924), Social Credit. London: C. Palmer. Eatwell, J., Milgate, M., and Newman, P., eds (1989), The New Palgrave: The Invisible Hand. London: Macmillan. Elliot, G. (2006), The Mystery of Overend and Gurney. York: Methuen Publishing Ltd. Feavearyear, A.E. (1931), The Pound Sterling. Oxford: Clarendon Press. Fisher, I. (1936) [1935], 100% Money. New York: Adelphi Company. Flandreau, M. and Uglioni, S. (2011), “Where It All Began: Lending of Last Resort and the Bank of England During the Overend, Gurney Panic of 1866.”

How to Run a Government: So That Citizens Benefit and Taxpayers Don't Go Crazy
by Michael Barber
Published 12 Mar 2015

Nevertheless, the policy can also be attractive to politicians both because some ideologically prefer markets and because, if the policy works, it frees the government from day-to-day intervention as the system becomes sustainable. As Bevan and Wilson put it, ‘Quasi-markets have high transaction costs, but are popular with governments because pressure on poor performance comes from an invisible hand …’6 Blair saw choice as a key ingredient in creating ‘self-improving systems’ – different words for the same basic point. There is much academic debate about whether choice and competition work in the sense of driving up performance. The evidence so far is unclear, though cumulatively it is beginning to suggest that under the right conditions choice does work.

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This is not to say that the measurement of productivity in the market sector is without its complexity, but for practical purposes most of the time it is straightforward. In the public sector – where the service is free at the point of use or where the price is fixed by government rather than the invisible hand of the market – the measurement of productivity becomes much harder. Adding to this complexity is what value to put on quality – how well a teacher teaches a lesson has a major impact on student outcomes, but it is hard to put a number to it. Or again, the thoughtfulness and responsiveness of a care worker who visits an elderly person in their home makes a huge difference to the person visited, but is hard to measure.

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E. (2000), The Public Sector: Concepts, Models and Approaches, London, Sage Publications Lawson, N. (2010), The View from No. 11: Memoirs of a Tory Radical, revised edition, London, Biteback Lax, D. and Sebenius, J. (2006), 3-D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals, Boston, Harvard Business School Press Le Grand, J. (2003), Motivation, Agency and Public Policy: Of Knights and Knaves, Pawns and Queens, New York, Oxford University Press — (2007), The Other Invisible Hand: Delivering Public Services through Choice and Competition, Princeton, Princeton University Press Lesley, E. (2014), Mapping a Transformation Journey: A Strategy for Malaysia’s Future, 2009–2010, Innovations for Successful Societies, Woodrow Wilson School of Public and International Affairs and the Mamdouha S.

The Meritocracy Myth
by Stephen J. McNamee
Published 17 Jul 2013

Such efforts to reduce the nonmeritocratic effects of social capital, however, are still the exception rather than the rule since most employment occurs in private settings where such efforts are typically not required or employed. The Invisible Hand of Social Capital Having friends in high places increases the likelihood of receiving useful information in routine exchanges even without actively seeking such information (Lin 2000a). People with networks yielding access to substantial job information will be more apt to be presented with opportunities to change jobs without an active search. In short, having friends in high places is associated with the routine flow of useful information—“the invisible hand of social capital.” Only when such useful information is not available and not forthcoming would mobilization of social contacts become necessary.

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Economic Origins Freedom from political tyranny, however, is not the same as “market freedom,” although the two are often mistakenly viewed as inextricable. Free markets mean that prices, profits, and wages are determined by the “free” operation of market forces—the outcome of innumerable matches of supply and demand for goods and services unregulated by governments. In free-market societies, “the invisible hand of the market” operates: the sole determinant of investment—the sale and purchase of land, labor, and business—is individual calculation of costs and benefits intended to maximize profits. But free markets themselves do not guarantee democracy, civil liberties, or political freedom. In one of the great coincidences of American history, America’s economic blueprint for a free-market economy was laid out in the same year, 1776, as its political blueprint for a democratic government.

The End of Doom: Environmental Renewal in the Twenty-First Century
by Ronald Bailey
Published 20 Jul 2015

This conclusion is further bolstered by a 2005 study by University of Helsinki economists Ulla Lehmijoki and Tapio Palokangas; according to this study, in the short run trade liberalization boosts birth rates, but in the long run it cuts fertility. Again, this is true largely because trade liberalization encourages the development of women’s human capital (education), which makes childbearing relatively more costly. The Invisible Hand of Population Control In 2002, Seth Norton, an economics professor at Wheaton College in Illinois, published a remarkably interesting study, “Population Growth, Economic Freedom, and the Rule of Law,” on the inverse relationship between prosperity and fertility. Norton compared the fertility rates of over a hundred countries with their index rankings for economic freedom and another index for the rule of law.

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And as we have seen, the global total fertility rate is rapidly decelerating. Of the 231 countries and territories listed in the 2013 CIA World Factbook, 122 are at or below replacement fertility rates. Norton persuasively argues that Hardin’s fears of a population tragedy of the commons are actually realized when the invisible hand of economic freedom is shackled. Many poor countries have weakly specified and enforced property rights. Poor property rights means that many resources are effectively left in open-access commons where the incentive is to grab what one can before another individual gets it. Norton points out that in such situations, more children mean more hands for grabbing unowned and unprotected resources such as water, fodder, timber, fish, and pastures, and for the clearing of land.

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Throughout history, most people lived in the institutional equivalents of open-access commons overseen by rapacious elites who encouraged high fertility rates and the plundering of natural resources. It turns out that economic freedom and the rule of law are the equivalent of enclosing the open-access breeding commons, causing parents to bear more and more of the costs of rearing children. In other words, economic freedom actually serves as an invisible hand of population control. Hope for Africa? The United Nations’ 2012 Revision forecasts that more than half of global population growth between now and 2050 will take place in Africa, rising from 1.1 billion to 2.4 billion. The middle-variant trend for sub-Saharan Africa projects that total fertility rate will fall from 4.9 children now to 3.1 by 2050, reaching 2.1 by 2100.

Age of Anger: A History of the Present
by Pankaj Mishra
Published 26 Jan 2017

Its publicists insisted, contra Montaigne, that individual interests, far from being opposed, could be harmonized by trade, and, more remarkably, such private gains were also congruent with the public good. Adam Smith envisaged an open global system of trade powered by envy and admiration of the rich. He argued that the human instinct for emulation of others could be turned, through a mechanism he called the ‘invisible hand’, into a constructive moral and social force. Montesquieu thought that commerce, which renders ‘superfluous things useful and useful things necessary’, would ‘cure destructive prejudices’ and promote ‘communication between peoples’. In Supplement to the Voyage of Bougainville (1772), Diderot fantasized about the new boldly sensuous man, a connoisseur of: the delights of society.

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But nearly every major thinker in Europe – whether liberal, nationalist, Marxist, atheistic or agnostic – also transposed Christian providentialism into would-be rationalistic categories. Marx reproduced medieval and Reformation millenarian expectations in his utopia of a classless, stateless society. Herzen cautioned that liberalism with its invisible hand alchemizing selfishness into general welfare ‘is the final religion, though its church is not of the other world but of this’; and its ‘theology is political theory’, whose ‘mystical conciliations’ are to be achieved on Earth. Christian eschatology even suffuses the political ideals of today’s insistently Islamic radicals and Hindu nationalists – an inescapable irony of history that would enrage these vendors of gaudy particularism if they became aware of it.

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Social Darwinism, as it rapidly developed, applied Darwin’s theory of natural selection – of the progress of species by adaptation to changing local environments, preserving the ‘favourable variations’ and rejecting the ‘injurious variations’ – to society at large. Progress still looked as inevitable as when Adam Smith first linked it to mimetic desire and aggressive mutual competition, but after Darwin and the rise of the masses the workings of the invisible hand no longer seemed adequate. * * * Drastic measures were needed; and eugenic thinking, as it became respectable in the wake of popular Darwinism, fed on a widely felt need for a systematic alternative to an old model that looked unsuitable for a struggle that only the fittest would survive. So did the vogue for looking at the world as a struggle between races.

The Reckoning: Financial Accountability and the Rise and Fall of Nations
by Jacob Soll
Published 28 Apr 2014

There was poison in this great industry, and even with Wedgwood’s true genius, he had not accounted for this heavy cost.33 Although Wedgwood the innovator would, in the end, use accounting to try to hold the status quo, economists and philosophers saw that accounting could be a tool for wider social and cultural change and progress. Adam Smith used accounting data to develop free-market theories. It was in ancient accounts, like the Domesday Book—which he called a “very imperfect book of accounts”—that Smith traced the movements of the invisible hand of market prices. He cited the accounts of French, English, and Scottish food markets to understand pricing. A professor of moral thought, Smith mixed the numbers of accounting with theories of moral commerce and liberty in his quest to design a model for human happiness.34 Moving beyond profit-oriented accounting, British Protestant thinkers tried to budget productiveness as well as happiness.

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The most famous idea that emerged from the works of the French economic philosophers François Quesnay, Vincent de Gournay, and Anne-Robert-Jacques Turgot is what they famously called “laissez faire,” a theory of commerce based on the natural law of freedom. Before Adam Smith, it was their hope that by lifting government subsidies, price controls, and guild monopolies, an “invisible hand” would spur agricultural production and national wealth. Large-scale, state financial management was not necessary in a market regulated by the balance of nature itself. Although Quesnay used mathematics to study economic theory and de Gournay and Turgot were skilled accountants, their published work rarely contained analysis of complex numbers, accounts, or budgets.

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Matthew (art) (Caravaggio), 23 International Accounting Standards Board (IASB), 194, 206 International Accounting Standards Committee (IASC), 194 Interstate Commerce Commission, 172 Introduction to the Counting House, An (Serjeant), 150 Inventorying, 2–3 Investment banks, x, 192, 200, 202–204 Investment in stocks Dutch East India Company and, 79–84 Great Depression and, 192–193 railroads and, 169, 174 risky mortgage bundles and, 202–203, 206 South Sea Company and, 106–112 Invisible hand, 130, 135 Irwin, Timothy, 207 Islington Academy, 119 Italian city republics. See Renaissance; Republics, Italian Jacombe, Robert, 110 Jacques Savary, 96–97 Jarry, Nicolas, 97 Jefferson, Thomas, 155–156 Jesuit order, 57 Jesus Christ, 23, 26 Jews, usury and, 21 Johnson, Lyndon, 198 Johnson, Samuel, 115 Joint Stock Companies Act of 1844 (England), 173 Jones, Joseph, 159 Jones, Lewis Davies, 173 Jullien, Adolph, 169 “Just price” concept (Aquinas), 21, 62 Kantoor van de Financie van Holland, 71 Keayne, Robert, 149 Kennedy, Joseph P., 192 Kent, William, 116 Knight, Robert, 112 KPMG, x, 202 Laffitte, Jacques, 167 “Laissez faire” theory, 135, 163, 171–172 Lampe, Barent, 81 Law, John, 107, 134 Lawrence, Thomas, 123 Le Maire, Isaac, 80–81 Le Peletier, Claude, 99 Leeson, Nick, 123 Lehman Brothers Bank, x, 203 Lenin, Vladimir, 187 Leonardo da Vinci, 50 Lerma, Duke of, 68 Leviathan (Hobbes), 104 Liabilities, in accounting, 83 Liancourt, Duke de, 145 Liber abaci (Fibonacci), 10 Libro segreto, 18–19, 34, 37, 44 L’Interdiction (The Ban) (Balzac), 178–179 Little Dorrit (Dickens), 171, 178, 180–181 Little Women (Alcott), 181–182 Locke, John, 103 London (Johnson), 115 Loose-leaf notebooks, 169 Lorenzo the Magnificent.

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab
Published 7 Jan 2021

Union membership started to decline, and collective bargaining became less common (though much of continental Europe, including Germany, France, and Italy clung to it until the 2000s, and some, like Belgium, still do today). Economic policies in two of the West's leading economies—the United Kingdom and the United States—were largely geared toward deregulation, liberalization, and privatization, and a belief that an invisible hand would lead markets to their optimal state. Many other Western economies later followed their path, in some cases after more left-leaning governments failed to jumpstart economic growth. On a more positive note, new technologies also made their contribution, leading to a Third Industrial Revolution.

…

It should come as no surprise then that many Western societies have become deeply polarized, people have become wary of their institutions and leaders, and increasingly, these various factions only interact within their own echo chamber. For decades, their leaders promised things would get better for everyone, and many privileged observers stood by. If only we let the free market run its course, they said, an invisible hand would allocate all resources optimally. If only companies were unshackled of regulation, they would create unmatched prosperity. And if only financial and technological innovators could blossom, we'd reach endless GDP growth, which would have benefits for all. Many leading economists believed in these dogmas, and they increasingly influenced government and central banks.

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The car replaced the horse, the plane replaced the ship, and electric household devices replaced domestic workers. Milton Friedman and his colleagues at the University of Chicago (the so-called Chicago School) went a step further. Friedman believed in the naturally positive role of business in the economic system. An invisible hand ensured that markets would always have an optimal outcome, maximizing utility for society. It meant that “there is one and only one social responsibility of business,” Friedman wrote in a 1970 New York Times essay.43 It is “to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab and Peter Vanham
Published 27 Jan 2021

Union membership started to decline, and collective bargaining became less common (though much of continental Europe, including Germany, France, and Italy clung to it until the 2000s, and some, like Belgium, still do today). Economic policies in two of the West's leading economies—the United Kingdom and the United States—were largely geared toward deregulation, liberalization, and privatization, and a belief that an invisible hand would lead markets to their optimal state. Many other Western economies later followed their path, in some cases after more left-leaning governments failed to jumpstart economic growth. On a more positive note, new technologies also made their contribution, leading to a Third Industrial Revolution.

…

It should come as no surprise then that many Western societies have become deeply polarized, people have become wary of their institutions and leaders, and increasingly, these various factions only interact within their own echo chamber. For decades, their leaders promised things would get better for everyone, and many privileged observers stood by. If only we let the free market run its course, they said, an invisible hand would allocate all resources optimally. If only companies were unshackled of regulation, they would create unmatched prosperity. And if only financial and technological innovators could blossom, we'd reach endless GDP growth, which would have benefits for all. Many leading economists believed in these dogmas, and they increasingly influenced government and central banks.

…

The car replaced the horse, the plane replaced the ship, and electric household devices replaced domestic workers. Milton Friedman and his colleagues at the University of Chicago (the so-called Chicago School) went a step further. Friedman believed in the naturally positive role of business in the economic system. An invisible hand ensured that markets would always have an optimal outcome, maximizing utility for society. It meant that “there is one and only one social responsibility of business,” Friedman wrote in a 1970 New York Times essay.43 It is “to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century
by Rodrigo Aguilera
Published 10 Mar 2020

Because for all the talk about how capitalism has been one of the great engines of human progress in their narrative, there is virtually no discussion of how markets, firms, and entrepreneurs have achieved this. This chapter is about the very visible hand of capitalism and whether its contribution to progress is what the New Optimists claim it is. Markets Behaving Badly “Money and power are inextricably linked. And with power has come influence over the market mechanism. The invisible hand of the marketplace is connected to a wealthy and muscular arm. It is perhaps no accident that those who argue most vehemently on behalf of an immutable and rational “free market” and against government “intrusion” are often the same people who exert disproportionate influence over the market mechanism.

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Unfortunately, the complete mismatch of where global capitalism’s trillions of investable wealth ends up (unproductive but lucrative housing markets, risky third-world corporate debt, safe first-world public debt, or simply stashed away in tropical island tax havens) and where it should (clean energy, green infrastructure, social investments) is possibly the most serious indication of how modern capitalism is unfit for the challenge of climate change, or any challenge that requires prioritizing environmental and social needs rather than treating them as consequential to interest rates being in equilibrium with the profit motive of each individual firm. But even in the event that the invisible hand guided private capital towards climate mitigating investment, this comes up against yet another well-known quandary in environmental economics: the Jevons Paradox. Named after a mid-nineteenth-century English economist, William Stanley Jevons, the paradox is one that appears to be endemic to resource markets; the tendency for efficiency gains in any industry to result in increased demand.

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v=koPmuEyP3a0 18 Lasch, C., The Culture of Narcissism, pg. 7 19 “Statement on the Purpose of a Corporation”, Business Roundtable, 19 Aug. 2019, https://opportunity.businessroundtable.org/ourcommitment/ 20 Lasch, C., The Culture of Narcissism, pg. 30 21 Lasch, C., The World of Nations: Reflections on American History, Politics & Culture (Vintage Books, 1973), pg. 187 22 Taylor, C., “Atomism”, in Philosophical Papers 2: Philosophy and the Human Sciences (Cambridge University Press, 1985) 23 Thatcher, M., “Interview for Woman’s Own”, Margaret Thatcher Foundation, 23 Sep. 1987, https://www.margaretthatcher.org/document/106689 24 Rawls, J., Justice as Fairness, pg. 21. 25 Sen, A., Development as Freedom (First Anchor Books, 1999), pg. 31 26 Rawls, J., Justice as Fairness, pg. 4 27 Fisher, M., Capitalist Realism, pg. 80-81 ACKNOWLEDGEMENTS First and foremost, I would like to thank the wonderful staff at Repeater Books for helping put this book together, in particular Tariq Goddard for taking a chance with a manuscript from a first-time author as well as Josh Turner for his editing work and incredibly valuable feedback. It is a shame that Mark Fisher was no longer with us to be part of this project, but I would like to think that his “invisible hand” may have had some spiritual role in certain sections of the book. Publisher aside, I would also like to give thanks to Ivan Mulcahy for feedback on a very early version of the manuscript and steering it towards the direction it eventually took. A few people read some version of the manuscript and offered feedback, and/or had extended conversations with me (including the occasional heated debates) on the topics that were dealt with in the book.

Among the Braves: Hope, Struggle, and Exile in the Battle for Hong Kong and the Future of Global Democracy
by Shibani Mahtani and Timothy McLaughlin
Published 7 Nov 2023

South China Morning Post, liveblog of student government talks, October 21, 2014, www.scmp.com/news/hong-kong/article/1621141/live-hong-kong-students-prepare-meet-government-officials-democracy. 14. Nikki Sun, “‘Invisible Hand’ Interfering in Hong Kong Chief Executive Race, NPP Deputy Chair Michael Tien Says,” South China Morning Post, January 17, 2017, www.scmp.com/news/hong-kong/politics/article/2062740/invisible-hand-interfering-hong-kong-chief-executive-race?module=hard_link&pgtype=article. 15. Carrie Lam, interview with the BBC, June 21, 2017, www.youtube.com/watch?v=srp_UPG5VAA. 16. Carrie Lam, interview with the Financial Times, March 2018, www.ft.com/content/d81d82ba-2392-11e8-ae48-60d3531b7d11. 17.

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None of that—not Lam’s cringe-worthy attempts at public stumping or her charismatic opponent, who was favored by almost twenty points in the polls—mattered. A devout Catholic, she believed that God had called on her to serve Hong Kong. Her fortunes were the product of a less divine force. Privately, Beijing had been working for months to ensure her win. The “invisible hand” of the Liaison Office warned off other hopeful candidates, making certain they wouldn’t get far enough to challenge her.14 As soon as Lam’s candidacy was announced, mainland officials instructed state media to devote more space to coverage of her. Beijing’s proxies in Hong Kong inserted themselves further as the election day drew near.

The Next Factory of the World: How Chinese Investment Is Reshaping Africa
by Irene Yuan Sun
Published 16 Oct 2017

And it’s a recognition that no one can ever accomplish anything hard without at least giving it a try. If that sounds overly glib, consider that its very glibness serves a purpose. As the late, great economist Albert O. Hirschman observed, a certain amount of overconfidence is necessary for economic development. In a corollary to Adam Smith’s “invisible hand” that guides market decisions, Hirschman identified a “Hiding Hand” that obscures difficulties and allows people to embark on projects that are beyond their current ken. He writes, “The Hiding Hand can help accelerate the rate at which ‘mankind’ engages successfully in problem-solving: it takes up problems it thinks it can solve, finds they are really more difficult than expected, but then, being stuck with them, attacks willy-nilly the unsuspected difficulties—and sometimes even succeeds.”35 This is the mental enabler of bootstrapping: if you’re overconfident, you’re more likely to take on a challenge and more likely to stick with it when it gets hard.

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See also union movements Humanwell Healthcare Group, 166–169 Ibrahim, Ahmed, 89–91, 93, 94 Ibrahim, Mo, 136 identity, 124–127 illiteracy, 95 import substitution industrialization, 37–38 Independent Democratic Union of Lesotho (IDUL), 103–104 India, 43–44, 161–162 industrialization China, 1–3 complaints about workers in, 91, 96–100 deaths during, 83–84 economic development and, 12–13, 20 economic slowing in China and, 171–172 flying geese theory of, 93, 112–113 government development with, 82–84 history of, 19–20 as human chain reaction, 17–30 import substitution, 37–38 negative effects of, 7–8 possibilities of, 9–10 product upgrading in, 26–27 societal transformations from, 91, 97–98, 101–107 uneven paths of, 109–127 infrastructure, 62–63, 65–66 Chinese investment in African, 43 clever, 175–177 good enough governance and, 140 Nigeria, 38 South Africa, 62–63 innovation, 142–148, 158 institutions, economic development and, 22 international aid, 9–10, 135–136, 151–169 International Labour Organization, 94 International Monetary Fund, 20, 37, 174 invisible hand, 165 Japan, industrialization in, 19, 25, 26, 29 Joseph, Michael, 144 Kaduna Textile Mills, 33–34, 35, 38 Kanono, Mpho Agatha, 102–105 Katzenstein, Peter, 147–148 Kenya, 11, 109–112 demographics, 190n14 industrialization in, 8 local ownership in, 119–120 M-Pesa in, 142–146, 190n14 pharmaceutical industry, 157 railroad project in, 175–177 worker skills training in, 129–134, 148–150 Kenya Association of Manufacturers, 120, 133–134 Kenya Technical Trainers College, 133, 149 Kenya Wildlife Service, 175 Kerry, John, 156 Kibaki, Mwai, 144 Knack, Stephen, 140–141 Kohl’s, 56 labor costs, 7, 23, 64 China vs.

The Gene: An Intimate History
by Siddhartha Mukherjee
Published 16 May 2016

But aside from inventing a Latinate name for a vague principle, Wolff could provide no further specifics. The instructions, he argued obliquely, were blended together in the fertilized egg. The vis essentialis then came along, like an invisible hand, and molded the formation of this mass into a human form. While biologists, philosophers, Christian scholars, and embryologists fought their way through vicious debates between preformation and the “invisible hand” throughout much of the eighteenth century, a casual observer may have been forgiven for feeling rather unimpressed by it all. This was, after all, stale news. “The opposing views of today were in existence centuries ago,” a nineteenth-century biologist complained, rightfully.

…

“The opposing views of today were in existence centuries ago,” a nineteenth-century biologist complained, rightfully. Indeed, preformation was largely a restatement of Pythagoras’s theory—that sperm carried all the information to make a new human. And the “invisible hand” was, in turn, merely a gilded variant of Aristotle’s idea—that heredity was carried in the form of messages to create materials (it was the “hand” that carried the instructions to mold an embryo). In time, both the theories would be spectacularly vindicated, and spectacularly demolished. Both Aristotle and Pythagoras were partially right and partially wrong.

…

What hand, Darwin asked, had guided the creation of such different varieties of finches on those distant volcanic islands or made small armadillos out of giant precursors on the plains of South America? Darwin knew that he was now gliding along the dangerous edge of the known world, tacking south of heresy. He could easily have ascribed the invisible hand to God. But the answer that came to him in October 1838, in a book by another cleric, the Reverend Thomas Malthus, had nothing to do with divinity. Thomas Malthus had been a curate at the Okewood Chapel in Surrey by daytime, but he was a closet economist by night. His true passion was the study of populations and growth.

Why Stock Markets Crash: Critical Events in Complex Financial Systems
by Didier Sornette
Published 18 Nov 2002

Smith’s masterpiece [384], An Inquiry into the Nature and Causes of the Wealth of Nations, introduced the then-radical notion that selfish, greedy individuals, if allowed to pursue their interests largely unchecked, would interact to produce a wealthier society as if guided by an “invisible hand.” Smith never worked out a proof that this invisible hand existed. Not all subsequent economists agreed with his optimistic assessment. T. Malthus thought people would have too many children and overpopulate the world. Karl Marx thought capitalists would be so greedy they would 84 chapter 4 bring down the system. But they all shared Smith’s view of economics as the study of people trying to maximize their material well being. In 1954, K. Arrow and G. Debreu [16] published an article that in essence mathematically proved the existence of Adam Smith’s invisible hand. This “general equilibrium” proof, which relies on a set of very restricted assumptions of an idealized world, has been a mainstay of graduate-level economics training ever since.

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Conway, G. and Toenniessen, G. (1999). Feeding the world in the twenty-first century, Nature 402, c55–c58. 92. Cootner, P. H., Editor (1967). The Random Character of Stock Market Prices (Cambridge, MA, MIT Press). 93. Cosmides, L. and Tooby, J. (1994). Better than rational—evolutionary psychology and the invisible hand, American Economic Review 84, 327–332. 94. Costanza, R., dArge, R., deGroot, R., Farber, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., O’Neill, R. N., Parvelo, J., Raskin, R. G., Sutton, P., and van den Belt, M. (1997). The value of the world’s ecosystem services and natural capital, Nature 387, 253–260. 95.

Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition
by Kindleberger, Charles P. and Robert Z., Aliber
Published 9 Aug 2011

Household consumption spending is three or four times larger than investment spending in most countries, and accounted for most of the increase in total spending. The inevitable outcome of the adjustment process was that domestic saving declined in the countries that received large inflows of cross-border money. The invisible hand led to increases in the values of the currencies of the countries that experienced larger money inflows and to increases in the values of assets in these countries. Moreover the invisible hand led to higher rates of growth of GDP as asset prices increased and consumption spending climbed. Thus the increases in the variability in the ratios of the changes in the trade balances to GDP that resulted from the initial increase in the flows of money to countries induced changes in the adjustment process that led to higher rates of return on securities and other assets in these countries.

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The price of securities available in the country also increased in response to the purchases by the foreign investors. When currencies were not pegged, comparable increases in the foreign demand for securities denominated in these currencies initiated the adjustment process to ensure that the countries’ trade balances changed by the amounts that corresponded to the increases in the money inflows. The invisible hand operated to ensure that the immediate impacts of the increases in the flows of money was that domestic investment spending increased as the cost of capital declined and consumption spending increased in response to higher levels of household wealth. Household consumption spending is three or four times larger than investment spending in most countries, and accounted for most of the increase in total spending.

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Morier 163 excessive leverage concept 30 exchange rates 2, 293 floating 2, 165, 178, 186, 187, 229, 250, 279, 291 pegged 2, 6, 16, 17, 98, 168, 190, 229, 244, 246, 250, 277, 291 see also foreign exchange Exchequer bills 197, 200, 210–12 expectations adaptive 39–40 rational/irrational 39–40, 84–5 fallacy of composition 42, 213, 231 Fannie Mae 24, 87, 195, 263, 299, 300 Fastow, Andrew and Lea 132 Fauntleroy, Henry 141 Federal Deposit Insurance Corporation (FDIC) 65, 127, 210, 251, 262, 265, 270 Federal Reserve Act 1913 (US) 65, 224 Federal Reserve Bank of New York 82, 168, 208, 223, 227, 245, 246, 249, 252 Great Depression and 78–9, 99, 104, 167–8, 223 Federal Reserve Board 19, 77, 168, 183, 223, 227 Federal Reserve System 20, 65, 89, 91, 203, 251 Volcker shock, 1979 284 Federal Savings and Loan Insurance Corporation (FSLIC) 24, 127, 210 Fidelity group 104 financial deepening 259 financial distress 84–5, 90–4, 162, 166 swindles/fraud and 144 financial liberalization see deregulation financial regulation 174 bank regulation/supervision 193–4 Finland 121, 157, 280, 285 First Bank of the United States 219 First Jersey Securities 47, 138 First Republic Bank of Dallas 210 First World War see World War I Fisher, Irving 18, 27, 44 Fisk, Jim 46, 139, 165 Fordyce, Alexander 58, 96, 142 foreign exchange 1, 2, 35, 120, 148 see also exchange rates foreign exchange crises 2, 3, 6–7, 250 Foxwell, H.S. 101–2, 226 France 55, 63, 92 1825 crisis 235–6 1826–32 speculation 49–50 1836–39 crisis 89, 162 1857 crisis 89 1882 crash 74–5, 97 Alsace crisis, 1827–28 161, 204 Paris vs London 239–40 see also Bank of France; French Revolution Franco-Prussian indemnity 54, 165 Franklin National Bank, New York 3, 44, 103, 251 fraud see swindles/fraud Freddie Mac 24, 87, 195, 263, 299, 300 Frederick II of Prussia 54, 160, 200 French Revolution, 1789–95 53–4, 96 Friedman, Milton 41, 197, 209 on Great Depression 78–9, 81, 154–5, 215 G-5 256 G-7 252, 256 gambling 59, 60, 89, 140 see also swindles/fraud Garber, Peter M. 111 Garnier-Pagès, Louis Antoine 213 Genoa Conference, 1922 77 Germany 157–8, 165–6 1925 depression 21, 50, 53, 167–8 Berlin 112, 145, 160, 165, 237 Berlin crisis, 1763 200 Cologne 3, 163–4, 251, 278 Dawes loan to, 1924 242 Hamburg see Hamburg Maklerbanken 63 the mark 77, 78, 241 Reichsbank 91, 93, 224, 238 see also Prussia Gibbons, James S. 94, 150 Glass-Steagall Act 1932 (US) 91, 144, 150–1, 168–9, 194, 298 Global Crossing 119 Glyn, Mills & Co. 207 Goddefroy, Gustav 144 gold 3, 4, 14, 31, 43–4, 48, 63, 82, 91, 93, 164, 168, 230, 235, 238–9, 242, 245, 246, 247, 275 exchange standard 77–8, 83, 154 panic, 1869 46, 165 standard 66, 73, 79, 242, 243 gold agio, in US 46, 155, 165 gold discoveries 48–9, 60, 164 gold parity 2, 43 gold prices 1869 panic 46, 165 1970s surge 43–4 gold-exchange standard 77–8, 83, 154 Goldman Sachs 120, 270 Goldschmidt, Jacob 217, 244 Gould, Jay 46, 165 grain prices see corn prices Granger movement 101 Grasso, Richard 135 Great Britain 1636 bubble 11 1772 crisis 96 1810 crisis 160 1825 crash and panic 88, 92, 105 1864 crisis 97 1872–73 financial distress 238 1886 crisis 73 1907 financial distress 94, 119, 167–8 1931 crisis 244, 246 Cabinet Committee on Economic Information 243 Glorious Revolution, 1688 53 railway booms 45, 225 Scotland 81, 224 see also Bank of England Great Depression, 1928–33 causes of 21, 63, 76, 78–80, 89, 154, 167–9, 240–6 credit expansion and 78ff as international 167–9 Keynesian view of 79–80 lenders of last resort and 227, 228 monetarist view of 79–80 Greece 170, 171, 274, 275, 287 Greenspan, Alan 10, 19–20, 29, 90, 99, 183, 186, 191, 223, 227 Grill, Carlos and Claes 72 Grubman, Jack 22, 119, 137, 139 guarantee of liabilities 206–8 Guinness, Arthur and Co. 49 Guy, Thomas 100 Hamburg 50–1, 160 1836–39 crisis 236 1857 crisis 205–6, 236–7 Hansen, Alvin H. 35, 78 Harrison, George 223, 227 Hatry, Clarence 142 Hawtrey, R.G. 103, 162, 242–3 on IMF 330n44 Hayek, Friedrich 81 HealthSouth 119, 135, 152 hedge finance 29, 69 hedge funds 20, 55–6, 74, 86, 95, 121, 136–7, 150, 199, 262 see also Long-Term Capital Management (US) Herstatt AG, Cologne 3, 251, 278 Holland (the Netherlands) 59, 62 1763 crisis 235 Amsterdam see Amsterdam tulipmania, 1636 11, 17, 59, 109–11 home-equity credit 68–9 Hong Kong 85, 178, 233 Hoover, Herbert 154, 167, 195–6 Howson, Susan 242, 225 Hoyt, Homer 111–2 Hudson, George 147 Hungary 165, 242 Hunt, Bunker 94 Huskisson, William 211–12 Hyndman, H.M. 305n33 Iceland 4, 10, 20, 28, 36–7, 121, 154, 186, 187, 287 ImClone 135 India 54, 130, 139, 164 Indonesia, 1990s asset price bubble 1, 6, 8, 11, 24, 104, 126, 180, 253 inflation in 1970s 81, 282–3 hyperinflation 98, 241 in US 282–3 inflation rates 4–5, 181, 282–6 inflation targeting 115 information availability 303n10 ING (bank) 4 initial public offerings (IPOs) 56, 181 Innovation financial 51, 55–6, in credit expansion 62–5, 66, 69–77, 131 technological 18, 27, 56, 181 insiders see outsiders/insiders insider trading 120 installment credit 63, 69 Insull, Samuel 148 interest rates 44, 174, 284 on international loans 35–6 on junk bonds 71 panics and 49–50, 54–5, 82, 106 in Ponzi finance 29 International Bank for Reconstruction and Development (IBRD) see World Bank International Monetary Fund (IMF) 104, 202, 247–8 General Arrangements to Borrow 248 R.G. Hawtrey on 330n44 as lender of last resort 16, 25, 198, 231, 234, 248, 296 internet 147 investment banks 4, 9, 23, 56, 74, 119, 120–1, 130, 138, 149, 151, 174, 181–2, 183, 194, 208, 257ff, 298, 299, 300 invisible hand theory 293 Ireland 274, 275, 287 irrational exuberance concept 13, 90, 180, 183, 273 irrationality see rationality Israel, Jonathan 111 Istituto Per la Ricostruzione Industriale (IRI) 23 Italy 165 1907 crisis 23, 25, 167 Jackson, Andrew 91, 154 Janssen, Sir Theodore 158 Japan 1985–89 asset price bubble 1, 3, 4, 7, 8, 9, 17–18, 23, 36, 113, 125, 173–7, 176, 285, 251 1990s crisis 5, 24, 98, 176–7, 199 banking system 174–5, 175, 176 deregulation 56, 114, 174–5, 176, 285 real estate and share prices see 1985–89 asset price bubble above Tokyo 94–5, 175 Jellico, Charles 216 ‘jingle mail’ 93, 261 Johnson, Harry G. 40, 46 Johnson, Paul 196 Joplin, Thomas 16 Joseph, Arend 152, 196 journalism, as unethical 145–7 Juglar, Clement 155 Juglar cycle of investment 26 junk bonds 2, 20, 70–1, 128–9, 152 Kahn, Herman 104, 128 Kaminsky, Graciela 74 Kauffman Brothers, Hamburg 194 Kaufman, Henry 64 Keating, Charles 174 Kennedy, Joseph P.

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society
by Binyamin Appelbaum
Published 4 Sep 2019

They did not think the government could increase growth by borrowing money from private citizens and spending it on public works. This was widely seen as equivalent to moving money from the left pocket to the right pocket of the same pair of pants. Keynes’s letter was an attack on this faith in markets. In his view, no invisible hand ensured markets automatically would deliver the best possible outcomes. Businesses uncertain about the future would refrain from investing; people would remain unemployed. The government, he said, needed to borrow and spend until “animal spirits” were revived.3 Keynes wrote that if Roosevelt followed his instructions, the President could spark a global recovery.

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Dales, Pollution, Property and Prices (Toronto: University of Toronto Press, 1968), 100. 30. A number of recent works have influenced my understanding of the relationship between the rise of the conservative movement in American politics and the rise of trust-the-market economics, including: Bernstein, A Perilous Progress; Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade Against the New Deal (New York: Norton, 2010); Lisa McGirr, Suburban Warriors: The Origins of the New American Right (Princeton, N.J.: Princeton University Press, 2001); Kevin Kruse, One Nation Under God: How Corporate America Invented Christian America (New York: Basic Books, 2015); and Rick Perlstein, Before the Storm: Barry Goldwater and the Unmaking of the American Consensus (New York: Hill and Wang, 2001). 31.

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Powell wrote in his memo (see the next endnote) that Bank of America branches had been attacked 39 times in the previous eighteen months, “22 times with explosive devices and 17 times with fire bombs or by arsonists.” 23. Powell’s memo, “Attack on American Free Enterprise System,” was dated August 23, 1971. For the memo and the reaction, see Kim Phillips-Fein, Invisible Hands: The Businessman’s Crusade Against the New Deal (New York: Norton, 2010), 156–65. 24. Lee Edwards, The Power of Ideas: The Heritage Foundation at 25 Years (Ottawa, Ill.: Jameson Books, 1997), 9. 25. Jacob S. Hacker and Paul Pierson, Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class (New York: Simon and Schuster, 2010), 116. 26.

Business Lessons From a Radical Industrialist
by Ray C. Anderson
Published 28 Mar 2011

There is the flawed view that when accumulating all that stuff gets us into trouble technology will see us through, even though it’s the extractive, abusive attributes of technology—especially when coupled with numbers-driven, unemotional, results-oriented, left brain intelligence—that got us into the fix to begin with. And there is the flawed view that relies on the invisible hand of the market to be an honest broker, even though we know the market can be very dishonest. Does the price of a pack of cigarettes reflect its true cost? Not even close! How about the price tag on a lead-tainted toy from China? A box of contaminated infant formula? I don’t think so. And the price of a barrel of oil?

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Will he succumb to temptation and issue more regulations, unfunded mandates, and edicts? Or is there a better way here, too? The kind of future our children and grandchildren will live to see depends on getting this thing right. What should he do? Well, I expect you already know my thoughts about placing too much faith in that mythical invisible hand of the market. Trusting in its ultimate wisdom ( just like mistrusting anything government comes up with) may be bred into the bones of most business people. But as long as the market is steered by invisible subsidies and perverse incentives, as long as it remains blind to the real costs—economic, social, and environmental—it cannot steer a safe course through the storm any better than a blind helmsman can keep a ship off a reef.

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It must become an even bigger part of the solution. In a sustainable society, technologies will share different general characteristics. They will be renewable, cyclical, solar-driven, waste-free, benign, and focused on resource-productivity. That old flawed view of reality holds that the invisible hand of the market is an honest broker. Yet the market is as blind as a bat if prices are dishonest. A sustainable society will insist on ecologically honest prices that will enable a sighted market to work for sustainability rather than against sustainability. The old, flawed view of reality holds that increasing labor productivity is the route to abundance for all, when it is obvious in a world of diminishing nature and increasing human population that the route to abundance for all is through increasing resource-productivity.

Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex
by Rupert Darwall
Published 2 Oct 2017

In 1968, Hardin gave a lecture to the American Association for the Advancement of Science that became one of ecology’s canonical texts (Science lists over 26,000 citations). “The Tragedy of the Commons” takes a (hypothetical) example of open pasture leading to overgrazing. On the basis of this, Hardin asserted that freedom in a commons brings ruin to all. Adam Smith’s invisible hand had to be replaced by government coercion. It was theorizing without facts. As the Nobel economist Elinor Ostrom wrote in a 1999 critique, such a prescription was not supported by extensive research. In fact, there is a wide diversity of institutional arrangements for coping with common-pool resources—when they had not been prevented by central authorities.42 Population control was at the core of Hardin’s concerns: “Freedom to breed will bring ruin to us all.”43 In an earlier biology textbook, Hardin had asked students to confront the benefits of eugenics in reducing the “supply of mutant types at equilibrium.”44 Should society resort to eugenics?

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In 2000, the eponym of the first law and cofounder of Intel, Gordon Moore, and his wife set up the Palo Alto–based Moore Foundation with five billion dollars and later would spend one million dollars on the anti–Prop. 23 campaign.4 Climate change is ethics for the wealthy: It legitimizes great accumulations of wealth. Pledging to combat it immunizes climate-friendly corporate leaders and billionaires from being targeted as members of the top one-tenth of the top one percent. This signifies a profound shift in the nature and morality of capitalism. In the famous passage on the invisible hand in The Wealth of Nations, Adam Smith wrote of individuals who, intending their own gain, promote an end that was no part of their intention. “By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.”5 Less well known are the two sentences that immediately follow: I have never known much good done by those who affected to trade for the public good.

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The next two years saw the three branches of government clear the ground on which President Obama’s Energiewende would be built. Unlike Europe, America had already embarked on its own energy transformation, one not foreordained by politicians and regulators but brought about by the genius of capitalism and wrought by Adam Smith’s invisible hand. Geologists had long known about enormous shale formations such as the Bakken Shale of North Dakota and Montana, the Barnett Shale of Texas, and the Marcellus Shale running through northern Appalachia. Hydraulic fracturing dates back to the 1940s but was not widely deployed until 2003. Other than exempting fracking from the Safe Drinking Water Act in 2005, as far as politicians in Washington were concerned, the fracking revolution might as well have been happening on another planet.

Hopes and Prospects
by Noam Chomsky
Published 1 Jan 2009

The hazards of what is now called “neoliberalism” were recognized quite early. One prominent example is Adam Smith. The term “invisible hand” appears only once in his classic Wealth of Nations. His primary concern was England. He warned that if English merchants and manufacturers were free to import, export, and invest abroad, they would profit while English society would be harmed. But that is unlikely to happen, he argued. The reason is that English capitalists would prefer to invest and purchase in the home country, so as if by an “invisible hand,” England would be spared the ravages of economic liberalism. The other leading founder of classical economics, David Ricardo, drew similar conclusions.

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See also health care reform interaction Nuclear Non-Proliferation Treaty and, 135, 169, 196, 197, 199, 249, 250 nuclear weapons and, 135, 169, 188, 194, 196–200, 249 International Atomic Energy Agency (IAEA), 170, 194 International Labor Organization, 208 International Monetary Fund (IMF), 67, 70, 72, 90, 106, 108 International Republican Institute (IRI), 68 Inter-Services Intelligence Directorate (ISI), 241 investment theory of politics, Ferguson’s, 32, 108, 208, 212 “invisible hand” (Adam Smith), 81 Iran, 127, 194 Iraq Baath party, 222 Clinton sanctions against, 128, 129 democracy and, 121–22 economic problems, 127 George W. Bush and, 23, 24, 42–44, 140, 141 “good news” about, 130–33 oil and, 140 oil-for-peace program, 128–29 “the right issue” and “more profound questions” regarding, 133–34 U.S. military bases in, 62–63, 140–41 “Iraq effect,” 28 Iraq War, 41–42, 125–29, 235–37 American public opinion and, 131–32 compared with Nazi war crimes, 131 compared with Vietnam War, 237 ethnic cleansing and, 132 refugees and displaced persons, 125–26 See also Iraq, “good news” about Iraqis “shared beliefs” and opinions, 130–31 U.S. attitude toward, 133 voice of, 133, 134 Israel attack on Iraq’s nuclear reactor, 197 democracy and, 157–58 Iran and, 139 North Korea and, 139 Syria and, 139 U.S. relations with, 139–40, 145 See also specific topics Israel Lands Administration, 159 Israel-Palestine problem “democracy promotion” and, 44 Obama and, 177, 178, 181, 190–91, 195–96, 233, 249–58 settlement expansion, 186–89, 253 United Nations and, 195, 252–53 See also specific topics Jackson, Robert, 131 Jacobs, Lawrence, 47 Japan, 15, 26, 48–49, 81 Jefferson, Thomas, 17–18 Jennings, Frances, 14 Jerusalem, 224–25 Jesus, 273–74 Jewish National Fund (JNF), 158 jihadis, 193–94, 241 Johnson, Lyndon B., 55–56 Johnson, Simon, 222 Jones, James, 223–24 Jordan, 125, 126 Joya, Malalai, 246–48 Karzai, Hamid, 242, 245, 257–58 Katz, Yisrael, 187 Kay, David, 197 Kayani, Ashfaq Parvez, 240 Kennan, George, 24–25, 28 Kennedy, Anthony, 32, 33 Kennedy, Edward M., 230 Kennedy, John F., 49, 53, 123, 237 Kennedy, Robert F., 50, 123 Kerry, John F., 201–3, 221 Keynes, John Maynard, 6, 82, 99 Kfoury, Assaf, 145 Khamenei, Ali, 197 Kimmerling, Baruch, 161–62 Kindelberger, Charles, 78 Kinsley, Michael, 265 Kirchner, Néstor, 70 Kissinger, Henry, 116, 223 Knox, Henry, 19 Kohl, Helmut, 273, 279 Kramer, Mark, 279 Kranish, Michael, 109–10 Krugman, Paul, 220 Kurtzer, Dan, 224, 225 labor, free circulation of, 29 labor law, 217–19 international, 208 Lahood, Ray, 95 Lanine, Nikolai, 248 Latin America China’s relations with, 25 choices facing, 102, 114–15 democratization, 100, 105 “Economic Charter for the Americas” imposed on, 25 economic inequality in, 71–72, 114 global conquest and, 4–6 militarization, 62 shift toward independence in, 71 “social cleansing,” 61 social justice, human rights, and, 38 unity of Caribbean and, 103–18 U.S. foreign policy and, 25, 37, 39–73, 116, 174 See also specific countries Lebanon, 146–47, 153, 154, 257 2008 election, 143 George W.

The Class Ceiling: Why It Pays to Be Privileged
by Sam Friedman and Daniel Laurison
Published 28 Jan 2019

The contrast here with acting and television – along with many other precarious elite occupations – is striking. In these arenas, where work is often freelance, short-term, poorly paid and extremely competitive, the Bank of Mum and Dad fundamentally mediates how people can respond to chronic early-career conditions of precarity, offering an invisible hand to some while leaving many others, often unwittingly, at an unfair disadvantage. Yet a helping hand does not always come from behind, or below. Similarly, it does not always have to come in the form of financial support or patronage. In many elite occupations, for example, particularly more traditional professions such as accountancy and architecture, support is more likely to come from above rather than below.

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This is because for ‘merit’ to land it has to be given the opportunity to be demonstrated, it has to be performed in a way that aligns with dominant ideas about the ‘right’ way to work, and it has to be recognised as valuable by those holding the keys to progression. And in all of these ways, as we go on to explain, it is the privileged who enjoy a critical head start. The invisible hand (up) In most elite occupations, and certainly among the people we interviewed, there is a strong belief in the meritocratic ideal – the idea that career progression should be based on the abilities, skills and achievements of the individual. Yet we find that people rarely progress in elite occupations based only on their own efforts.

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This, we argue, is social capital in the Bourdieusian sense, not necessarily being a ‘good networker’, but networking with the ‘right’ people and crucially, knowing them well enough to leverage their backing. These helping hands rig the game of progression in favour of the privileged. And the main reason they are so effective, we argue, is that they are largely hidden from public view – they operate as invisible hands, helping to propel some and simultaneously disadvantage others. In terms of sponsorship this is partly about a particular species of management jargon – the use of empty terms such as ‘talent mapping’ – that give a misleading impression of formalised performance management and obscure the autonomy enjoyed by senior leaders in advancing sponsees through the organisational ranks.

Value of Everything: An Antidote to Chaos The
by Mariana Mazzucato
Published 25 Apr 2018

Such interaction, he contended, was not down to ‘benevolence' or central planning.21 Rather, it was due to the ‘invisible hand' of the market: Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society ... He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was not part of his 22 intention.

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Manufacturing labour, not land, was the source of value.23 The labour theory of value was born. Smith has become the figurehead of much modern economic theory because of his ideas about how capitalism is founded on supposedly immutable human behaviour, notably self-interest, and competition in a market economy. His metaphor of the ‘invisible hand' has been cited ad nauseam to support the current orthodoxy that markets, left to themselves, may lead to a socially optimal outcome - indeed, more beneficial than if the state intervenes. Smith's book is actually a collection of recipes for politicians and policymakers. Far from leaving everything to the market, he thinks of himself as giving guidance to ‘statesmen' on how to act to ‘enrich both the people and the sovereign'24 - how to increase the wealth of nations.

Green Philosophy: How to Think Seriously About the Planet
by Roger Scruton
Published 30 Apr 2014

The result, in modern conditions, is a population explosion that is rapidly destroying the environment of Muslim Arabia and North Africa, spilling over into a Europe whose institutions and traditions are in friction with the Muslim way of life, and now putting in question half a century of uneasy dictatorship.15 There is a tendency among environmentalists to single out the big players in the market as the principal culprits: to pin environmental crime on those – like oil companies, motor manufacturers, logging corporations, agribusinesses, supermarkets – that make their profits by exporting their costs to others (including others who are not yet born). But this is to mistake the effect for the cause. In a free economy such ways of making money emerge by an invisible hand from choices made by all of us. It is the demand for cars, oil, cheap food and expendable luxuries that is the real cause of the industries that provide these things. Of course it is true that the big players externalize their costs whenever they can. But so do we. Whenever we travel by air, visit the supermarket, or consume fossil fuels, we are exporting our costs to others, and to future generations.

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Their case has been amplified by Joel Garreau’s striking advocacy of ‘edge city’ – of the temporary focus on the edge of things, moving always outwards across the land, and largely indifferent to the chaos that it leaves in its wake.274 The conflict between the two visions of urbanization – the centripetal and the centrifugal – has come to a head with the emergence of the New Urbanist movement, with the work of Léon Krier, adviser to the Prince of Wales’s model new town of Poundbury in Dorset, and with the writings of Christopher Alexander and Nikos Salingaros.275 The New Urbanists have forcefully argued that aesthetic choices are not ecologically neutral but, on the contrary, internally connected to the whole enterprise of settlement. The aesthetic of the American suburb embodies an environmental policy as much as does the rival aesthetic of the city street – even if, in both cases, the policy is one that arose ‘by an invisible hand’. It is by attending to aesthetic requirements that the suburb becomes a shared habitat: one in which a residual delight in nature is punctuated by the desire to present an agreeable façade in a community of neighbours. Whether that aesthetic succeeds is a question that cannot be separated from the question whether the result is sustainable – the question whether people can live in this way from generation to generation.

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It is of course unrealistic to expect to feed the entire population without the large farms that currently provide such staples as potatoes and corn, but the rebirth of local markets will change the ways that those farms produce and distribute what they grow. The pastures, hedgerows, copses, coverts and streams of England were not preserved simply because people loved them. They were created and preserved by the self-interest of those who farmed and owned the land. They arose by an invisible hand from pasture farming, from historic rights of way and the maintenance of boundaries, from field sports, and from the local food economy in which milk and cheese were sold in the markets. This local food economy survived intact until recent years, as did the other economic interests that maintained the landscape.

Ethics in Investment Banking
by John N. Reynolds and Edmund Newell
Published 8 Nov 2011

For instance, it is often argued that markets are “just” or “fair” in that they determine, through the interacting forces of supply and demand, the prices of goods and services and their allocation in a way that takes into account the various needs of consumers and producers. However, not all ethical questions of distribution are dealt with by the “invisible hand” of the market, to use Adam Smith’s famous term. As was discussed earlier, for reasons of equity some market participants may need protection from adverse market forces. An influential contemporary theory of justice, which has been applied to economics, is that developed by the philosopher John Rawls.

…

An influential consequentialist thinker was Thomas Hobbes (1588– 1679), who argued that humans are fundamentally self-interested and should act in ways that maximise their own long-term interests. Similarly, Adam Smith (1723–90) argued that the pursuit of individual self-interest was permissible because it produced a morally desirable outcome through the workings of the “invisible hand” of the market. However, the bestknown and most influential form of consequentialist ethics is utilitarianism, the underlying principle of which is that we should act in such a way that maximises the good, happiness, pleasure or “utility” of the greatest number of people. Associated in particular with the work of Jeremy Bentham (1748–1832) and John Stuart Mill (1806–73), utilitarianism has provided the philosophical underpinning of much economic theory, where utility maximisation is a key guiding principle, and applied economics.

Pity the Billionaire: The Unexpected Resurgence of the American Right
by Thomas Frank
Published 16 Aug 2011

Their heroes, they quivered to learn, were victims of “persecution,” their nation was under “systematic assault” by its own leaders, and they who had defeated Soviet communism; they who rejoiced to see their enemies writhe in the dungeons of Guantánamo—why, now they were “Gulag Bound,” as a popular website of the day moaned rapturously.5 This time it was apocalypse that moved the needle, that swayed the undecided, that made the sale. We the Market And what it sold was the great god Market. The market’s invisible hand would lift the threat of “destruction” from the land. It would restore fairness to a nation laid waste by cronyism and bailouts. It would let the failures fail, at the same time comforting the thrifty and the diligent. Under its benevolent gaze, rewards would be proportionate to effort; the lazy and the deceiving would be turned away empty-handed, and once again would justice and stability prevail.

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The president of the American Liberty League was Jouett Shouse, a former Kansas congressman, but its main backers were the DuPont family, the Koch brothers of their day. The speech in which this passage occurs was called “The New Deal vs. Democracy” and was issued as a pamphlet by the league in 1936. 15. See the account of the American Liberty League in Kim Phillips-Fein’s Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009), p. 13. 16. Remley J. Glass, “Gentlemen, the Corn Belt!” Harper’s, July 1933, pp. 199–202. 17. “Virtually impossible”: cited in Theodore Saloutos and John D. Hicks, Twentieth Century Populism: Agricultural Discontent in the Middle West 1900–1939 (Lincoln, NE: University of Nebraska Press, 1951), p. 448.

Thinking in Systems: A Primer
by Meadows. Donella and Diana Wright
Published 3 Dec 2008

Bounded Rationality As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of greatest value. . . he generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. . . . He intends his own security; . . . he intends only his own gain and he is in this . . . led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. —Adam Smith,9 18th century political economist It would be so nice if the “invisible hand” of the market really did lead individuals to make decisions that add up to the good of the whole. Then not only would material selfishness be a social virtue, but mathematical of the economy would be much easier to make.

How We Got Here: A Slightly Irreverent History of Technology and Markets
by Andy Kessler
Published 13 Jun 2005

Free enterprise was not yet ready for primetime, the 62 HOW WE GOT HERE monarchy was having too much fun doling out favors to friends of the crown. It worked for a while. There was so little trade with India that giving out a monopoly was no big deal. The next 200 years would see the growth of this mercantilism system until Adam Smith hallucinated the Invisible Hand. In the meantime, it turned out that Elizabeth I was way ahead of her time. She figured out that world trade and a strong navy were interdependent; she couldn’t afford the navy without the wealth created by trade, and a capital markets system to fund it. *** England had almost no colonies in the New World while Spain had spent the past 100 years exploring and controlling Central and South America and what is now Florida, Texas and California, giving it not only plenty of gold, but enough electoral votes to win any election.

…

A bursting of the Mississippi Bubble in 1720 caused a run on the Banque and a depression in France for years to come. Almost three hundred years later, the French don’t call their banks, Banques, but Credits, as in Credit Lyonnais. John Law proved economists shouldn’t be businessmen and his reputation killed the Real Bills Doctrine. Even when “invisible hand” Adam Smith backed Real Bills the Bullionists weren’t swayed. Too bad. Real Bills was only slightly flawed in that it didn’t check the amount of speculative loans a bank could issue, since loans are the source of bank profits. A floating reserve requirement, putting limits on fractional reserve banking in good times, could have fixed that flaw.

And Then All Hell Broke Loose: Two Decades in the Middle East
by Richard Engel
Published 9 Feb 2016

Salafism is Islam as Allah recited it, and jihadi means “through war,” so it is a militant movement seeking an “originalist” form of Islam and willing to use force to get there. Salafism is often associated with the Wahhabi movement, an equally austere branch of Sunni Islam that arose in the early part of the eighteenth century. Wahhabis dominate Saudi Arabia, the paymaster and invisible hand behind many political machinations in the Middle East. In Cairo, living among the Muslim Brotherhood, Salafi dreamers, and seeing the horrors of what Salafi jihadis did at the Egyptian Museum and in Luxor, I delved deeper into the political side of the Islamic movement. I came in contact with a group called Tabligh wa Dawa.

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Because of their long years in power, and their grandiose sense of entitlement, some Sunnis were convinced they comprised a majority of Iraqis, a self-deceiving mythology of arithmetic. They wound up with only 21 percent of the vote. They said the election was a fraud and blamed Iran, their ancient Persian and Shiite enemy, for rigging the vote. To them, Iran was the invisible hand, aiding its favorite Shia candidates. Zarqawi’s group lashed out at fellow Sunnis for voting this time, accusing them of legitimizing a Shiite project cooked up by Iran and Washington. Stressed-out by a year of violence and by covering the elections, journalists at the Hamra threw a New Year’s Eve bacchanalia, drinking to excess, dancing wildly, and knocking over any furniture that got in the way.

The Metric Society: On the Quantification of the Social
by Steffen Mau
Published 12 Jun 2017

Numbers safeguard a particular order of worth and help anchor it in society by their very existence. As such, there is a close correlation between value estimation in the context of quantification and esteem in the sense of social recognition. The calculative practices of the market The notion that markets evolve spontaneously and are guided by an invisible hand is a myth which, although still accepted in certain circles of economic theory, does not stand up to close scrutiny. We have known at least since Max Weber's (1930 [1906]) famous thesis of the ‘spirit of capitalism’ that market exchange processes are cultural practices, and that they are closely linked to the emergence of specific economic systems.

…

Hence the disappearance of the high street travel agent, for example: nowadays, people simply go to comparison sites for the cheapest deal. Thanks to the internet and the availability of comparative information, a new level of market transparency is emerging which in turn allows the physical expansion of those markets. It is no longer the invisible hand that orders and structures markets, but the differentiated evaluation of products and suppliers made possible by the collaborative efforts of consumers. Through ranking practices, such evaluation systems serve to generate trust in confusing and intransparent markets (Jeacle & Carter 2011). Tourism portals such as Tripadvisor (Gretzel & Yoo 2008), which are used by large numbers of travellers and where reviews of several million restaurants and hotels can be viewed, assume the role of mass navigators and exert a considerable influence on customer behaviour.

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy
by Mehrsa Baradaran
Published 5 Oct 2015

Even Costa Rica, which has no army, and Kuwait, which has no taxes whatsoever, still have a state-supported banking system.3 The essential relationship between banks and the governments that enable them has largely been forgotten, yet it makes banks completely unlike any other corporation or commercial enterprise. Banks need government support. In turn, governments need banks. Banks often serve as an appendage to the state and carry out its economic policies. In other words, banks do not operate in markets guided by an “invisible hand” but are the hands that move markets—often at the behest of the state. Many people express discomfort with government “subsidies” to the banking sector. And there are subsidies, to be sure. To name just a few, take the billions of dollars of bailouts that flowed to the largest banks and prevented market corrections and lowered their costs of doing business.4 Underpriced deposit insurance is the reason the deposit insurance fund had a $9 billion shortfall during the recent financial crisis.5 Banks also pay less money for credit, as explained by the leading banking-law textbook: “On balance, we can conclude that banks receive a benefit not available to other firms—a subsidy notably evident in lower borrowing costs.”6 Although these subsidies may be a cause for concern, to characterize state support of the banking system as solely a subsidy mischaracterizes the nature of the bank-government relationship.

…

The credit that flowed into these insolvent banks helped them recover their losses, saving them. Ideally, the central bank would only lend to illiquid banks because otherwise, it is interfering with market discipline by “picking winners and losers.” However, during the recent crisis, the government decided that it would strong-arm the market’s “invisible hand” and bail out the banks because their failure was more detrimental than the long-term effects of moral hazard. Instead of letting the market punish the foolish debtors so that they would learn their lesson, the government smoothed their transition and let them live another day. Generally, we do not categorize individuals as insolvent or illiquid.

…

Paul Tucker, “Regimes for Handling Bank Failures—Redrawing the Banking Social Contract,” remarks, British Bankers’ Association Annual International Banking Conference “Restoring Confidence—Moving Forward,” London, June 30, 2009, accessed January 18, 2015, www.bis.org/review/r090708d.pdf. 21. Gary Gorton, “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007,” conference, Federal Reserve Bank of Atlanta’s 2009 Financial Markets Conference: Financial Innovation and Crisis, May 9, 2009, accessed March 13, 2015, www.frbatlanta.org/news/conferences/09-financial_markets_agenda.cfm. 22. See “Adding Up the Government’s Total Bailout Tab,” New York Times, July 24, 2011, accessed March 13, 2015, www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html?

Common Knowledge?: An Ethnography of Wikipedia
by Dariusz Jemielniak
Published 13 May 2014

Forking, often despised in open-collaboration communities as detrimental to common goals, is an option that ensures that the collaboration is truly free (Reagle, 2004; Cheliotis, 2009). The theoretical possibility of forking is itself a safety valve that all stakeholders are aware of and that empowers the minorities. It is the “invisible hand of sustainability” of projects, allowing them to develop (Nyman, Mikkonen, Lindman, & Fougère, 2011). Yet its practical possibility highly depends on the governance model used in the community (Kogut & Metiu, 2001). On Wikipedia, even though the theoretical possibility of forking has been discussed occasionally and a few attempts have been made (e.g., Citizendium, Wikinfo, the Spanish Enciclopedia Libre; for an analysis of Wikipedia forks, see Tkacz, 2011), a forking resulting in a success comparable to the original Wikimedia movement seems unlikely.

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What motivates wikipedians? Communications of the ACM, 50(11), 60–64. Nyman, L., & Mikkonen, T. (2011). To fork or not to fork: Fork motivations in SourceForge projects. Open Source Systems: Grounding Research, 365, 259–268. Nyman, L., Mikkonen, T., Lindman, J., & Fougère, M. (2011). Forking: The invisible hand of sustainability in open source software. In I. Hammouda & B. Lundell (Eds.), Proceedings of SOS 2011: Towards Sustainable Open Source (pp. 1–5). Tampere, Finland: Tampere University of Technology. Retrieved from http://tutopen.cs.tut.fi/ sos11/papers/SOS11_proceedings.pdf#page=9 O’Mahony, S. (2003).

…

See also gender infoboxes, 21–22, 23, 229n11 infoplease.com, 73 informational-communal approach, 183 I n d e x    2 8 7 “information flux,” 103 “inner circles” accusations, 50 “insiderness,” 194 institutional trust, 122 instruction creep, 96 “internal-1” mailing lists, 53, 234n3 Internet Brands, 235n2 (chap. 8) “Internet ethnography,” 199 Internet Relay Chat (IRC) channel, 46, 86, 92, 136, 138 Internet revolution, 1–2 interpersonal relations, 85–86 interviews for this book, 197 interwikis, 68 “invisible hand of sustainability,” 146 IP addresses, blocking, 61, 137 iPhone, 191 IP-only/anonymous users: and accountability, 108; autoconfirmation of, 142, 203; close scrutiny of, 23, 87–88, 137; contributions of, 101–102; entry barriers for, 101; and flagged revisions, 136; insufficient scrutiny of, 51–52; and “IPs are human too” reminders, 88–89; as providing introductory editing, 144; and right of anonymity, 115, 117; status of, 32.

Apollo's Arrow: The Profound and Enduring Impact of Coronavirus on the Way We Live
by Nicholas A. Christakis
Published 27 Oct 2020

Looking for a way to help others as the pandemic began to rage, he and a friend founded Invisible Hands, an organization whose goal was to deliver groceries and other necessities to the elderly and other at-risk people in their neighborhood and beyond. As soon as the website went live, volunteer and media interest exploded. Within four days, more than twelve hundred volunteers had signed up. To reach clients who were unlikely to find it online, Invisible Hands spread the word with old-fashioned flyers that volunteers translated into many languages and tacked up in buildings around the city. Within a month, Invisible Hands had signed up twelve thousand volunteers, fielded over four thousand requests for help, and started a subsidy program to provide some free food too.1 Many such organizations sprang into action across the country.2 Mutual aid societies, which have been around for more than a hundred years, have seen a resurgence.

Capitalism and Freedom
by Milton Friedman
Published 1 Jan 1962

In such an economy, there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud. Similarly, the “social responsibility” of labor leaders is to serve the interests of the members of their unions. It is the responsibility of the rest of us to establish a framework of law such that an individual in pursuing his own interest is, to quote Adam Smith again, “led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”4 Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.

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The United States has continued to progress; its citizens have become better fed, better clothed, better housed, and better transported; class and social distinctions have narrowed; minority groups have become less disadvantaged; popular culture has advanced by leaps and bounds. All this has been the product of the initiative and drive of individuals co-operating through the free market. Government measures have hampered not helped this development. We have been able to afford and surmount these measures only because of the extraordinary fecundity of the market. The invisible hand has been more potent for progress than the visible hand for retrogression. Is it an accident that so many of the governmental reforms of recent decades have gone awry, that the bright hopes have turned to ashes? Is it simply because the programs are faulty in detail? I believe the answer is clearly in the negative.

Respectable: The Experience of Class
by Lynsey Hanley
Published 20 Apr 2016

Seventy years after the Butler Act created the tripartite system of grammar, technical and secondary schools, and fifty years after most of them were replaced with comprehensives, our social class still largely determines the type and quality of education we receive. The effects of class are the hardest of all social evils to slay because they are the most given to mutation. Like the ‘invisible hand’ of capitalism itself, they shift shape in order to go unnoticed. What we are left to grapple with are the signs of class, the consequences of it and the injuries it inflicts on civil society. These ‘hidden injuries of class’, to use the sociologist Richard Sennett’s phrase, abound because of the intimate connection between how we feel about ourselves in relation to others, the relationship between what we start out wanting for ourselves and our loved ones and what we’re able to achieve, and our relationship to a social and economic structure that we did nothing to bring about.

…

To reverse this confidence trick, you have to force yourself to believe in a greater part of yourself than you actually do. You may feel infinitesimal in comparison with the forces that constrain you, yet you have to tell yourself that there’s a rope you can grab on to which won’t fray – or be yanked away by an invisible hand – when you give it your whole weight. This is the paradox of trying to achieve social mobility through the education system, which is nothing more than a finely tuned replica of the larger social system it serves. I would never discourage someone who is attempting to do just that, of course, aware that it may be their only tangible, navigable chance of getting out of the box.

Ever Since Darwin: Reflections in Natural History
by Stephen Jay Gould
Published 1 Jan 1977

The ideal economy, Smith argued, might appear orderly and well balanced, but it would emerge “naturally” from the interplay of individuals who follow no path beyond the pursuit of their own best interests. The apparent direction towards a higher harmony, Smith argues in his famous metaphor, only reflects the operation of an “invisible hand.” As every individual … by directing (his) industry in such a manner as its produce may be of greatest value, intends only his own gain, he is in this as in many other cases led by an invisible hand to promote an end which was no part of his intention.… By pursuing his own interest he frequently promotes that of society more effectively than when he really intends to promote it. Since Darwin grafted Adam Smith upon nature to establish his theory of natural selection, we must seek an explanation for apparent harmony in the advantage that it confers upon individuals.

The Fair Trade Scandal: Marketing Poverty to Benefit the Rich
by Ndongo Sylla
Published 21 Jan 2014

Indeed, if placing a label on global poverty was enough to eliminate it, there would hardly be any reasons to disapprove of Fair Trade. The problem is that things are not quite what they seem. Between intentions and outcomes, there is a gap, often filled only with rhetoric. As I shall demonstrate, Fair Trade is but the most recent example of another sophisticated ‘scam’ by the ‘invisible hand’ of the free market. This noble endeavour for the salvation of the free market was tamed and domesticated by the very forces it wanted to fight. With its usual efficiency, the free market triggered the implosion of the Fair Trade universe and hijacked its mission, without Fair Trade supporters and stakeholders even realising it.

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For Smith, economic principles could not logically produce economic policy 63 Sylla T02779 01 text 63 28/11/2013 13:04 the fair trade scandal recommendations that would be valid in all circumstances. The specific histories, the role of institutions, human nature, unforeseen consequences (symbolised by the notorious ‘invisible hand’) are, according to Smith, so many parameters that can create a gap between the general principles and the practical uses that these can lead to; hence, from a methodological point of view, his frequent digressions and his use of historical illustrations. Thus, Smith considered the ‘perfect freedom of trade’ as the ‘general principle of wealth and opulence’.

Revolution at Point Zero: Housework, Reproduction, and Feminist Struggle
by Silvia Federici
Published 4 Oct 2012

It also relaunches the image of women as sexual objects and breeders, and institutes among women a relation similar to that between white and black women under the apartheid regime in South Africa. The antifeminist character of the new international division of labor is so evident that we must ask to what extent it has been the work of the “invisible hand” of the market, or it has been a planned response to the struggles women have made against discrimination, unpaid labor and “underdevelopment” in all its forms. In either case, feminists must organize against the recolonization attempt of which the NDIL is a vehicle and reopen the struggle on the terrain of reproduction.

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We know, for instance, that it was King Leopold of Belgium who had a personal responsibility for the killing of millions of people in the Congo.24 By contrast, today, millions of Africans are dying every year because of the consequences of structural adjustment but no one is held responsible for it. On the contrary, the social causes of death in Africa are increasingly becoming as invisible as the “invisible hand” of the capitalist market.25 Finally, we have to realize that we cannot mobilize against the bombings alone, nor demand that bombing stops and call that “peace.” We know from the postwar scenario in Iraq, that the destruction of a country’s infrastructure produces more deaths than the bombs themselves.

The End of Absence: Reclaiming What We've Lost in a World of Constant Connection
by Michael Harris
Published 6 Aug 2014

We can presume that in the future much more will be selected by public consensus—and that we’ll be vaguely unaware of those selections, too. The computer scientist (and virtual reality pioneer) Jaron Lanier writes angrily against this “invisible hand” in Who Owns the Future?: If market pricing is the only legitimate test of quality, why are we still bothering with proving theorems? Why don’t we just have a vote on whether a theorem is true? To make it better we’ll have everyone vote on it, especially the hundreds of millions of people who don’t understand the math. Would that satisfy you? This invisible hand is at work each time you search online. When Google delivers your search results, its algorithm (mimicking an academic tradition) assumes that work that receives more citations has a greater authority.

Reinventing Capitalism in the Age of Big Data
by Viktor Mayer-Schönberger and Thomas Ramge
Published 27 Feb 2018

Globally, transactions worth well over $100 trillion take place every year, a figure that has grown by a factor of almost 2,000 since the 1500s. And every such transaction boils down to two parties communicating with each other. It’s an amazing feat—all achieved through a simple social innovation. The great Scottish philosopher Adam Smith coined the term “the invisible hand” to capture the essence of what makes markets work, nearly 250 years ago. But the simplicity of the metaphor conceals a complex and astonishing accomplishment that altered the conditions for coordination. It has to do with how much our goals have to be aligned for human coordination to happen.

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See choice Human Use of Human Beings, The (Wiener), 160 human-centric firms, 214–215 Hurricane Grace, 133–134 IBM, 96, 109, 127, 163, 183 India, 184 Industrial Revolution, 4, 111, 162, 188, 201 Infi (machine learning system), 79 information asymmetry, 40, 72–73 information flows centralized vs. decentralized (see centralization; decentralization) complexity of processing, 43–44 cost of, 39–40, 44, 45, 81 data-rich markets and, 63, 64, 70, 72–73, 81 dyadic, 72 firms and, 90–100, 102, 106 historical improvements in, 51–52 impact of bad information on, 39 information overload and, 40–41, 70 information sharing and, 41, 46 information shortage and, 40, 52–56 markets and, 38–57, 63, 90 obstacles to, 41–42 innovation, 166, 199, 200 Instagram, 163 intercontinental nuclear missiles, 159 interest rates, 134–135, 143, 150–151, 165, 194 internal talent management, 126–129 Internet network effects and, 163 projected growth rates in traffic, 7–8 See also specific sites investment banking, 150, 154–155 investors, 143–144 capital share of, 185, 186 opportunities in data-rich markets, 144–145 problems caused by data-rich markets, 143–144 returns for, 195 “invisible hand” (Adam Smith), 27 InvisibleHand (app), 52 iPad, 54–55 iPhone, 136, 164 Italy, 134, 136 iTunes, 121–122 Japan, 30–31, 32 Jensen, Robert, 36 JetBlue, 112 Jobs, Steve, 54–55 Kabbage, 150 Kahneman, Daniel, 102 Kant, Immanuel, 223 Kawasaki, 30 Kay, John, 111 Kayak, 3, 52 Kensho, 155 Kerala fishermen, 35–37, 39 Kickstarter, 152–153, 156 kidneys, donor, 73–74 Kleiner, Eugene, 216 labor augmenting technology, 194 labor market, 13, 181–206 algorithms used in, 75 automation in, 181–188, 200–202, 205 declining participation in, 183–184 distributive measures for, 186–187, 189, 190, 193, 197–200 money unbundled from, 203–206, 218 participatory measures for, 186, 188–189, 190, 193, 200–202 self-employment in, 185–186 universal basic income and, 189–193, 205–206 labor share, 184–186, 188, 193–195, 198 labor unions, 205 Lake, Katrina, 207–209 Large Hadron Collider, 22, 25 Le Pen, Marine, 186 Lehman Brothers, 155 lending by banks, 150–151 by fintechs, 152–153 Les, Jason, 59–60 liberals, 190 libertarians, 190–191 Libratus (machine learning system), 59–62, 78 Lindblom, Charles, 23, 26 LinkedIn, 202 Linnaeus, Carolus, 22, 23 Linux, 166 Lorentzon, Martin, 122 Lufax, 152 LVMH, 75 machine learning.

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar
Published 16 May 2016

Still, this was a sensitive topic—since asset managers are hired to manage the retirement money of the very firms whose corporate governance they might be trying to direct—and Bogle’s suggestion got a rather mixed reaction. “I remember one of the guys from some big firm said, ‘We all know what you’re trying to do, Jack. Why don’t you just leave it to the markets? Leave it to Adam Smith’s Invisible Hand!’ And I said, ‘Don’t you realize that we are Adam Smith’s Invisible Hand?’ ”48 It’s a profound statement. Finance is in control, yes. But that means that it has the potential to be a force for economic and social good, rather than exploitation. Yet in this case, harnessing that force would require that the asset management industry turn its back on a business model that has been yielding unbelievably easy money for decades.

…

But Walter Wriston, a returning GI with a graduate degree in foreign affairs from Tufts who took an entry-level job with the bank in 1946, would change all that. Wriston was a child of privilege; his father, a successful academic who eventually became president of Brown University, had argued against the government planning of the New Deal and idolized Adam Smith and his “invisible hand.”38 (No matter that Smith only mentioned the hand a few times, briefly, in a couple of his works, or that this Scottish economist who came to emblematize laissez-faire economic thinking had built his ideas at a time when the economy was mostly small, family-owned businesses rather than large and growing corporations.)

The Righteous Mind: Why Good People Are Divided by Politics and Religion
by Jonathan Haidt
Published 13 Mar 2012

Reagan defeated Democrat Jimmy Carter in 1980, a time when Americans were being held hostage in Iran, the inflation rate was over 10 percent, and America’s cities, industries, and self-confidence were declining. The Reagan narrative goes like this: Once upon a time, America was a shining beacon. Then liberals came along and erected an enormous federal bureaucracy that handcuffed the invisible hand of the free market. They subverted our traditional American values and opposed God and faith at every step of the way.… Instead of requiring that people work for a living, they siphoned money from hardworking Americans and gave it to Cadillac-driving drug addicts and welfare queens. Instead of punishing criminals, they tried to “understand” them.

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Think about all the work that went into it—the farmers, truckers, and supermarket employees, the miners and metalworkers who made the can—and think how miraculous it is that you can buy this can for under a dollar. At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you. If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god. You can begin to understand why libertarians sometimes have a quasi-religious faith in free markets. Now let’s do the devil’s work and spread chaos throughout the marketplace. Suppose that one day all prices are removed from all products in the supermarket.

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See Cosmides and Tooby 2006 on how organizing labor along Marxist or socialist principles, which assume that people will cooperate in large groups, usually runs afoul of moral psychology. People do not cooperate well in large groups when they perceive that many others are free riding. Therefore, communist or heavily socialist nations often resort to the increasing application of threats and force to compel cooperation. Five-year plans rarely work as well as the invisible hand. 69. From “Conservatism as an ideology,” as quoted by Muller 1997, p.3. 70. Burke 2003/1790, p. 40. I don’t think Burke was right that the love of one’s platoon leads, in general, to a love of humanity. But it does seem as though increasing the love of one’s in-group usually doesn’t lead to an increase in hate for out-groups (see Brewer and Campbell 1976; de Dreu et al. 2011), so I’d be content to live in a world with vastly more parochial love and little or no decrease in love of humanity. 71.

The End of Alchemy: Money, Banking and the Future of the Global Economy
by Mervyn King
Published 3 Mar 2016

As the eminent Cambridge economist, the late Professor Frank Hahn, wrote: ‘the most serious challenge that the existence of money poses to the theorist is this: the best developed model of the economy cannot find room for it’.46 Why is modern economics unable to explain why money exists? It is the result of a particular view of competitive markets. Adam Smith’s ‘invisible hand’ – the notion that the impersonal forces of competition among a large number of people pursuing their own self-interest would guide resources to activities where they would be used as efficiently as possible – was a beautiful idea. But if the ‘hand’ was invisible, what exactly did it correspond to in the world?

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In the nineteenth century, important contributions came from Frenchman Léon Walras, who taught in Lausanne, and Englishman Alfred Marshall, who taught in Cambridge. Then, in the early 1950s, two economists, Kenneth Arrow and Gerard Debreu, both working in America, finally produced a rigorous explanation of the invisible hand (for which they were subsequently awarded the Nobel Prize).47 They imagined a hypothetical grand auction held at the beginning of time in which bids are made for every possible good and service that people might want to buy or sell at all possible future dates. The process continues until every market has cleared (that is, demand equals supply) with prices, demands and supplies of all goods and services determined in the auction.

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Morgan, 92, 95, 136–7, 161, 278 Kahn, Richard, 12, 292–3 Kahneman, Daniel, 132 Kay, John, 262 Keynes, John Maynard, 15, 20, 76, 100–1, 131, 233–4, 262; description of stock market, 152–3; on economists, 158, 289; and First World War, 193, 195–6, 198–9; The General Theory of Employment, Interest and Money (1936), 78, 292, 293, 294–5, 298; and WW1 reparations, 341, 343, 345 Keynesian economics, 5, 20, 45, 292–3, 306–7, 308–9, 317–18, 325, 326; and coordination problem, 295–302, 315–16, 332; and monetary policy, 78, 181, 182, 298–302; and neoclassical economics, 293–4, 302–3; and paradox of policy, 48, 326, 328, 333, 357; and recessions, 315–16, 327; role of sentiment and expectations, 293–7, 300, 301, 309; short-term stimulus during crisis, 39, 41, 48, 118–19, 326, 328, 356; and wages, 297–8, 300; waning influence of, 12, 318 Kiyotaki, Nobuhiro, 51, 82 Knickerbocker Trust Company, 196 Knight, Frank, 126–7, 131, 135, 145, 262 Kotlikoff, Laurence, 262 Krugman, Paul, 44, 302 Kumhof, Michael, 262 labour markets, 27, 29, 38, 327, 354, 355; and currency unions, 213, 225, 237; and Keynesian policies, 297–8, 300; and ‘rational’ expectations concept, 302–3; reforms, 41, 318, 363; ‘rigidities’ in wage adjustment, 167, 304 Lambert, Paul, 120 Latin America, 30, 339, 350 Latin Monetary Union (LMU), 216, 218 Lausanne conference (1932), 341 League of Nations, 219 Leeson, Nick, 137 legal system, 17, 81 Leggett, William, 250, 270–1 Lehman Brothers, 36–7, 89, 98, 113, 279, 323 Leibniz, Gottfried, 123 Leigh Pemberton, Robin, 176 Lenin, V.I., 163–4 leverage ratios (total assets to equity capital), 24, 25, 33, 36, 95–6, 110–11, 257, 276, 280, 307, 323; as regulatory heuristic, 139–40, 259 limited liability status, 98, 107–9, 254–5 liquidity, 119, 149, 163, 202–3, 208, 259, 269–81; and bank balance sheets, 97, 255, 257–8, 259; ‘Chicago Plan’ (1933), 261–4, 268, 273, 274, 277–8; coverage ratio, 256, 259; crisis (2007-8), 35–8, 64–5, 76, 110; demand for during crises, 65–6, 76–7, 86, 106, 110, 148, 182, 187–92, 194, 201–7, 253–4, 367; illusion of, 149–55, 253–4; liquidity regulation, 163, 187–92, 208, 259, 272, 276; ‘liquidity trap’ theory, 298–302; and money, 64–6, 76, 85, 86, 106, 119, 287 Lloyd George, David, 193, 195, 197–8, 199–200, 368 Long-Term Capital Management (LTCM), 120–1, 125 Lord’s cricket ground, 92 Lucas, Robert, 303 Macdonald, James, 350 Madoff, Bernie, 101 Magna Carta (1215), 286 Malthus, Thomas, 128 Mansfield, Lord, 260 market economy, 4–5, 10, 13, 17, 42–3, 50, 353–7; hypothetical grand auction, 79–81, 83, 128–9, 144, 149, 295, 297–8, 315; linking of present and future in, 11–12, 23, 46, 84–5, 325–6, 367; Adam Smith’s ‘invisible hand’, 79–80 ‘marking to market’ valuing, 147 Marshall, Alfred, 79 Martin, McChesney, 166 Marx, Karl, 19, 365 mathematics, 7, 12, 16, 93–4, 99–100, 121, 130, 143, 153, 293, 310 Max Planck Institute, Berlin, 123 McAdoo, William, 195, 196–7, 200, 201 McCain, John, 157 McCulloch, Hugh, 88 Meriwether, John, 121 Merkel, Angela, 224, 227 Merton, Robert, 120–1 Mesopotamia, 55–6 Mexico, 100, 367 Middle East, 56, 337 Mill, John Stuart, 214 Minsky, Hyman, 262, 306–8, 323 Mitchell, Andrea, 157 monetarism, 78 monetary policy, 45, 78, 167–72, 180–6, 247, 288, 315, 327–8, 352; and aggregate demand, 30, 41–9, 167, 184–5, 212–13, 221, 229–31, 291–2, 294–302, 319–24, 329–32, 335, 358; alternative strategies for pre-crisis period, 328–33; exhaustion of, 48, 347–8; and fiscal policy, 184, 347–8; and Great Depression (early 1930s), 76; and Great Stability, 22, 25, 30, 46–7, 315, 328–33; ‘helicopter drops’, 283, 358; intervention in asset markets, 172, 173–5, 265; and Keynes, 78, 298–302; and Diego Maradona, 176–7; and market expectations, 176–8; in post-crisis period, 48, 49, 168–9, 183–4, 291, 319–24, 335, 356, 358; short-term stimulus during crisis, 39, 41, 118–19, 182–3 monetary unions, 212–18, 238–49; see also European Monetary Union (EMU, euro area) money: acceptability criterion, 53, 54, 59–60, 61, 63, 64–6; and American colonists, 57–8, 68; central bank creation of, 65–6, 70–1, 160–1; commodities as, 55, 58, 68, 286–7; counterfeiting, 56, 57; definitions of, 53; and economists, 78–80; electronic transfers, 53, 281, 282–5; first paper banknotes, 57–8, 74; future of, 281–7; gold versus paper debate, 71–7; government monopoly on banknote issue, 62, 160; government printing of, 70, 85–6, 163–4, 358; history of, 4–5, 18–19, 54–8, 64, 67–8, 71–7, 160–1, 163–4, 187–202; history of (alternative view), 59–63; in Iraq (1991-2003), 218, 238–42; and liquidity, 64–6, 76, 85, 86, 106, 119, 287; ‘monetary base’, 291; and nation state, 211–12, 214, 215–18, 238–49; quantity theory of, 163; role and function of, 4–5, 8, 51–4, 57, 58–63, 65–6, 83–6, 281; role of precious metals, 55–7, 58, 59, 60, 62, 66, 71–7, 86, 216; and Scottish independence referendum (2014), 243–5, 248; share of bank deposits in total money, 62–3; single unit of account, 285–7; St Paul’s Epistle to Timothy, 51, 52; stability criterion, 53, 54, 60, 61, 63, 66–71, 163; standardised coinage, 56; and trust, 8, 55, 57, 66–71, 82–3, 155; UK Currency and Bank Notes Act (1914), 198 money market funds, 112–13 money supply, 62–3, 76, 77, 78, 85–7, 162, 327; and central banks, 63, 65–6, 76, 86–7, 162, 163, 180–4, 192, 196–201; ‘monetary base’, 65–6 Monti, Mario, 225 Moore, John, 51, 82 moral hazard, 192, 268, 274–5, 344 Morgan, John Pierpont (J.P.), 161, 196 Morgan Stanley, 98 mortgage-backed securities (MBS), 35, 64, 99, 113, 142, 143, 144, 150 mortgages, 32, 138, 139, 173, 174, 258, 335–6; sub-prime, 35–6, 99, 100, 143 Mundell, Robert, 212 Muth, John, 303 mutual funds, 102, 112–13 Nakamoto, Satoshi, 282 Napoleon Bonaparte, 28, 68, 159 nation states, 211–14, 215–18, 238–49; post-war expansion in numbers of, 214–15; sovereignty and economic integration, 212–13, 348–9, 351 neoclassical economics, 293, 294, 302–3, 304, 306; ‘New Keynesian’ models, 305–6; ‘optimising’ model, 129–31, 132, 134, 138, 309, 311; ‘rational’ expectations concept, 303–5, 310, 314; stability heuristic, 312–14, 319–21, 323, 331, 332 Netherlands, 49, 230 New Zealand, 92, 167, 170, 179, 348 Nixon, President Richard, 73 Norman, Montagu, 13 North Korea, 68 Northern Rock, 107, 139, 205 Obama, Barack, 334 oil market, 21, 295–6, 306, 318, 362 Olympic Games, London (2012), 227 O’Neill, Onora, 81 Overend, Gurney & Co, 189–90, 191 Panama, 246, 287 Pascal, Blaise, 123 Paulson, Hank, 37–8 pawnbroker for all seasons (PFAS) approach, 270–81, 288, 368 pension funds, 32, 103, 112, 183, 204 Pitt, William (the Younger), 75 Portugal, 221, 222, 224, 229, 363–4 Prince, Chuck, 90 prisoner’s dilemma, 25, 81, 89–90, 255, 302, 332, 333, 368; central banks and interest rates, 335; definition of, 9–10; escaping, 347–8, 352–3 privatisation, 41 probability theory, 121, 123, 302–3, 311 productivity (output per head), 17–19, 42, 318–19, 354, 359–62; see also economic growth Prudential Regulation Authority, UK, 260 quantitative easing (QE), 47–8, 182–3, 270, 275, 358 radical uncertainty, 9, 11–12, 126–31, 247, 257–9, 304–5, 306, 308; and Arrow–Debreu grand auction, 80, 83, 128–9, 144, 149, 295, 297–8, 315; and banking sector, 42–3, 106–10, 125, 136–40, 191, 257–8, 264–5, 269, 281; and central banks, 166–7, 171, 179, 180, 259; and coordination problem, 295–303, 310, 315–16, 332, 333; coping behaviour, 130–40, 150, 153–5, 170, 270–1, 288, 310–15, 316–17, 330–1, 352–3; and financial markets, 140, 143, 144–5, 149–55; heuristics, 130–1, 134–40, 170, 208, 278, 310–11, 312–14, 319–21, 323, 331, 332; illusion of certainty, 121–6; illusion of liquidity, 149–55; and Keynes, 293–302; and money, 42–3, 83–6; and narrative, 136, 137, 150, 153, 257, 310–16, 319–21, 323–4, 328, 332–3, 356, 357; narrative revision downturns, 328, 332–3, 356, 357, 358–9, 364; neoclassical rejection of, 302; as precondition of capitalist economy, 145; and ‘rational’ expectations concept, 304–5, 310, 314; and risk weights, 138–9, 258–9, 277; role of expectations, 310–17, 323, 331–3 rating agencies, 146, 224 ‘rational’ expectations concept, 302–4, 310, 314 regulation, 10, 17, 62, 112–13, 114, 137–9, 255–61, 280; Basel Committee, 255, 276; deregulation from late 1970s, 22, 23–4, 98, 174, 255; and extreme complexity, 259–61, 275–6; lax, 6, 33; PFAS approach, 270–81, 288; post-crisis reforms, 40–1, 255–6, 257–61; reintroduction of ring-fencing, 256, 264 Reinhart, Carmen M., 308 resolution mechanisms, 256, 279 Richardson, Gordon, 176 risk, 84, 121–2, 123, 124, 126–9, 143, 254; implicit taxpayer subsidy for, 191–2, 207, 254–5; maturity and risk transformation, 104–15, 117–19, 250–1, 254–5; ‘optimising’ model, 129–31, 132, 134, 138, 309, 311; risk premium, 32–3, 115, 183; risk weights, 138–9, 258–9, 277 Robinson, Joan, 12, 292–3 Rodrik, Dani, 348 Rogoff, Kenneth, 44, 308 Rome, ancient, 59, 164, 216 Roosevelt, President Franklin, 91, 316 Royal Bank of Scotland (RBS), 37, 89, 118, 206, 243 Russia, 121, 159 saving, 101–2, 155, 308–17, 362–3; in emerging economies, 22–3, 27–8, 29, 30; ‘paradox of thrift’, 297, 326; ‘savings glut’, 28, 29, 30, 46, 319, 325; as source of future demand, 11, 46, 84–5, 185, 325–6, 356 Schacht, Hjalmar, 341–2, 343 Schäuble, Wolfgang, 211 Scholes, Myron, 120–1 Schumpeter, Joseph, 152 Schwartz, Anna, 192, 328 Scotland, 218, 243–7, 248 Second World War, 20, 21, 219, 242, 317, 342 secular stagnation theory, 44, 291–2, 355 Seneca, 123–4 11 September 2001 terrorist attacks, 124 ‘shadow’ banking system, 107, 112–14, 256, 262, 274 Shiller, Robert, 151 Silber, William, 206 Simons, Henry, 262 Sims, Christopher, 79 Slovakia, 216 Smith, Adam, 17–18, 54–5, 79–80, 163 Smith, Ed, 124 sovereign debt (government bonds), 32, 65, 92, 138, 182–4, 196–7, 203, 258, 259, 338–40; bond yields, 29, 183–4, 224, 227, 228, 231, 299, 336; in euro area, 162, 190, 224, 226–31, 258, 338, 339–40, 342–4; framework for restructuring, 346–7; need for export surplus before payment, 339–40, 341–3; WW1 reparations, 340–2, 343, 345–6 Soviet Union, 27, 68, 216 Spain, 47, 93, 159, 216, 221, 222, 227–8, 229, 257–8, 355, 363–4 special purpose vehicles, 113–14 stock markets, 102, 125–6, 133, 151–4, 194, 195, 200, 347 Stresemann, Gustav, 219 Summers, Larry, 44 Sweden, 159, 166, 173, 179, 216–17, 279, 335 Swift, Jonathan, ‘Thoughts on Various Subjects’ (1703), 250, 290 Switzerland, 33, 70, 100, 118, 184, 216, 335 Syed, Matthew, 124 Taylor, John, 168 technological change, 83–4, 127, 129, 153–4, 281, 291, 354, 355, 365 Tequila crisis (1994), 367 Thaler, Richard, 132 Thornton, Henry, 188 Tobin, James, 262 trade surpluses and deficits, 33, 34, 46, 319, 321–2, 329, 352, 356, 364; in emerging economies, 27–8, 30, 329; in EMU, 222, 232–3, 236, 363–4; and exchange rates, 22–3; and interest rates, 23, 30, 46, 319–20; likely re-emergence of, 48–9 trading, financial, 3, 24, 64, 99–100, 257; bonuses, 99, 101, 117, 144, 147; erosion of ethical standards, 100–1, 288; ‘front-running’, 153–4, 284 Transatlantic Trade and Investment Partnership (TTIP), 361 Trans-Pacific Partnership (TPP), 361 Trichet, Jean-Claude, 225 trust, 10, 81–3, 106; and monetary unions, 220, 232, 237; and money, 8, 55, 57, 66–71, 82–3, 155 Tsipras, Alexis, 230, 231 Tuckett, Professor David, 133–4 Turner, Adair, 324 Tversky, Amos, 132 unemployment, 38, 292, 293, 294, 297–9, 302, 326–7, 329, 330; in euro area, 45, 226, 228, 229–30, 232, 234, 345; and inflation targeting, 168, 169; and interest rates, 169, 298–300; ‘stagflation’ (1970s), 5, 302–3, 318 United Kingdom: Acts of Union (1707), 215; alternative strategies for pre-crisis period, 328–32; Banking Act (2009), 40; Banking and Joint Stock Companies Act (1879), 109; Banking Reform Act (2013), 40; ‘Big Bang’ (1986), 23; City of Glasgow Bank failure (1878), 108–9; commercial property market, 47, 118; Currency and Bank Notes Act (1914), 198; Labour government (1964-70), 20; as monetary union, 215; need for export sector support, 357, 364; return to gold standard (1920s), 76; Scottish independence referendum (2014), 218, 243–5, 248; trade deficits, 30, 321, 322, 329, 364; tradition of national branch banking, 116; see also Bank of England United Nations, 214–15 United States: 1914 financial crisis, 192–201, 206; Aldrich-Vreeland Act (1908), 196, 206; Bureau of War Risk Insurance (1914), 200; Constitution, 286; Dodd-Frank Reform (2010), 40, 260; dollar and gold link, 73, 195, 200–1; dollar as world’s reserve currency, 25, 28, 34; ‘double liability’ (1865-1934), 107–8; ‘free banking’ era, 60–2, 77, 161; Glass-Steagall Act (1933), 23, 98, 260; gold reserves, 74, 77; Gramm-Leach-Bliley Act (1999), 23, 98; history of money in, 57–8, 67, 68, 160–1, 187, 188, 212, 215; as monetary union, 212, 215, 234; need for export sector support, 357, 364; New York becomes world money centre, 194–5, 200–1; notes and coins in, 281; Office of the Comptroller of the Currency, 137, 206; trade deficits, 30, 34, 46, 49, 319, 321, 329, 364 Van Court’s Counterfeit Detector and Bank Note List, 61 Vietnam War, 5, 20, 73, 306 Viniar, David, 123 Volcker, Paul, 176, 288 Voltaire, 126 Wall Street Crash (1929), 347 Walpole, Horace, 369 Walras, Léon, 79 Washington, George, 286 Weatherstone, Sir Dennis, 136–7, 278 weights and measures, 212, 286, 287 Wheeler, Judge Thomas C., 162 wholesale funding, 97 Willetts, David, 83 Wilson, Brigadier-General Henry, 89 Wimbledon tennis championships, 142, 187–8 Wolf, Martin, 96, 262 World Bank, 21, 350 World Trade Organisation, 361 Yellen, Janet, 176, 287 Yugoslavia, break-up of, 216 Zimbabwe, 68, 69–70 ABOUT THE AUTHOR Mervyn King was Governor of the Bank of England from 2003 to 2013, and is currently Professor of Economics and Law at New York University and School Professor of Economics at the London School of Economics.

To the Ends of the Earth: Scotland's Global Diaspora, 1750-2010
by T M Devine
Published 25 Aug 2011

Above all, his social ideas were also those of the propertied classes because, like them, he accepted the existing economic order to be divinely ordained, opposed ‘democracy’ as a sure route to anarchy, condemned trade unions, and believed that the pursuit of self-interest would, through Adam Smith’s ‘invisible hand’, also promote the general welfare of all citizens. But Chalmers also argued that with the possession of wealth came the heavy responsibility of philanthropic action. This also generated a deep response among his middle-class audience: The effect was to turn the cities into the vibrant focus of aggressive Christianity with endless and very successful appeals for money for building churches, manses and mission stations, for mounting foreign missions, and for the publication of tracts.

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Robertson, John, ed., A Union for Empire: Political Thought and the British Union of 1707 (Cambridge, 1995). Robertson, P. L., ‘Shipping and Shipbuilding: The Case of William Denny and Brothers’, Business History, 16 (1974). Robertson, Seona and Les Wilson, Scotland’s War (Edinburgh, 1995). Rodger, R. G., ‘The Invisible Hand: Market Forces, Housing and the Urban Form in Victorian Cities’, in D. Fraser and A. Sutcliffe, eds., The Pursuit of Urban History (London, 1980). Rodgers, Nini, Ireland, Slavery and Anti-Slavery: 1612–1865 (Basingstoke, 2009). Ross, Andrew, ‘Scottish Missionary Concern 1874–1919: A Golden Era’, Scottish Historical Review, 1 (1972).

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Smout, A Century of the Scottish People, 1830–1950 (London, 1986), pp. 109–13. 56. R. D. Anderson, Education and Opportunity in Victorian Scotland (Edinburgh, 1983), p. 152. 57. R. H. Campbell, The Rise and Fall of Scottish Industry, 1707–1939 (Edinburgh, 1980), pp. 76–101; Smout, Century of the Scottish People, p. 112. 58. R. G. Rodger, ‘The Invisible Hand: Market Forces, Housing and the Urban Form in Victorian Cities’, in D. Fraser and A. Sutcliffe, eds., The Pursuit of Urban History (London, 1980), pp. 190–211. 59. J. D. Gould, ‘European Intercontinental Emigration 1815–1914: Patterns and Causes’, Journal of European Economic History, 8 (1979). 60.

Vultures' Picnic: In Pursuit of Petroleum Pigs, Power Pirates, and High-Finance Carnivores
by Greg Palast
Published 14 Nov 2011

Thug had a big rock and put a fence around the best dirt for growing corn and left Ugh with just about nothing, and Thug said, “This is the rule and this is my big-ass rock. Get it?” And Ugh said, “OK.” So who holds the big rock today? Who made up this system and who enforces it for The Sack’s benefit, for Goldfinger, for BP PLC? We’re told the Invisible Hand of the Marketplace holds the rock now, but it must attach to a very powerful arm. Whose? There were many candidates, several Thugs and their generals moving assets and reserves around the map. Undoubtedly, one of them sat within the high-walled compound rising up in front of Badpenny and me, the headquarters of the WTO, the World Trade Organization.

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How could my master Black have gotten it so horrifically wrong? He had slipped on the banana peel dropped by Milton Friedman. Friedman had sold Black and the world the idea that markets are perfectly “efficient,” from its pricing of French fries to derivatives and money itself, all set in a perfectly rational and fair way. The market’s magical Invisible Hand needed no arm attached. Government would only get in the way of this wondrous self-regulating economy. Crucial to the Friedman theory—and please pay attention to this—was that markets have “wisdom.” That is, prices in a free market communicate all information about a product, securities included (and their derivatives).

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LONDON SCHOOL OF ECONOMICS Sometimes it’s helpful to have your paranoia justified by an expert. Joe Stiglitz is an expert, a big-shot economist. He made a big splash by analyzing the First Catechism of Free Market economics: that The Market has “wisdom,” that The Market is always right. That’s why we should be happy to designate The Market as the modern Thug, the Invisible Hand with a big rock to keep us in line with its wisdom. But Stiglitz proved, mathematically, that sometimes The Market can be just crazy, cruel, insane, ignorant, especially when some of the players in the market are keeping secrets. Now, you and I and Lonigro and most of the planet know that already, but to economists, the discovery that The Market could be wrong was so astonishing that they gave Stiglitz the Nobel Prize.

The Book of Woe: The DSM and the Unmaking of Psychiatry
by Gary Greenberg
Published 1 May 2013

Their colleagues/competitors included neurologists, but they also included anthropologists and art historians and social workers—nonmedical people who had been trained in psychoanalysis and had hung out their shingles. Given the ascendant power of medicine, these lay analysts might well have failed to capture much of the market from doctors, but the New York Psychoanalytic Society, dominated by psychiatrists, was not content to wait for the invisible hand to lift them to dominance. In 1926, for reasons it didn’t spell out explicitly, it declared that only physicians could practice psychoanalysis. Back in Vienna, Freud, who had long loathed America as a land of the shallow and unsophisticated, was livid. “As long as I live26,” he thundered, “I shall balk at having psychoanalysis swallowed by medicine.”

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“Did this change the way you treated her?” I asked. “No.” “So what was its value, would you say?” “I got paid.” It is at least ironic that a profession once dedicated to the pursuit of psychological truth is now dependent on this kind of dishonesty for its survival. But I suppose that any system guided by the invisible hand—financial markets no more than health care financing—is bound to be gamed. And the DSM, whatever its flaws, has proved to be a superb playbook. • • • Maybe Michael First’s claim that psychiatry is somehow the victim of the selfsame diagnostic manual that pulled its chestnuts out of the fire sounds disingenuous to you, too.

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“We are just going to get more and more diseases, since our expectations of health are going to become more sophisticated and expansive.” Thanks to a DSM that has kept pace with those expectations, that future is here. It has arrived in a capitalist age, which means that we have placed our well-being in the not-so-invisible hands of a medical-industrial complex whose proprietors have a stake in reducing suffering to biochemistry. It has spawned a psychiatry that can’t help giving us more and more diseases, at least not if it wants to meet the economic, if not the scientific, demands of the day. Still, the problem with psychiatry may not be that it lags behind the other medical specialties, with their magic bullets and the science by which they identify the targets.

Shutdown: How COVID Shook the World's Economy
by Adam Tooze
Published 15 Nov 2021

FAO and WFP, “FAO-WFP Early Warning Analysis of Acute Food Insecurity Hotspots,” July 17, 2020; www.wfp.org/publications/fao-wfp-early-warning-analysis-acute-food-insecurity-hotspots. 46. K. Hearst, “COVID-19 and the Garment Industry’s Invisible Hands,” Open Democracy, July 20, 2020; www.opendemocracy.net/en/oureconomy/covid-19-and-the-garment-industrys-invisible-hands/. 47. Z. Ebrahim, “ ‘Moving Mountains’: How Pakistan’s ‘Invisible’ Women Won Workers’ Rights,” Guardian, December 1, 2020. 48. G. Flynn and M. Dara, “Garment Workers Cornered by Job Loss, Virus Fears and Looming Debt,” VOD, April 16, 2020. 49.

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Du, and K. W. Chan, “Unequal Pain: A Sketch of the Impact of the Covid-19 Pandemic on Migrants’ Employment in China,” Eurasian Geography and Economics 61, no. 4–5 (2020): 448–63. 30. “Xi Chairs Leadership Meeting on Epidemic Control,” Xinhua, February 3, 2020. 31. H. Lockett and S. Yu, “How the Invisible Hand of the State Works in Chinese Stocks,” Financial Times, February 4, 2020. 32. M. Mackenzie, “A Dicey Period for Risk Sentiment,” Financial Times, February 3, 2020. 33. H. Lockett, N. Liu, and S. Yu, “Chinese Stocks Suffer Worst Day Since 2015 on Coronavirus Fears,” Financial Times, February 3, 2020. 34.

The Controlled Demolition of the American Empire
by Jeff Berwick and Charlie Robinson
Published 14 Apr 2020

The Visible Hand of Crony Capitalism Crony capitalism is defined as an economy in which businesses thrive, not as a result of risks they take, but rather as a return on money amassed through a nexus between a business class and the political class. This has been the mission statement of the United States for at least the last 30 years, and probably longer. The original economist, Adam Smith, described the “invisible hand” as enlightened self-interest, and a market force that helps the demand and supply of goods in a free market to reach equilibrium automatically. If a person makes a product and charges too much for it, nobody will buy it. This is both Common Sense 101 & Economics 101. Their competitor may sell a similar product and charge much less, so they would need to either lower their price to a point where they are competitive, or else they will never sell anything and the market will punish them.

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The Sellers and Buyers will come to an agreement that they consider to be fair. If the price offered for a product is too low, the Seller simply will not sell. If the Buyer is unable to find any Sellers willing to take his offer, maybe his offer is just too low and will need to be raised in order to entice someone to sell. This is why they call it an invisible hand because it does not need anyone messing with it to make the market fair for the people. Crony capitalism gives the invisible middle finger to the people. When one manipulates either side of the equation, be it the demand or supply side, they end up with numbers that are invalid and warped. If the local butcher kept his thumb on the scale every time people bought meat from him, they would get fed up and go somewhere else.

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There are examples of “Economic Darwinism” throughout the business landscape, and just because a person, family, or company dominated a segment of business for a generation, does not assure them continued success in the future. When was the last time someone bought a roll of Kodak film? How is the biggest pager company doing these days? When was the last time kids were excited to go home and play Atari after school? If the Invisible Hand balances things out, then Economic Darwinism is like a fat kid on one side of the See Saw. The other kids can try as hard as they like to push their side down, but their skinny ass might want to think about swinging on the monkey bars instead. When the government gets involved with marketplaces in order to prop up an aspect of the economy that they feel is important to stimulate, it delays the natural transition to something better.

How to Kick Ass on Wall Street
by Andy Kessler
Published 4 Jun 2012

They can sell few shares and dilute fewer existing shareholders to raise the $1 billion for the new factory. When a stock goes down, the market is, in effect, starving the company for capital, making it more expensive to raise money. Management can lower costs, change product plans, whatever it takes to please investors to lower their cost of capital. For you economics majors, this is Adam Smith’s Invisible Hand writ large, pushing great companies (or ones the markets thinks their prospects are great) along, and spanking the ones it doesn’t like. Economists are often confused by the stock market and its seemingly Wild West way of allocating capital. Probably because most economists would rather be Central Planners and do the job themselves.

The Signal and the Noise: Why So Many Predictions Fail-But Some Don't
by Nate Silver
Published 31 Aug 2012

They allow us to make transactions at one fixed price, at a consensus price, rather than having to barter or bet on everything.7 The Bayesian Invisible Hand In fact, free-market capitalism and Bayes’ theorem come out of something of the same intellectual tradition. Adam Smith and Thomas Bayes were contemporaries, and both were educated in Scotland and were heavily influenced by the philosopher David Hume. Smith’s “invisible hand” might be thought of as a Bayesian process, in which prices are gradually updated in response to changes in supply and demand, eventually reaching some equilibrium. Or, Bayesian reasoning might be thought of as an “invisible hand” wherein we gradually update and improve our beliefs as we debate our ideas, sometimes placing bets on them when we can’t agree.

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housing bubble, 22–23, 24–26, 28–29, 30–34, 36, 38–39, 42, 43, 45, 68, 186 credit bubble and, 196 real-time identification of, 22–23, 33, 347, 369 housing prices, 19, 43, 44, 186n, 187 Hsu, Feng-hsiung, 268 Huckabay, Gary, 78, 82, 85, 88, 89 Hudson, Tim, 99 Hugo, Hurricane, 138 human judgment, see biases; heuristics Hume, David, 242, 332 humility, 97–98 Hungary, 52 Hurricane Betsy, 140 Hurricane Hugo, 138 Hurricane Irene, 139 Hurricane Katrina, 55, 108–10, 138–41, 388, 472, 473 Hurricane Rita, 139 hurricanes, 113, 471–72, 476 forecasting of, 126–27, 127, 145–46, 387–88 Hydrometeorological Prediction Center, 123 hypothesis testing, 230, 243–49, 256–57, 266–67, 376, 452 IBM, 9, 10, 12, 110, 266, 268, 269, 270, 281, 283–84 ice age, 398 ideas, evolution of, 1 imagination, 266, 288, 289 failures of, 288, 423 improbabability, unfamiliarity vs., 419–20 Inc., 187 incentives, 184, 250, 313, 333, 356, 357, 501 Inconvenient Truth, An, 385 index funds, 344, 370 India, 210n Indiana Pacers, 236n, 489 indicators: lagging, 187–88 leading, 186–88, 196–97 Indonesia, 209 Industrial Revolution, 2, 5–6, 112, 212 infectious disease, 16, 204–31 SIR model of, 220–21, 221, 223, 225, 389 see also specific diseases inflation, 11, 186n, 191, 198, 202 information, 1, 451 analyzing, 232 asymmetrical, 35 collecting, 232 exclusive, 98, 99–101 explosion of, 3–4, 6, 7, 12, 13, 17, 45 forecasting and, 5 quality of, 2, 13, 17 information age, 7, 45, 358 information overload, 12 information processing, 449 information technology, 411 revolution in, 1–4 information theory, 265 InfoSpace, 353, 360 initial condition uncertainty, 390–92 insider trading, 341–42 intelligent extraterrestrial species, 488 interest rates, 186n, 190, 202 International Panel on Climate Change (IPCC), 382, 383–84, 393 1990 predictions of, 373–76, 389, 393, 397–99, 397, 399, 401, 507 “uncertainty” in, 389 Internet, 13, 223, 250, 514 poker on, 296–97, 310 quality of information on, 3 Intrade, 333, 334, 335, 336–37, 358, 367, 497 invisible hand, 332 Ioannidis, John P. A., 11, 249, 250, 253 Iowa caucus, 60, 217, 252, 333, 334 Iran, 152–53 Iranian Revolution, 428 Iraq, 420 Ireland, 210 Irene, Hurricane, 139 Irish Confederate Wars, 4 irrational exuberance, 346–52 Irrational Exuberance (Shiller), 22, 347–48, 354 irrationality, 356–57 IRS, 481 Israel, 210, 440–42 Italy, 476 Ivey, Phil, 308–9 Jackson, Phil, 233 James, Bill, 77, 81–82, 84, 89, 102–5, 338, 471 Janabi, Rafid Ahmed Alwan al-, 443 Japan, 144, 145n, 190, 379, 394, 423, 476 Pearl Harbor attacked by, 10, 412–13, 414, 415–17, 419–20, 423, 426, 444, 510 real estate bubble in, 11, 31–32, 32, 45, 52 2011 earthquake in, 154, 155, 168–71, 172 Jesuits, 112 Jeter, Derek, 446 job growth, GDP growth vs., 189 Johnson, Magic, 237 Jones, Chipper, 85 Jordan, Tom, 174 Journal of Geophysics Research, 395 Journal of Zoology, 148 JSVAX (Janus Contrarian T), 339–40 judgment, see biases; heuristics Jupiter, 242–43 Justice Department, U.S., 319, 320 Kahneman, Daniel, 64, 366, 424 kamikaze, meaning of word, 145n kamikaze pilots, 423 Kanagawa Institute of Technology, 476 Kansas City, Mo., 136–37 Kansas City Athletics, 94 Kapanke, Dan, 70–72 Karpov, Anatoly, 280, 281 Kashyap, Anil, 26, 464 Kasparov, Garry, 266, 267–85, 443, 493–94 Deep Blue’s final games against, 282–83 Deep Blue’s first game against, 268, 270–79, 271, 274, 275, 276, 278 Deep Blue’s second game against, 279–82, 280 moves ahead seen by, 279 Katrina, Hurricane, 55, 108–10, 138–41, 388, 472, 473 Keilis-Borok, Vladimir, 159–60, 161, 167, 477 Kelling, George L., 439 Kemp, Matt, 89 Kennedy, John F., 50 Kenya, 422 Kerry, John, 55 Keynes, John Maynard, 65, 360 Killebrew, Harmon, 94 Kind, Ron, 70 Kinsler, Ian, 89 Knight, Frank H., 29 knowledge, accumulation of, 2–3 Kokko, Hanna, 219 Kotchman, Casey, 76 Koufax, Sandy, 94 KPMG, 78, 84, 296 Kroll, Jules, 23–24 Kroll Bond Ratings, 23–24 Kroll Inc., 23 Krugman, Paul, 7, 22, 40–41, 184 Kuwait City, 374 lagging indicators, 187–88 La Gloria, Mexico, 216 Lajoie, Nap, 102 Laliberté, Guy, 318 Lamont, Owen, 361 Lancet, The, 206 language, 230 Laplace, Pierre-Simon, 112–14, 242–43, 248–49, 251, 255 Laplace’s Demon, 112–14, 127 L’Aquila, Italy, 142–44, 148, 154–55, 157, 173, 476 Larsen, Bent, 268 Las Vegas, Nev., 10 housing in, 19 Laurila, David, 76–77 Law, Keith, 75 Leading Economic Index, 187, 480 leading indicators, 186–88, 196–97 learning ability, 98 Lehman Brothers, 19, 34–35, 36, 37–38, 42, 48 Lenin, Vladimir, 428 Lester, Jon, 89 leverage, 29, 33–37, 43, 196 “Leveraged Losses: Why Mortgage Defaults Matter” (Hatzius), 184 Levi, Michael, 435–36 Lewis, David, 204–5, 206 Lewis, Michael, 77, 93–94, 105, 355 liberalism, 509 LifeMinders, Inc., 353 lightning, 125–26 Lima, 158, 174 limit hold ’em, 311, 322, 322, 324n Lin, Jeremy, 119 linear regression, 498 linearity, see nonlinear systems Lipsitch, Marc, 223, 229 Lisbon earthquake, 145 literature, progress of, 4 Livingston Survey, 183 Lockerbie bombing, 427 Loft, Richard, 111, 112, 114–15, 118 logarithmic scales, 142n, 144, 146, 151, 263, 429–30, 430 logistic regression analysis, 489 Loma Prieta earthquake, 160 London, 222 Long Boom, 189–90 Long Leading Index, U.S., 196 Lorenz, Edward, 118, 119, 129, 472 Los Angeles, Calif., 368, 432, 476 Los Angeles Dodgers, 94, 98 Los Angeles Lakers, 233–37, 243, 246, 258, 489 Los Angeles Times, 160, 234 lottery tickets, 186, 324 Louisiana, 109 “Love Will Tear Us Apart,” 283 Lowess regression, 478 Lucas, Robert, 188, 200 luck, 79 skill vs., 321–23, 322, 338–39 Lugar, Richard, 434 lung cancer, 254–55, 258 Luther, Martin, 4 Lynn, Fred, 79 Macal, Chip, 229 McCain, John, 48–49, 59, 358, 468 McDaniel, Raymond, 25 McGovern, George, 67 McLaughlin, John, 47 McLaughlin Group, The, 47–50, 49, 56, 103, 129, 314 McNess, Stephen K., 198 McVeigh, Timothy, 425 malaria, 214 Malkiel, Burton, 340n mammogram, 245–46, 246 Mandelbrot, Benoit, 284 Manic Momentum strategy, 344–45, 345, 368 Mann, Michael, 408–9 manufacturing sector, 189 Maradona, Diego, 281 margin of error, 176, 178, 181, 213, 252, 452 in economic forecasts, 183, 184 in political polls, 62, 65, 176, 252, 452 Markakis, Nick, 90 “Market for Lemons, The” (Akerlof), 35 MARL, 264 Marshall Islands, 509 Martinez, Edgar, 82, 83 Marx, Karl, 53 Massa, Eric, 72 Massachusetts, 391 Mathematics of Poker, The (Chen and Ankenman), 323 Mathews, F.

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present
by Jeff Madrick
Published 11 Jun 2012

Henry Wriston’s reputation rose in these years and he was named president of Brown University in 1936, from which perch he was able to preach against FDR and the New Deal, convinced that the programs would lead to a planned economy. His heroes included Adam Smith, who, despite the complexities in thinking of the Scottish philosopher, he saw largely as the father of the invisible hand and laissez-faire economic philosophy. He also deeply admired the British philosopher Herbert Spencer, who a century after Smith had become popular for what was later called social Darwinism. Spencer, who beginning in the 1850s was philosophically opposed to government intervention in markets, was the popular author of the notion that human poverty was natural because the “survival of the fittest” (a phrase Charles Darwin borrowed from him) was a law of nature.

…

Americans were losing their confidence, increasingly frustrated and confused, but still clinging to the notion that all could return to normal. It bears repeating that Reagan mostly avoided making economic self-interest the centerpiece of his economic program. His was not the controversial morality of Smith’s invisible hand, or of the free market economists some of whom were his advisers, but rather something more like the opposite. It was the selflessness of hard work, self-reliance, and courage associated with an American Protestant ethic. Material success was its by-product, not its objective. He believed the rich earned what they made and he castigated those who saw a fat man and a skinny man together and blamed the fat man for the travails of the thin man.

…

, Pew Charitable Trusts, http://www.economicmobility.org/assets/pdfs/EMP%20American%20Dream%20Report.pdf. 5 THERE WERE POVERTY AND NEED: Davis, City of Quartz, p. 17. 6 THEY PARTICIPATED IN THE REAL AND RELIABLE: This actually characterized the history of the American economy since before the Civil War. 7 IN SOUTHERN CALIFORNIA: Perlstein, Before the Storm, pp. 608–16. 8 THEY FOUND POWERFUL ALLIES: A particularly useful history of the development of business political interest is Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009). 9 “WE THOUGHT OF OURSELVES”: Author interview with Lewis Uhler, June 2004. 10 THE SOCIETY SOON DREW: Perlstein, Before the Storm, pp. 120–22; “Orange County had caught anti-communism fever,” he writes. 11 UHLER JOINED THE BIRCHERS: Lou Cannon, Governor Reagan: His Rise to Power (New York: PublicAffairs, 2003), p. 369. 12 UHLER WROTE A REPORT: Author interview with Lewis Uhler, October 2003. 13 THE INVESTIGATION CONCLUDED: Andy Furillo, “The Front Man for Proposition 75,” Sacramento Bee, August 15, 2005, p.

The Age of Surveillance Capitalism
by Shoshana Zuboff
Published 15 Jan 2019

The notion that ignorance and freedom are essential characteristics of capitalism is rooted in the conditions of life before the advent of modern systems of communication and transportation, let alone global digital networks, the internet, or the ubiquitous computational, sensate, actuating architectures of Big Other. Until the last few moments of the human story, life was necessarily local, and the “whole” was necessarily invisible to the “part.” Adam Smith’s famous metaphor of the “invisible hand” drew on these enduring realities of human life. Each individual, Smith reasoned, employs his capital locally in pursuit of immediate comforts and necessities. Each one attends to “his own security… his own gain… led by an invisible hand to promote an end which was no part of his intention.” That end is the efficient employ of capital in the broader market: the wealth of nations. The individual actions that produce efficient markets add up to a staggeringly complex pattern, a mystery that no one person or entity could hope to know or understand, let alone to direct: “The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would… assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever.…”1 The neoliberal economist Friedrich Hayek, whose work we discussed briefly in Chapter 2 as the foundation for the market-privileging economic policies of the past half century, drew the most basic tenets of his arguments from Smith’s assumptions about the whole and the part.

…

.…”1 The neoliberal economist Friedrich Hayek, whose work we discussed briefly in Chapter 2 as the foundation for the market-privileging economic policies of the past half century, drew the most basic tenets of his arguments from Smith’s assumptions about the whole and the part. “Adam Smith,” Hayek wrote, “was the first to perceive that we have stumbled upon methods of ordering human economic cooperation that exceed the limits of our knowledge and perception. His ‘invisible hand’ had perhaps better have been described as an invisible or unsurveyable pattern.”2 As with Planck, Meyer, and Skinner, both Hayek and Smith unequivocally link freedom and ignorance. In Hayek’s framing, the mystery of the market is that a great many people can behave effectively while remaining ignorant of the whole.

…

We have carefully examined surveillance capitalism’s novel foundational mechanisms, economic imperatives, gathering power, and societal objectives. One conclusion of our investigations is that surveillance capitalism’s command and control of the division of learning in society are the signature feature that breaks with the old justifications of the invisible hand and its entitlements. The combination of knowledge and freedom works to accelerate the asymmetry of power between surveillance capitalists and the societies in which they operate. This cycle will be broken only when we acknowledge as citizens, as societies, and indeed as a civilization that surveillance capitalists know too much to qualify for freedom.

Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization
by Jeff Rubin
Published 19 May 2009

Recessions don’t diminish our dependence on oil; they just cut back a little on our appetite for it. When we start to feel a little better, we will be guzzling it again, and we may well be left wanting more. Because unlike after past oil shocks, there is no post-shock boost in oil supply to look forward to any more. If we wait for Adam Smith’s invisible hand to pull abundant sources of new cheap oil out of the ground, we are going to be waiting for Godot. Governments around the world may be thrusting bailout money into the hands of businesses and taxpayers, but you can count on one thing. There will be no energy bailout. Just as I had good news and bad news for the oilmen, part 2 of this book will have good news and bad news for you too.

…

And of course this record increase in oil prices, with the aid of a world financial crisis to boot, has also brought the economy to its knees, but not before oil demand defied the laws of economic gravity for the better part of a decade. In fact, for most of that decade, world oil demand was growing faster than it did at the turn of the millennium, when oil was only a fraction of the price. That’s not the way a demand curve is supposed to behave. Somehow, Adam Smith’s invisible hand had been misled or misguided into consuming more oil just when it was expected to burn less. Why did oil have to skyrocket all the way to nearly $150 per barrel before the world economy stopped growing? Prices half that amount should have stopped global oil demand in its tracks long before the recession hit in late 2008.

The Inequality Puzzle: European and US Leaders Discuss Rising Income Inequality
by Roland Berger , David Grusky , Tobias Raffel , Geoffrey Samuels and Chris Wimer
Published 29 Oct 2010

William Weld, a former Republican Governor in famously liberal Massachusetts, refers to the social stability created by a confident middle class and argues that prudence would suggest some spreading out and flattening of income curves. The guiding hand of religion which sometimes curbed excess has largely faded from secular Western countries to be replaced by invisible hands of globalized markets. “What is fair?” Maurice Lévy asks, “Today we are in a 158 T. Raffel and G. Samuels situation where all this is decided by what we call les forces du marché, the market conditions. So I’m not sure that someone can say from any standpoint – could be a philosopher, a sociologist, a politician, or a man in the street – what is equal, what is not?”

…

We are of course continuously engaged in reforming our economic institutions: We have to decide whether to enter into proposed trade alliances, whether to reform tax law, whether to allow new types of corporate forms, and so forth. When such decisions are being made, we typically refer back to first principles by asking whether the proposed reform will be competition-enhancing, in effect whether it will allow the “invisible hand” to better operate. We call ourselves market economies precisely because of this a priori commitment. When, however, we turn to poverty and inequality reform, we seem rather less tethered to any a priori commitments. In the absence of principles, our interventions tend to grow and accumulate into a sprawling array, one without any obviously unifying rhyme or reason.

A World in Disarray: American Foreign Policy and the Crisis of the Old Order
by Richard Haass
Published 10 Jan 2017

The Internet grew up with little government role, even though it had its origins in a precursor invented in the late 1960s by the Advanced Research Projects Agency of the U.S. Department of Defense. Rules, to the extent they exist, have been set from the bottom up, by the efforts of and interactions among individuals, civil society, corporations, and governments. This “multistakeholder” process is the closest thing there is to a governing example of Adam Smith’s “invisible hand.” This era seems to have run its course, or at least run into strong headwinds. Cyberspace increasingly resembles nothing so much as the old American Wild West with no real sheriff. The Internet is more important to economies, societies, and militaries than ever, but there are few if any rules preventing or even limiting disruptive operations, the theft of intellectual property, violations of privacy, and government censorship—and even when there are rules, there are few or no means for enforcing them.19 This is not to suggest an absence of global governance and multilateral arrangements.

…

This is inevitable for several reasons, only one of which is that the United States is and will likely remain the most powerful country in the world for decades to come. The corollary to this point is that no other country or group of countries has either the capacity or the mind-set to build a global order. Nor can order ever be expected to emerge automatically; there is no invisible hand in the geopolitical marketplace. Again, a large part of the burden (or, more positively, opportunity) falls on the principal power of the day. There is more than a little self-interest at stake. The United States cannot remain aloof, much less unaffected by a world in disarray. Globalization is more reality than choice.

The Next 100 Years: A Forecast for the 21st Century
by George Friedman
Published 30 Jul 2008

From another, more substantial perspective, this is called geopolitics. Geopolitics is not simply a pretentious way of saying “international relations.” It is a method for thinking about the world and forecasting what will happen down the road. Economists talk about an invisible hand, in which the self-interested, short-term activities of people lead to what Adam Smith called “the wealth of nations.” Geopolitics applies the concept of the invisible hand to the behavior of nations and other international actors. The pursuit of short-term self-interest by nations and by their leaders leads, if not to the wealth of nations, then at least to predictable behavior and, therefore, the ability to forecast the shape of the future international system.

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines
by William Davidow and Michael Malone
Published 18 Feb 2020

One customer reported that his auto mechanic charges him quite a bit more if he asks for a receipt.10 It is extremely difficult to make a voluntary compliance system work in a culture where large numbers believe it is acceptable to cheat. Tax evasion runs between 6 percent and 9 percent of GDP in Greece. Government revenues would be 20 to 25 percent higher if Greeks were as honest about their taxes as Americans.11 Adam Smith understood that moral authority served as the thumb of the invisible hand. If moral authority broke down, the invisible hand would lose its grip. In Smith’s day, business activity was predominantly local. One thing that ensured that market participants remained well-behaved was that most people conducted their business affairs in the communities in which they lived. As a result, control rested with one’s neighbors, the people one saw in church, and at meetings of local business organizations.

The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth
by Jeremy Rifkin
Published 9 Sep 2019

Larry Summers, a former treasury secretary and president emeritus of Harvard University, spoke for the group, saying, “The gravity of the climate change problem concentrates minds and leads people to put aside differences. People who agree on little seem to agree on this. And that’s striking.”13 The signers said that the proposed carbon tax would send “a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future” and “promote economic growth.” They recommended that the tax “should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of the government,” because “a consistently rising carbon price will encourage technological innovation and large-scale infrastructure development and accelerate the shift to low and zero carbon goods and services.”

…

This, too, might be difficult to hear for those activists still wedded to the idea that the market is never on the side of the people. I am certainly aware that this is often the case, and for a lifetime I have been critical of various aspects of market capitalism. This time, however, and with this disruption, the market is a guardian angel looking over humanity. But the invisible hand alone will not steer us into the Age of Resilience. Building a new ecological civilization from the ashes will require a far more collective response that marshals our public capital, market capital, and social capital at every level of governance and engages the deep participation of the entire body politic.

Cloudmoney: Cash, Cards, Crypto, and the War for Our Wallets
by Brett Scott
Published 4 Jul 2022

I believe that the key to understanding this tension is to see that, within large-scale interdependent markets, agency and coercion are inseparable. Since the eighteenth century, economists have hinted at this when speaking of the ‘wisdom of the market’. The phrase conjures imagery of a meta-entity generated by people and yet transcending them. This is where Adam Smith’s concept of the ‘invisible hand’ emerges: the actions of people within an exchange network push and pull upon the other members of that network, via the monetary system that holds it together. This is not a vision of individual freedom. It is a vision of collective entanglement, albeit one that people experience as individuals.

…

Here Tomorrow’, 145–6 Hindustan Times, 44 hippies, 7, 101, 226 HMRC, 110 Hobbes, Thomas, 177 home banking, 139 homelessness, 31, 132 homosexuality, 102 honesty boxes, 91 Hong Kong, 216, 219, 220, 226 horseless carriages, 87–9 horseshoe theory, 215, 222 hotwatch system, 111 HSBC, 74, 147, 156 Huawei, 178 Hungary, 35, 43 hurricanes, 36 hut tax, 55 Hyperledger, 232 I, Robot (Asimov), 161, 170 ‘If Crisis or War Comes’ (2018 report), 48 immigration, 127 incubators, 17 India, 40, 42, 43–4, 60–61, 93, 96, 245, 255 Aadhar system, 44, 97, 169 cash thresholds in, 42 cashless campaigns in, 40, 127–8 counterfeiting in, 60–61 demonetisation in, 43, 44, 93 Greenpeace in, 116 Paytm, 44, 79, 150 Industrial and Commercial Bank of China, 75 inertia, 10, 124 Inevitable, The (Kelly), 12 informal markets, 176–9 initial coin offerings (ICOs), 225 Instagram, 198 integration, 149–50 interbank markets, 138, 231 interest, 39 interfaces, 138–51 International Monetary Fund (IMF), 7, 14, 47, 79, 93, 110, 168 international transfers, 74–6, 108, 179 Internet, 180 banking, 76–7 e-commerce, 40, 77 Internet of Things, 150 Interpol, 111 interracial relationships, 102 invisible hand, 251 IOUs, see promises Iran, 76 Islam, 179 Israel, 46 Italy, 43 J. P. Morgan, 8, 96, 150, 156, 227, 232 Jamaica, 42 Japan, 18, 35, 135, 215, 248 Johannesburg, South Africa, 129 Johnson, Alexander Boris, 38 Kazakhstan, 11, 227–9, 233, 247 Keep Cash UK, 262 Kelly, Kevin, 12 Kentridge, William, 144 Kenya, 47, 75, 129, 130–31, 169, 178, 179 Kerouac, Jack, 173, 175 Keynesianism, 80 ‘Kindness is Cashless’, 40 Kiva, 238 Kowloon Walled City, Hong Kong, 216, 219, 220, 226 Kuala Lumpur, Malaysia, 60, 74 Kurzweil, Ray, 153, 252–3 Kyoto, Japan, 135 La Guardia Airport, New York, 128 learning methodology, 163–4 left-wing politics, 7, 184, 191, 211–12, 215 Lehman Brothers, 17–18 Lenddo, 169 Level 39, Canary Wharf, 17, 20, 27, 41, 143 Leviathan (Hobbes), 177 leviathans, 177–84, 215–16 libertarianism, 7, 14, 42, 155, 156, 184 cryptocurrency and, 191, 212, 215–16, 225–6 Libra, 236–41, 245 Litecoin, 218 Lloyds, 72–3, 144, 146 loans, 70–71, 107, 159 artificial intelligence and, 167–8, 172 London, England, 128, 247, 248 Brixton Market, 177 Camberwell, 128 Canary Wharf, 17–18, 20, 41, 62, 211 City of London, 6, 135 Mayor’s Fund, 38 Somali diaspora, 116, 179 Stock Exchange, 24 Underground, 11, 37–8, 86, 87 longevity derivatives, 160 Lonsdale, Joe, 155 Lord of the Rings, The (Tolkien), 19, 155 Los Angeles, California, 101 Luther, Martin, 212 M-Pesa, 79, 109 machine-learning systems, 163–4 Macon, USS, 153 Mafia, 163 Main Incubator, 143 Malaysia, 7, 45, 60, 74 Malick, Badal, 127–8 malware, 32 manifest destiny, 212 ‘Manifesto for Cashlessness’ (Emili), 37 Maputo, Mozambique, 96 Marcus, David, 237, 241 Maréchal, Nathalie, 113 marijuana industry, 101–3 market price, 29, 171 markets, 65, 124–6, 176–80 choice and, 124–6 giant parable, 54 informal, 176–9 oligopolies and, 124–5 payments companies and, 29, 30, 31, 32–3 Marxism, 155, 262 Massachusetts, United States, 46 Massachusetts Institute of Technology (MIT), 7 Mastercard, 30, 37, 39, 77, 91 automatic payments, 149 data, 109, 111 financial inclusion and, 131–2 Wikileaks blockade, 116 Masters, Blythe, 232 Matrix, The (1999 film), 226 Mayfair, London, 6 McDonald’s, 145, 153 Medici family, 135 Melanesia, 255–6 Mercy Corps, 131, 132 Mexico, 42 Microsoft, 7 Azure cloud, 233 Word, 32, 156 middle class, 86, 128, 129 Mighty Ducks, The (1992 film), 234 Military Spouse, 153 millennials, 86, 140 Minority Report (2002 film), 10 mis-categorisations, 167 mist, 30–33 MIT Media Lab, 7 Modi, Narendra, 43, 93 Moffett airfield, California, 153 Monetarism, 80 money creation, 59–63, 67–72, 202 Money Heist (2017 series), 61 money laundering, 42, 116 money users vs. issuers, 50–52 money-passers, 30, 32–3 Monzo, 113, 142 Moon Express Inc., 153 mortgages, 26–7, 94 motor cortex, 248 Mountain View, Silicon Valley, 153 Moynihan, Brian, 38 Mr Robot, 184 Mubarak, Hosni, 116 Mugabe, Robert, 239–41 Mumbai, India, 96 Musk, Elon, 15, 212, 257 mutual credit systems, 259–60 N26, 142 Nairobi, Kenya, 129, 179 Nakamoto, Satoshi, 13, 184–5, 187, 191, 204 NASDAQ, 157, 233 National Aeronautics and Space Administration (NASA), 153 National Arts Festival, 144 National Retail Federation, 86 National Security Agency (NSA), 112, 155 Nationwide, 145–6 Natural Language Processing (NLP), 146 natural market order, 192 Nazarbayev, Nursultan, 227 Neener Analytics, 169 neo-Nazism, 226 nervous system, 20–22, 57, 80, 81, 240, 247–8, 251–2 Nestlé, 24, 28 Netflix, 61 Netherlands, 48, 49, 128–9 Nets Union Clearing Corp, 115 Network Computing, 78 New Age spiritualism, 7, 14, 193, 226 New Jersey, United States, 46 New Scientist, 137 New World Order, 261 New York City, New York, 18, 91–2, 128, 248 La Guardia Airport, 128 Wall Street, 6, 178–9 Nigeria, 43 No Cash Day, 37 no-file clients, 169 Nobel Prize, 93 nomadism, 228 non-seepage, 73 Norway, 35 nudging, 39, 93, 114 Nur-Sultan, Kazakhstan, 11, 227–9 O’Gieblyn, Meghan, 154 Oakdale, California, 101 Occupy movement (2011–12), 211, 215 Office of National Statistics, 83 oil industry, 6, 22–4 oligopolies, 2, 12, 15, 89, 124–5, 142, 151, 180–83, 191 cryptocurrencies and, 229–33, 246 On the Road (Kerouac), 173, 175 OpenBazaar, 229 OpenOil, 24 operating system, 141–2 Oracle, 109 Oxford English Dictionary, 144 Pakistan, 61 Palantir, 155, 157, 226 Panama Papers leak (2016), 81 panopticon effect, 118–19, 172 Papua New Guinea, 191 passive process, 125–6 PATRIOT Act (2001), 111, 179 payments companies, 30, 32–3, 39–41, 77–8, 79 automatic payments, 149 data, 108–9 interpellation, 86–7 plug-ins, 79, 115, 141–2 PayPal, 50, 79, 109, 155, 226, 233–7, 243 New Money campaign (2016), 86–7 Wikileaks blockade, 116 Payter, 31–2 Paytm, 44, 79, 150 Peercoin, 218 Penny for London, 37–8 pension funds, 7, 23 People’s Bank of China, 79, 242 periphery, 28, 248 Peru, 129–30, 176 Peter Diamandis, 153 Philadelphia, Pennsylvania, 41, 133 Pierce, Brock, 234 Piercy, Marge, 150 Pisac, Peru, 129 point-of-sales devices, 40, 77, 130 points of presence, 148 poker games, 91 Poland, 37, 91 police, trust in, 93 Politics of Bitcoin, The (Golumbia), 225 posture, 49 pre-capitalist societies, 55, 215, 251 Premier League, 231 primary system, 50–64 Privacy International, 168 privacy, 2, 43, 44, 46, 47, 104–19 private blockchains, 229, 231 Prohibition (1920–33), 102 promises, 50, 52, 58–9, 61, 70–72, 205–6, 259–60 casino chips, 68–9 deposits as, 69 digital money, 70–72 giant parable, 52–6, 63–4, 188 loans, 70–71, 107, 159 mutual credit systems, 259–60 Promontory Financial Group, 38 Protestantism, 212, 255 psilocybin, 226 psychometric testing, 169 pub quizzes, 91 Pucallpa, Peru, 130, 176, 249 Puerto Rico, 234 Quakers, 135 Quechuan people, 129 Quorum, 232 R3, 233 RAND Corporation, 105 re-localisation, 259 re-skinning, 16, 135–51, 171, 175 Red Crescent, 131 refugees, 131–2 Reinventing Money conference (2016), 31 remittances, 105, 116 Revolut, 140, 142 right-wing politics, 7, 14, 184, 191–3, 211–12, 215, 225–6, 261 rippling credit, 260 risk-adjusted profit, 94 Robert Koch Institute, 34 robotics, 11 Rogoff, Kenneth, 47, 92–3 rolling blackouts, 247 Roman Empire (27 BCE–395 CE), 55–6 Romeo and Juliet (Shakespeare), 29, 30, 32 Rowe, Paulette, 38 Royal Bank of Canada, 158 Royal Bank of Scotland, 62 Russia, 6, 42, 48, 140, 227 Samsung, 11 San Francisco, California, 35, 46, 119, 133, 179, 247 Sān people, 4 Santander, 38 Sardex system, 259 Satoshi’s Vision Conference, 215 Save the Children, 131 savers, 25 Scott, James, 228 seasteading, 156, 216 secondary system, 50, 63–4 self-service, 145–6 SEPA, 80 September 11 attacks (2001), 111 Serbia, 7 sex workers, 96 Shakespeare, William, 29 Shanghai, China, 18, 115, 248 Shazam, 180 Sherlock Holmes series (Doyle), 114, 162, 165, 166 Shiba Inu, 13 Shipibo-Conibo people, 130 Sikoba, 260 Silicon Valley, 7, 9, 139–41, 148, 153, 180, 221 Libra, 237 Singularity, 154–6, 252–3 Silk Road, 227, 229 Singapore, 11, 18, 168, 248 Singularity, 153–6, 226, 252, 252–3 Singularity University, 153–6, 252–3 six degrees of separation theory, 260 skyscrapers, 17–20, 27, 253 slow-boiling frogs, 104 smart cities, 11, 180 smart contracts, 220–24, 258 smart homes, 180 smartphones, 4, 28 financial inclusion and, 95 posture and, 49 Smith, Adam, 251 smoking, 181 Snow Crash (Stephenson), 10 social class, 91–9, 113, 128, 129, 155, 167 Somalia, 116, 179 South Africa, 3–4, 11, 28, 55, 62, 128, 175–6 apartheid, 95 hut tax, 55 National Arts Festival, 144 rolling blackouts, 247 syncretism in, 175–6 South Sudan, 105 Spiegel, Der, 112 Spotify, 166 spread-betting companies, 26 stablecoins, 233–41, 245–6, 255 Standard Bank, 95, 144 states, 42–5, 50–64, 176–85, 215 anti-statism, 42, 184, 215–16 base money, 69 centralisation of power, 15, 180–83 cryptocurrency and, 215 data surveillance, 110–12, 114–15, 155, 168 digital currencies, 242–5 expansion and contraction, 57–8 giant parable, 52–6, 63–4 markets and, 176–80 money issuance, 58–9 primary system, 50, 51, 63 Stockholm syndrome, 121, 131 sub-currencies, 72–3 sub-prime mortgages, 26–7, 94 subsidiary companies, 24, 26–7 Sufism, 91 suits, 124 Sunset Boulevard, Los Angeles, 101 Super Bowl, 8, 261 super-system, 3 supply, 29 surveillance, 2, 7, 8, 10, 15, 33, 39, 42, 72, 104–19, 153–72, 180, 250 artificial intelligence and, 153–72 banking sector and, 108–9 Big Brother, 113–15 CBDCs and, 244, 245 panopticon effect, 118–19, 172 payments censorship, 116–18 predictive systems, 105 states and, 110–12, 114–15, 168 Suspicious Activity Reports (SARs), 111 Sweden, 35, 43, 48, 84, 121 Sweetgreen, 91, 93 SWIFT, 32, 75–6, 80, 108, 112 Switzerland, 35, 108 Symbiosis Gathering, 101 syncing, 195–7, 200–202, 231 syncretism, 175–6 systems failures, 32, 34, 48 Szabo, Nick, 220 Taiwan, 234, 235 Tala, 169 taxation, 55, 57, 110 evasion, 42, 43, 45, 46 TechCrunch Disrupt, 130 Tencent, 2, 7, 114, 178 terrorism, 42, 48, 112, 127 Tether, 234–5, 241 Thaler, Richard, 93 Thatcher, Margaret, 193 Thiel, Peter, 155, 226 thin-file clients, 169 timelines, 197–200 Times of India, 44 tobacco, 181 Tokyo, Japan, 18, 215, 248 Tracfin, 112 transfers, 74–8 transhumanism, 180 Transport for London, 11, 37–8, 86, 87 Transylvania, 65 Trustlines, 260 Twitter, 167, 198 Uber, 2, 149, 177, 179, 237 Uganda, 168 unbanked, 35, 94, 181, 238 underdog, support for, 106 Unilever, 99, 131 United Kingdom American Revolutionary War (1775–83), 60 banking oligopoly, 230 Canary Wharf, 17–18, 20, 41, 62, 211 cash use in, 249 City of London, 6, 135 colonialism, 55, 97, 175–6, 178, 239 digital money system in, 72 GCHQ, 112 HMRC, 110 Premier League, 231 Royal Mint, 60 Somali diaspora, 116, 179 Taylor Review (2016–17), 110 Transport for London, 11, 37–8, 86, 87 United Nations, 14 blockchain research, 222 Capital Development Fund, 37 World Food Programme, 132 United States cash use in, 41, 46, 133 CBDCs and, 244–5, 254 Central Intelligence Agency (CIA), 155 China, relations with, 74–5, 245, 255 data surveillance, 111–12, 155 dollar system, 80, 182, 210, 233–6, 239, 240 Federal Bureau of Investigation (FBI), 111, 155 Federal Reserve, 32, 35, 36, 234 Financial Crimes Enforcement Network, 111 hurricanes in, 36 leviathan complex, 178 marijuana industry, 101–3 NASA, 153 National Security Agency (NSA), 112, 155 Occupy movement (2011–12), 211, 215 PATRIOT Act (2001), 111, 179 Prohibition (1920–33), 102 Revolutionary War (1775–83), 60 Senate, 105–6 September 11 attacks (2001), 111 Singularity University, 153–6 Super Bowl, 8, 261 Wall Street, 6, 178–9 Uruguay, 42 USAID, 45, 127, 178, 179, 245 vending machines, 31–2, 220 Venmo, 79, 243 Ver, Roger, 212, 214, 215 Vienna, Austria, 7 virtual reality, 10 Visa, 15, 30, 31, 37, 39, 40, 41, 44, 77, 80, 127, 174, 255 automatic payments, 149 data, 108, 109, 111, 112 plug-ins, 142 USAID and, 128, 178, 245 Wikileaks blockade, 116 VisaNet, 77 Wall Street, New York City, 6, 178–9 Occupy movement (2011–12), 211, 215 Wall Street (1987 film), 8 Wall Street Journal, 133 Warner, Malcolm, 106 WarOnCash, 37 Weber, Max, 179 WeChat, 79, 109, 114–15, 150 welfare, 43, 113, 118 Wells Fargo, 109, 234, 235 WhatsApp, 75, 198, 237–8, 244, 255 Wikileaks, 116, 183 Wilson, Cody, 216 Winton Motor Carriage Company, 87, 90 Wired, 12 World Economic Forum, 11 World Food Programme, 132 World Health Organisation (WHO), 34 World of Warcraft (2004 game), 234 Xhosa people, 175–6 YouTube, 163, 166, 167, 170 Zambia, 131 Zimbabwe, 11, 239–41, 245 Zuckerberg, Mark, 241 About the Author BRETT SCOTT is an economic anthropologist, financial activist, and former broker.

The Capitalist Manifesto
by Johan Norberg
Published 14 Jun 2023

The economist Weiying Zhang says the reform process was about ‘becoming good at using spontaneous forces and turning spontaneous forces into conscious policy.’ The process was not planned, controlled or even foreseen. It was, Weiying writes in an explicit reference to Adam Smith, as if it was controlled by an ‘invisible hand’.11 Everything that took China out of poverty happened outside the five-year plans. By the mid-1990s, the last four five-year plans had been abandoned before they reached halfway, and the plans thereafter were more about vague objectives than governance and commands. ‘How much of that success can be attributed to industrial policy and planning?’

…

Nikolai Shmelev & Vladimir Popov, The Turning Point: Revitalizing the Soviet Economy, Tauris, 1990, p.128f. 19. Apparently, Jevon’s son complained to Keynes that the children still had failed to use up their father’s paper reserves. Milanović 2019, p.256. 20. Karl Marx, Capital, Chicago: Charles H. Kerr and Co., 1909, vol.III, pt I, chap.5. See also Pierre Desrochers, ‘Did the invisible hand need a regulatory glove to develop a green thumb? Some historical perspective on market incentives, win-win innovations and the Porter hypothesis’, Environmental and Resource Economics, vol.41, February 2008. 21. For a discussion of how free market liberalism can and should be combined with environmental regulations, see Mattias Svensson, Miljöpolitik för moderater, Fores, 2015. 22.

More Than You Know: Finding Financial Wisdom in Unconventional Places (Updated and Expanded)
by Michael J. Mauboussin
Published 1 Jan 2006

From the failure of humans to optimize in complex tasks, one need not conclude that the equilibria derived from the competitive model are descriptively irrelevant. We show that even in complex economic systems, such equilibria can be attained under a range of surprisingly weak assumptions about agent behavior. —Antoni Bosch-Domènech and Shyam Sunder, “Tracking the Invisible Hand” How could economics not be behavioral? If it isn’t behavioral, what the hell is it? —Charlie Munger, Psychology of Misjudgment Sorry Syllogism Classical economic theory assumes that all people have the same preferences, perfect knowledge of all alternatives, and an understanding of the consequences of their decisions.

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“The Mutual Fund Industry Sixty Years Later: For Better or Worse?” Financial Analysts Journal 61, no. 1 (January-February 2005): 15-24. Bonabeau, Eric, Marco Dorigo, and Guy Theraulaz. Swarm Intelligence: From Natural to Artificial Systems. New York: Oxford University Press, 1999. Bosch-Domènech, Antoni, and Shyam Sunder. “Tracking the Invisible Hand: Convergence of Double Auctions to Competitive Equilibrium.” Computational Economics 16, no. 3 (December 2000): 257-84. Brandenburger, Adam M., and Barry J. Nalebuff. Co-opetition. New York: Currency, 1996 Britton, B.C., ed. Executive Control Processes. Hillsdale, N.J.: Lawrence Erlbaum Associates, 1987.

The Corona Crash: How the Pandemic Will Change Capitalism
by Grace Blakeley
Published 14 Oct 2020

These decisions are not being based on rational calculation – no consideration is being made, for example, of the environmental sustainability, tax practices or employment practices of the companies in question – but on the demands of various vested interests. As capitalism has become more centralised, the defining justification for its existence – that competition between firms promotes the most efficient use of society’s scarce resources – has ceased to apply. Adam Smith’s ‘invisible hand’ has been replaced by the iron fist of the modern monopoly, supported by the capitalist state, which has succeeded in extracting huge amounts of value from workers all over the world. When markets are dominated by a few large firms, and when state action is the only thing that stands between a firm and bankruptcy, it is hard to argue that resource allocation continues to be governed by free market competition.

Civilization: The West and the Rest
by Niall Ferguson
Published 28 Feb 2011

.* Yet perhaps the greatest achievement of the era was Smith’s analysis of the interlocking institutions of civil society (The Theory of Moral Sentiments) and the market economy (The Wealth of Nations). Significantly, by comparison with much else that was written in the period, both works were firmly rooted in observation of the Scottish bourgeois world Smith inhabited all his life. But where Smith’s ‘Invisible Hand’ of the market manifestly had to be embedded in a web of customary practice and mutual trust, the more radical Francophone philosophes sought to challenge not just established religious institutions but also established political institutions. The Swiss Jean-Jacques Rousseau’s Social Contract (1762) cast doubt on the legitimacy of any political system not based on ‘the general will’.

…

A wall of lead and iron suddenly hurled itself upon the attackers and the entanglements just in front of our trenches. A deafening hammering and clattering, cracking and pounding, rattling and crackling, beat everything to earth in ear-splitting, nerve-racking clamor. Our machine guns had flanked the blacks! Like an invisible hand they swept over the men and hurled them to earth, mangling and tearing them to pieces! Singly, in files, in rows and heaps, the blacks fell. Next to each other, behind each other, on top of each other.100 Eleven days before the battle, the Germans had in fact obtained detailed plans of the attack from a captured French NCO.

…

It can be seen not just in forest fires but also in earthquakes and epidemics. Only the steepness of the line varies.11 The political and economic structures made by humans share many of the features of complex systems. Indeed, heterodox economists such as W. Brian Arthur have been arguing along these lines for decades, going far beyond Adam Smith’s notion of an ‘Invisible Hand’, seeming to guide multiple profit-maximizing individuals, or Friedrich von Hayek’s later critique of economic planning and demand management.12 To Arthur, a complex economy is characterized by the interaction of dispersed agents, a lack of any central control, multiple levels of organization, continual adaptation, incessant creation of new market niches and no general equilibrium.

Wall Street: How It Works And for Whom
by Doug Henwood
Published 30 Aug 1998

In a speech reprinted in the Wall Street Journal, Harry Markowitz (1991), one of the creators of modern portfolio theory and CAPM, predictably summoned Adam Smith to defend program trading, Salomon Brothers' mortgage-backed bond depart- WALL STREET merit, and junk bond finance: "My own view is that the invisible hand could work its magic through mere humans is an essential part of Adam Smith's insight. Not many thousands of years ago, men like this would have clubbed each other over hunting rights. A few hundreds of years ago they would have hacked each other with axes and swords. Now they yelled at trainees while they brought together the supply and demand of [sic] home mortgages on a world-wide scale." Through mere humans? Smith, a man of his time, saw the invisible hand as attached to God's invisible arm; are we to believe that Milken & Co. were divine agents?

…

The point of this little review is not just to embarrass official wisdom, though certainly that is always fun, but to undermine confidence in the entire enterprise of conventional mathematized economics. And few sub-fields are as math-dense as finance. A lot of neat theories grew up in the 1950s, 1960s, and 1970s, only to be challenged by some neater theories in the 1980s and 1990s, but the entire project of clever, influential, and largely empty theorizing about capital markets and the invisible hand has yet to be severely questioned. Even the extensive empirical work by a number of financial economists, often based on thousands, even millions, of data points, fails to provide any significant enlightenment, because it asks such self-contained, even puerile, questions."* As Leontief argued — in the presidential address to the AEA given 20 years before Debreu's — that self-contained quality is a significant reason for the failings of econometric analysis.

Behemoth: A History of the Factory and the Making of the Modern World
by Joshua B. Freeman
Published 27 Feb 2018

On war-related industrial development in the Southwest, see Elizabeth Tandy Shermer, Sunbelt Capitalism: Phoenix and the Transformation of American Politics (Philadelphia: University of Pennsylvania Press, 2013). 15.Metzgar, “The 1945–1946 Strike Wave”; Freeman, American Empire, 39–41; Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009), 93–97; Elizabeth A. Fones-Wolf, Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945–60 (Urbana: University of Illinois Press, 1994), 138–39. 16.Kim Phillips-Fein, “Top-Down Revolution: Businessmen, Intellectuals and Politicians Against the New Deal, 1945–1964,” Ph.D. dissertation, Columbia University, 2004, 220; Joshua B.

…

Freeman, Working-Class New York: Life and Labor since World War II (New York: New Press, 2000), 60–71; Tami J. Friedman, “Communities in Competition: Capital migration and plant relocation in the United States carpet industry, 1929–1975,” Ph.D. dissertation, Columbia University, 2001, 22, 70–76, 201–04. 17.Schatz, Electrical Workers, 170–75; Phillips-Fein, Invisible Hands, 97–114. 18.Schatz, Electrical Workers, 233–34. 19.Schatz, Electrical Workers, 234–36; Freeman, American Empire, 303–06; Thomas J. Sugrue, The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit (Princeton, NJ: Princeton University Press, 1996), 128–29; James C. Cobb, The Selling of the South: The Southern Crusade for Industrial Development, 1936–1980 (Baton Rouge: Louisiana State University Press, 1982); Friedman, “Communities in Competition,” 111–66. 20.See, for example, Martin Beckman, Location Theory (New York: Random House, 1968); Gerald J.

…

Bramhall, Locational Analysis for Manufacturing: A Selection of Readings (Cambridge, MA: MIT Press, 1969); and Paul Krugman, Geography and Trade (Leuven, Belgium: Leuven University Press and Cambridge, MA: MIT Press, 1989), esp. 62–63 for discussion of Akron. 21.Counter to the common management view, the productivity of unionized workers often exceeded that of nonunion workers. Roger W. Schmenner, Making Business Location Decisions (Englewood Cliffs, NJ: Prentice-Hall, 1982), vii, 10–11, 124–26, 154–57, 239; Phillips-Fein, Invisible Hands, 104; Lawrence Mishel and Paula B. Voos, eds., Unions and Economic Competitiveness (New York: M.E. Sharpe, 1992). 22.Kimberly Phillips-Fein, “American Counterrevolutionary: Lemuel Ricketts Boulware and General Electric, 1950–1960,” in Lichtenstein, ed., American Capitalism, 266–67; John Barnard, American Vanguard: The United Auto Workers during the Reuther Years, 1935–1970 (Detroit, MI: Wayne State University Press, 2004), 483; Cowie, Capital Moves, 53–58.

Money: 5,000 Years of Debt and Power
by Michel Aglietta
Published 23 Oct 2018

How can a society that is supposedly based on the sovereignty of the individual transform into its opposite – into a dictatorship of the market? The answer comes by way of a hypothesis that transforms supposedly decentralised exchanges into their opposite: a hypercentralisation of exchange. This hypercentralisation operates under the aegis of a metaphorical entity that Walras calls ‘the auctioneer’ and Adam Smith ‘the invisible hand of the Market’. This hypothesis holds that no market actor has any influence on prices. Everyone buys at the prices that the auctioneer announces. And yet this latter is nothing but a metaphor! Why do market actors take prices to be fixed? It would make no sense to reply that they are too small to influence prices.

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Table 1.1 Alternative views of the genesis of money Theory of perfect competition General equilibrium model Evolutionary theory Models of prospection Institutional theory Mimetic model How is exchange conceptualised? – Individual subjects which are autonomous and endowed with their own utilities – Goods’ characteristics are common knowledge – Centralised exchanges – Coordination by the invisible hand – Same hypotheses on utility as in perfect competition – Decentralised exchanges – Coordination by the search for a means of exchange – Utilities depend on social relations – Exchanges are reciprocal debts with a view to the acquisition of the society’s resources – A search for liquidity regulating debts How is money introduced?

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In so doing, it singularly reduces the traditional representation – from Smith onwards – of the market division of economic activities. This hypothesis is indispensable if we are to wish away any reciprocal dependency among market participants. A good available in the future is considered in the same way as any other good, enabling the hypothesis of fixed prices – a hypothesis indispensable to coordination by the invisible hand of the market – can be extended into the future. The anticipated price of a good available at a future date is called the fundamental value of the real future asset that produces this good. 25 Opposed to this are the transaction costs (information in order to understand the possible counterparties to the goods which each party wants to exchange, transport and insurance, verification, etc.).

Let them eat junk: how capitalism creates hunger and obesity
by Robert Albritton
Published 31 Mar 2009

The difference between the input costs and selling price of the produced commodity is the capitalist’s profit. Competition insures that capitalists always strive to maximize their profits, such that capital will always gravitate from the less profitable to the more profitable commodities. The use of the metaphor “invisible hand” in connection with capitalist markets implies that capitalism has its own inner logic. In other words, it has a life of its own that is not concerned with human flourishing, democracy or social justice, but instead is concerned with profits, which may or may not advance ethical norms as spin-offs.

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Coli 115 ecology 6–7, 24, 148, 161, 219 see also environment Ecuador 138 election campaigns (US) 185–6 El Salvador 159 empty calories 3, 5, 94 see also junk food enclosures of commons 12, 21 England 31, 44, 54 environment 152, 146–65 environmental costs 61, 148, 183 environmental debt 147 environmental degradation 61, 147, 151 environmental regulations 45 see also ecology Environmental Protection Agency (EPA) 137, 151, 159, 192 equality x, 197 see also inequality erosion 157 ethanol 5, 15, 23, 107, 135, 147, 150–2, 154, 189, 212 Everglades 45, 100–1, 171, 216 exercise 104 export-oriented agriculture 125, 134–6, 141 externalities xii, 28, 208 see also social costs extinction 156 extreme weather 35, 153, 156, 158 F Factory Acts 31 factory farms 19, 29, 36, 150, 157 see also agriculture fair trade 204 254 INDEX family farms 8, 18, 19, 25, 42, 45, 49, 59, 69, 82, 83, 120, 123, 128–30, 138, 140–1, 144, 203 see also agriculture farm income 128–30 fashion 69 fast food 32, 92, 97–8, 109, 120 fast food chains 133, 120–2 feedlots 103 see also confined animal feeding operation (CAFO) field workers 126–8 Fiji Islands 176 fish 160 flourishing 6 food 10 food additives 63, 113 food aid 108 food crisis ix, x, 89 food disparagement laws 189 food inspection 112, 189 food prices ix, 5, 23, 41, 88, 108, 129, 135, 141–2, 150, 152, 187, 204 see also hunger, starvation, structural adjustment policies, subsidies food provisioning 164 food pyramid 188 food regime/system 6 food safety 189 food security 153 see also food prices, hunger, starvation, structural adjustment policies, subsidies food sovereignty 204 Food and Agriculture Organization (FAO) ix, 89, 97, 153, 188 forced labour 124, 127 see also slavery fossil fuel 148, 151, 155 see also coal, petroleum Framework Convention on Tobacco Control 187 Frank Statement 191–2 freedom 47, 189 see also rights French revolution 2 G General Marshall 182 General Pershing 182 genetically modified organisms (GMOs) 118–19, 147, 161–3, 193 Bt crops 162 Roundup ready crops 162 global warming xi, 4, 5, 35, 147, 150, 154–6, 159, 179, 218 globalization 43–6, 71 glyposate 118–19 see also Roundup golden age 13, 52, 53 Gore, Al 100 government 183 government regulation 168, 193, 206 grain crops 155 green house gas emissions 142, 146, 148, 151, 155, 157 Greenland ice sheet 154 green revolution 58, 61, 115, 118, 124, 135, 149 green tobacco sickness 220 group of eight xii guaranteed annual income 35, 205, 210 guest workers 127, 140 H Haber–Bosch process 57 Haiti 128 Hammer, Armand 63 health 6, 16, 81, 92–4, 144, 174, 190–1, 210 high blood pressure 109 high fructose corn syrup (HFCS) 96, 101 historical analysis 13 historical directionality 12 homogenization 24, 33–7, 66 see also monoculture, species loss human flourishing 213 INDEX human rights 132 human right to food 197 see also rights Human Rights Watch 131, 138–9 hunger 4, 80, 89, 91, 105–8, 158, 204 see also starvation I identity 6, 10 island identity 46–7 see also subjectivity, individualism, possessive individualism ideology 74–5, 168, 182, 196 see also capitalist ideology illegal drugs 141 immigrant labour 40, 124, 126 see also guest workers, undocumented workers India 142 Indian Ocean 158 indifference to use-value 28, 29, 77 see also quality versus quantity individualism 26, 73–4, 166, 168, 170, 179 Indonesia 142, 155 industrial reserve army 39 inelasticity 24 inequality 8, 72, 134, 152, 180, 184, 194, 213 see also equality, poverty, poverty line, wages inner logic 12 see also abstract theory, deep structure/cause, pure capitalism intensification 30, 131 see also speed international cooperation 204, 207, 211 see also movements International Monetary Fund (IMF) 134 invisible hand 11 irrationality x, xi, 6, 29, 195, 202, 207 see also contradiction, rationality irrigation 157 255 Ivory Coast 138, 202 J jobs 126 job security 125–6 job turnover 131, 133 Joe Camel 171 Johnson, President L. B. 57, 217 judicial system 85–7, 169–70, 183–4, 190 junk food 2, 3, 5–6, 92, 123, 172, 174, 176–7, 191 see also empty calories junk capitalism 5–6 K King, David 194 knowledge 8 Kyoto Accord 154 L labelling 162, 189, 236 labour 124 labour-intensive 140, 143–4, 220 land 21, 156–8 degradation 156–7 landless workers movement (MST) 203 Las Vegas 159 legal subjectivity 46, 47, 207 levels of analysis 10–14, 202 liberal-democracy 9, 14, 182–97 see also democracy liberalism 183 livestock 150, 155, 224 living conditions 142 long run 22–3 M Malawi 140 Malaysia 142 Mali 129 malnutrition x, 90, 106–7, 212 Marie Antoinette 2 256 INDEX market failure 15–16 marketing 86, 140, 168, 171–2, 177, 220 marketing to children 69, 70, 140, 165, 166, 172–7 markets 14–15, 19, 43, 144, 208 see also democratizing markets Marlboro Man 169, 171 Marx, Karl 9, 10, 11, 12, 18, 19, 20, 21, 22, 28, 30, 31, 39, 43, 46, 76, 81 massacre x meat production 149, 155 meatification 101, 104 mechanization 64, 128, 202 media 45, 85, 169, 172–77, 183–6, 195–7 medicalization 90, 91 mental illness 173, 177 merger movement 44 Mexico 136 mid-range theory 12–13, 51–78, 202, 216 see also levels of analysis military Keynesianism 75 military-industrial complex 75 miscarriages 151 monoculture 34, 66, 118, 151, 161, 203 see also homogenization, species diversity monopolistic trading companies 44–5 Monsanto 162, 189 movements xii, 8, 33, 203 see also cooperation, international cooperation N National Cancer Institute 62 nation-state xiii see also government, state, state intervention natural disasters 204 nemagon 137, 190, 193 Nestle, Marion 115, 149 Nicaragua 138 nitrates 151 nitrous oxide (N2O) 151, 155 Nixon, President Richard 63, 146 non-governmental organization (NGO) 211 North American Free Trade Agreement (NAFTA) 107, 136 nutrients 4, 115–17 nutrition 6, 80–122, 195 O obesity 4, 41, 90, 91, 93, 97–9, 104, 109, 172–3, 180, 188, 190, 221 obesity epidemic 32, 43–6 89, 93 objectification 47–9 see also subjectification oceans 154, 159–60 ocean levels 154 oestrogen 109–10, 225 Ogallala aquifer 157 oligopoly 43–6, 70–2 organic farming 144, 162, 205, 212 organic food 167 Organization of Petroleum Exporting Countries (OPEC) 57 P palm oil 142–3, 151 palm oil workers 142–3 peak oil 142–54 per capita emissions 155 perfect storm ix pesticides 58, 86, 110, 127–8, 130, 137–40, 142–4, 161, 179, 195, 206 petro-chemicals 147, 179 see also pesticides, petroleum petro-dollars 134 petro-food 58, 149, 150, 195 petroleum x, 57, 147, 149, 217 pharmaceutical industry 153 phase of consumerism 13, 51–77, 217 phase of imperialism 54 phase of liberalism 54 phase of mercantilism 54 INDEX Pimentel, David 5, 149 plankton 159 planning 14 policy 8 politics of fear xiii pollution 14, 146–7, 157, 159, 217 portion size 104, 121 possessive individualism 26, 46, 72, 166, 184 see also atomism, individualism, islandization, subjectification pouring rights 175 poverty 107, 128, 134, 141, 210, 213 poverty line 126, 127, 130, 227 power 21, 167, 175, 183, 185 see also class, corporations, state preference schedules 166–7 private property 21, 46–7, 207 privatize profits 62, 84, 180, 206, 208 processed food 92, 120, 149 profit 6, 9, 11, 15, 20, 22–3, 26–33, 62–3, 77, 82–4, 86–7, 92, 108, 112, 115, 121, 127, 129–33, 139, 142–3, 147–8, 153, 159, 162–3, 169, 171–2, 179–80, 189–90, 192–3, 197, 201–2, 206, 224 Proctor, Robert 192 public health 190 public sector 144, 180, 185, 191–2, 194, 204, 206 public transportation 179, 209, 217 pulp and paper industry 157 pure capitalism 23, 26, 38, 39, 42, 43, 43, 44, 48, 49, 50 see also abstract theory, deep structure, inner logic putting-out system 25, 54 Q quality versus quantity 20, 22, 27, 28, 32–3, 35, 37, 47 see also indifference to use-value R race 99 257 racism 66–7, 111, 124 rainforest 157, 179 Randall, Peggy 96 rationality xii, 19, 49, 86–7, 126, 164 capitalist rationality 9, 11, 15, 18, 19, 20, 146, 166, 169, 192 Reagan, President Ronald 62, 74, 140, 171–2 redistribution of wealth 123, 144, 204, 209 see also distributive justice, equality, inequality, progressive taxation reductionism 9 refrigeration 149 reproduction 109–110 rice 108 right to food 122, 226 rights x, 126, 132 formal rights 122 individual rights x social rights x Roundup 118–19, 195 see also glyposate rule of law 183 S salmonella 114 salt 108–9 schools 123, 172, 175–6 science 85, 90, 169, 183, 190–7 seeds 66, 83 see also genetically modified organisms, monoculture, species diversity self-regulating markets 48, 50 sense of community 49, 73 shopping malls 65 silent tsunami ix, xiii slaughterhouse workers 131–2 slavery 49, 127–8, 138–9, 144, 179, 227, 229 smoker’s bill of rights 170, 196 snacks 41 social costs xii, 8–9 14–15, 24, 28, 32, 258 INDEX 57, 64, 76, 83, 87, 102–4, 111, 183, 186, 200, 206–8 social injustice 144, 152, 164 social needs 210 social responsibility 26, 191, 197, 205 socialism 52–3, 62, 65, 74–5 socialization of costs 14, 62, 180, 206, 208 soft drinks/soda pop 92, 96, 98, 100, 174, 222 soil 18, 117–18, 215 South Sea Bubble 216 soy 109, 142, 151 soy formula 109 space 33–7, 64–6 see also homogenization, monoculture species diversity 34, 160–1 see also homogenization, monoculture speed 24, 30–3 53, 61–64, 72, 126, 131–2, 147, 178, 193, 218 see also intensification, space, time Sri Lanka 142 starvation ix, 88, 90, 105, 108, 153 see also hunger state see warfare state, welfare state state intervention 12, 15, 20, 38, 75, 75, 77, 186 see also regulation status symbol 73, 166 sterility 137–8, 193 Stern Report 16, 157 stewardship 23, 36, 45 strict settlement 215 structural adjustment policies (SAPs) 134, 141, 203, 205 subjectivity 46–9, 72–6 subsidies 15, 59, 69, 71, 75, 78, 86, 100–1, 107–8, 121, 124, 128–9, 131, 133, 135–6, 139, 141, 144, 150, 152, 154, 159, 171, 180, 187, 189, 204–6, 208–9, 236 suburbanization 65–6, 72 see also homogenization, space sugar 91, 95–6, 172, 177, 227 sugar industry 15, 45, 47, 97, 100, 127–8, 139, 151, 171, 188 suicide 129–30, 162, 228 Sumatra 155 supermarkets 119–20, 132–3 supply/demand 24, 37, 43, 48 Surgeon General (US) 170 surtax 208–9 sustainability 10, 16, 50, 164, 200, 201, 209, 210 T Tanzania 140 tax evasion 204–5, 207 taxation 194, 204–5, 220 Taylorism 30 tea workers 142 television 66, 69–70, 172–3, 217 Thatcher, Prime Minister Margaret 74 time 30–33, 61–4, 177, 215 see also intensification, speed tobacco industry 8, 60, 70, 84–7, 139–40, 143, 157, 168–71, 174, 182, 191, 217 tomatoes 34 toxic food environment 91, 173, 190, 226 toxic waste 156 toxicity 32, 61–2, 112–12, 127, 147, 167 toys 175 trade 152 deficit 171 trade unions 133, 215, 216 trans fat 102 transition 54 transparency 73, 207 transportation 149, 153 see also public transportation tree plantations 157 tropical commodities 14, 72, 141 tween strategy 173 see also marketing to children INDEX U underconsumption 25, 41–3, 68–71 underfunding of schools 175 undocumented workers 126–8, 132, 136 unemployment 227 uneven development 54 United Nations 107, 155, 160, 197, 211 United States Center for Disease Control (CDC) 112 government 3 food security 4 hegemony see American hegemony military 149 urban slums 107, 125, 136, 141 use-value 22, 28, 33 see also indifference to use-value, quality versus quantity V Valium 72 259 W water 108 wages 24–5, 37, 40–1, 67, 124–33, 137 warfare state 74, 76 war on cancer 63 welfare state 74–6 Winfrey, Oprah 189 women 6, 40, 72, 99, 107, 133 Wootan, M. 93 workers 7, 18, 21, 24, 28, 37–41, 124–45 food workers 125 working class 4, 80, 92–3 working conditions 67, 131–2 working day 31 World Bank 93 Z Ziegler, Jean 100 

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century
by Ryan Avent
Published 20 Sep 2016

As in baseball, it is easy for all the participants in the economy to convince themselves that their participation is what matters, that they are the authentic creators of value, that their effort is what ought to be rewarded most handsomely. And everyone has a point. But while we can rely on economics to do some of the work of sorting out who deserves what, we are kidding ourselves if we think the invisible hand can be entrusted to handle the whole job. Left alone, the invisible hand is simply the thudding fist of the powerful. It would be wonderful if things were otherwise, but they aren’t. Like most people, I often wonder if I am paid fairly. I like to think that I am very good at my job. But I am keenly aware of my bargaining power.

Ten Billion Tomorrows: How Science Fiction Technology Became Reality and Shapes the Future
by Brian Clegg
Published 8 Dec 2015

The researchers suggest the accuracy and speed provided mean that it would be possible to mentally control typing at a speed of around fifteen words per minute, if such a system were available to a human brain. The significance of this development is that where someone using the BrainGate approach would have to consciously control an invisible hand—fine to move a cursor, but very slow for an action like typing—this approach would make it possible to think about typing and to have the appropriate signals produced, rather than consciously moving a virtual finger from key to key. These experiments show very early steps toward being able to directly control robotic limbs from the brain.

…

Almost always in fiction, the ability for an individual to become invisible corrupts that individual—and the temptations that invisibility offers prove to be largely criminal. The invisible person is not inclined to perform acts of kindness and valor, or even to hide from enemies. Time after time, he or she will peek and pry where invisible hands should not reach, will steal or abuse others in misdemeanors from petty pinching, eventually pushing to sexual transgressions and murder. In early stories, the ability to become invisible was usually produced by something that was worn—a ring, a hat, or in the mode that made its way all the way through to Harry Potter (and that verbally, at least, features in Star Trek), a cloak.

The Loop: How Technology Is Creating a World Without Choices and How to Fight Back
by Jacob Ward
Published 25 Jan 2022

Between his two careers—one spent trying to understand how people become trapped in the most desperate circumstances, the other spent trying to help people find their way into a new financial life—Hernandez says he now understands that the grand circus of opportunity isn’t open to all Americans, that vast numbers of people have been handicapped by more than a century without the proper opportunity and investment, and that the “invisible hand” described by Adam Smith as equalizing the open market doesn’t exist. “If we could see the invisible hand,” he told me, “we’d see that it’s white.” As he explains it, when a neighborhood has been held in stasis for as long as Sacramento’s nonwhite neighborhoods have, it begins to look as if the conditions are somehow endemic. We as humans fall prey to the illusion that “bad” and “good” neighborhoods are a reflection of the moral standing and ongoing creditworthiness of their occupants, rather than a reflection of the discriminatory practices that created impossible conditions for them.

What Algorithms Want: Imagination in the Age of Computing
by Ed Finn
Published 10 Mar 2017

The “thing” that software has become is the cultural figure of the algorithm: instantiated metaphors for effective procedures. Software is like Bogost’s cathedral of computation, Chun argues, “a powerful metaphor for everything we believe is invisible yet generates visible effects, from genetics to the invisible hand of the market, from ideology to culture.”45 Like the crucifix or a bell-tower signaling Sunday mass, software is ubiquitous and mysterious even when it is obvious, manifesting in familiar forms that are only symbolic representations of the real work it does behind the scenes. The elegant formulation of software as a metaphor for metaphor, paired with Chun’s quotation of Weizenbaum—the MIT computer scientist who created an alarmingly successful algorithmic psychotherapist called ELIZA in the 1960s—draws together cybernetics and magic through the notion that computers themselves have become metaphors for the space of effective computability.

…

See also Siri; Star Trek computer Interface economy Airbnb and, 124 Amazon and, 124 arbitrage and, 123–131, 139–140, 145, 147 class and, 129–130 cloud warehouses and, 131–145 efficient access and, 127–128 faking sincerity and, 146–147 Google and, 124 individualism and, 126–127 intimacy and, 129 labor and, 123–145, 147 Mechanical Turk and, 135–145 moral machinery and, 144–149 Netflix and, 124 remobilization of capitalism and, 127 sharing economy and, 54, 123, 127–129, 145, 148 Uber and, 123–133, 145, 147 worker conditions and, 132–134, 139–140 work of algorithms and, 123–145 wrappers and, 129 Interface Effect, The (Galloway), 143–144 Interfaces abstraction and, 52, 54, 92, 96, 103, 108, 110–111 API, 7, 113 Bogost and, 49 clean, 8, 96, 110 community and, 52 conscious, 36 cultural processing and, 16 customized, 36 fetish and, 35 Google and, 66–67 imagination and, 189 layers of, 12, 52, 123, 126–131, 140–141, 144, 189 metaphor and, 25, 60 Ramsey and, 52 Siri and, 59–60, 63, 75, 77 Star Trek computer and, 67–68 transparency and, 189 Uber and, 54 visual abstractions and, 25 Intimacy algorithms and, 4, 11, 35, 54, 65, 74–78, 82–85, 97, 102, 107, 128–130, 172, 176, 185–189 Google and, 75–76 interface economy and, 129 meaning and, 75 Memex and, 186–189, 195 mining value and, 176–177 Samantha (Her) and, 77–85, 154, 181 iTunes, 161 Jackson, Samuel L., 59 Jenkins, Henry, 102 Johansson, Scarlett, 78 Jonze, Spike, 11, 77–79, 84–85 Journalists, 3 automatization and, 38 Bitcoin and, 12 cultural values and, 171–172 Facebook and, 116, 170, 172 gamification and, 116 Gawker Media and, 170–175, 210n35 Google and, 75 Siri and, 58 Thiel and, 170–171 transactional algorithms and, 151 “Trending Topics” widget and, 180 Uber and, 129 Kael, Pauline, 175 Kasparov, Gary, 135–138 Kindle, 195 Kirschenbaum, Matthew, 47–48 Kiva Systems, 134 Kline, Ronald, 31 KnowledgeGraph, 71–73, 75, 94 Knuth, Donald, 17–18 Kurzweil, Ray, 184 Labor, 7, 18, 46, 122 Adam Smith on, 146 affective, 145–148 arbitrage and, 97, 112, 123–145 Bitcoin and, 164, 178 capitalism and, 165 cloud warehouses and, 131–445 culture machines and, 93, 119 deep structures of, 123 faking sincerity and, 146–147 feedback systems and, 145–148 HITs and, 135, 139, 141, 145 identity and, 146–147 intellectual, 12 interface economy and, 123–145 ludic, 120 mandatory smiles and, 146 Marx on, 165 Mechanical Turk and, 135–145 pickers and, 132–134 Taylorism and, 93 worker conditions and, 8, 132–134, 139–140 Lambda calculus, 24 Langlois, Ganaele, 111 Language abstraction and, 2, 24 advertisements and, 178 algorithms and, 24–28, 33–41, 44, 51, 54–55 cognition and, 39 color words and, 4 culture machines and, 39–40 epistemological layers and, 4, 11, 148, 155, 157, 175, 177, 188 ethos of information and, 159 grammar and, 2, 16, 25, 38–41, 62–64, 110–112, 138, 178–179 imagination and, 38, 185, 196 incompleteness and, 24, 40 as intellectual technology, 4 intelligent assistants and, 11, 57, 62, 64–65, 77 machine learning and, 2, 112 many registers of, 1–2 mathematics and, 2, 55 meaning and, 1 metaphor and, 183–184 (see also Metaphor) natural language processing (NLP) and, 62–63 of new media, 112, 122 plasticity and, 38, 191 power of, 1–2, 4–5 procedural, 3–4, 6 reality and, 1 rhetoric and, 6, 16, 22, 30, 45, 89, 96, 101, 104, 110, 112, 123, 127, 136 Siri and, 57–65, 71–84 spoken, 2, 58, 60, 62–63, 67, 84, 185 symbolic, 2, 26, 38–41 tricks and, 3–4 Turing Machine and, 33, 41 universal, 5 vocabulary and, 2, 4, 25, 138, 160, 190 Wiener and, 28 Language of New Media, The (Manovich), 122 Lawsuits, 90, 171, 175 Leibniz, Gottfried Wilhelm, 25–27, 72 Lem, Stanislaw, 184 Levy, Steven, 3 Lewis, Michael, 12, 151, 153, 168 Leyden, Peter, 160 Library Computer Access/Retrieval System (LCARS), 67–68 Life magazine, 31 Literacy, 5, 39, 52, 75, 109, 129, 159, 177 LiveJournal, 209n20 Loebner Prize, 87, 203n50 Logic general substitutability and, 33 Gödel and, 24, 40 halting states and, 41–46 information theory and, 10, 27 invisibly exclusionary, 110 pragmatist approach and, 18–25, 42, 58, 62 process and, 41–46 proofs and, 15, 24–25, 41, 44 rationality and, 38, 40 symbolic, 2, 21, 24, 39, 41, 44, 54–55 “Long Boom, The” (Schwartz and Leyden), 160–161 Lyft, 123, 127–130, 145, 148 Machine learning artificial intelligence (AI) and, 2, 15, 28, 42, 62, 66, 71, 85, 90, 112, 181–186, 191 big data and, 90 computationalist approach and, 183 DeepMind and, 28, 66, 181–182 Google and, 66, 181–186, 191 imagination and, 181–186 language and, 2, 112 Netflix and, 182–183 neural networks and, 28, 31, 39, 182–183, 185 Siri and, 62, 182 (see also Siri) Turing Machine and, 182 (see also Turing Machine) Macy Conferences, 30, 199n42 Madrigal, Alexis, 92, 94–95 Magic agency and, 78 artificial intelligence and, 135–136 cached content and, 159 code as, 1–5, 8, 10, 16, 49–50, 196 computation as, 4, 8, 10, 46, 52, 59–60, 94, 96, 121, 161 constructed reality and, 39 curses and, 1 data cloud and, 131, 134 fantasy and, 121, 124, 126 government currency and, 172 hacker powers as, 3, 51 incantations and, 1, 3–5, 51, 196 invisible sides of system and, 178 machines and, 137–138, 188 Memex and, 188 metaphors for, 32–36 myths and, 1–2, 10, 16 ontology and, 62–65 ratings and, 130 rational language for, 25 shamans and, 1, 3, 5 Siri and, 59–60, 62–65 sourcery and, 3, 10, 17, 21, 33–34 symbolic, 105 Manjoo, Farhad, 75 Manovich, Lev, 112, 122 Market impacts advertisements and, 34 (see also Advertisements) arbitrage and, 152, 161 attention and, 119 automobiles and, 127 Bitcoin and, 163–180 crashes and, 151 cryptocurrency and, 160–180 digital identity and, 159 digital trading and, 152 eliminating vulnerability and, 161–162 encryption and, 153, 162–163 fungible space and, 54 gaming and, 119, 121 gaming the system and, 153 Google and, 66 high frequency trading (HFT) and, 151–158, 168–169, 177 hyperinflation and, 166 international trade and, 12 invisible hand and, 33 labor and, 8 (see also Labor) Mechanical Turk and, 135–145 NASDAQ and, 152 Netflix and, 87, 97, 107–110, 114–115 NYSE and, 152 parallel computing and, 139 pension funds and, 151, 168 Siri and, 59, 75–77 stock market and, 12, 15, 154 transaction fees and, 164–165 transparency and, 160–164, 168, 171, 177–178 virtuous action and, 146 Wall Street and, 16, 66, 109, 151, 153, 171, 185 Marx, Karl, 165 Master Algorithm, The (Domingos), 183 Materiality, 26, 47–49, 53, 133 Mathematics abstract symbolism, 2, 55 algebra, 17 Babylonian, 17 Berlinski and, 9, 181 calculus, 24, 26, 30, 34, 44–45, 98, 148, 186 complexity, 28 computationalist approach and, 23, 183, 185 Conway and, 29–30 culture machines and, 49–50 Descartes and, 26, 69, 75 effective computability and, 40 “extended mind” hypothesis and, 40 Fibonacci sequence, 17 Golden Ratio, 2 Hilbert and, 23 Hindu-Arabic numerals, 17 language and, 2, 55 Leibniz and, 25–26, 72 logic, 2, 10, 24 machine duplication and, 22 materiality and, 26 Moschovakis and, 17 Nakamoto and, 161–162 Netflix Prize and, 87–91 ontology and, 84 perceived reality and, 20 Post and, 9 Pragmatic Chaos and, 90 proofs, 15, 24–25, 41, 44 pure, 47 reality and, 34 Rendell and, 30 Shannon and, 27 Strogatz and, 44, 183 theory of computation and, 18 Turing and, 6–9, 23–30, 33, 39–43, 54, 73, 79–82, 87, 138, 142, 182, 186 Mathesis universalis, 25–26, 28, 72 Matrix, The (film), 3, 36, 109 Maturana, Humberto, 28–29 McClelland, Mac, 132–133 McCloud, Scott, 110, 154–155 McCulloch-Pitts Neuron, 28, 39 Meaning acceleration of epistemological change and, 188–189 algorithms and, 35–36, 38, 44–45, 50, 54–55 belonging and, 122 black boxes and, 7, 15–16, 47–48, 51, 55, 64, 72, 92–93, 96, 136, 138, 146–147, 153, 162, 169–171, 179 Chun on, 35 Cow Clicker and, 116, 118–119 cultural exchange and, 12, 111–112 data mining and, 175 decision-making and, 20, 28, 34, 37, 90 digital culture and, 3, 7, 18, 22, 43, 49, 66, 87, 156, 160, 191, 193–194 endless hunt for, 184 imagination and, 184 (see also Imagination) intimacy and, 75 language and, 1 Mechanical Turk and, 136–140 metaphor and, 183–184 (see also Metaphor) obfuscations and, 7, 55, 64 organization of, 8 PageRank and, 169 Siri and, 65 structures of, 89, 96 value and, 155 vs. information, 9, 9–10 Mechanical Turk Google and, 12, 135–145 history of original, 136–138 meaning and, 136–140 as metaphor, 143 von Kempelen and, 135 worker conditions and, 139–140 Mechanisms (Kirschenbaum), 47–48 Memex, 186–189, 195 Memory computation and, 18, 21, 37, 43–44, 51, 56, 58, 69, 75, 159–160, 176, 185–186, 191–193 culture and, 43 human, 37, 43–44 process and, 21 technical, 51, 192 understanding and, 37 Metaphor, 121 assumption of code and, 43 cathedral of computation and, 6–8, 27, 33, 49, 51 Church-Turing thesis and, 41–42 cloud, 131 for communication, 32–36 computational, 22 cultural, 50, 54 effective computability and, 34 human cognition and, 39 imagination and, 183–184, 189 interfaces and, 25, 60 Mechanical Turk and, 143 Netflix as, 96, 104 obelisk and, 155 reality and, 10, 50 Samantha (Her) and, 84–85 Microsoft, 97, 144, 152 Miners (Bitcoin), 165, 167–168, 171–172, 175–179 Money abstraction and, 153, 159, 161, 165–167, 171–175 algorithmic trading and, 12, 20, 99, 155 arbitrage and, 151–152, 155–163, 169–171, 175–179 Bitcoin and, 160–180 as collective symbol, 165–166 ontology and, 156–159, 178–179 Moore’s Law, 43 Morowitz, Harold, 23 Moschovakis, Yiannis, 17 Moth machine (Wiener), 31–32, 34 Musk, Elon, 191 My Mother Was a Computer (Hayles), 21, 93 Myths ancient, 28 Campbell on, 94 code and, 7–8, 16, 44 cultural space and, 5 culture machine and, 55 fantasy and, 78 government currency and, 172 human-computer interaction and, 36, 51 magic and, 1–2, 10, 16 material reality and, 47 ontology and, 26 origin, 68 personalization and, 106–107 power of language and, 6, 44, 196 Sumerian, 3, 5, 16 unitary simplicity and, 49 Nakamoto, Satoshi, 161–162, 165–167 Nam-shubs, 1, 3–6, 37–40, 56, 135 Nardi, Bonnie, 121 NASDAQ, 152 Natural-Born Cyborgs (Clark), 37 Natural language processing (NLP), 62–63 Natural selection, 44 Negri, Antonio, 145 Netflix, 161 abstraction of aesthetics and, 87–112, 205n36 abundant choices and, 176 arbitrage and, 94, 97, 109–112, 124 art of personalization and, 97–103 Bogost on, 92–95 business model of, 87–88 Cinematch and, 88–90, 95 commissioned shows of, 97–98 computationalist approach and, 90, 104 consumer desire and, 93–96 disruptive technologies and, 124 effective computability and, 93 Facebook and, 91, 110 fan making and, 100–101 FCC and, 90 genre categories of, 94 ghost in the machine and, 55, 95, 183 gutter problem and, 110 Hastings and, 97–98 House of Cards and, 11, 54, 92, 98–112, 192 influence of, 87 interface economy and, 124 Leibniz and, 26 machine learning and, 182–183 market issues and, 87, 97, 107–110, 114–115 metaphor and, 96, 104 ontology and, 92, 94, 96 original content by, 97–98 parsing data and, 182 personalization and, 97–103, 109 Pragmatic Chaos and, 89–90 predictor ensemble and, 89–90 quantum mechanics and, 91–94, 96, 99, 112 recommendation algorithm competition of, 87–91 rejection of big-data approach and, 11 serendipitous glitches and, 55 Spoiler Foiler and, 101–102, 108 streaming and, 90 system behavior and, 16 taggers and, 54, 88, 92–93, 96, 99 techno-utopian rhetoric and, 16 Neural networks, 28, 31, 39, 182–183, 185 New Digital Age, The (Schmidt), 66 Newitz, Annalee, 60 Newton, Isaac, 17, 166 New York Stock Exchange (NYSE), 152 New York Times, 170 Nielsen ratings, 102 Note Book (Nunokawa), 53 @NSA_prismbot, 194–195 Nunokawa, Jeff, 53 Nyby, Christian I., II, 95 Of the Subcontract, Or Principles of Poetic Right (Thurston), 12, 140–145 OK Google, 51 One-way functions, 162–163 Ontology Apple and, 62–63, 65 computationalist approach and, 8 consciousness and, 178 culture machines and, 62–65, 68–69 Google and, 159–160 ideology and, 68 imagination and, 69, 73–74 of information, 8, 63, 69–71 mathematics and, 84 meaning and, 8, 21–22, 26, 39 money and, 156–159, 178–179 Netflix and, 92, 94, 96 Siri and, 62–65, 71–73, 82, 84 work of algorithms and, 122 Open source software, 6, 162, 167 ORION, 19, 47 Orwellian surveillance, 132–134 Page, Larry, 155–156 PageRank, 20, 111, 155–159, 169, 177–178, 189 Pariser, Eli, 46, 50 Parisian Great Exhibition, 80 Pasquale, Frank, 21 Pension funds, 151, 168 Perfect knowledge, 13, 65, 71, 73, 190 Perry Mason (TV series), 95–96 Phaedrus (Plato), 37 Phoenix, Joaquin, 77 Pickers, 132–134 Pitts, Walter, 28 Planned Parenthood, 64 Plato, 4, 31, 37–38, 40, 82 Popova, Maria, 175–176 Post, Emil, 9 Pragmatic Chaos (Netflix), 89–90 Pragmatist approach algorithmic, 2, 18–25, 42 effective computability and, 25–26 experimental humanities and, 193 growing power of computation and, 27 justice and, 146 models of reason and, 47 reframing humanities and, 193 Siri and, 58, 62 Privacy, 49, 62, 75, 90, 160–161, 163, 173 Private keys, 163 Programmability, 16, 178 Programmable culture, 169–175 Programmed Visions (Chun), 33 Project Loon, 66 Proofs, 15, 24–25, 41, 44 Protocol (Galloway), 50 Public keys, 163 Purdy, Jedediah, 146–147 Quantum mechanics Netflix and, 91–94, 96, 99, 112 Wiener and, 26–27 Raley, Rita, 194–195 Ramsey, Stephen, 52 Raymond, Eric, 6 Reading Machines (Ramsey), 52 Religion, 1, 7, 9, 49, 69, 71, 80, 136 Rendell, Paul, 30 Rice, Stephen P., 144–145 Rid, Thomas, 199n42 Riskin, Jessica, 136–137 Robotics, 31, 34, 43–45, 132–134, 188 Rood of Grace, 137 Rotten Tomatoes, 96 RSE encryption, 163 Samantha (Her), 77–85, 154, 181 Sample, Mark, 194–195 Sandvig, Christian, 107, 131 Sarandos, Ted, 98, 100, 104 Schmidt, Eric, 66, 73, 127 Schwartz, Peter, 160–161 Scorsese, Martin, 59 Searle, John, 4 Shannon, Claude, 27 Sharing economy, 54, 123, 127–129, 145, 148 Shoup, Donald, 127 Silicon Valley, 3, 9, 30–31, 49, 54, 87, 100, 124, 182 SimCity (game), 194 Simondon, Gilbert, 40, 42–44, 53, 59, 84, 106, 118 Singhal, Amit, 72, 76 Siri abortion scandal and, 64 abstraction and, 64–65, 82–84 anticipation and, 73–74 as beta release, 57 CALO and, 57–58, 63, 65, 67, 79, 81 cognition and, 57–65, 71–84 computationalist approach and, 65, 77 consciousness and, 57–65, 71–84 conversation and, 57–65, 71–84 DARPA and, 11, 57–58 Easter eggs in, 60, 148 effective computability and, 58, 62, 64, 72–76, 81 emotional work and, 148 Enlightenment and, 71–76, 79–80, 82 gender and, 60–61, 80 interfaces and, 59–60, 63, 75, 77 intimacy and, 11, 75–81 language and, 57–65, 71–84 launch of, 57 machine learning and, 62–65, 182 market issues and, 59, 75–77 meaning and, 65 ontology and, 62–65, 71–73, 82, 84 parsing data and, 182 performing knowledge and, 59–61 quest for knowledge and, 71–75, 82, 84 reading, 58–59 reduced abilities of, 59 speed of, 131 Skinner boxes, 61, 115–116, 119–120, 122 Smith, Adam, 12, 146–147 Smith, Kevin, 88 Sneakers (film), 3 Snow Crash (Stephenson), 1, 3–5, 9, 17, 36, 38, 50 Social behavior, 22, 146 addiction and, 114–119, 121–122 discrimination and, 21, 130 exploitationware and, 115–116 Social gaming, 114, 118, 120–122 Social media, 6 Arab Spring and, 111, 186 changing nature of, 171 digital culture and, 3, 7, 18, 22, 43, 49, 66, 87, 156, 160, 191, 193–194 Enlightenment and, 173 identity formation and, 191 in-person exchanges and, 195 intellectual connection and, 186 newsfeeds and, 116, 177–178 peer review and, 194 raising awareness and, 174 Spoiler Foiler (Netflix) and, 101–102, 108 transaction streams and, 177 Uber and, 148 Software agency and, 6 Apple and, 59, 62 apps and, 6, 8, 9, 15, 59, 83, 91, 94, 102, 113–114, 124, 128, 145, 149 blockchains and, 163–168, 171, 177, 179 cathedrals of computation and, 6–8, 27, 33, 49, 51 Chun on, 33, 42, 104 Church-Turing thesis and, 25 consciousness and, 77 dehumanizing nature of, 116 depersonification of, 6 digital materiality and, 53 experience and, 34 as foundation of computational expression, 47 imagination and, 186, 194 in-house affect and, 59 interfaces and, 124 (see also Interfaces) logic of general substitutability and, 33 Manovich and, 112 material layers and, 48 as metaphor for metaphors, 35 Metaverse, 50 networks vs. individuals and, 118 open source, 6, 162, 167 Pasquale on, 21 reality and, 10 self-modification and, 1, 38 Weizenbaum and, 33–40 Solaris (Lem), 184 Sourcery, 3, 10, 17, 21, 33–34 Space of computation, 2–5, 9, 21, 42, 45, 76, 154, 185 Spacey, Kevin, 98–99, 106–107 Spoiler Foiler (Netflix), 101–102, 108 SRI International, 57, 59, 63, 169 Srinivasan, Balaji, 169 Star Fleet Federation, 67 Star Trek computer anticipation and, 73–74 conversation and, 67 Google and, 11, 65–82, 159, 186 interfaces and, 67–68 LCARS and, 67–68 Memex and, 186–189, 195 public expectations and, 67 Star Trek: The Next Generation (TV series), 67 Stephenson, Neal, 1, 3–5, 9, 17, 36, 38, 50, 51 Stiegler, Bernard, 43–44, 53, 106 Streaming content, 49, 54, 87, 90–92, 97, 99, 101–102, 104, 205n39 Strogatz, Steven, 44, 183 Sumerian myths, 3, 5, 16 SuperPACs, 174 Symbolic logic, 2, 21, 24, 39, 41, 44, 54–55 Symposium (Plato), 82 Tacit negotiation, 20 Taggers, 54, 88, 92–93, 96, 99 Tanz, Jason, 116 TaskRabbit, 124 Taylorism, 93 Teller, Astro, 66 Terminator (film series), 191 Terrorism, 163, 178 Theory of Communicative Action, The (Habermas), 109 Theory of Moral Sentiments (Smith), 12, 146–147 Thiel, Peter, 170–171, 174 Third parties, 59, 114, 125, 132–133, 147, 162, 170–171 Thurston, Nick, 12, 140–145 Tindr, 128 Transaction fees, 164–165 Transcendent Man (Kurzweil), 184 Transparency bazaar model and, 6 cryptocurrency and, 160–164, 168, 171, 177–178 feedback and, 146 freedom and, 9 interfaces and, 189 market issues and, 160–164, 168, 171, 177–178 politics of algorithms and, 18, 20 proprietary platforms and, 9 Traveling salesman problem, 19 “Trending Topic” widget, 180 Turing, Alan, 8, 23, 42, 79–80, 182 Turing Machine, 182 Berlinski and, 9, 24 computability boundary and, 23–24 concept of, 23 effective computability and, 42 finite-time processes and, 42 game of life and, 29–31 language and, 33, 41 McCulloch-Pitts Neuron and, 28 as though experiment, 23–24 as uniting platform, 25 Turing’s Cathedral (Dyson), 6 Turing test, 43, 79–82, 87, 138, 142 Turner, Fred, 3, 46 Twain, Mark, 151 Twitter, 53, 101–102, 173, 177, 179, 194–195, 210n43 Uber, 9, 12, 97, 138 abstraction levels of, 129 African Americans and, 130 business model of, 54, 93–94, 96 feedback system of, 145–148 interface economy and, 123–133, 145, 147 massive infrastructure of, 131 threats to, 129 Ubiquitous computation algorithms and, 3–4, 15, 33, 43, 54, 119, 124–125, 127, 178, 189–190 Bitcoin and, 178 colonization of margins and, 119 gamification and, 124 imagination and, 189–190 interfaces and, 189 Uber and, 125, 127 Unit Operations (Bogost), 118 U.S.S.

Overdiagnosed: Making People Sick in the Pursuit of Health
by H. Gilbert Welch , Lisa M. Schwartz and Steven Woloshin
Published 18 Jan 2011

Unlike most of my medical-school classmates, I was not a biology or biochemistry major in college. I majored in economics. I was taught about the value of free markets—how they worked to create the goods and services people want in the right quantities and at the lowest possible prices. I also learned about the “invisible hand”4: how individuals pursuing their own self-interests—and their desire to make money—can improve the welfare of the larger society. But I do think that the drive to make more money has become a bad thing for medical care. The problem is that medical care is nowhere close to being a free market.

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[back] Although the drug-company study referenced above collected data on both symptomatic and asymptomatic compression fractures, the publication only reported on the combination.[back] I feel compelled to add that some of my ancestors were serious capitalists. My great-great-grandfather started a bank in the mid-nineteenth century and helped the federal government finance the Civil War. His offspring managed it over the next century.[back] The invisible hand is the term economists use to describe the self-regulating nature of markets to produce socially useful results. Although attributed to Adam Smith and his book The Wealth of Nations (published around the time of the American Revolution), he actually used the term only three times. [back] This is one of many ways to express the conditions required for a perfect market and is not intended to be a complete list.

"Live From Cape Canaveral": Covering the Space Race, From Sputnik to Today
by Jay Barbree
Published 18 Aug 2008

It began with me staring at a vertical horizon and realizing the edge of the world now stood on its end. But not for long, as the Stearman continued on over, rolling around the inside of an invisible barrel in the air, until the ground was up and the sky was down. I had just enough time to catch my breath when the nose went down and an invisible hand pushed me gently into my seat and glued me there as the nose came up, and up. The horizon disappeared again, and the engine screamed with the dive. Then the nose was coming up, higher and higher, and the engine began to protest. The sun flashed in my eyes, and I found myself on my back as the Stearman soared up and over in a beautiful loop.

…

Where was God, I asked, and suddenly, out of the light, out of its magnificent brilliance there appeared a darker form, a bed—that’s what it was, a huge bed being pushed by two white shadowed forms, two nurses, and I heard the gallop of their feet, the high-pitched squeal of wheels needing oil… The brilliant light vanished. It was gone. There was only the huge bed, the nurses taking tremendous strides, crashing through the darkness, the squealing wheels… An invisible hand grasped me, swept me like a leaf in a high wind after the fleeing nurses. Instantly the bed and the nurses stopped, and I suddenly realized there was someone in the bed. A man. A familiar man, and he turned his head to face me. Me. Hell, it was my own body. I was in the bed, but I wasn’t. How could this be?

Why We Work
by Barry Schwartz
Published 31 Aug 2015

We may not expect business leaders to ask themselves “How can I make my employees’ lives better by restructuring their jobs?” But we surely would expect them to ask themselves “How can I make my business better by restructuring employees’ jobs?” As Adam Smith famously imagined in describing the “invisible hand” of market competition, when markets are competitive, we don’t need good intentions to improve human welfare; competition among selfish individuals does it for us. If competition will improve the lives of consumers of goods and services, as no doubt it has, surely it should also improve the lives of producers of goods and services as well.

Against the Web: A Cosmopolitan Answer to the New Right
by Michael Brooks
Published 23 Apr 2020

Competition would start kicking in and between UPS, Fed Ex and Amazon and drones and blah blah blah… Rogan doesn’t even make the obvious points about how much Amazon currently relies on the Post Office or how it would be massively unprofitable for private companies to service depopulated rural areas in a post-USPS world without enormously jacking up prices—all excellent reasons to think that it would indeed suck a great deal—but I have a hard time imagining that anyone watching the exchange or listening to it later could have missed the way that Rogan is bringing up practical realities while Rubin is both literally and figuratively hand-waving it all away. It gets even funnier when Rubin tries to back up his childlike belief in the invisible hand by telling a story about ordering live chickens from UPS. Rogan points out that Rubin’s story is actually a USPS success story. UPS doesn’t deliver live chickens. Flustered, Rubin concedes that his story was about the USPS, but insists that in a libertarian utopia UPS would deliver live chickens and that they’d do it even better.

Magic Internet Money: A Book About Bitcoin
by Jesse Berger
Published 14 Sep 2020

Instead, because of our high time preference orientation and unwillingness to accept economic dynamism, we again traded integrity for expediency by letting central banks dictate the distribution of newly created money. In doing so, they unilaterally granted irresponsible enterprises a second chance to double down on their mistakes, stealing opportunity from the invisible hand of free markets. 10.6 Amoral Safeguard “A wise neuter joins with neither, but uses both as his honest interest leads him.” William Penn, Writer & Democracy Advocate In Bitcoin, no moral hazard exists. No wizardry can compel unscheduled coins to come into existence or be spent unjustly. This system epitomizes freedom because it is both neutral, unaffected by biases or special interests, and also amoral, unable to accommodate even conscientious objections to the rightful use of property.

Reaganland: America's Right Turn 1976-1980
by Rick Perlstein
Published 17 Aug 2020

On February 18 UPI, February 21, 1979; Gannett Service, February 21, 1979; “IRS Chief Calls Tax Changes Vital in Fight Against Private School Bias,” Baltimore Sun, February 21, 1979. Secret Service protection Thomas Edsall and Jane Byrne Edsall, Chain Reaction: The Impact of Race, Rights, and Taxes on American Politics (New York: W.W. Norton, 1991), 132. at least since 1962 Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade Against the New Deal (New York: Norton, 2009), 226. “The next real major” Garry Wills, Lead Time: A Journalist’s Education (New York: Doubleday, 1983), 284. “vote for Christianity” Jewish Telegraphic Agency, October 21, 1976. the very next day William Martin, With God on Our Side: The Rise of the Religious Right in America (New York: Broadway Books, 1996), 171.

…

The version in which the name is brainstormed is in Michael Sean Winters, God’s Right Hand: How Jerry Falwell Made God a Republican and Baptized the American Right (New York: HarperOne, 2012), 119. historical record Falwell and Billings article in Jerry Falwell’s newspaper the Journal-Champion, February 23, 1979, quoted in Phillips-Fein, Invisible Hands, 233. Viguerie’s mailing lists Richard Viguerie and David Franke, Right Turn: How Conservatives Used New and Alternative Media to Take Over America (Lanham, MD: Taylor Trade Publishing, 2004), 133. his own telling “Political Gospel: Christian Soldiers Spread the ‘Right’ Word,” Minneapolis Star, August 25, 1980.

…

The Sunday after Presidents’ Day “Robison Show Is Canceled by Channel 8,” Fort Worth Star-Telegram, March 3, 1979; AP, March 4, 1979. Dallas Gay Political Caucus AP, May 27, 1979. WFAA had suspended Ibid. Falwell—who had run “TV Time Is Offered by a Carter Critic,” NYT, October 13, 1976; AP, October 15, 1976. Wallie Criswell Flippen, Jimmy Carter, 209. Tim LaHaye pitched in Phillips-Fein, Invisible Hands, 233. North Phoenix Baptist Church “Evangelist Defends Right to Speak Out on Moral Issues,” Arizona Republic, March 10, 1979. Michael Huckabee Ariel Levy, “Prodigal Son: Is the Wayward Republican Mike Huckabee Now His Party’s Best Hope?” New Yorker, June 21, 2010. news conference AP, May 27, 1979.

Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State
by Paul Tucker
Published 21 Apr 2018

The idea of a Pareto improvement is, nevertheless, useful because it captures the thought that if we can make some people better off (improve their well-being) without making anyone worse off, we should. Over the middle decades of the last century, economists pinned down the circumstances under which Adam Smith’s invisible hand can bring about efficiency in this sense. In their famous “welfare theorems,” Kenneth Arrow, Gerard Debreu, and Lionel McKenzie uncovered the ideal or abstract conditions under which a market economy (the price mechanism) would deliver an efficient allocation of resources, with no gains from trade—no potential Pareto improvements—left unexploited and, therefore, with everyone left with their well-being as high as possible given the original distribution of resources.

…

From Political Theory to Political Values Part of the problem is that neither of the two dominant strands of modern political theory have had much to say about this. Modern Hobbesians do emphasize that, to meet the welfarist diktats of instrumental logic, the state will rationally incorporate limits on government in order to guard against abuses of power. And, since there is no analogue to Adam Smith’s “invisible hand” guiding government toward efficient policies, they hold that discretionary regulation is likely to substitute incurable government failure for curable market imperfections. A polity would, therefore, rationally seek to remedy impediments to efficient markets by creating new property rights; and should as far as possible look to rules rather than governmental discretion when addressing important collective-action problems that cannot be left to the market (chapters 3 and 8).3 In other words, Hobbesians typically carry a lot of prescriptive baggage on what the state should and should not do but relatively little on how things should be structured below the “constitutional” level.

…

See Tories Constant, Benjamin, 210 constitutional democracies: central banks and, 448–49, 456, 527; credibility and, 233; democratic values and, 555–59, 562; incentives and, 293; independent agencies and, 147, 173–74, 186, 191, 194–96, 217, 339; insulated agencies and, 274, 283, 291; legal issues and, 349; power and, 382, 394; Principles for Delegation and, 241, 250, 269–71, 307 constitutionalism: administrative state and, 34, 81n11, 189–92, 273–78; authority of law and, 196–98; branches of the state and, 273–78; Buchanan and, 188–89, 226, 287, 439, 446, 456; central banks and, 287–90, 392–94, 510, 532; common law, 81n11, 189n36; consensus systems and, 297–99; credibility and, 224–26; democratic procedure and, 284; democratic values and, 173–94, 274–76, 557; electoral commissions and, 285–87; European Central Bank (ECB) and, 393–94; fourth branch of government and, 18–20, 27, 29, 33, 95, 118n11, 272–73, 277, 287–92, 392, 550, 563–64; France and, 322–23; guardians and, 285–87, 290–92, 392–93; incentives and, 293–306, 316, 334, 338n10, 341, 348, 358n14, 379, 382n5, 385n6, 387; independent agencies and, 166, 171, 173–94, 217, 220, 272–91, 334, 338n10, 341, 348; infinite regress and, 191–92; influence of on political structure, 294–300; institutional consequences and, 280; insulated agencies and, 269–92; judges and, 191–92; legal, 189–90, 226, 334, 341, 348, 358n14; liberalism and, 238–40; monetary, 188–89, 289; political, 189–92, 274–78, 316, 334, 348, 379, 557; postcrisis standards and, 178–80; power and, 9, 20, 24, 379, 382n5, 385n6, 387, 448–49, 510, 532; Principles for Delegation and, 20, 243, 246, 250–51, 265, 267, 316; regulatory state and, 276–77; Republicanism and, 269–70; right to pass laws and, 303–4; rule of law and, 173–94; separation of powers and, 173, 181–84, 186, 191, 217, 272, 275n4, 285–91, 294, 316, 352n5, 361–62, 392–93, 408, 472, 487, 526, 532, 543, 550; social norms and, 279–83; trustees and, 277–78, 290–92 constrained discretion, 84, 109, 180, 282, 289, 488, 490, 510, 513, 559 Consumer Financial Protection Bureau (CFPB), 87, 312, 315, 350 Consumer Safety Commission, 324 contestability, 203, 210, 214, 259–64, 360, 376–77, 461 corporatism, 238–40, 297–98 cost-benefit analysis (CBA), 30n12, 34–35, 57–58, 60, 62–64, 261, 361, 381, 554, 571 courts: administrative state and, 25, 28, 34–35, 38, 42, 49, 67–70, 73–75, 89, 91; agencies vs., 232–33, 354; constitutionalism and, 6 (see also constitutionalism); credibility and, 432; credible commitment and, 223, 226–29, 232–33; democratic values and, 548, 552, 554, 565–66; elected executive and, 232–33; emergency state and, 521; European Court of Justice (ECJ) and, 43, 137, 328–29, 356, 359, 386; incentives and, 297–99, 302–3; incrementalism and, 228–29; independent agencies and, 97, 117, 135, 143, 160, 168, 174–77, 180, 182–94, 197, 223, 226–29, 334–37; insulated agencies and, 277–79, 287n24, 290–91; nonlegislative policy making and, 74–75; overmighty citizens and, 541–43; oversight issues and, 369; participation and, 228–29; power and, 6, 9–10, 14, 19, 377, 379, 385–87, 392, 398; Principles for Delegation and, 242, 246, 248, 256, 260, 309–16, 319, 322, 324–25, 328–29; Supreme Court and, 355 (see also Supreme Court); transparency and, 349, 354–65 credibility: Bank of England and, 232, 417, 423; centrality of commitment and, 98–105; consensus and, 229n13; constitutional democracies and, 233; constitutionalism and, 224–26; courts and, 432; Delegation Criteria and, 229, 569; democratic values and, 213–14; Design Precepts and, 229, 231, 235; different commitment problems and, 102–4; efficiency and, 231, 425; elected executive and, 232–33; elitism and, 421; executive agencies (EAs) and, 232; executive branch and, 421; Federal Reserve and, 416–18; Germany and, 416; guardians and, 234; independent agencies and, 92–108, 213–14; inflation and, 230, 414–24; interest rates and, 419; judges and, 221–35, 355, 422; judiciary and, 222, 227, 230, 422; labor and, 233; legislature and, 228–29, 232–33, 424; legitimacy and, 228, 231–35, 414–25; liberalism and, 225, 231, 236–51, 415; monetary policy and, 417, 419n13, 423, 426–29, 432–36; monitorable objectives and, 229, 232; override and, 231, 234, 420; political economy and, 419; power and, 14–18; public debate and, 229, 233, 420, 423; public reputation and, 419–21; regulatory state and, 225; representative democracy and, 224, 226, 234; robustness test and, 235; rule of law and, 225–31, 415; security and, 225; short/long-term realism and, 92–94; sovereignty and, 223–24; stability and, 225–26, 230, 414, 416, 423–24; stress tests and, 466, 476–80, 522; Supreme Court and, 227n9; sustaining checks and balances for, 418–21; technocracy and, 221, 414, 421; time-inconsistency problem and, 98, 103, 213, 267, 290, 414, 416, 418–19, 486, 532, 555; trustees and, 234, 419, 421; welfare and, 223, 233 credible commitment: administrative state and, 65; constraints of, 223–27; courts and, 223, 226–29, 232–33; Delegation Criteria and, 123; delegation decisions and, 13–14; democratic values and, 15, 221–35, 554; division of labor and, 233; effect of multiple veto points and, 309–10; elected executive and, 232–33; emergency state and, 16; European Union (EU) and, 327–32; expedited and simple abandonment of, 315; France and, 321–24; Germany and, 325–27; hierarchy for candidates and, 225–26; independent agencies and, 92–108, 116, 123, 208, 211n32, 213–14; legitimacy and, 228, 231–35; monetary independence and, 5–8, 23, 270–71, 290, 325n30, 395, 419, 450, 489, 493, 507, 509, 520, 526–27, 531–32; monetary policy and, 229; people’s rights and, 222; Principles for Delegation and, 135, 140, 145–46, 307–33; reordering constraints and, 319–20; rule of law and, 227–31; rule writing and, 221, 227, 231; self-binding, 223, 230–31; settled goals and, 92–108; social costs and, 226; stability and, 450–51; states’ capacity for, 307–33; tension from, 223–27; transparency and, 116; trial and error and, 222; United Kingdom and, 316–21; United States and, 308–16 credible stress tests, 478–79 credit funds, 445 crime, 50, 52, 74, 141n18, 207, 236, 247–49, 268, 308, 313–14, 558, 570 cross-sectional consistency, 102–3, 117 Currie, David, 346 Cutting, Bronson, 445 Dahl, Robert, 238n5, 239, 287 Darling, Alistair, 493, 503, 508 Davos Man, 540 debt management, 52, 129–30, 139, 395, 409n14, 492–93, 519 decision making: administrative state and, 33, 38, 83; committees and, 246; democratic values and, 264–66, 546n1, 554–56; emergency state and, 520n32; independent agencies and, 95, 105, 109, 114, 120, 169, 184–85, 199, 208, 264–66; insulated agencies and, 278n11; legal issues and, 349–52; power and, 14; Principles for Delegation and, 246–47, 264–67, 319 Declaration of Independence, 163 deferred esteem, 107 Delegation Criteria: agency design and, 105–8; Alesina-Tabellini model and, 99–104, 107–8; balance-sheet policy and, 491–92; central banks and, 193–94, 440, 450–51, 463, 467, 483, 491, 499, 505, 511–13, 529; constrained discretion and, 84, 109, 180, 282, 289, 488, 490, 510, 513, 559; credibility and, 229, 569; delegating everything and, 104–5; Design Precepts and, 110–11 (see also Design Precepts); incentives and, 305, 309, 315, 318; independent agencies and, 92, 99–102, 105–8, 114, 116, 123–24, 173, 183, 193–94, 569; insulated agencies and, 282, 289; monetary regimes and, 432; multiple-mission agencies and, 571–72; policy maker reputation and, 107–8; Principles for Delegation and, 127–28, 241, 254, 256, 309, 315, 318, 569, 571 deliberative democracy, 200n13, 206, 236, 264–66, 268, 281 delivery agencies, 39–40, 73–74, 84, 101, 217n39, 261n30 Delors Report, 428 democracy: authority of law and, 196–98; as challenge, 203–4; delegation-with-insulation and, 15, 145, 168, 206, 219, 232, 270, 281–83, 300, 319, 334, 375, 388, 411, 454, 462, 467n8, 547, 553, 555; extra demands of representative, 209–17; independent agencies and, 195–213, 217–20; instrumental justification and, 205–8; intrinsic warrant for, 204–5; robustness test of regime authority and, 208–9; trial and error, proceeding via, 206–7, 214–15, 222, 225, 268; as talking, 200–2; as voting, 198–200; as watchfulness, 203–4, 234–35, 250, 263, 315 democratic procedure, 284 democratic values: accountability and, 159, 170–71, 203–4, 215–16, 221, 229, 233, 241, 243, 250, 253, 259–64, 269, 555, 563; administrative state and, 547, 550–54, 557–58; authority of law and, 196–98; balance-sheet policy and, 561; Bank of England and, 548, 560; Berlin Wall and, 3, 431; central banks and, 559–64; Churchill and, 163, 205, 426, 430, 546, 564; civic virtue and, 165; conceptions of, 198–204; consensus and, 556; conservatism and, 163, 165–67, 251–53; constitutional democracies and, 555–59, 562; constitutionalism and, 173–94, 274–76, 557; courts and, 548, 552, 554, 565–66; credibility and, 213–14; credible commitment and, 15, 221–35, 554; debate and, 200–2; decision making and, 264–66, 546n1, 554–56; delegation issues and, 46–47; deliberative democracy and, 200n13, 206, 236, 264–66, 268, 281; Design Precepts and, 556; different political conceptions of, 163–70; direct democracy and, 33, 215–16, 261, 262n33, 377; distributional equity and, 380–82; elected executive and, 550–51, 554–55, 557; elitism and, 237, 549, 554 (see also elitism); emergency state and, 243–45, 561; equity and, 547, 550, 556, 559; Europe and, 1, 36, 553, 563; executive branch and, 550–51; executive orders and, 29; fairness and, 555; Federal Reserve and, 35, 557, 566; fiscal state and, 547, 561; France and, 553–54; General Will and, 57, 199–203; Germany and, 553; Great Financial Crisis and, 550, 559; guardians and, 285–87, 552–54, 563; incentives and, 300–5; independent agencies and, 147–71, 173–94, 195–220; inflation and, 555, 561–62; insulated agencies and, 195–220; interest-group corporatism and, 239–40; international policy making and, 283–85; intrinsic warrant for, 204–5; judges and, 554, 557, 560, 565; judiciary and, 550, 564–67; justification of, 204–9; legislature and, 549–52, 555–61, 568; legitimacy and, 147–71, 177, 547–48, 552, 555, 557, 564, 567–68; liberalism and, 148n3, 154n10, 156, 161–70, 173, 175, 181, 188–96, 199–201, 204, 210–11, 214, 218–19, 225, 231, 236, 238–57, 260, 268–69, 280, 283, 289, 548, 554–57, 561, 570; liberty and, 164–66, 196, 209, 216, 219, 254, 275, 287, 290, 437, 474, 558, 561; liquidity and, 561–62; many sides of democratic deficit and, 219–20; market failure and, 555; military and, 546, 564–67; monitorable objectives and, 556, 558; national democracy and, 12, 300, 467; overmighty citizens and, ix–x, 538–40, 568; participatory democrats and, 203, 267, 554; pluralism and, 161, 164, 200, 238–40, 242, 296, 301; populism and, 195, 199; power and, 448–49 (see also power); price stability and, 169–70; Principles for Delegation and, 250–51, 555–56; public debate and, 254–57, 555–62, 568; public interest and, 33–34, 554; public reason and, 200–2; regulatory state and, 547–52, 561; representative democracy and, 3, 8, 147, 162, 195, 198, 209–20, 224, 226, 234, 236, 238n5, 242, 249, 257–58, 262n33, 263, 272, 275, 286, 294–95, 341n16, 373, 376–77, 379, 510, 548, 556; Republicanism and, 163–65, 265 (see also Republicanism); robustness tests and, 208–9; rule of law and, 177, 376–77, 379, 384, 392, 415, 428, 503, 520, 536, 550, 554, 563; security and, 566; self-realization and, 165; self-restraint and, 564–67; separation of powers and, 173, 181–84, 186, 191, 217, 272, 275n4, 285–91, 294, 316, 352n5, 361–62, 392–93, 408, 472, 487, 526, 532, 543, 550; social costs and, 556; social democracy and, 5, 43, 163, 166–70, 175, 188n34, 269, 275, 366, 530; stability and, 546, 548, 554, 561–62, 566–67; standard of resilience and, 562; Supreme Court and, 552, 566; technocracy and, 548, 550, 553–57, 563, 568; transparency and, 159, 194, 241, 250, 265n37; by trial and error, 206–7, 214–15, 222, 225, 268; trustees and, 554, 563, 567; US Constitution and, 30n14, 32–33, 89, 224, 227n10, 253, 276, 341n16, 352n5, 361, 422, 551–52; values compatibility and, 550, 552, 557, 562, 564; voting and, 198–200; watchfulness and, 203–4, 234–35, 250, 263, 315, 422, 467; welfare and, 549, 567; Westminster system and, 38, 153, 179, 243n13, 253n21, 259, 273, 279n14, 297, 317–20, 342–47, 371–75, 387, 393, 405–6, 519, 539, 548, 552–53 Denning, Lord, 565 Department of Justice (DOJ), 135, 137, 184n26 dernier resort, 505 Design Precepts: accountability and, 110, 118–19 (see also accountability); appointments and, 114; balance-sheet policy and, 491–92; central banks and, 440n5, 464, 468, 476, 486, 490–92, 496, 499, 504, 507, 510–15, 520; committee procedures and, 114–15; constrained discretion and, 84, 109, 180, 282, 289, 488, 490, 510, 513, 559; credibility and, 229, 231, 235; democratic values and, 556; Emergencies and, 111, 119–21, 243–45, 382, 436, 504, 507, 510–15, 520, 571; incentives and, 304, 309, 315, 323, 333; independent agencies and, 92, 109–26, 159, 173–74, 180, 183–84, 187, 194, 216, 334–42, 345, 570–71; insulated agencies and, 109–10, 281, 285; legal issues and, 349–67; lexicographic objectives and, 113, 264, 344, 347, 570; limits of, 378–89; monetary regimes and, 432, 436; Money-Credit Constitution (MCC) and, 17–18, 402, 436, 456–59, 463, 511, 520, 526, 537, 562–63; nondelegation doctrine and, 334–48; normative expectation and, 112, 214, 479, 561; Operating Principles and, 110, 115–16, 354–55, 476, 510, 571; oversight issues and, 366, 372, 377; political balance and, 109–10; power and, 15, 382–88, 398; Principles for Delegation and, 127–28, 134, 238–47, 250, 253, 260, 262, 265, 268–69, 309, 315, 323, 333, 570–71; Procedures and, 110, 114–15, 570; Purpose-Powers and, 110–13, 118, 491, 570; transparency and, 110, 116–18 (see also transparency); trustees and, 110–11; warranted predictability and, 112, 124, 561 Dewey, John, 60, 195, 207–8, 257 Dicey, Albert Venn, 176, 185, 364 dichotomies: adjudication v. administration, 14, 363; ends v. means, 14, 262; politics versus administration, 14, 37, 96, 256–57 Diplock, Lord, 338, 356n13 direct democracy, 33, 215–16, 261, 262n33, 377 disaster management, 387, 505 discount windows, 449n21, 490n11, 516 distributional effects: administrative state and, 63; independent agencies and, 100–1, 105; power and, 380–81; overmighty citizens and, 528–30, 537; vs. distributional choices, 101, 134, 256, 308, 318, 381, 528–30 distributional justice, 52–58, 63–64, 67, 69, 144, 382 division of labor, 41, 69, 111, 146, 233, 247, 258n26, 523 Dodd-Frank Act, 384, 434, 476, 506, 516, 524 Dombret, Andreas, 7 Domesday Book, 36 double delegation, 210–11, 213, 237, 254, 552–53 Doylan, Delia, 410 Draghi, Mario, 19, 507, 544, 566 Dworkin, Ronald, 191 East India Company, 253, 548–49 École Nationale Administration (ENA), 276, 299, 369 Economic Affairs Committee of the European Parliament, 45 effective lower bound for interest rates (ELB), 490 efficiency: administrative state and, 37, 48, 52–72, 75; allocative, 52–53, 61, 63, 67, 69, 127, 403, 462; central banks and, 447, 462–64, 469, 510; cost-benefit analysis (CBA) and, 30n12, 34–35, 57–58, 60, 62–64, 261, 361, 381, 554, 571; credibility and, 231, 425; democratic values and, 547, 550, 556, 559; equity and, 14, 62–63, 69–70, 96–97, 101, 305, 318, 320; fairness and, 96–97; impediments to policy making and, 65; incentives and, 293, 305, 318; independent agencies and, 94, 96–97, 101, 105, 117, 125, 156, 168, 180, 182–83, 188, 210, 336; insulated agencies and, 274, 275n4; invisible hand and, 55, 274; market, 53–58, 60–61, 63–64, 69–70, 141, 168, 255, 274, 320, 336, 447; monetary regimes and, 432; Pareto, 53–57, 64, 66, 101, 105, 249; power and, 14, 382, 403; Principles for Delegation and, 127–28, 136–38, 141, 239, 249, 255–56, 318, 320, 328 electoral commissions, 19, 269, 273, 285–87, 290–91, 563 elected executive: administrative state and, 30–31, 35, 37–38, 42, 52, 73–76, 80, 84, 86, 91; central banks and, 443, 451, 459, 474, 499, 515, 532, 534; credibility and, 232–33; democratic values and, 550–51, 554–55, 557; independent agencies and, 97, 110–11, 125, 186–87, 215, 343–44; insulated agencies and, 273, 277, 284n20, 290; legal issues and, 361, 367; oversight issues and, 368n36, 375; power and, 18–19, 382–83, 392, 405, 443, 451, 459, 474, 499, 515, 532, 534; Principles for Delegation and, 135, 139, 238, 244, 248, 270, 312, 317, 319, 321n19, 324–25 electoral politics, 8, 103, 136, 421 elites, x; administrative state and, 42, 47; credibility and, 421; democratic values and, 549, 554; incentives and, 299–300; independent agencies and, 150–51, 193n44, 197, 201, 203, 214, 219, 276; internationalism and, 398–402; legal issues and, 366; overmighty citizens and, 540; oversight issues and, 369; power and, 8, 12, 21, 379, 398–404; Principles for Delegation and, 236–38, 251, 260; technocracy and, 8, 12, 21, 201, 219, 237, 299, 366, 554 Elster, Jon, 223n4 Emergencies precept, 111, 119–21, 243–45, 382, 436, 571 emergency state: administrative state and, 35, 41, 51–53; Bank of England and, 503–9, 512, 516; central banks and, 460, 503–25; contingencies and, 243–45; courts and, 521; credible commitment and, 16; decision making and, 520n32; democratic values and, 243–4; Design Precept and, 504, 507, 510–15, 520; disaster management and, 387, 505; economic sovereignty and, 504; European Union (EU) and, 386–87; executive branch and, 504, 513, 515; Federal Reserve and, 506, 507n8, 514, 516, 519, 523; Germany and, 386–87; judges and, 521; lender of last resort (LOLR) and, 447–48, 503–17, 521; liberalism and, 243–45; liquidity and, 442, 457, 472, 504–9, 513–16, 521, 523, 561–62; military and, 503–4, 517–24; monetary policy and, 510–12, 516, 519, 523; political economy and, 508; post-crisis monetary policy and, 527–34; power and, 17, 388, 460, 503–25; Principles for Delegation and, 243–45; public debate and, 514; public facilities and, 508–11; representative democracy and, 510; rules vs. principles and, 510–11; self-restraint and, 382–88; social costs and, 511–16; stability and, 506, 513–16, 522–23; United States and, 382–86 emerging market economies (EMEs), 411–12 End of Liberalism, The (Lowi), 173, 239 enforcement state, 51 entrenchment of basic laws and institutions, 3, 20, 81, 188–89, 222–23, 287, 290, 303, 457 Environmental Protection Agency (EPA), 31, 86, 93n4, 102, 336, 449n21 equality, 162, 166, 176, 182, 205, 254, 275, 364, 529n5, 566 equity: administrative state and, 51, 53, 62–63, 69–70; central banks and, 457n28, 463, 489n10, 514, 521; delegation criterion and, 380–82; efficiency and, 14, 62–63, 69–70, 96–97, 101, 305, 318, 320; incentives and, 305; independent agencies and, 96–97, 101, 178; power and, 14, 380–82; Principles for Delegation and, 142n20, 318, 320 error correction, 214 European Central Bank (ECB): administrative state and, 44, 85; Brexit and, 483; constitutionalism and, 393–94; crisis management and, 523, 563; democratic values and, 563; Draghi and, 19, 507, 544, 566; ECON committee and, 299; European Council and, 522; insulated agencies and, 278, 291; legal issues and, 359; lending discretion of, 516; levitational aid and, 544; monetary regimes and, 427n5, 434; negative interest rates and, 495; oversight issues and, 370, 373; power and, 1, 6–7, 10, 19, 386–87, 393–94, 398, 473, 475; Principles for Delegation and, 244, 265, 328, 332; quantitative easing and, 386–87; stress testing and, 478; as Siysyphus, 563 European Court of Justice (ECJ), 43, 137, 328–29, 356, 359, 386 European Exchange Rate Mechanism, 406 European Securities and Markets Authority (ESMA), 44, 86–87, 329, 387 European Supervisory Authorities (ESAs), 329, 331n37, 332 European Union (EU): administrative state and, 27, 41–45, 74–75, 86; Basel Capital Accord and, 45; Brexit and, 136n8, 368n37, 483; central banks and, 466, 540, 543; civil law nations within, 327–28; Competition Commissioner and, 350; confederal governance and, 299–300; credible commitment and, 327–32; democratic values and, 553; emergency state and, 386–87; evolving doctrine of, 328–29; executive functions and, 43–44; Great Financial Crisis and, 44, 299, 366; incentives and, 294, 299–305; independent agencies and, 218n42; insulated agencies and, 273; international policy making and, 44–48; legal issues and, 350, 352, 355–56, 359; limits of Design Precepts and, 379; majority vote and, 329; Meroni judgment and, 43n47, 328–29; monetary regimes and, 428; output legitimacy and, 304–5, 320; override and, 331–32; oversight issues and, 330–31, 368n37; power and, 1, 19, 22, 379, 393; Principles for Delegation and, 128, 132, 137, 144, 308, 318, 322, 324, 327–32; Treaty on the Functioning of European Union (TFEU) and, 356n12; veto points and, 329 examinations branch, 275–76 executive agencies (EAs): administrative state and, 30–31, 38, 73–74, 84, 86; central banks and, 452; conditions for delegating rule-making authority, 227–31; credibility and, 232; fiscal state and, 129–30; independent agencies and, 93n4, 341; legal issues and, 361; power and, 377, 381; Principles for Delegation and, 129–30, 310–11, 312n9, 315, 330 executive branch: administrative state and, 25, 29, 31, 39, 45, 73–76, 80, 84; congressional control and, 310–13; credibility and, 421; democratic values and, 550–51; emergency state and, 504, 513, 515; incentives and, 296, 302; independent agencies and, 93n4, 95, 97, 114, 121, 125, 174, 181n20, 183, 186, 214; insulated agencies and, 273, 275, 277, 288; legal issues and, 361, 364; overmighty citizens and, 532; oversight issues and, 366–67; power and, 377, 381, 383, 385, 405; presidential vs. congressional control and, 310–13; Principles for Delegation and, 1, 42, 135, 139, 248, 312n9, 318, 322–25, 331–32; stability and, 450, 452; statutorily required remits from, 344–45; trustees and, 11; use of term, 18n18; vague objectives and, 344–45; veto points and, 297, 308–10, 312–13, 317, 329, 361, 408–11 executive orders (EOs), 29–30, 34, 310, 381, 385 experts and expertise: administrative state and, 29, 34, 36, 66, 75, 83–84; Burkean trustees and, 211–13; credibility and, 229–34, 237, 421, 424; democratic values and, 553–55, 564, 566n17; emergency state and, 520; fiscal state and, 488; independent agencies and, 93–98, 105, 109–10, 114, 122, 176, 195–96, 206, 208, 211–13, 219, 342–43, 347; insulated agencies and, 284; legal issues and, 350, 363; monetary regimes and, 429, 431; oversight issues and, 375; power and, 1–2, 6, 8, 13–14, 394–95, 400; Principles for Delegation and, 128, 133, 135, 140, 142n20, 258–59, 264, 569; reliable information and, 94–95 externalities, 52, 59–60, 462 fairness: administrative state and, 56n9; central banks and, 472, 475; cross-sectional consistency and, 102–3, 117; democratic values and, 555; efficiency and, 96–97; independent agencies and, 96–97, 102–3, 114, 163–64, 176–77, 184n27, 192, 205; insulated agencies and, 281; judges and, 357–62; justice as, 56n9; legal issues and, 357–62, 365; power and, 377, 408; Principles for Delegation and, 128, 135–36, 243; rule of law and, 175–78 Fannie Mae, 52, 131–32 fascism, 29, 82 Federal Communications Commission (FCC), 232n14, 309n2, 336 Federal Deposit Insurance Corporation (FDIC), 30n12, 31–32, 133, 312n8, 345 Federal Energy Regulatory Commission, 336 Federal Housing Finance Agency, 132 Federalist Papers, 163, 182n22, 212n36, 293n1, 309n3 Federal Open Market Committee (FOMC), 29, 265, 475–76 Federal Reserve: administrative state and, 25, 29–32, 30n13, 32, 35, 46, 62; annual congressional budget approvals and, 10; Bernanke and, 30, 375, 449n21, 559; Blinder and, 14, 92, 99, 104, 106n24, 264n36, 289n28, 419n13, 423n21; credibility and, 416–18; democratic values and, 35, 557, 566; Dodd-Frank Act and, 384, 434, 476, 506, 516, 524; emergency state and, 506, 507n8, 514, 516, 519, 523; Financial CHOICE Act and, 10; fiscal state and, 482, 501; Greenspan and, 169, 408n9, 416, 431, 450, 453, 520n32, 542, 544, 566; incentives and, 303; independence of, 449n21; independent agencies and, 92, 102, 121, 123, 153n9, 173, 190, 201, 336, 345n23; insulated agencies and, 287; legal issues and, 367; as market maker of last resort (MMLR), 482; Martin and, 407–8, 452, 485n5; monetary regimes and, 15, 428, 430–31, 434, 442n8; multiple-mission agencies and, 121–22; overmighty citizens and, 539; oversight issues and, 374–75; power and, 384, 388, 393, 402n10, 407, 408n8, 464, 473, 475–78, 482–85, 503, 507, 516, 523–24, 530, 533n12; Principles for Delegation and, 128, 133, 244, 310–14; reform and, 6; regulatory state and, 464, 473, 475; stability and, 440n5, 442n8, 449n21, 464, 473, 475; stability policy and, 7; Volcker and, 169n44, 313, 413, 415–17, 431, 438–40, 446–47, 482; Wilson and, 28; Yellen and, 530 Federal Trade Commission (FTC), 28–30, 86, 110, 135, 137, 168 fiat money, 23, 288–90, 392, 405, 439, 457, 561 Financial CHOICE Act, 10 Financial Conduct Authority (FCA), 38, 39n37, 87, 141–43, 346 Financial Services Authority (FSA), 87n22, 122, 141–42, 262, 278n12, 318, 346, 353, 434 Financial Stability Board (FSB), 45–46, 399n7 financial trilemma, 283, 399, 401 First Bank of the United States, 443 Fiscal Carve-Out (FCO), 18, 289n29, 402, 436, 488–91, 510–11, 520, 562 Fiscal Shield, 289, 488, 491 fiscal state: administrative state and, 50–53, 90; balance-sheet policy and, 129–33, 435, 481–502, 526; capital market intervention and, 499–501; central banks and, 460, 480, 482–503, 525, 537–38; clarifying role of authority in, 537–38; debt management and, 52, 129–30, 139, 395, 409n14, 492–93, 519; democratic values and, 547, 561; executive agencies (EAs) and, 129–30; Federal Reserve and, 482, 501; helicopter money and, 492, 494, 562; independent agencies and, 113, 126; interest rates and, 482–84, 486n7, 490, 492, 495, 499–501; lender of last resort (LOLR) and, 485, 497; liquidity and, 482, 484, 490, 492, 496, 501; market maker of last resort (MMLR) and, 432, 482, 495–98; monetary policy and, 487, 493–94, 497–501; open market operations (OMOs) and, 485; parsimony and, 490; political economy and, 488n9, 489, 495–500; power and, 7, 17, 388, 402, 460, 480, 482–503, 525, 537–38; Principles for Delegation and, 128–33; public debate and, 490; pure credit policy and, 498–99; quantitative easing and, 486, 492–93, 498; restraining exuberance and, 499–501; social costs and, 487 Fischer, Stanley, 112n3, 415n3, 417, 428n10, 449n21 Fisher, Irving, 428n8, 438 forward-looking mandate, 213 Foucault, Michel, 21, 42 fractional-reserve banking (FRB), 440–42, 444–46, 487, 505, 561 France: AAIs and, 323–24; administrative state and, 42–43, 82; Conseil d’État and, 43, 182, 324, 341–42, 364–65; constitutionalism and, 322–23; credible commitment and, 321–24; democratic values and, 553–54; draft rules and, 354; École Nationale Administration and (ENA), 276, 299; incentives and, 294, 298–99; independent agencies and, 163, 181–82, 185, 341–42; insulated agencies and, 276; judges and, 364–65; legal issues and, 352, 354, 356, 360, 361n22, 364–66; limits of Design Precepts and, 378–79; oversight issues and, 368n37, 369; power and, 9, 22, 377–79; Principles for Delegation and, 308, 321–24, 327; republican values of, 42–43, 360, 366, 553; semi-presidential, 298; Tresor and, 42; vague objectives and, 341–42 Freddie Mac, 52, 131–32 free markets, 136, 165, 289 Friedman, Benjamin, 500n24, 531n9 Friedman, Milton, 48, 58, 62, 65, 272, 287, 291, 410, 414–15, 422, 494, 524 Friendly, Henry J., 228 Fukuyama, Francis, 431 Fuller, Lon, 174–75, 184 G7 countries, 405 G20 countries, 45, 400, 466 Geithner, Timothy, 385n6, 537n17 General Will, 57, 199–203 George, Eddie, x, 186n30, 252, 407, 409n14, 423, 427, 439n4, 440n6, 446n18, 461, 465, 507, 509, 520n32, 537, 566, 576 Germany, 22; administrative state and, 41–42, 82; Bankhauss Herstatt failure and, 399–400; Basic Law of, 41, 187, 325, 358, 379, 397, 553; Bundesbank and, 7, 325, 328, 397, 416–17, 427, 443n9, 449, 471n14; cartel office and, 135–36, 325; central banks and, 448, 471n14, 501, 528; chain of legitimacy of, 359, 379; credibility and, 416; credible commitment and, 325–27; democratic values and, 553; distributional effects and, 528; draft rules and, 354; emergency state and, 386–87; facts versus norms and, 308, 327; Great Financial Crisis and, 326; incentives and, 294, 298–99; independent agencies and, 168, 182n21, 187, 191, 198n9; legal issues and, 354–59; Lijphartian consensus and, 325; limits of Design Precepts and, 379; Merkel and, 299, 366; oversight issues and, 369; power and, 379, 397, 400; Principles for Delegation and, 134n5, 135–36, 308, 321, 325–28; Rechsstaat view and, 298, 379, 553; rule of law and, 356 Ginsburg, Douglas, 336n7 Ginsburg, Ruth Bader, 566 globalization, 4–5, 46, 283, 401 Goodfriend, Marvin, 482, 485, 488n9 Gordon Lecture, xi Gore, Al, 160 government failure, 22, 48, 62, 97, 196, 274, 459, 555 government-sponsored enterprises (GSEs), 52, 132n4 Great Depression, 4–5, 433, 465, 490, 528, 537 Great Financial Crisis, ix; accountability and, 41, 366; administrative state and, 35; aftermath of, 207; central banks and, 4–5, 8n14, 23, 44, 53, 68, 90, 221, 375, 380, 388, 402, 431, 433, 438, 442, 457n28, 501, 507, 517–18, 527, 532, 534–36, 550; democracy and, 550, 559; Emergencies precept and, 119; European Union (EU) and, 44, 299, 366; Financial Services Authority and, 318; financial trilemma and, 401; Germany and, 326; international policy cooperation and, 45; legitimacy and, 388, 402; limits of design and, 385, 387; monetary regimes and, 431; oversight issues and, 380; political upheavals from, 169; regulation and, 16, 53, 144–45, 230; securities and, 16; stability and, 438, 442, 445, 454, 457n28, 469; subdued growth since, 2, 4; United Kingdom and, x–xi, 318, 346, 366, 387; United States and, 131, 132n4, 366, 375 Great Moderation, 4, 431 Greenspan, Alan, 169, 408n9, 416, 431, 450, 453, 520n32, 542, 544, 566 Gross, Lord Justice, 83n15, 229n13 guardians: administrative state and, 72, 81–83, 85; central banks and, 538; constitutionalism and, 285–87, 392–93; credibility and, 234; democratic values and, 285–87, 552–54, 563; electoral commissions and, 285–87; hierarchy of, 290–92; independent agencies and, 191–92, 197, 203, 208; infinite regress and, 191–92; insulated agencies and, 285–91; judges and, 191–92; judiciary and, 81–83; power and, 9, 13, 19, 387, 391–94, 398–99; Principles for Delegation and, 322–23; Promissory Oaths Act and, 81n11; trustees and, 81–83 Habermas, Jürgen, 21, 42, 201, 202n18, 255, 327 Haldane Committee, 40 Hamilton, Alexander, xi, 163, 182n22, 195, 209, 293, 443, 547, 567 Hardin, Russell, 154n10, 157n14, 446n16 Hart, Henry, Jr., 278n11 Hart, Oliver, 88n24 Harvard, xi Hawtrey, R.

Empire
by Michael Hardt and Antonio Negri
Published 9 Mar 2000

Smith begins with a theory ofindustry that poses the contradiction between private enrichment and public interest. A first synthesis ofthese two levels is confided to the ‘‘invisible hand’’ ofthe market: the capitalist ‘‘intends only his own gain,’’ but he is ‘‘led by an invisible hand to promote an end which was no part ofhis intention.’’31 This first synthesis, however, is precarious and fleeting. Political economy, considered a branch ofthe science ofthe administrator and legislator, must go much further in conceiving the synthesis. It must understand the ‘‘invisible hand’’ ofthe market as a product ofpolitical economy itself, which is thus directed toward construct- ing the conditions ofthe autonomy ofthe market: ‘‘All systems either ofpreference or ofrestraint, therefore, being thus completely taken away, the obvious and simple system ofnatural liberty estab- lishes itselfofits own accord.’’32 In this case, too, however, the synthesis is not at all guaranteed.

How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World and Everything in It
by Arthur Herman
Published 27 Nov 2001

The first is that Smith believed that the wealth of capitalism was generated by some great, guiding “invisible hand.” In fact, the term, which appears in Wealth of Nations and The Theory of Moral Sentiments, is meant to be taken, once again, as irony. Smith did believe that capitalism produces its own kind of natural rational order, based on the market and its complex, interlocking system of self-interested exchange. To a superficial observer it might appear as if everyone were moving according to a single directing mind or “invisible hand.” But his real point was not that a market-based order was perfect or even perfectible.

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By devoting all his efforts and those of his employees and tenants to his land or his warehouse or factory, he ends up producing far more than he can consume himself: The rich consume little more than the poor [after all, you can drive only one Rolls-Royce at a time] and in spite of their natural selfishness and rapacity, though they mean only their own conveniency [and] their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand [my emphasis] to make the same distribution of the necessarities of life, which would have been made, had the earth been divided into equal portions among all its inhabitants. . . . Thus, without intending it, without knowing it, [the rich] advance the interest of the society, and afford means to the multiplication of the species.

The Price of Inequality: How Today's Divided Society Endangers Our Future
by Joseph E. Stiglitz
Published 10 Jun 2012

Markets matter, as do social forces (like discrimination). This chapter focuses on the myriad forms that rent seeking takes in our society, and the next turns to the other determinants of inequality. GENERAL PRINCIPLES Adam Smith’s invisible hand and inequality Adam Smith, the father of modern economics, argued that the private pursuit of self-interest would lead, as if by an invisible hand, to the well-being of all.5 In the aftermath of the financial crisis, no one today would argue that the bankers’ pursuit of their self-interest has led to the well-being of all. At most, it led to the bankers’ well-being, with the rest of society bearing the cost.

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The formalization of this idea is called the “first welfare theorem of economics.” It asserts that under certain conditions—when markets work well—no one can be made better-off without making someone else worse-off. But, as we shall explain shortly, there are many instances in which markets do not work well. A recent popular analysis is Kaushik Basu, Beyond the Invisible Hand: Groundwork for a New Economics (Princeton: Princeton University Press, 2011). Basu uses the metaphor of a magic show to describe the way the discussion of economics on the political right draws attention to the conclusion of this theorem—that markets are efficient—and away from the very special and unrealistic conditions under which the conclusion holds—perfect markets.

Understanding Asset Allocation: An Intuitive Approach to Maximizing Your Portfolio
by Victor A. Canto
Published 2 Jan 2005

The theoretical argument regarding market efficiency is, however, very compelling. Some time ago, Rex Sinquefield made the case that the efficient market theory—which, in brief, states consistently “beating the market” is improbable because existing stock prices are the result of all current information—is simply an application of Adam Smith’s invisible-hand theory to financial markets. I share this efficient market world view. More, although it is true market inefficiency is a sufficient condition for justifying active management, it is not a necessary condition. In this sense, I again part ways with Sinquefield’s passive-investing-only mandate.

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See corporate debt international price rule, 89 international stocks location cycles, 57-58 optimal mix with domestic stocks, 24-25, 34-37, 125-126 performance of, 16-17, 42 risk measurement, 20 Sharpe ratio, 61-63 investor convictions empirical forecast method, 132-137 probabilities forecast method, 129-132, 137-142, 275-281 qualitative forecast method, 132-137 investor horizons, 115-116, 129 invisible-hand theory, 169 J-K-L Jensen’s alpha. See alpha junk bonds, 75-76 Kennedy, John F., 89 Kerry, John, 84 large-cap stocks active management tested against passive management, 166-168 annual returns, 19 elasticity, 184, 187-189 Index 311 location effect, 190-193, 202-204, 273-274 optimal mix with small-cap stocks, 23-24, 31-32, 123 performance of, 16-18, 41-43 regulatory fixed costs, 184-185 risk measurement, 20 size cycles, 54-55 active versus passive management during, 170-172, 175, 271-272 equal-weighted versus cap-weighted indexes, 175-180 and market breadth, 168-170, 237-238 in value-timing strategy, 243-250 LBOs (leveraged buyouts), 74 legislation.

Hegemony or Survival: America's Quest for Global Dominance
by Noam Chomsky
Published 1 Jan 2003

The secretary-general of the Organization of American States, a strong advocate of neoliberal globalization, opened the annual session by warning that free movement of capital, “the most undesirable feature of globalisation”—in fact, its core feature—is the “greatest obstacle” to democratic governance, just as Keynes had warned.61 The fears go back to Adam Smith. His sole use of the phrase “invisible hand” in Wealth of Nations is in a discussion of the harmful consequences of foreign investment, which England need not fear, he believed, because an “invisible hand” will induce investors to keep their capital at home. The same is true of other parts of the neoliberal package: privatization, for example, reduces the arena of potential democratic choice, dramatically in the case of liberalization of “services,” which has evoked enormous popular opposition.

Will Storr vs. The Supernatural: One Man's Search for the Truth About Ghosts
by Will Storr
Published 4 Sep 2006

And there was more. There had been twenty suicides at the house, all of which involved people hurling themselves off the same place. Their curiosity ignited, Andrew and his father went back to Montpelier Road for a poke about. When Andrew reached the stairs that led up to the tower, he felt invisible hands pushing him up. On reaching the top, he heard a powerful voice in his head telling him the garden was only twelve inches below and that he wouldn’t hurt himself if he jumped. Andrew was only slapped aware of the deadly height of the drop when his dad realised what was about to happen and yanked him back from the edge.

…

Don’t be in such a hurry all the time. You’re not in London now, you know.’ I sit back down and help myself to one of the folders of ghost reports. I flick through the pages. After an hour or so reading, patterns begin to emerge. As well as the usual footsteps and self-closing doors, many people have felt an invisible hand holding theirs, had their hair pulled or felt suddenly overcome with a powerful feeling of sadness in the child’s bedroom, upstairs. But the room next to that is said to be the most troubled of all. I read an interview with the house’s previous owner that’s been cut out of an old local newspaper.

The Upside of Inequality
by Edward Conard
Published 1 Sep 2016

“Civilian Labor Force Participation Rate,” Labor Force Statistics from the Current Population Survey, Bureau of Labor Statistics, accessed September 16, 2015, http://data.bls.gov/timeseries/LNS11300000. 37. Robert Frank, “Darwin, the Market Whiz,” New York Times, September 17, 2011, http://www.nytimes.com/2011/09/18/business/darwin-the-market-whiz.html. Robert Frank, “The Invisible Hand Trumped by Darwin?” New York Times, July 12, 2009, http://www.nytimes.com/2009/07/12/business/economy/12view.html?_r=0. 38. “Poverty Overview,” World Bank, updated April 6, 2015, http://www.world bank.org/en/topic/poverty/overview. 39. Peter Kuhn and Fernando Lozano, “The Expanding Workweek?

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Erik Brynjolfsson, “The Future of Work in the Age of the Machine: A Hamilton Project Policy Forum,” National Press Club, Washington, DC, February 19, 2015, http://www.hamiltonproject.org/assets/legacy/files/download_and_links/2015_02_24_THP_Future_of_Work_in_Machine_Age_tran script_unedited.pdf. 4. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2013). 5. Bradford Delong, “Over at the Washington Center for Equitable Growth: Piketty Day Here at Berkeley: The Honest Broker for the Week of April 26 2014,” Grasping Reality with the Invisible Hand, April 23, 2014, http://delong.typepad.com/sdj/2014/04/piketty-day-here-at-berkeley-the-honest-broker-for-the-week-of-april-26-2014.html. 6. Lawrence Summers, “The Inequality Puzzle,” Democracy, 2014, http://demo cracyjournal.org/magazine/33/the-inequality-puzzle/?page=all. 7. Robert Putnam, Our Kids: The American Dream in Crisis (New York: Simon & Schuster, 2015), 73. 8.

Servant Economy: Where America's Elite Is Sending the Middle Class
by Jeff Faux
Published 16 May 2012

Nelson Drew (Washington, DC: National Defense University, 1994), 90. 20. Meritt Roe Smith, Military Enterprise and Technological Change: Perspectives on the American Experience (Cambridge, MA: MIT Press, 1985), 4; John Gertner, “True Innovation,” Washington Post, February 20, 2012; Fred Block, “Innovation and the Invisible Hand of Government,” in State of Information: The U.S. Government’s Role in Technology Development, ed. Fred Black and Matthew R. Keller (Boulder, CO: Paradigm Publishers, 2011), 5–10. 21. Robert Whaples, “Hours of Work in U.S. History,” Economic History Association, February 1, 2010, http://eh.net/encyclopedia/article/whaples.cork.hours.us. 22.

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He was specific; he condemned the repeal of the Glass-Steagall Act and said it was aimed more at “facilitating mergers than creating an efficient regulatory framework.” It was not simply some policy mistake, he noted. It was the work of a three-hundred-million-dollar lobbying campaign financed by many of the people in his audience. “This was not the invisible hand at work,” he noted. “Instead it was the hand of industry lobbyists tilting the playing field in Washington.”4 Throughout the campaign he eloquently indicted Wall Street and the compromised regulators in Washington. When the bottom finally fell out in September 2008, Obama had been right on the money.

The Price of Everything: And the Hidden Logic of Value
by Eduardo Porter
Published 4 Jan 2011

In 2007, the Congressional Budget Office issued a report about how the nation might bring spiraling health-care costs under control by measuring the cost-effectiveness of medical treatments, as several other countries do. The report warned that putting a price on life might be politically tricky in the United States. “Many people find the notion uncomfortable if not objectionable,” noted the CBO, incompatible with “the sentiment that no expense should be spared to extend a patient’s life.” The invisible hand of the market is as ruthless in denying health care to the needy as the most coldhearted central planner. Our unwillingness to acknowledge life’s price does not mean it doesn’t have one. CHAPTER THREE The Price of Happiness ONE OF MEXICO’S most famous cultural exports, alongside mariachi bands and drunken spring break in Cancún, is the 1979 telenovela titled Los Ricos También Lloran, or The Rich Also Weep.

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But in 1979, more than two hundred years later, Ayatollah Ruhollah Khomeini told the Italian journalist Oriana Fallaci that Iran’s “law of the four wives is a very progressive law, and was written for the good of women since there are more women than men.” Polygamy, he concluded, “is better than monogamy.” IT MIGHT SEEM odd to bring the invisible hand of the market to bear on the most intimate transactions between men and women. But there is an economic rationale for these mating arrangements. It has to do with the relatively low cost of sperm. Prices are on prominent display in the most intimate transaction that we know. In the market for mates, prices are attached to different things—husbands and wives rather than diamonds or sound systems.

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth
by Michael Jacobs and Mariana Mazzucato
Published 31 Jul 2016

Chief among these is that markets generally produce positive outcomes which increase welfare, and should therefore be allowed to operate without much interference wherever possible. A basic regulatory framework of employment, consumer and environmental protection is required to correct for clear externalities and information asymmetries; but governments should not seek to direct markets or shape the businesses which operate in them. The ‘invisible hand’ of the market knows best, generating the highest welfare-producing activities where firms seek to maximise value for their shareholders. Even where the market might seem to get it wrong, governments cannot presume to know better. So governments should be extremely wary of seeking to ‘pick winners’ through industrial and innovation policy; of seeking to push banks and other financial institutions to make specific forms of investments; or of investing in the private economy themselves.

…

But I have seen no evidence for this sudden change in technology—and no theory for why this might have happened. 40 America’s mass incarceration policies have also been an important instrument of discrimination. See M. Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness, New York, The New Press, 2010. 41 For a recent account of this literature, see K. Basu, Beyond the Invisible Hand: Groundwork for a New Economics, Princeton, NJ, Princeton University Press, 2010. See also J. E. Stiglitz, ‘Approaches to the economics of discrimination’, American Economic Review, vol. 62, no. 2, 1973, pp. 287–95 and J. E. Stiglitz, ‘Theories of discrimination and economic policy’, in G. von Furstenberg, Ann R.

Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us About Economics and Life
by Alan B. Krueger
Published 3 Jun 2019

This concern for fairness, which suppresses prices and creates a shortage, is the main reason there is a large and enduring secondary market for scalped tickets. You can’t understand markets or the economy without recognizing when and how the jazz of emotions, psychology, and social relations interfere with the invisible hands of supply and demand. Scale and non-substitutability: the two ingredients that create superstars. Music is the quintessential example of a superstar market, with a small number of players who attract most of the fanfare and earn most of the money. Economists have long understood what enables superstars to dominate certain markets.

…

I call this “block party economics,” and it is a rational way to build an industry and loyal customer base (although to agents like Marc Geiger, it smacks of rock and roll socialism). It is not surprising to see tension between the desire to treat customers fairly and the desire to price to whatever the market will bear in a block party economy. This tension often causes the invisible hand of the market to appear to be all thumbs when it comes to setting the price of concert tickets. Some artists hold to the practice of charging fans a reasonable price irrespective of the price that supply and demand would dictate. Musicians can be sensitive. They care about what is said about them on social media.

Artificial Whiteness
by Yarden Katz

Zeleny has argued that “the economy is not a machine but an organism.”40 When markets are left to be “free,” he claimed, the economy self-maintains and self-regulates without the need for centralized control (much like an organism), and he therefore linked “social autopoiesis” to Hayek’s conception of markets.41 He even described autopoiesis as a way to make notions like Adam Smith’s “Invisible Hand” more explicit in order to illuminate “business self-renewal.”42 This view of autopoiesis rehashes the epistemic forgery of neoliberal economics (which also manifests in AI) that the market is a self-organizing and powerful information-processor that stands outside people and institutions. Theories of living things as complex, self-maintaining systems have been broadly used as metaphors for markets, and vice versa.

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Pylyshyn, “Connectionism and Cognitive Architecture: A Critical Analysis,” Cognition 28, no. 1–2 (1988): 3–71.   50.   Skinner, Reflections on Behaviorism and Society, 15.   51.   As Shoshana Zuboff has argued, the behaviorist frame aligns closely with the ideology of the major platform companies. These platforms are used to delegate “rewards and punishments of a new kind of invisible hand,” making it possible to modify “the behaviors of persons and things for profit and control.” Zuboff, “Big Other: Surveillance Capitalism and the Prospects of an Information Civilization,” Journal of Information Technology 30, no. 1 (2015): 75–89.   52.   For examples of the fascination with “explainable AI,” see Weinberger, “Our Machines Now Have Knowledge”; Finale Doshi-Velez et al., Accountability of AI Under the Law: The Role of Explanation (Cambridge, Mass.: Berkman Klein Center for Internet & Society Research Publication, 2017); David Weinberger, “Don’t Make AI Stupid in the Name of Transparency,” Wired, January 28, 2018.

Why Aren't They Shouting?: A Banker’s Tale of Change, Computers and Perpetual Crisis
by Kevin Rodgers
Published 13 Jul 2016

How many FX staff, like spot brokers before them, could be made redundant? Where it might all end? Not really. As the (possibly apocryphal) quote by quantum physicist Niels Bohr has it, ‘Predictions are very hard to make, especially about the future.’ I suppose I just had a touching faith that if we gave our customers what they wanted, all would be well; the invisible hand would make things turn out fine. I was partly right. Meetings Monkey and Cat Herder A few months later, in early 2000, FX was reorganised. Jim was promoted to a role running FX in Europe and I was asked, along with my colleague Matt, to take over his old job running the options business globally.

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n=PET&s=RWTC&f=D 20 Central Bank of Russia statistics website, http://www.cbr.ru/eng/statistics/print.aspx?file=b_sector/interest_rates_98_e.htm&pid=procstavnew&sid=svodProcStav 21‘An Historical Document: Long-Term Capital Management CEO John Meriwether Asks for Money’, Grasping Reality with the Invisible Hand, http://delong.typepad.com/sdj/2005/06/an_historical_d.html 22 ‘Long-Term Capital Management, Report to Congressional Requesters’, United States General Accounting Office, October 1999, http://www.gao.gov/assets/230/228446.pdf Chapter 6 1 ‘Weather risk market remains buoyant, claims Clemmons’, Paul Lyon, Risk.net, 24 October 2002, http://m.risk.net/risk-magazine/news/1503229/weather-risk-market-remains-buoyant-claims-clemmons 2 Presentation to Merrill Lynch European Banking & Insurance Conference London, Anshu Jain, 8 October 2002, https://www.db.com/ir/en/download/1382.pdf 3 Stern Business School, NYU, datasets, http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html 4 US Treasury data, http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/Historic-LongTerm-Rate-Data-Visualization.aspx 5 2015 Investor Company Handbook, Investment Company Institute, May 2015, Chapter 2, http://www.icifactbook.org/fb_ch2.html#popularity 6 ‘Studies on Stock and Bond Picking Performance’, Mark Hebner, Index Fund Advisors, May 2013, https://www.ifa.com/articles/studies_on_stock_picking_performance/ 7 ‘Speculators Have Discovered Palladium and Sugar’, William Baldwin, Forbes, March 2011, http://www.forbes.com/forbes/2011/0411/investing-william-baldwin-investment-strategies-palladium-sugar.html 8 Presentation to Merrill Lynch European Banking & Insurance Conference London, Anshu Jain, 8 October 2002, Slide 17, https://www.db.com/ir/en/download/1382.pdf 9 Ibid., Slide 14. 10 Market Surveys Data, 1987–2010, ISDA, 2010, http://www.isda.org/statistics/pdf/ISDA-Market-Survey-annual-data.pdf 11 ‘Introducing CCOs’, Credit magazine, February 2005, http://www.risk.net/credit/feature/1510254/introducing-ccos 12 ‘CDO Evaluator Applies Correlation and Monte Carlo Simulation to the Art of Determining Portfolio Quality’, Sten Bergman, Standard and Poor’s, 12 November 2001, http://www.globalriskguard.com/resources/crderiv/sp_portf_qual.pdf 13 ‘“The Formula That Killed Wall Street”?

Sickening: How Big Pharma Broke American Health Care and How We Can Repair It
by John Abramson
Published 15 Dec 2022

That psychology leaves them just as susceptible as ordinary consumers are to manipulation by skillful marketing. In 2013, two Nobel Prize–winning economists, George Akerlof and Robert Shiller, were writing Phishing for Phools: The Economics of Manipulation and Deception. Their book debunks the myth of the utopian market being magically overseen by an “invisible hand.” In it, the authors state that Adam Smith’s unregulated market is not in fact a mechanism for optimally distributing goods and services to the maximum benefit of society; rather, it is a way to exploit human weaknesses (and thus engage in “phishing”). And this is possible because consumers often confuse rational needs and preferences with unconscious desires (like people who choose to purchase a particular car without being aware that the appeal derives from its aura of power or wealth), which renders them vulnerable to exploitation by skillful marketers (and thus destined to act as “phools”).

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Still, the negative consequences of the pharmaceutical industry’s business model reach far beyond the extra $170 billion they take in each year through unregulated and unjustified pricing. As I pointed out in the introduction, American health care has devolved into a “tail wags dog” situation. The invisible hand of the market, even the health-care market, has no social conscience. Nor does it have any commitment to the principle that all Americans deserve the opportunity to reach their health and life potential. Rather, our innovation-based, commercially funded, ROIC-maximizing narrative about health care sustains the appearance of normalcy surrounding our upside-down distribution of resources between medical care and the social aspects of health.

The Centrist Manifesto
by Charles Wheelan
Published 18 Apr 2013

Again, any introductory economics book makes the crucial point that markets do not work efficiently when private behavior generates costs that spill over and harm the rest of us—like air and water pollution. When markets do not send accurate price signals (e.g., when the private cost of producing electricity from coal does not include the cost of CO2 emissions), the “invisible hand” no longer points in a sensible direction. This is an overly technical explanation of what most Americans understand intuitively: private firms should not have free rein to do things that harm public health and well-being. Climate change makes the stakes all the higher in that regard. The Democrats are not effective in communicating their environmental message (Al Gore’s Oscar award notwithstanding), and the policies they advocate are not particularly well designed.

Decline of the English Murder
by George Orwell
Published 24 Jul 2009

Seneca On the Shortness of Life Marcus Aurelius Meditations St Augustine Confessions of a Sinner Thomas à Kempis The Inner Life Niccolò Machiavelli The Prince Michel de Montaigne On Friendship Jonathan Swift A Tale of a Tub Jean-Jacques Rousseau The Social Contract Edward Gibbon The Christians and the Fall of Rome Thomas Paine Common Sense Mary Wollstonecraft A Vindication of the Rights of Woman William Hazlitt On the Pleasure of Hating Karl Marx & Friedrich Engels The Communist Manifesto Arthur Schopenhauer On the Suffering of the World John Ruskin On Art and Life Charles Darwin On Natural Selection Friedrich Nietzsche Why I am So Wise Virginia Woolf A Room of One’s Own Sigmund Freud Civilization and Its Discontents George Orwell Why I Write Confucius The First Ten Books Sun-tzu The Art of War Plato The Symposium Lucretius Sensation and Sex Cicero An Attack on an Enemy of Freedom The Revelation of St John the Divine and The Book of Job Marco Polo Travels in the Land of Kubilai Khan Christine de Pizan The City of Ladies Baldesar Castiglione How to Achieve True Greatness Francis Bacon Of Empire Thomas Hobbes Of Man Sir Thomas Browne Urne-Burial Voltaire Miracles and Idolatry David Hume On Suicide Carl von Clausewitz On the Nature of War Søren Kierkegaard Fear and Trembling Henry David Thoreau Where I Lived, and What I Lived For Thorstein Veblen Conspicuous Consumption Albert Camus The Myth of Sisyphus Hannah Arendt Eichmann and the Holocaust Plutarch In Consolation to his Wife Robert Burton Some Anatomies of Melancholy Blaise Pascal Human Happiness Adam Smith The Invisible Hand Edmund Burke The Evils of Revolution Ralph Waldo Emerson Nature Søren Kierkegaard The Sickness unto Death John Ruskin The Lamp of Memory Friedrich Nietzsche Man Alone with Himself Leo Tolstoy A Confession William Morris Useful Work v. Useless Toil Frederick Jackson Turner The Significance of the Frontier in American History Marcel Proust Days of Reading Leon Trotsky An Appeal to the Toiling, Oppressed and Exhausted Peoples of Europe Sigmund Freud The Future of an Illusion Walter Benjamin The Work of Art in the Age of Mechanical Reproduction George Orwell Books v.

The Skeptical Economist: Revealing the Ethics Inside Economics
by Jonathan Aldred
Published 1 Jan 2009

There is a widespread but implicit belief that non-economists are stupid. The economist Bryan Caplan is more explicit, devoting a book to discussing how non-economists repeatedly suffer from ‘antimarket bias, antiforeign bias, make-work bias, and pessimistic bias’.10 That is, compared to economists, non-economists ‘do not understand the “invisible hand” of the market ... underestimate the benefits of interaction with foreigners ... equate prosperity not with production, but with employment’. Lastly they are ‘overly prone to think that economic conditions are bad and getting worse’.11 It is true that Caplan produces strong evidence to show that ordinary people think differently about economics to those with PhDs in the subject (surprise, surprise).

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Quarterly Journal of Economics 115(1): 99-144 Le Grand, J. (1990) ‘Equity versus efficiency: The elusive trade-off.’ Ethics 100: 554-568 Le Grand, J. (2003) Motivation, Agency, and Public Policy. Oxford, OUP Le Grand, J. (2006) ‘Equality and choice in public services.’ Social Research 73(2): 695-710 Le Grand, J. (2007) The Other Invisible Hand. Princeton, Princeton University Press Leat, D. (1990) For Love and Money. York, Joseph Rowntree Foundation Leat, D. and P. Gay (1987) Paying for Care. London, Policy Studies Institute Levett, R. (2003) A Better Choice of Choice. London, Fabian Society Levitt, S. and S. Dubner (2005) Freakonomics.

A Pelican Introduction Economics: A User's Guide
by Ha-Joon Chang
Published 26 May 2014

Smith’s ideas were further developed in the early nineteenth century by three near-contemporaries – David Ricardo (1772–1823), Jean-Baptiste Say (1767–1832), and Robert Malthus (1766–1834). The invisible hand, Say’s Law and free trade: the key arguments of the Classical school According to the Classical school, the pursuit of self-interests by individual economic actors produces a socially beneficial outcome, in the form of maximum national wealth. This paradoxical outcome is made possible by the power of competition in the market. In their attempts to make profits, producers strive to supply cheaper and better things, ultimately producing their products at the minimum possible costs, thus maximizing national output. This idea is known as the invisible hand and has become arguably the most influential metaphor in economics, although Smith himself used it only once in The Wealth of Nations (TWON) and did not accord it a prominent role in his theory.* Most Classical economists believed in the so-called Say’s Law, which states that supply creates its own demand.

Risk: A User's Guide
by Stanley McChrystal and Anna Butrico
Published 4 Oct 2021

—Captain John Paul Jones, “Father of the US Navy” In reality, risk is neither mathematical nor finite. Its impact depends to a great extent on how we perceive, process, and respond. The Blade Above The heavy sword hung from the palace ceiling by a single horsehair, its sharpened blade pointed downward as if an invisible hand executing a lethal thrust from above had been suddenly stopped. Directly below, in sharp contrast to the image of imminent violence, a man sat on a regal bed of gold, surrounded by delicacies of food and drink while servants attended to his desires. The sword belonged to Dionysius II, the king of Syracuse, and it loomed over Damocles, a subject of the monarch who was receiving an unsubtle lesson in the perils of power, simultaneously enjoying its benefits while being made acutely aware of its mortal dangers.

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(Photo by Leslie Jones) The SEC wasn’t alone in assuming Madoff’s good intentions: JPMorgan, who ran his bank account, did not raise any red flags about signs of money laundering, nor did accounting firms identify anything suspicious in their financial reviews. There was a demonstrated willingness for stakeholders to cover their eyes—to unquestionably accept something that was too good to be true, as long as it served their short-term benefit. As we shall examine in more detail throughout this chapter, bias is an invisible hand driven by self-interest. Too often it contributes to and reinforces an unfair system. It foments willful blindness, creating narratives that achieve personal goals at the cost of greater equity and justice. We all live with biases—biases of those around us and biases of our own. Left unexamined and unchecked, they can skew our ability to respond to threats.

The Einstein of Money: The Life and Timeless Financial Wisdom of Benjamin Graham
by Joe Carlen
Published 14 Apr 2012

However, he was skeptical of those with a quasi-religious faith in the unmitigated societal benefits of unrestrained capitalism. Regarding Adam Smith's oft-quoted principle of the “invisible hand” (in which participants in a capitalist economy make decisions that, though motivated by personal profit, ultimately benefit society at large), Graham made the following observation at an address he delivered just months after retiring from Graham-Newman: This point of view [Smith's “invisible hand”] still has validity, but not in the unqualified over-enthusiastic way in which the proponents of laissez-faire presented it. It is now being offset by a complementary point of view, expressed by Peter F.

On Grand Strategy
by John Lewis Gaddis
Published 3 Apr 2018

Enshrined formally in the 1648 Treaty of Westphalia, it saw little significance in the internal configuration of states: what mattered was their external behavior.63 But Machiavelli understands balancing in a second and subtler sense, conveyed more explicitly in The Discourses than in The Prince: [I]t is only in republics that the common good is looked to properly in that all that promotes it is carried out; and, however much this or that private person may be the loser on this account, there are so many who benefit thereby that the common good can be realized in spite of those few who suffer in consequence.64 This idea of an internal equilibrium within which competition strengthens community wouldn’t appear again until Adam Smith unveiled an “invisible hand” in The Wealth of Nations (1776), until the American Founding Fathers drafted and in The Federalist justified constitutional checks and balances (1787–88), and until Immanuel Kant linked republics, however distantly, with Perpetual Peace (1795). From all of this would emerge the twentieth-century idea of an international system consistent with order and justice, 65 although Augustine had foreseen it long before.

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Averell, 286 Hedgehog and the Fox, The (Berlin), 4–5 hedgehogs, 215, 289–90 Berlin’s concept of foxes vs., 4–6 ends given priority over means by, 12–13, 310 leaders as, 26–27 as poor political forecasters, 6–9 reconciling fox thinking with, 14–16, 17–19, 309 self-confidence of, 9, 310 see also foxes Hellespont, 1–3, 8, 12, 24, 25, 30, 203 hendiadys, 147–49 Henry II, king of France, 127, 128 Henry V, king of England (char.), 223 Henry VIII, king of England, 127–28, 146 nationalization of English Catholicism by, 124, 133, 137 Herndon, William, 224, 245 Herodotus, 1, 6, 7, 8, 10, 12, 32 Hilton, Lisa, 139 Hippo Regius, 97, 98, 105 Hirtius (Roman consul), 71 historians, gaps between theorists and, 23 history: counterfactual, 149–50 dramatizations (narratives) and, 16, 18–19, 62 Machiavelli on usefulness of, 108 Thucydides on usefulness of, 32–33, 62 History (Herodotus), 12 Hitler, Adolf, 279–80, 284 Anglo-French appeasement of, 282 in nonaggression pact with Stalin, 283, 284 war on U.S. declared by, 288 Hobbes, Thomas, 117 Holmes, Oliver Wendell, Jr., 308 Holy Roman empire, 89–90, 130 Homer, 22, 85 Hoover, Herbert, 277, 278–79 Hopkins, Harry, 286 House, Edward M., 267–68, 270–71 House of Commons, British, 180–81 House of Representatives, U.S., 182, 218, 220–21, 224 Howard, Charles, 144 Howard, Michael, 192, 197 Hull, Cordell, 300 Ignatieff, Michael, 302 Iliad (Homer), 85 imagination, strategy and, 201, 203 improvisation: by FDR, 282 planning vs., 24–25, 26 intellect, temperament and, 308 intellectual capital, 23 intemperance, 309 intentions, see means, alignment of ends with “invisible hand,” 115 Ireland, 133–34 irony, 194 Isabel of France, queen of Spain, 128 “island” strategy, 31, 35, 36–37, 50, 54–55 Jackson, Andrew, 178, 218–19 James II, king of England, 157 James VI, king of Scotland, 141 Japan, 54 in attack on Pearl Harbor, 287, 288, 297 expansionism of, 280, 282 Jefferson, Thomas, 163–64, 175, 177 Johnson, Hiram, 301 Johnson, Lyndon, 312 Johnson, Samuel, 170 joint-stock companies, 153, 155 Jomini, Antoine-Henri, 237 Judaism, 94–95 Julia (Augustus’ daughter), 87–88, 89 justice: Augustine on order as necessary for, 101, 105, 114, 116 Machiavelli on, 112 order vs., 100 just wars, see war, just Kagan, Robert, 256 Kahneman, Daniel, 20 Kansas-Nebraska Act (1854), 225–26, 230 Kant, Immanuel, 115–16, 196 Kennan, George (surveyor), 93–94, 116 Kennan, George F., 93, 115, 260 Kennedy, John F., 60 Kennedy, Paul, 266 Kennedy, Robert F., 311 Kim Il-sung, 54 Kissinger, Henry, 58, 115, 274 on World War I, 263–64 knowledge, universal vs. local, 23 knowns, strategy and, 214–15 Korean War, 54, 55–56 Kundera, Milan, 107 Kushner, Tony, 17 Kutuzov, Mikhail, 189, 198, 199, 215 Tolstoy’s portrayal of, 206–7 Landon, Alf, 300 laws, theory vs., 191–92, 210–11 leaders, leadership: and alignment of means with ends, 204, 215 as combining fox and hedgehog thinking, 47–48 common sense and, 19, 20–21 as cultivators, 48–49, 84, 86, 90–91 friction and, 202, 204, 208 hedgehog thinking and, 26–27 Machiavelli on, 112–14 as navigators, 47–49, 84, 86 persuasion vs. confrontation in, 48–49 Sun Tzu on qualities of, 68 theory and, 208–9 League of Nations, 274, 275, 281 Lee, Robert E., 236, 242 Leicester, Earl of, 143 Lend-Lease, 286 Lenin, Vladimir Ilich, 272, 276, 278, 306 Leonidas, 10–11 Lepidus, 71–72, 76, 79 Lesbos, 51 Lexington and Concord, battles of (1775), 163 liberty: and necessity of choice, 15, 310–11 positive vs. negative, 310–11, 312 “lightness of being,” 107, 109, 118, 134, 147 Lincoln, Abraham, 24, 174, 175, 267, 309 alignment of ends and means by, 240 appearance of, 222 assassination of, 255 in balancing law and military necessity, 238 cabinet of, 233 in call for antislavery amendment, 243–44 childhood of, 221–22 as circuit court lawyer, 227 Civil War strategy of, 236–37, 240, 249, 251 Clausewitz’s principles intuited by, 237, 240, 249, 252 as combination of fox and hedgehog, 16–17, 19, 20 common sense of, 19, 20, 239, 250 as congressman, 221, 224 coup d’oeil of, 239–40, 243, 249 debating style of, 227–28 early jobs of, 223 in 1860 election, 232–33 in 1864 election, 247–48 Emancipation Proclamation of, 242–43, 247, 251 fatalism of, 222–23 first inaugural address of, 234 on free will vs. determinism, 253 in gradual adoption of abolitionism, 240–42 “House Divided” speech of, 230–31 humor as used by, 222 internal improvements and, 244–45 J.

The Snow Queen
by Joan D. Vinge
Published 1 Feb 2001

They boarded the shuttle at the tail of the crowd. Moon caught a glimpse of its tubby, boxlike exterior through the airlock's port: It was a crate, just as Cress had said, with no propulsion of its own. It was drawn down to the planet and shunted back up again just like any other piece of freight, clutched in an invisible hand of repeller-or tractor--beams from one of the planetary distribution centers. A shipping window was a column of no-man's space thirty meters wide, licking out into the zone of heavy industry between Kharemough and its moons. On board they were led to tiers of seats above a central floor screen that showed her a view of the planet's surface, misty with blue and khaki; she tried to concentrate on the solid immensity of it, and not to remember that it was unspeakably far below them.

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The island centrally below grew until it was all she could see, dividing and redividing into murals of mountain, forest, farmland, all rolling inexorably into morning .. . and then, before she quite realized it, a slender ring of twilit city laid out in ripples concentric around an immense, shining, treeless plain. ".. . landing field," Elsevier said. At the final moment she had the feeling that another giant's invisible hand plucked them out of the air, before they impacted on the glowing grid lines of the field. It swept them aside, into one of the stolid warehouse buildings that peri metered the landing area, and at last set them down. The crowd of passengers left the warm-colored interior of the passenger terminal.

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The past becomes a continuous future, unless you break the Change.. .. No further analysis!" Aspundh's head dropped forward; he leaned against the table for a long moment before he looked up again. "It seemed to be--night, there." He took a sip from his drink. "And the room was full of strange faces.. .." Moon picked up her own glass, drank to loosen the invisible hand closing on her throat. He loved you, but he loves her now. Page 113 "What did I say?" Aspundh looked toward her, clear eyed again, but his face was drained and drawn. She told him, haltingly, helped on by the others. "But I don't understand it.. .." _I_ don't understand it! How could he love .. .

Antifragile: Things That Gain From Disorder
by Nassim Nicholas Taleb
Published 27 Nov 2012

Adam Smith himself made the analogy of the economy as a watch or a clock that once set in motion continues on its own. But I am certain that he did not quite think of matters in these terms, that he looked at the economy in terms of organisms but lacked a framework to express it. For Smith understood the opacity of complex systems as well as the interdependencies, since he developed the notion of the “invisible hand.” Click here for a larger image of this table. But alas, unlike Adam Smith, Plato did not quite get it. Promoting the well-known metaphor of the ship of state, he likens a state to a naval vessel, which, of course, requires the monitoring of a captain. He ultimately argues that the only men fit to be captain of this ship are philosopher kings, benevolent men with absolute power who have access to the Form of the Good.

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Matt Ridley’s Anti-Teleological Argument The great medieval Arabic-language skeptic philosopher Algazel, aka Al-Ghazali, who tried to destroy the teleology of Averroes and his rationalism, came up with the famous metaphor of the pin—now falsely attributed to Adam Smith. The pin doesn’t have a single maker, but twenty-five persons involved; these are all collaborating in the absence of a central planner—a collaboration guided by an invisible hand. For not a single one knows how to produce it on his own. In the eyes of Algazel, a skeptic fideist (i.e., a skeptic with religious faith), knowledge was not in the hands of humans, but in those of God, while Adam Smith calls it the law of the market and some modern theorist presents it as self-organization.

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And, no, you cannot centralize innovations, we tried that in Russia. Remarkably, to get a bit more philosophical with the ideas of Algazel, one can see religion’s effect here in reducing dependence on the fallibility of human theories and agency—so Adam Smith meets Algazel in that sense. For one the invisible hand is the market, for the other it is God. It has been difficult for people to understand that, historically, skepticism has been mostly skepticism of expert knowledge rather than skepticism about abstract entities like God, and that all the great skeptics have been largely either religious or, at least, pro-religion (that is, in favor of others being religious).

The Long Twentieth Century: Money, Power, and the Origins of Our Times
by Giovanni Arrighi
Published 15 Mar 2010

Both groups were the “governors,” not of the “imperial engine,” but of the finances of the imperial engine. They were business cliques who, in view of a profit and by means of the cosmopolitan business network which they controlled, acted as the “invisible hand” of an imperial organization — Imperial Britain and Imperial Spain, respectively. Thanks to this “invisible hand,” both imperial organizations could reach and control a greater number and variety of power and credit networks than they would have ever been able to do just by deploying the “visible hand” of their stateand war-making apparatuses. Instrumentality ran both ways.

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In the latter half of the sixteenth century, however, the Genoese “nation” emerged as by far the most powerful among them. In 1617, Suarez de Figueroa went as far as claiming that Spain and Portugal had become “the Indies of the Genoese” (quoted in Elliott 1970b: 96). The hyperbole contained an important element of truth. As we shall detail in the next chapter, in the half-century or so preceding 1617 the “invisible hand” of Genoese capital, operating through the triangle-offlows that linked Seville, Antwerp, and Bisenzone to one another, had succeeded in turning the power pursuits of Imperial Spain, as well as the industrial pursuits of Genoa’s old rival and “model” city-state Venice, into powerful engines of its own self-—expansion.

The confusion
by Neal Stephenson
Published 13 Apr 2004

“As I watched Yevgeny’s bout this evening,” Moseh continued, “it came to me that said market is a sort of Invisible Hand that grips us all by the testicles—” “Hold, hold! Are you babbling some manner of Cabbalistic superstition now?” “No, Jack, now I am using a similitude. For there is no Invisible Hand—but there might as well be.” “Very good—pray continue.” “The workings of the market dictate that tutsaklar who are likely to be ransomed, and for large fees, are well-treated—” “And ones like us end up as galley-slaves,” Jack said. “And ’tis clear enough to me why I am assessed a low value by this market, and my nuts gripped most oppressively by the Invisible Hand of which you spoke.

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But this ship was captured by the corsairs of Rabat, and we all ended up galley-slaves together, rowing to the strains of the Hava Negila; which, owing to its tiresome knack for getting stuck in the head, was the only Jewish song we knew.” “All right,” Jack said, “I am satisfied, now, that it is true what you said: namely that the Invisible Hand of yonder market is gripping our cojones just like that Nubian wrestler did Yevgeny’s. And now I suppose you’re going to say we should all do like the Rus and ignore the pain and swelling and score some sort of magnificent triumph of the human spirit, or some shit like that. Anyway, I am willing to listen, as it seems preferable to bedding down in the banyolar to listen to the antiphonal coughing of a thousand consumptive oar-slaves.”

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When he tore his dark, quasi-Mongol eyes away from Sophie Charlotte (not easy in that she was very likely the most lovely and interesting female he had ever seen) and got a load of the tableau in the dining room, he came to a stop. His left eye twitched shut as if he were winking, then struggled open, then did it again. Then the whole left side of his face contorted as if an invisible hand had gripped his cheek and twisted it. He pulled free of Sophie Charlotte’s arm and clapped both hands over his face for a few moments, possibly from embarrassment and possibly to hide this twitching. Then both hands lunged out as he strode forward. He was so shockingly colossal that it seemed as if he were diving forward, launching himself towards his three guards like an immense bat.

Darwin Among the Machines
by George Dyson
Published 28 Mar 2012

Any brain, machine, or other thing that has a mind must be composed of smaller things that cannot think at all.”38 Or, as Samuel Butler put it in 1887: “Man is only a great many amoebas, most of them dreadfully narrow-minded, going up and down the country with their goods and chattels.”39 The archetypal invisible hand of Adam Smith (“He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”)40 appears to be capable of building not only an economy, or a damage-resistant communications network, but a brainlike structure, perhaps a mind. “Probably the closest parallel structure to the Internet is the free market economy,” observed Paul Baran.41 The incubation of intelligence within a network requires an exceptionally fluid, arborescent structure and the infiltration of this architecture by a statistical language analogous to the primary statistical language that von Neumann identified as the machine language of the brain.

How Will Capitalism End?
by Wolfgang Streeck
Published 8 Nov 2016

Capitalist society may be described in shorthand as a ‘progressive’ society in the sense of Adam Smith1 and the enlightenment, a society that has coupled its ‘progress’ to the continuous and unlimited production and accumulation of productive capital, effected through a conversion, by means of the invisible hand of the market and the visible hand of the state, of the private vice of material greed into a public benefit.2 Capitalism promises infinite growth of commodified material wealth in a finite world, by conjoining itself with modern science and technology, making capitalist society the first industrial society, and through unending expansion of free, in the sense of contestable, risky markets, on the coat-tails of a hegemonic carrier state and its market-opening policies both domestically and internationally.3 As a version of industrial society, capitalist society is distinguished by the fact that its collective productive capital is accumulated in the hands of a minority of its members who enjoy the legal privilege, in the form of rights of private property, to dispose of such capital in any way they see fit, including letting it sit idle or transferring it abroad.

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A short recapitulation of the history of modern capitalism serves to illustrate this point.10 Liberal capitalism in the nineteenth century was confronted by a revolutionary labour movement that needed to be politically tamed by a complex combination of repression and co-optation, including democratic power sharing and social reform. In the early twentieth century, capitalism was commandeered to serve national interests in international wars, thereby converting it into a public utility under the planning regimes of a new war economy, as private property and the invisible hand of the market seemed insufficient for the provision of the collective capacities countries needed to prevail in international hostilities. After the First World War, restoration of a liberal-capitalist economy failed to produce a viable social order and had to give way in large parts of the industrial world to either Communism or Fascism, while in the core countries of what was to become ‘the West’ liberal capitalism was gradually succeeded, in the aftermath of the Great Depression, by Keynesian, state-administered capitalism.

Seventeen Contradictions and the End of Capitalism
by David Harvey
Published 3 Apr 2014

In cultivating monopoly power, capital realises far-reaching control over production and marketing. It can stabilise the business environment to allow for rational calculation and long-term planning, the reduction of risk and uncertainty. The ‘visible hand’ of the corporation, as Alfred Chandler terms it, has been and continues to be just as important to capitalist history as Adam Smith’s ‘invisible hand’.7 The ‘heavy hand’ of state power exercised broadly in support of capital also plays its part. Monopoly power is strongly associated with the centralisation of capital. On the other hand competition generally entails decentralisation. It is useful here to consider this cognate relation between the centralisation and decentralisation of political-economic activities as a subset of the contradictory unity between monopoly and competition.

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283 Maddison, Angus 227 Maghreb 174 Malcolm X 291 Maldives 260 Malthus, Thomas 229–30, 232–3, 244, 246, 251 Manchester 149, 159 Manhattan Institute 143 Mansion House, London 201 manufacturing 104, 239 Mao Zedong 291 maquilas 129, 174 Marcuse, Herbert 204, 289 market cornering 53 market economy 198, 205, 276 marketisation 243 Marshall Plan 153 Martin, Randy 194 Marx, Karl 106, 118, 122, 142, 207, 211 and alienation 125, 126, 213 in the British Museum library 4 on capital 220 conception of wealth 214 on the credit system 239 and deskilling 119 on equal rights 64 and falling profits 107 and fetishism 4 on freedom 207, 208, 213 and greed 33 ‘industrial reserve army’ 79–80 and isolation of workers 125 labour theory of value 109 and monetary system reforms 36 monopoly power and competition 135 reality and appearance 4, 5 as a revolutionary humanist 221 and social reproduction 182 and socialist utopian literature 184 and technological innovation 103 and theorists of the political left 54 and the ‘totally developed individual’ 126–7 and world crises xiii; Capital 57, 79–80, 81, 82, 119, 129, 132, 269, 286, 291–2 The Economic and Philosophic Manuscripts of 1844 269, 286 Grundrisse 97, 212–13 Theories of Surplus Value 1 Marxism contradiction between productive forces and social relations 269 ‘death of Marxism’ xii; ecologically sensitive 263 and humanism 284, 286, 287 ‘profit squeeze’ theory of crisis formation 65 traditional Marxist conception of socialism/ communism 91 Marxists 65, 109 MasterCard Priceless 275 Mau Mau movement 291 Melbourne 141 merchants 67 and industrial capital 179 price-gouging customers 54 and producers 74–5 Mercosur 159 Mexican migrants 115, 175, 195–6 Mexico 123, 129, 174 Mexico City riots (1968) x microcredit 194, 198 microfinance 186, 194, 198, 211 Microsoft 131 Middle East 124, 230 Milanovic, Branko 170 military, the capacities and powers 4 dominance 110 and technology 93, 95 ‘military-industrial complex’ 157 mind-brain duality 70 mining 94, 113, 123, 148, 239, 257 MIT (Massachusetts Institute of Technology) 292 Mitchell, David: Cloud Atlas 264 Mitchell, Timothy 122 Modern Times (film) 103 Mondragon 180 monetarism xi monetary wealth and incomes, inequalities in (1920s) x 1071 monetisation 44, 55, 60, 61, 62, 115, 192–3, 198, 235, 243, 250, 253, 261, 262 money abandonment of metallic basis of global moneys 30, 37, 109 circulation of 15, 25, 30–31, 35 coinage 15, 27, 29, 30 commodification of 57 commodity moneys 27–31 creation of 30, 51, 173, 233, 238–9, 240 credit moneys 28, 30, 31, 152 cyber moneys 36, 109–10 electronic moneys 27, 29, 35, 36, 100 and exchange value 28, 35, 38 fiat 8, 27, 30, 40, 109, 233 gap between money and the value it represents 27 global monetary system 46–7 love of money as a possession 34 measures value 25, 28 a moneyless economy 36 oxidisation of 35 paper 15, 27, 29, 30, 31, 37, 40, 45 power of 25, 36, 59, 60, 62, 65–66, 131–6, 245, 266 quasi-money 35 relation between money and value 27, 35 represented as numbers 29–30 and social labour 25, 27, 31, 42, 55, 88, 243 and the state 45–6, 51, 173 storage of value 25, 26, 35 the US dollar 46–7 use value 28 money capital 28, 32, 59, 74, 142, 147, 158, 177, 178 money laundering 54, 109 ‘money of account’ 27–8, 30 monopolisation 53, 145 monopoly, monopolies 77 and competition 131–45, 218, 295 corporate 123 monetary system 45, 46, 48, 51 monopoly power 45, 46, 51, 93, 117, 120, 132, 133–4, 136, 137, 139, 141, 142–3 monopoly pricing 72, 132 natural 118, 132 of state over legitimate use of force and violence 42, 44, 45, 51, 88, 155, 173 see also prices, monopoly monopsony 131 Monsanto 123 Montreal Protocol 254, 259 ‘moral restraints’ 229, 233 mortgages 19, 21, 28, 32, 54, 67, 82, 239 multiculturalism 166 Mumbai 155, 159 Murdoch, Rupert xi Myrdal, Gunnar 150 N NAFTA 159 name branding 31, 139 nano-trading 243 Nation of Islam 291 national debt 45, 226, 227 National Health Service 115 National Labor Relations Board 120 National Security Administration 136 nationalisation 50 nationalism 7, 8, 44, 289 natural resources 58, 59, 123, 240, 241, 244, 246, 251 nature 56 alienation from 263 capital’s conception of 252 capital’s relation to 246–63 commodification of 59 domination of 247, 272 Heidegger on 59, 250 Polanyi on 58 power over 198 process-thing duality 73 and technology 92, 97, 99, 102 Nazis 151 neoclassical economists 109 neocolonialism 143, 201 neoliberal era 128 neoliberal ethic 277 neoliberalisation x, 48 neoliberalism xiii, 68, 72, 128, 134, 136, 176, 191, 234, 281 capitalism 266 consensus 23 counter-revolution 82, 129, 159, 165 political programme 199 politics 57 privatisation 235 remedies xi Nevada, housing in 77 ‘new economy’ (1990s) 144 New York City 141, 150 creativity 245 domestic labour in 196 income inequality 164 rental markets 22 social reproduction 195 Newton, Isaac 70 NGOs (non-governmental organisations) 189, 210, 284, 286, 287 Nike 31 Nkrumah, Kwame 291 ‘non-coincidence of interests’ 25 Nordic countries 165 North America deindustrialisation in 234 food grain exports 148 indigenous population and property rights 39 women in labour force 230 ‘not in my back yard’ politics 20 nuclear weapons 101 Nyere, Julius 291 O Obama, Barack 167 occupational safety and health 72 Occupy movement 280, 292 Ohlin Foundation 143 oil cartel 252 companies 77, 131 ‘Seven Sisters’ 131 embargo (1973) 124 ‘peak oil’ 251–2, 260 resources 123, 240, 257 oligarchy, oligarchs 34, 143, 165, 221, 223, 242, 245, 264, 286, 292 oligopoly 131, 136, 138 Olympic Games 237–8 oppositional movements 14, 162, 266–7 oppression 193, 266, 288, 297 Orwell, George 213 Nineteen Eighty-Four 202 overaccumulation 154 overheating 228 Owen, Robert 18, 184 Oxfam xi, 169–70 P Paine, Tom: Rights of Man 285 Paris 160 riots (1968) x patents 139, 245, 251 paternalism 165, 209 patriarchy 7 Paulson, Hank 47 pauperisation 104 Peabody, George 18 peasantry ix, 7, 107, 117, 174, 190, 193 revolts 202 pensions 134, 165, 230 rights 58, 67–8, 84, 134 people of colour: disposable populations 111 Pereire, Emile 239 pesticides 255, 258 pharmaceuticals 95, 121, 123, 136, 139 Philanthropic Colonialism 211 philanthropy 18, 128, 189, 190, 210–11, 245, 285 Philippines 115, 196 Picasso, Pablo 140–41, 187, 240 Pinochet, Augusto x Pittsburgh 150, 159, 258 planned obsolescence 74 plutocracy xi, xii, 91, 170, 173, 177, 180 Poland 152 Polanyi, Karl 56, 58, 60, 205–7, 210, 261 The Great Transformation 56–7 police 134 brutality 266 capacities and powers 43 powers xiii, 43, 52 repression 264, 280 surveillance and violence 264 violence 266, 280 police-state 203, 220 political economy xiv, 54, 58, 89, 97, 179–80, 182, 201, 206–9 liberal 204, 206, 209 political parties, incapable of mounting opposition to the power of capital xii political representation 183 pollutants 8, 246, 255 pollution 43, 57, 59, 60, 150, 250, 254, 255, 258 Pontecorvo, Gillo 288 Ponzi schemes 21, 53, 54, 243 population ageing 223, 230 disposable 108, 111, 231, 264 growth 107–8, 229, 230–31, 242, 246 Malthus’s principle 229–30 Portugal 161 post-structuralism xiii potlatch system 33 pounds sterling 46 poverty 229 anti-poverty organisations 286–7 and bourgeois reformism 167 and capital 176 chronic 286 eradication of 211 escape from 170 feminisation of 114 grants 107 and industrialisation 123 and population expansion 229 and unemployment 170, 176 US political movement denies assistance to the poor 292–3 and wealth 146, 168, 177, 218, 219, 243 world xi, 170 power accumulation of 33, 35 of capital xii, 36 class 55, 61, 88, 89, 97, 99, 110, 134, 135, 221, 279 computer 105 and currencies 46 economic 142, 143, 144 global 34, 170 the house as a sign of 15–16 of labour see under labour; of merchants 75 military 143 and money 25, 33, 36, 49, 59, 60, 62, 63, 65–6, 245, 266 monopoly see monopoly power; oligarchic 292 political 62, 143, 144, 162, 171, 219, 292 purchasing 105, 107 social 33, 35, 55, 62, 64, 294 state 42–5, 47–52, 72, 142, 155–9, 164, 209, 295 predation, predators 53, 54, 61, 67, 77, 84, 101, 109, 111, 133, 162, 198, 212, 254–5 price fixing 53, 118, 132 price gouging 132 Price, Richard 226, 227, 229 prices discount 133 equilibrium in 118 extortionate 84 food 244, 251 housing 21, 32, 77 land 77, 78, 150 low 132 market 31, 32 and marketplace anarchy 118 monopoly 31, 72, 139, 141 oil 251, 252 property 77, 78, 141, 150 supermarket 6 and value 31, 55–6 private equity firms 101, 162 private equity funds 22, 162 private property and the commons 41, 50, 57 and eradication of usufructuary rights 41 and individual appropriation 38 and monopoly power 134–5, 137 social bond between human rights and private property 39–40 and the state 47, 50, 58, 59, 146, 210 private property rights 38–42, 44, 58, 204, 252 and collective management 50 conferring the right to trade away that which is owned 39 decentralised 44 exclusionary permanent ownership rights 39 and externality effects 44 held in perpetuity 40 intellectual property rights 41 microenterprises endowed with 211 modification or abolition of the regime 14 and nature 250 over commodities and money 38 and state power 40–41, 42–3 underpinning home ownership 49 usufructuary rights 39 privatisation 23, 24, 48, 59, 60, 61, 84, 185, 235, 250, 253, 261, 262, 266 product lines 92, 107, 219, 236 production bourgeois 1 falling value of 107 immaterial 242 increase in volume and variety of 121 organised 2 and realisation 67, 79–85, 106, 107, 108, 173, 177, 179, 180, 221, 243 regional crises 151 workers’ dispossession of own means of 172 productivity 71, 91, 92, 93, 117, 118, 121, 125, 126, 132, 172, 173, 184, 185, 188, 220, 239 products, compared with commodities 25–6 profitability 92, 94, 98, 102, 103, 104, 106, 112, 116, 118, 125, 147, 184, 191–2, 240, 252, 253, 256, 257 profit(s) banking 54 as capital’s aim 92, 96, 232 and capital’s struggle against labour 64, 65 and competition 93 entrepreneurs 24, 104 falling 81, 107, 244 from commodity sales 71 and money capital 28 monopoly 93 rate of 79, 92 reinvestment in expansion 72 root of 63 spending of 15 and wage rates 172 proletarianisation 191 partial 175, 190, 191 ‘property bubble’ 21 property market boom (1920s) 239 growth of 50 property market crashes 1928 x, 21 1973 21 2008 21–2, 54, 241 property rights 39, 41, 93, 135 see also intellectual property rights; private property property values 78, 85, 234 ‘prosumers’ 237 Proudhon, Pierre-Joseph 183 Prozac 248 public goods 38 public utilities 23, 60, 118, 132 Q quantitative easing 30, 233 R R&D ix race 68, 116, 165, 166, 291 racial minorities 168 racialisation 7, 8, 62, 68 racism 8 Rand, Ayn 200 raw materials 16, 17, 148, 149, 154 Reagan, Ronald x, 72 Speech at Westminster 201 Reagan revolution 165–166 realisation, and production 67, 79–85, 106, 107, 108, 173, 177, 179, 180, 221, 243 reality contradiction between reality and appearance 4–6 social 27 Reclus, Elisée 140 regional development 151 regional volatility 154 Reich, Robert 123, 188 religion 7 religious affiliation 68 religious hatreds and discriminations 8 religious minorities 168 remittances 175 rent seeking 132–3, 142 rentiers 76, 77, 78, 89, 150, 179, 180, 241, 244, 251, 260, 261, 276 rents xii, 16–19, 22, 32, 54, 67, 77, 78, 84, 123, 179, 241 monopoly 93, 135, 141, 187, 251 repression 271, 280 autocratic 130 militarised 264 police-state 203 violent 269, 280, 297 wage 158, 274 Republican Party (US) 145, 280 Republicans (US) 167, 206 res nullius doctrine 40 research and development 94, 96, 187 ‘resource curse’ 123 resource scarcity 77 revolution, Fanon’s view of 288 revolutionary movements 202, 276 Ricardo, David 122, 244, 251 right, the ideological and political assault on the left xii; response to universal alienation 281 ‘rights of man’ 40, 59, 213 Rio de Janeiro 84 risk 17, 141, 162, 219, 240 robbery 53, 57, 60, 63, 72 robotisation 103, 119, 188, 295 Rodney, Walter 291 romantic movement 261 Roosevelt, Theodore 131, 135 Four Freedoms 201 Rousseau, Jean-Jacques 213, 214 Ruhr, Germany 150 rural landscapes 160–61 Russia 154 a BRIC country 170, 228 collapse of (1989) 165 financial crisis (1998) 154, 232 indebtedness 152 local famine 124 oligarchs take natural resource wealth 165 S ‘S’ curve 225, 230–31 Saint-Simon, Claude de Rouvroy, comte de 183 sales 28, 31, 187, 236 San Francisco 150 Santiago, Chile: street battles (2006–) 185 Sao Paulo, Brazil 129, 195 savings the house as a form of saving 19, 22, 58 loss of 20, 58 private 36 protecting the value of 20 Savings and Loan Crisis (USA from 1986) 18 savings accounts 5, 6 Scandinavia 18, 85, 165 scarcity 37, 77, 200, 208, 240, 246, 260, 273 Schumpeter, Joseph 98, 276 science, and technology 95 Seattle 196 Second Empire Paris 197 Second World War x, 161, 234 Securities and Exchange Commission 120, 195 security xiii, 16, 121, 122, 165, 205, 206 economic 36, 153 food 253, 294, 296 job 273 national 157 Sen, Amartya 208–11, 281 Development as Freedom 208–9 senior citizens 168 Seoul 84 serfdom 62, 209 sexual hatreds and discriminations 8 Shanghai 153, 160 share-cropping 62 Sheffield 148, 149, 159, 258 Shenzhen, China 77 Silicon Valley 16, 143, 144, 150 silver 27–31, 33, 37, 57, 233, 238 Simon, Julian 246 Singapore 48, 123, 150, 184, 187, 203 slavery 62, 202, 206, 209, 213, 268 slums ix, 16, 175 Smith, Adam 98, 125–6, 157, 185, 201, 204 ‘invisible hand’ 141–2 The Wealth of Nations 118, 132 Smith, Neil 248 social distinction 68, 166 social inequality 34, 110, 111, 130, 171, 177, 180, 220, 223, 266 social justice 200, 266, 268, 276 social labour 53, 73, 295 alienated 64, 66, 88 and common wealth 53 creation of use values through 36 expansion of total output 232 household and communal work 296 immateriality of 37, 233 and money 25, 27, 31, 42, 55, 88, 243 productivity 239 and profit 104 and value 26, 27, 29, 104, 106, 107, 109 weakening regulatory role of 109, 110 social media 99, 136, 236–7, 278–9 social movements 162–3 social reproduction 80, 127, 182–98, 218, 219, 220, 276 social security 36, 165 social services 68 social struggles 156, 159, 165, 168 social value 26, 27, 32, 33, 55, 172, 179, 241, 244, 268, 270 socialism 215 democratic xii; ‘gas and water’ 183 socialism/communism 91, 269 socialist revolution 67 socialist totalitarianism 205 society capitalist 15, 34, 81, 243, 259 civil 92, 122, 156, 185, 189, 252 civilised 161, 167 complex 26 demolition of 56 and freedom 205–6, 210, 212 hope for a better society 218 industrial 205 information 238 market 204 post-colonial 203 pre-capitalist 55 primitive 57 radical transformation of 290 status position in 186 theocratic 62 women in 113 work-based 273 world 204 soil erosion 257 South Africa 84–5, 152, 169 apartheid 169, 202, 203 South Asia labour 108 population growth 230 software programmers and developers 115, 116 South Korea 123, 148, 150, 153 South-East Asia 107–8 crisis (1997–8) 154, 232, 241 sovereign debt crises 37 Soviet Bloc, ex-, labour in 107 Soviet Union 196, 202 see also Russia Spain xi, 51, 161 housing market crash (2007–9) 82–3 spatio-temporal fixes 151–2, 153, 154, 162 spectacle 237–8, 242, 278 speculative bubbles and busts 178 stagnation xii, 136, 161–2, 169 Stalin, Joseph 70 standard of life 23, 175 starvation 56, 124, 246, 249, 260, 265 state, the aim of 156–7 brutality 266, 280 and capital accumulation 48 and civil society 156 curbing the powers of capital as private property 47 evolution of the capitalist state 42 and externality effects 44 guardian of private property and of individual rights 42 and home ownership 49–50 interstate system 156, 157 interventionism 193, 205 legitimate use of violence 42, 44, 45, 51, 88, 155, 173 loss of state sovereignty xii; and money 1, 45–6, 51, 173 ‘nightwatchman’ role 42, 50 powers of 42–5, 47–52, 57–8, 65, 72, 142, 155–9, 209, 295 and private property 47, 50, 58, 59, 146, 210 provision of collective and public goods 42–3 a security and surveillance state xiii; social democratic states 85 war aims 44 state benefits 165 state regulatory agencies 101 state-finance nexus 44–5, 46–7, 142–3, 156, 233 state-private property nexus 88–9 steam engine, invention of the 3 steel industry 120, 121, 148, 188 steel production 73–4 Stiglitz, Joseph 132–4 stock market crash (1929) x Stockholm, protests in (2013) 171, 243 strikes 65, 103, 124 sub-prime mortgage crisis 50 suburbanisation 253 supply and demand 31, 33, 56, 106 supply chain 124 supply-side remedies xi supply-side theories 82, 176 surplus value 28, 40, 63, 73, 79–83, 172, 239 surveillance xiii, 94, 121, 122, 201, 220, 264, 280, 292 Sweden 166, 167 protests in (2013) 129, 293 Sweezy, Paul 136 swindlers, swindling 45, 53, 57, 239 ‘symbolic analysts’ 188 Syntagma Square, Athens 266, 280 T Tahrir Square, Cairo 266 Taipei, Taiwan 153 Taiwan 123, 150, 153 Taksim Square, Istanbul 266, 280 Tanzania 291 tariffs 137 taxation 40, 43, 47, 67, 84, 93–4, 106, 133, 150, 155, 157, 167, 168, 172, 190 Taylor, Frederick 119, 126 Taylorism 103 Tea Party faction 205, 280, 281, 292 technological evolution 95–6, 97, 101–2, 109 technological imperatives 98–101 technological innovation 94–5 technology changes involving different branches of state apparatus 93–4 communicative technologies 278–9 and competition 92–3 constraints inhibiting deployment 101 culture of 227, 271 definition 92, 248 and devaluation of commodities 234 environmental 248 generic technologies 94 hardware 92, 101 humanising 271 information 100, 147, 158, 177 military 93, 95 monetary 109 and nature 92, 97, 99, 102 organisational forms 92, 99, 101 and productivity 71 relation to nature 92 research and development 94 and science 95 software 92, 99, 101 a specialist field of business 94 and unemployment 80, 103 work and labour control 102–11 telephone companies 54, 67, 84, 278 Tennessee 148 Teresa, Mother 284 Thatcher, Margaret (later Baroness) x, 72, 214, 259 Thatcherism 165 theft 53, 60, 61, 63 Thelluson, Peter 226, 227 think tanks 143 ‘Third Italy’ 143 Third World debt crisis 240 Toffler, Alvin 237 tolls 137 Tönnies, Ferdinand 122, 125 tourism ix, 16, 140, 141, 187, 236 medical 139 toxic waste disposal 249–50, 257 trade networks 24 trade unions xii, 116, 148, 168, 176, 184, 274, 280 trade wars 154 transportation 23, 99, 132, 147–8, 150, 296 Treasury Departments 46, 156 TRIPS agreement 242 tropical rainforest 253 ‘trust-busting’ 131 trusts 135 Turin, Italy 150 Turkey 107, 123, 174, 232, 280, 293 Tuscany, Italy 150 Tutu, Archbishop Desmond 284 Twitter 236 U unemployment 37, 104, 258, 273 benefits 176 deliberately created 65, 174 high xii, 10, 176 insurance 175 and labour reserves 175, 231 and labour-saving technologies 173 long-term 108, 129 permanent 111 echnologically induced 80, 103, 173, 274 uneven geographical developments 178, 296 advanced and underserved regional economies 149–50 and anti-capitalist movements 162 asset bubbles 243 and capital’s reinvention of itself 147, 161 macroeconomic processes of 159 masking the true nature of capital 159–60 and technological forms 219 volatility in 244 United Fruit 136 United Kingdom income inequality in 169; see also Britain United Nations (UN) 285 United States aim of Tea Party faction 280 banking 158 Bill of Rights 284 Britain lends to (nineteenth century) 153 capital in (1990s) 154 Constitution 284 consumption level 194 global reserve currency 45–6 growth 232 hostility towards state interventions 167 House of Representatives 206 human rights abuses 202 imperial power 46 indebtedness of students in 194 Indian reservations 249 interstate highway system 239 jobless recoveries after recession 172–3 liberty and freedom rhetoric 200–201, 202 Midwest ‘rust belt’ 151 military expenditures 46 property market crashes x, 21–2, 50, 54, 58, 82–3 racial issues 166 Savings and Loan Crisis (from 1986) 18 social mobility 196 social reproduction 196–7 solidly capitalist 166 steel industry 120 ‘symbolic analysts’ 188 ‘trust-busting’ 131 unemployment 108 wealth distribution 167 welfare system 176 universal suffrage 183 urbanisation 151, 189, 228, 232, 239, 247, 254, 255, 261 Ure, Andrew 119 US Congress 47 US dollar 15, 30, 45–6 US Executive Branch 47 US Federal Reserve xi, 6, 30, 37, 46, 47, 49, 132, 143, 233 monetary policy 170–71 US Housing Act (1949) 18 US Treasury 47, 142, 240 use values collectively managed pool of 36 commodification of 243 commodities 15, 26, 35 common wealth 53 creation through social labour 36 and entrepreneurs 23–4 and exchange values 15, 35, 42, 44, 50, 60, 65, 88 and housing 14–19, 21–2, 23, 67 and human labour 26 infinitely varied 15 of infrastructural provision 78 loss of 58 marketisation of 243 monetisation of 243 of money 28 privatised and commodified 23 provision of 111 and revolt of the mass of the people 60 social demand for 81 usufructuary rights 39, 41, 59 usury 49, 53, 186, 194 utopianism 18, 35, 42, 51, 66, 119, 132, 183, 184, 204, 206–10, 269, 281, 282 V value(s) commodity 24, 25 failure to produce 40 housing 19, 20, 22 net 19 production and realisation of 82 production of 239 property 21 relation between money and value 27, 35 savings 20 storing 25, 26, 35 see also asset values; exchange values; social value; use values value added 79, 83 Veblen, Thorstein: Theory of the Leisure Class 274 Venezuela 123, 201 Vietnam, labour in 108 Vietnam War 290 violence 53, 57, 72, 204–5, 286 against children 193 against social movements 266 against women 193 colonial 289–90, 291 and contemporary capitalism 8 culture of 271 of dispossession 58, 59 in a dystopian world 264 and humanism 286, 289, 291 of the liberation struggle 290 militarised 292 as the only option 290–91 political 280 in pursuit of liberty and freedom 201 racialised 291 state’s legitimate use of 42, 44, 45, 51, 88, 155, 173 of technology 271 and wage labour 207 virtual ecological transfer 256 Volcker, Paul 37 W wages 103 basic social wage 103 falling 80, 82 for housework 115, 192–3 low xii, 114, 116, 186, 188 lower bound to wage levels 175 non-payment of 72 and profits 172 reduction in 81, 103, 104, 135, 168, 172, 176, 178 rising 178 and unskilled labour 114 wage demands 150, 274 wage levels pushed up by labour 65 wage rates 103, 116, 172, 173 wage repression 158–9 weekly 71 see also income Wall Street criticised by a congressional committee 239–40 illegalities practised by 72, 77 and Lebed 195 new information-processing technologies 100 Wall Street Crash (1929) x, 47 Wall-E (film) 271 Walmart xii, 75, 84, 103, 131 war on terror 280 wars 8, 60, 229 currency 154 defined 44 monetisation of state war-making activities 44–5 privatisation of war making 235 resource 154, 260 and state aims 44 state financing of 32, 44, 48 and technology 93 trade 154 world 154 water privatisation 235 wave theory 70 wave-particle duality 70 wealth accumulation of 33, 34, 35, 157, 205 creation of 132–3, 142, 214 disparities of 164–81 distribution of 34, 167 extraction from non-productive activities 32 global 34 the house as a sign of 15–16 levelling up of per capita wealth 171 and poverty 146, 168, 177, 218, 219, 243 redistribution of 9, 234, 235 social 35, 53, 66, 157, 164, 210, 251, 265, 266, 268 taking it from others 132–3 see also common wealth weather futures 60 Weber, Max 122, 125 Weimar Republic 30 welfare state 165, 190, 191, 208 Wells Fargo 61 West Germany 153, 154, 161 Whitehead, Alfred North 97 Wilson, Woodrow 201 Wolf, Martin 304n2 Wollstonecraft, Mary: A Vindication of the Rights of Woman 285 women career versus family obligations 1–2 disposable populations 111 exploitation of 193 housework versus wage labour 114–15 oppression against 193 social struggle 168 trading of 62 violence against 193 in the workforce 108, 114, 115, 127, 174, 230 women’s rights 202, 218 workers’ rights 202 working classes and capital 80 consumer power 81 crushing organisation 81 education 183, 184 gentrified working-class neighbourhoods ix; housing 160 living conditions 292 wage repression and consumption 158–9 working hours 72, 104–5, 182, 272–5, 279 World Bank 16, 24, 100, 186, 245 World Trade Organization 138, 242 WPA programmes (1930s) 151 Wright, Frank Lloyd: Falling Water 16 Wriston, Walter 240 Y YouTube 236 Yugoslavia, former 174 Z Zola, Émile 7

Six Degrees: The Science of a Connected Age
by Duncan J. Watts
Published 1 Feb 2003

Economics, it must be remembered, is the antithesis of cynicism. People are selfish, it claims, but they are also rational. So greed is always mitigated by knowledge, and fear is absent entirely. The result, as Adam Smith famously predicted, is that rational agents, optimizing their selfish interests, will “be led by an invisible hand” to a collective outcome that is at least as good as any other. Governance—which is to say not just the government, but institutions, regulations, and externally imposed restrictions of all kinds—is likely only to upset the proper functioning of the market. Although Smith was writing specifically about the political economy of international trade, his logic has subsequently been applied to markets of all kinds, including financial markets, in which, naturally, there will not be any crises.

…

Manias, Panics, and Crashes: A History of Financial Crises, 4th ed. (Wiley, New York, 2000). Shiller, R. J. Irrational Exuberance (Princeton University Press, Princeton, NJ, 2000). Fear, Greed, and Rationality Adam Smith’s discussion of rationally optimizing agents, including his reference to the invisible hand, is in Smith, A. The Wealth of Nations, Vol. 1, Book 4 (University of Chicago Press, Chicago, 1976), chapter 2, p. 477. The paradox of the efficient market hypothesis is described in Chancellor, E. Devil Take the Hindmost: A History of Financial Speculation (Farrar, Straus and Giroux, New York, 1999).

Crude Volatility: The History and the Future of Boom-Bust Oil Prices
by Robert McNally
Published 17 Jan 2017

Leonardo Maugeri noted: [Rockefeller’s] world was not Adam Smith’s. In Smith’s world each person contributed to the overall progress of society by embarking on and competing in economic activities, while the steady working of an invisible hand corrected all imbalances. But Rockefeller … saw only the world as it was: a brutal blind struggle fueled by rapacity and greed. To his mind, there was no “invisible hand” at work behind this world, which—in the case of oil—was moved by irrational people, whose addiction to building castles in the air brought disaster on themselves and on the whole oil business.45 A massive new oil field discovered in Pithole Creek, Pennsylvania, in 1865 encouraged the twenty-five-year-old Rockefeller to shed his other business activities and exclusively focus his talents on the refining industry.

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by Kate Raworth
Published 22 Mar 2017

Economics: the twentieth-century neoliberal story (in which we go to the brink of collapse) Staging by Paul Samuelson Script by the Mont Pelerin Society Cast, in order of appearance: THE MARKET, which is efficient – so give it free rein. As Adam Smith famously wrote, ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’8 When the market’s invisible hand is set free to work its magic of allocative efficiency, it harnesses the self-interest of every household and business to provide all the goods and jobs that are wanted. BUSINESS, which is innovative – so let it lead. ‘The business of business is business’ summed up Milton Friedman’s influential philosophy in the 1970s.

…

Walras had an ambitious agenda for these scissors: he was convinced it was possible to scale the analysis up from a single commodity to all commodities, so creating a model of the whole market economy. And, he reasoned, if those markets were comprised of fully informed, small-scale competitive sellers and buyers, then the economy would reach a point of equilibrium that maximised total utility. In other words – in a neat echo of Smith’s invisible hand – it would, for any given income distribution, produce the best possible outcome for society as a whole. The mathematical techniques did not yet exist for Walras to prove his hunch but his agenda was later picked up by Kenneth Arrow and Gerard Debreu, who set out its equations in their 1954 model of general equilibrium.

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy
by Marc Levinson
Published 31 Jul 2016

Cabinet Task Force on Oil Import Control, The Oil Import Question (Washington, DC: USGPO, 1970), 19; US Treasury, Office of Economic Stabilization, Historical Working Papers on the Economic Stabilization Program Vol. 2 (Washington, DC: USGPO, 1974), 1237. 11. Martha Derthick and Paul J. Quirk, The Politics of Deregulation (Washington, DC: Brookings Institution, 1985), 36. There are many other explanations for the onset of deregulation. See Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009). Phillips-Fein sees deregulation as part of a conservative counterthrust against the social-democratic consensus that reigned in the years after World War II. See also Meg Jacobs, Panic at the Pump: The Energy Crisis and the Transformation of American Politics in the 1970s (New York: Hill and Wang, 2016), 26–27.

…

For example, see Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace (New York: Simon & Schuster, 1998). 24. US Energy Information Administration, Monthly Energy Review, February 2015, Tables 9.1 and 9.4. 25. Stacy L. Schreft, “Credit Controls: 1980,” in Federal Reserve Bank of Richmond, Economic Review (November–December 1990): 25–55. 26. Phillips-Fein, Invisible Hands; Hugh Heclo and Rudolph Penner, “Fiscal and Political Strategy in the Reagan Administration,” in Fred I. Greenstein, ed., The Reagan Presidency: An Early Assessment (Baltimore: Johns Hopkins University Press, 1983). 27. Transcript of presidential debate between Ronald Reagan and Jimmy Carter, Cleveland, Ohio, October 28, 1980, http://www.debates.org/index.php?

Trading Risk: Enhanced Profitability Through Risk Control
by Kenneth L. Grant
Published 1 Sep 2004

As with any investment, it requires the allocation of scarce resources, for which it is reasonable to expect a return. I’m biased, but I believe that a wellconceived and efficiently executed investment in a risk management program ought to generate as healthy and steady a return as anything that’s likely to make its way into your portfolio. And I heartily recommend that the next time the invisible hand of risk management finds its way into your nether regions, just do like I do: Close your eyes, repeat over and over again “It’s an investment,” and wait for the returns to come rolling in. The Risk Management Investment will insinuate itself into your otherwise tranquil portfolio management existence in myriad ways.

…

This helps him manage his risk, keep creditors at bay, and maintain the schedule flexibility he needs to be able to drop everything when he receives word (and the phone call is expected at any time) that Dreamworks has decided to provide funding for his bold but underdeveloped concept for a musical adaptation of Adam Smith’s The Wealth of Nations, featuring his selfpenned (soon to be) smash hit, “I Wanna Hold Your (Invisible) Hand.” In addition, I have a relative in this game, who I also consider a friend. Her name is Barbara. She’s raised a whole passel of kids and grandkids and is the chief financial officer of the family business. We don’t see eye-to-eye on every issue, but she has a better outlook on life than just about anybody I know.

Cities Are Good for You: The Genius of the Metropolis
by Leo Hollis
Published 31 Mar 2013

However, his poem celebrated the complexity: ‘Thus every Part was full of Vice,/Yet the whole Mass a Paradise’.5 The city itself was the incubator of the deadliest sins yet counterintuitively combined to create a place of virtue. Was it trade itself that kept the city safe? Did the prospects of business regulate and pacify society? Mandeville offers a vision of the city that did not need mayors, politicians or police, for the market itself was the invisible hand that made a virtuous whole out of the self-interested parts. Contrast this beehive with a contemporary image from the work of the French street artist JR, who uses his large black and white flyposts to question people’s assumptions about their place in society. In 2011 he was awarded the TED Prize, yet his career began when he found a camera on the Paris Métro and began to plaster around the city vast portraits of people that he knew from the banlieus, the forgotten estates on the periphery of Paris.

…

Good ideas often do not come from solitary moments of contemplation but from sharing; of rubbing two notions together to produce something new; they are hunches that have lain dormant for long periods which are rolled over and examined in a new light; moments of serendipity that cause a surprise symbiosis; the result of a friend of a friend offering essential help at the right time. The city also offers diversity and competition, the best forcing grounds for turning seeds into blossoming success. This is what Adam Smith calls the ‘invisible hand’ of capitalism: the market’s demand for the new, the supplier’s desire to reduce costs and scale up profits has always fuelled creativity. Competition forces innovation, finding the new edge or improvement that makes the vital difference. Best of all, good ideas breed other good ideas; creativity develops its own virtuous circle.

Making It Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy
by Iain Martin
Published 11 Sep 2013

I am led to ponder to what extent the Chancellor’s renowned economic and financial skills are the result of exposure to the subliminal intellect-enhancing emanations of this area.’ Concluding a scholarly speech, Greenspan referred to the phrase ‘the invisible hand’ which Smith used to describe the workings of markets: ‘One could hardly imagine that today’s awesome array of international transactions would produce the relative economic stability that we experience daily if they were not led by some international version of Smith’s invisible hand.’ That night Brown hailed his friend Greenspan as ‘the greatest economist of his generation’. The next day, Monday 7 February, Greenspan got his honorary degree at Edinburgh with Brown in attendance.

The Code: Silicon Valley and the Remaking of America
by Margaret O'Mara
Published 8 Jul 2019

Let us instead look toward the future, for “the ideas and technologies of tomorrow are born here in California.” Gorbachev was as smitten with the Bay Area as Charles de Gaulle had been thirty years before. “I always wanted to come here, and I never had the chance,” he told a clutch of waiting reporters. “Fantastic!”28 But future-tense California had never been without the government’s invisible hand. The big money that flowed in via SCI and SDI contracts in the 1980s was a reminder that defense remained the big-government engine hidden under the hood of the Valley’s shiny new entrepreneurial sports car, flying largely under the radar screen of the saturation media coverage of hackers and capitalists.

…

Olmsted, Right Out of California: The 1930s and the Big Business Roots of Modern Conservatism (New York: The New Press, 2015). On business conservatism more broadly, see Angus Burgin, The Great Persuasion: Reinventing Free Markets Since the Depression (Cambridge, Mass.: Harvard University Press, 2012); Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade Against the New Deal (New York: W. W. Norton, 2010). 12. Hoover chose Campbell on the recommendation of one of the fiercest critics of the New Deal, ex-Roosevelt aide Raymond Moley. See Gary Atkins, “Attacked for Politics, Policies; Critics Center on Hoover Boss,” The Stanford Daily, January 7, 1972, 1.

…

This was part of a broader business push against the New Deal that included the formulation of the rhetoric of “free enterprise”; see Lawrence Glickman, “Free Enterprise versus the New Deal Order,” paper presented at the “Beyond the New Deal Order” conference, Center for the Study of Work, Labor, and Democracy, University of California, Santa Barbara, September 24–26, 2015. Also see Kathryn S. Olmsted, Right Out of California: The 1930s and the Big Business Roots of Modern Conservatism (New York: The New Press, 2015); Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade against the New Deal (New York: W. W. Norton, 2010); and Julia C. Ott, When Wall Street Met Main Street: The Quest for an Investors’ Democracy (Cambridge, Mass.: Harvard University Press, 2011). 8. “Curb Urged on Loans: Speculation Hit by Bankers,” The Los Angeles Times, October 5, 1928, 2; “Capital Gains Tax,” The Wall Street Journal, November 8, 1930, 1; “Whitney Attacks ‘Excessive’ Relief,” The New York Times, February 27, 1935, 29.

The Oil Age Is Over: What to Expect as the World Runs Out of Cheap Oil, 2005-2050
by Matt Savinar
Published 2 Jan 2004

A few hours later, the clothes have been burned up. You and your family are shivering in the cold. If you don't get that stove working soon, you will all perish. What, or should I say who, are you going to put in the stove now? It's a tough decision, and not one your economics textbook is likely to help you make. D. Conclusion The “invisible hand of the market” is about to bitch-slap us back to the stone age. What about the whale oil crisis of the 19th century? The market solved that crisis, what makes you think it won’t solve this one? 46. During the early 1800’s, people used whale oil to light their lamps. As the whale population shrank, a crisis emerged in the early 1830’s.

Conscience of a Conservative: A Rejection of Destructive Politics and a Return to Principle
by Jeff Flake
Published 31 Jul 2017

Someone in the car with us, remarking on the landscape, said, “Man, it looks like there was no planning at all.” Friedman just nodded his head and said, “Yes, isn’t it beautiful?” This was a classic Milton Friedman statement. Whatever the aesthetics of the suburban development, it wasn’t government coercion that had brought it into being. It was the invisible hand of the free market that had sprawled such a community. Planning requires control, control empowers government, and empowered government = disempowered individuals. Friedman’s musings out a car window are a pretty good distillation of what American conservatives used to believe. At least, it’s what we professed to believe when we were safely among the herd.

The Wake-Up Call: Why the Pandemic Has Exposed the Weakness of the West, and How to Fix It
by John Micklethwait and Adrian Wooldridge
Published 1 Sep 2020

John Maynard Keynes always saw himself as a liberal who disliked the Webbs’ puritanism as much as their collectivism and believed that the state should never consume more than about a quarter of GDP.27 But his book The General Theory of Employment, Interest and Money (1936) ripped apart laissez-faire capitalism. Left to itself, the market would not prove self-correcting, Keynes showed. Capitalism might be wonderful, but it was also self-destructive and needed to be saved from itself. The invisible hand of the market had to be guided by the visible hand of the state. During crises, government had to step in to boost demand by spending public money, particularly on infrastructure and unemployment pay. Events sealed the argument in favor of bigger government. The Wall Street crash proved that unrestrained capitalism might end in ruin, while Franklin Roosevelt’s New Deal between 1933 and 1939 proved that government spending worked.

Brazillionaires: The Godfathers of Modern Brazil
by Alex Cuadros
Published 1 Jun 2016

I met Olavo once, and he told me Eliezer wanted him to manage the project because Eike was better at finding assets than at bringing them to fruition. Even then they ran into money problems. So Eliezer got another friend, a rich Japanese businessman, to put more cash in. Eliezer Batista was an invisible hand in Eike’s rise. Eike liked to say he’d left TVX, his failed Toronto-listed gold venture, with a billion dollars in the bank—but other sources, and my own math from digging through his financial history, suggested he was broke by the time he set his sights on Brazil. His father helped him make his comeback.

…

Much as Eike touted an American culture of risk, Mauá held up the Anglo-Saxon line that self-interest was the engine of progress, and in this way too he went against the grain. The standard economic text in those days, the Viscount of Cairu’s Princípios de Economia Política, was supposed to be an adaptation of The Wealth of Nations, but Cairu jettisoned whatever concepts didn’t jibe with facts on the ground. Forget the invisible hand: “The sovereign of each nation must be considered the chief or head of a vast family, and thus care for all those therein like his children, cooperating for the greater good.” It was a “cordial man” approach to economic policy, state capitalism before the term ever existed. The problem, of course, was that the “greater good” didn’t always extend past the sovereign’s circle of friends.

The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention
by William Rosen
Published 31 May 2010

This was a remarkable bit of insight, the application of Locke’s labor theory of value to national policy. Smith argued that two conditions were necessary for labor to produce the maximum amount of wealth: perfect competition among sellers—everyone pursuing his or her selfish interest, the famous “invisible hand”—and the complete freedom of buyers to substitute one commodity for another. Under such ideal circumstances (Smith was not the first economist, but he was probably the first to “assume a can opener,” i.e. perfect conditions, in a model), specialization, or division of labor, was inevitable. Ten men could each bake their own bread, weave their own cloth, and build their own houses, but if one became a baker, another a weaver, and a third a builder, the result would be more food, clothing, bricks … and trade.

…

His pin factory, it turns out, was only a metaphor; he never set foot inside one. Nor did he show any understanding of Darby’s furnace, or Arkwright’s water frame, or Watt’s double-acting engine—none of the escape hatches out of humanity’s millennium-long Malthusian trap. The efficiencies of specialization are real, and the self-regulating “invisible hand” powerful, but it was the machines, and nothing else, that allowed Britain, and then the world, to finally produce food (or the wealth with which to buy food) faster than it produced mouths to consume it. A lot more is known about how population increases than how wealth grows. Indeed, the Industrial Revolution was decades old before anyone realized that wealth was growing at all.

Humankind: A Hopeful History
by Rutger Bregman
Published 1 Jun 2020

It’s hard to overstate the impact of Hardin’s paper, which went on to become the most widely reprinted ever published in a scientific journal, read by millions of people across the world.32 ‘[It] should be required reading for all students,’ declared an American biologist in the 1980s, ‘and, if I had my way, for all human beings.’33 Ultimately, ‘The Tragedy of the Commons’ would prove among the most powerful endorsements for the growth of the market and the state. Since common property was tragically doomed to fail, we needed either the visible hand of the state to do its salutary work, or the invisible hand of the market to save us. It seemed these two flavours – the Kremlin or Wall Street – were the only options available. Then, after the Berlin Wall came down in 1989, only one remained. Capitalism had won, and we became Homo economicus. 4 To be fair, at least one person was never swayed by Garrett Hardin’s arguments.

…

Enlightenment-era economists decided collective farmlands were not maximising their production potential, so they advised governments to create enclosures. That meant cutting collective property into parcels to be divvied up among wealthy landowners, under whose stewardship productivity would grow. Do you think capitalism’s ascent in the eighteenth century was a natural development? Hardly. It wasn’t the invisible hand of the market that gently shepherded peasants from their farms into factories, but the ruthless hand of the state, bayonet at the ready. Everywhere in the world, that ‘free market’ was planned and imposed from the top down.38 It wasn’t until the end of the nineteenth century that scores of unions and worker cooperatives began forming – spontaneously and from the bottom up – laying the basis for the twentieth century’s system of social safety nets.

The Case for Space: How the Revolution in Spaceflight Opens Up a Future of Limitless Possibility
by Robert Zubrin
Published 30 Apr 2019

Entrepreneurs have opened the way toward cheap access to space. As a result, all sorts of commercial activities in near-Earth space will soon become not only practical but profitable, and consequently, they will happen. The invisible hand is unstoppable. If someone can make money doing something, it will be done, for good or ill, regardless of the wishes of kings, presidents, religions, or secret police. That said, the invisible hand cannot be counted upon to do everything that needs to be done. The private sector can be expected to fund the development of new and ever-more-advanced reusable launch vehicles to keep reducing the price of access to orbit and enable fast global travel.

The Party: The Secret World of China's Communist Rulers
by Richard McGregor
Published 8 Jun 2010

The Party has not drawn one obvious lesson from the success of the economy–that the public policy sector that has been most open to debate and competition has produced the best outcomes. In the Party’s view, liberal economics have only succeeded in China because they have been married with authoritarian politics. China’s instincts in this respect are like those of much of Asia. The visible hand of the state and the invisible hand of the market, far from being contradictory, are made to complement and reinforce each other. These days, Chinese officials treat questions of any inherent contradiction between a communist political system and a capitalist economy as almost banal. In real life, China is full of symbols of how the Party has merged the two systems to its advantage.

…

A few extra steel mills built in defiance of central government diktats on industrial policy or a few rivers dirtier than they should have been, however bad that is, will not bring the country to its knees. But in instances such as the Sanlu case, where the city’s impulse to cover up a problem in its most profitable business was bolstered by the centre’s political priorities, the outcome was devastating. The largely invisible hand of party bodies, in assorted guises, at a variety of locations and at different levels of its competing hierarchies, was behind every important decision taken in the Sanlu case. In the public frenzy that followed the revelations about the poisoned babies, the Party ensured that the pivotal, and even sinister role played in the scandal by its institutions never became a topic for debate.

Aftershock: The Next Economy and America's Future
by Robert B. Reich
Published 21 Sep 2010

HC106.84.R45 2010 330.973—dc22 2010004134 v3.1 To Ella Reich-Sharpe, and her generation Epochs of private interest breed contradictions … characterized by undercurrents of dissatisfaction, criticism, ferment, protest. Segments of the population fall behind in the acquisitive race.… Problems neglected become acute, threaten to become unmanageable and demand remedy.… A detonating issue—some problem growing in magnitude and menace and beyond the market’s invisible hand to solve—at last leads to a breakthrough into a new political epoch. —Arthur M. Schlesinger, Jr., The Cycles of American History CONTENTS Cover Other Books by This Author Title Page Copyright Dedication Epigraph INTRODUCTION: The Pendulum PART I The Broken Bargain Chapter 1.

Magical Urbanism: Latinos Reinvent the US City
by Mike Davis
Published 27 Aug 2001

Indeed, they transform our understanding of the contemporary big city It is important to emphasize that but involves radical this is not merely metaphor, new social and geographical lifelines that have been forged by the cunning of communities and households adjudged most "expendable" by the invisible hand of the planetary marketplace. Pueblos whose genius for adaptive mutation lowed them to endure, now find first al- the Conquest, then the Porfiriato, that cultural survival in an age of cyber-capital requires TRANSNATIONAL SUBURBS 81 two parts to sustain a Strategic mitosis, dividing themselves into single heredity.

Bit by Bit: How P2P Is Freeing the World
by Jeffrey Tucker
Published 7 Jan 2015

It can vanish from one or a million nodes and reappear just as quickly on another one or million nodes. That’s why the distributed network evades the despots of the world. It knows no power, no geography, no jurisdiction, no regulation, no regimentation. It lives freely, developing like a global garden cultivated by an invisible hand. It’s a technological marvel, one that emerged auspiciously but has come to play a beautiful role in the freeing of the world from all forms of tyranny. Looking past the data and code, what’s really at stake is the liberation of lives. These technologies will not be uninvented. Over the past 10 years, they’ve found ever more applications.

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies
by Judith Stein
Published 30 Apr 2010

Norton, 1984) attributed the New Politics to business mobilization and labor weakness, which had nothing to do with race. For a critique of Edsall and Edsall, see Larry M. Bartels, Unequal Democracy: The Political Economy of the New Gilded Age (Princeton: Princeton University Press, 2008), 64–97. 9. Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009). 10. Earnings for nonagricultural workers declined over the 1970s by nearly 13 percent; median family income was level largely because more wives entered the labor force. 11. Bagehot, “Through a Pint Glass, Darkly,” Economist (Apr. 11, 2009), 58. 12.

…

Lou Cannon, President Reagan: The Role of a Lifetime (New York: Public Affairs, 1991), 296. 33. NA, “An Explanation of the Reagan Victories in Texas and the Caucus States,” May 1976, 1, file Reagan, Ronald (2), box 25, Jerry Jones papers, Gerald R. Ford Presidential Library and Museum, Ann Arbor, Mich. 34. Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: W. W. Norton, 2009), 213–21. 35. Ibid., 2. 36. Elizabeth Drew, American Journal: The Events of 1976 (New York: Random House, 1977), 367. 37. Gerald M. Pomper et al., The Election of 1976: Reports and Interpretations (New York: David McKay, 1977), 36. 38.

Sacred Economics: Money, Gift, and Society in the Age of Transition
by Charles Eisenstein
Published 11 Jul 2011

In any case, our culture’s notion of spirit is that of something separate and nonworldly, that yet can miraculously intervene in material affairs, and that even animates and directs them in some mysterious way. It is hugely ironic and hugely significant that the one thing on the planet most closely resembling the forgoing conception of the divine is money. It is an invisible, immortal force that surrounds and steers all things, omnipotent and limitless, an “invisible hand” that, it is said, makes the world go ’round. Yet, money today is an abstraction, at most symbols on a piece of paper but usually mere bits in a computer. It exists in a realm far removed from materiality. In that realm, it is exempt from nature’s most important laws, for it does not decay and return to the soil as all other things do, but is rather preserved, changeless, in its vaults and computer files, even growing with time thanks to interest.

…

Tellingly, in both secular and religious thought, this abstraction has become more important than the physical vehicle, just as the “value” of a thing is more important than its physical attributes. In the introduction I mentioned the idea that we have created a god in the image of our money: an unseen force that moves all things, that animates the world, an “invisible hand” that orders human activity, nonmaterial yet ubiquitous. Many of these attributes of God or spirit go back to the pre-Socratic Greek philosophers who developed their ideas at precisely the time that money took over their society. According to Seaford, they were the first to even distinguish between essence and appearance, between the concrete and the abstract—a distinction completely absent (even implicitly) from Homer.

The Future of Ideas: The Fate of the Commons in a Connected World
by Lawrence Lessig
Published 14 Jul 2001

There is good evidence that competition improves the quality of newspapers.49 And there is a general and broad view that the only justification for the power that the media has is that there is a broad range of views with the same power.50 No more. Never in our history has the concentration of media outlets been greater. Even a believer in the invisible hand might hope that this hand might muck things up a bit. SOMETHING has mucked things up a bit. Something has entered the field in a way that could make these concentrations change—not the government or a regulation imposed by the government, but the architecture of the Internet we have been describing so far.

…

Thus the consumer does not completely internalize the costs imposed by a closed system. And hence the pressure the consumer puts on closed systems to open themselves up is not equal to the costs that such closed systems impose on innovation generally. These are good reasons, I believe, for being skeptical about whether the invisible hand will solve the problem of closed networks. The observation that never in the history of telecommunications has a network voluntarily been opened after being closed is another reason to be skeptical. Finally, the interest of those who own these networks to keep control within the network is huge, and a huge reason to be skeptical about their control.

The Euro: How a Common Currency Threatens the Future of Europe
by Joseph E. Stiglitz and Alex Hyde-White
Published 24 Oct 2016

This, too, is a cross-cutting theme of our times: the neoliberal economic agenda may not have succeeded in increasing average growth rates, but of this we can be sure: it has succeeded in increasing inequality. The euro provides a detailed case study on how this has been accomplished. Two other themes relate more directly to work on economic systems in which I have long been engaged. It is now (finally) widely recognized that markets on their own are not efficient.14 Adam Smith’s invisible hand—by which individuals’ pursuit of self-interest is supposed to lead, in the aggregate, to the well-being of the entire society—is invisible because it is simply not there. And far too little attention has been paid to the instability of the market economy. Crises have been part of capitalism since the beginning.15 The standard model used by economists simply assumes that it is in equilibrium; in other words, if there is ever a dip in the economy, it quickly reverts to its normal path.16 The notion that the economy quickly converges to equilibrium after an upset is key in understanding the construction of the eurozone.

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Africa, 10, 95, 381 globalization and, 51 aggregate demand, 98, 107, 111, 118–19, 189, 367 deflation and, 290 lowered by inequality, 212 surpluses and, 187, 253 tech bubble slump in, 250 as weakened by imports, 111 aggregate supply, 99, 104, 189 agricultural subsidies, 45, 197 agriculture, 89, 224, 346 airlines, 259 Akerlof, George, 132 American Express, 287 Apple, 81, 376 Argentina, 18, 100, 110, 117, 371 bailout of, 113 debt restructuring by, 205–6, 266, 267 Arrow-Debreu competitive equilibrium theory, 303 Asia, globalization and, 51 asset price bubbles, 172 Athens airport, 191, 367–68 austerity, xvi–xvii, 9, 18–19, 20, 21, 28–29, 54, 69–70, 95, 96, 98, 97, 103, 106, 140, 150, 178, 185–88, 206, 211, 235, 316–17 academics for, 208–13 debt restructuring and, 203–6 design of programs of, 188–90 Germany’s push for, 186, 232 government investment curtailed by, 217 opposition to, 59–62, 69–70, 207–8, 315, 332, 392 private, 126–27, 241–42 reform of, 263–65 Austria, 331, 343 automatic destabilizers, see built-in destabilizers automatic stabilizers, 142, 244, 247–48, 357 flexible exchange rate as, 248 bail-ins, 113 bailouts, 91–92, 111, 112–13, 201–3, 354, 362–63, 370 of banks, 127–28, 196, 279, 362–63 of East Asia, 202 of Latin America, 202 of Mexico, 202 of Portugal, 178–79 of Spanish banks, 179, 199–200, 206 see also programs balanced-budget multiplier, 188–90, 265 Balkans, 320 bank capital, 284–85 banking system, in US, 91 banking union, 129–30, 241–42, 248, 263 and common regulations, 241 and deposit insurance, 241, 242, 246 Bank of England, 359 inflation target of, 157 Bank of Italy, 158 bankruptcies, 77, 94, 102, 104, 346, 390 super–chapter 11 for, 259–60 banks, 198–201 bailouts of, 127–28, 196, 279, 362–63 capital requirements of, 152, 249 closing of, 378 credit creation by, 280–82 development, 137–38 evolution of, 386–87 forbearance of regulations on, 130–31 Greek, 200–201, 228–29, 231, 270, 276, 367, 368 lending contracted by, 126–27, 246, 282–84 money supply increased by, 277 restructuring of, 113 small, 171 in Spain, 23, 186, 199, 200, 242, 270, 354 too-big-to-fail, 360 bank transfers, 49 Barclays, 131 behavioral economics, 335 Belgium, 6, 331, 343 belief systems, 53 Berlin Wall, 6 Bernanke, Ben, 251, 351, 363, 381 bilateral investment agreement, 369 Bill of Rights, 319 bimetallic standard, 275, 277 Blanchard, Olivier, 211 bonds, 4, 114, 150, 363 confidence in, 127, 145 Draghi’s promise to support, 127, 200, 201 GDP-indexed, 267 inflation and, 161 long-term, 94 restructuring of, 159 bonds, corporate, ECB’s purchase of, 141 borrowing, excessive, 243 Brazil, 138, 370 bailout of, 113 bread, 218, 230 Bretton Woods monetary system, 32, 325 Brunnermeier, Markus K., 361 Bryan, William Jennings, xii bubbles, 249, 381 credit, 122–123 real estate, see real estate bubble stability threatened by, 264 stock market, 200–201 tech, 250 tools for controlling, 250 budget, capital, 245 Buffett, Warren, 287, 290 built-in destabilizers, 96, 142, 188, 244, 248, 357–58 common regulatory framework as, 241 Bulgaria, 46, 331 Bundesbank, 42 Bush, George W., 266 Camdessus, Michel, 314 campaign contributions, 195, 355 Canada, 96 early 1990s expansion of, 209 in NAFTA, xiv railroad privatization in, 55 tax system in, 191 US’s free trade with, 45–46, 47 capital, 76–77 bank, 284–85 human, 78, 137 return to, 388 societal vs. physical, 77–78 tax on, 356 unemployment increased by, 264 capital adequacy standards, 152 capital budget, 245 capital controls, 389–90 capital flight, 126–34, 217, 354, 359 austerity and, 140 and labor flows, 135 capital flows, 14, 15, 25, 26, 27–28, 40, 116, 125, 128, 131, 351 economic volatility exacerbated by, 28, 274 and foreign ownership, 195 and technology, 139 capital inflows, 110–11 capitalism: crises in, xviii, 148–49 inclusive, 317 capital requirements, 152, 249, 378 Caprio, Gerry, 387 capture, 158–60 carbon price, 230, 260, 265, 368 cash, 39 cash flow, 194 Catalonia, xi CDU party, 314 central banks, 59, 354, 387–88 balance sheets of, 386 capture of, 158–59 credit auctions by, 282–84 credit creation by, 277–78 expertise of, 363 independence of, 157–63 inequality created by, 154 inflation and, 153, 166–67 as lender of last resort, 85, 362 as political institutions, 160–62 regulations and, 153 stability and, 8 unemployment and, 8, 94, 97, 106, 147, 153 CEO compensation, 383 Chapter 11, 259–60, 291 childhood poverty, 72 Chile, 55, 152–53 China, 81, 98, 164, 319, 352 exchange-rate policy of, 251, 254, 350–51 global integration of, 49–50 low prices of, 251 rise of, 75 savings in, 257 trade surplus of, 118, 121, 350–52 wages controlled in, 254 as world’s largest economy, 318, 327 chits, 287–88, 290, 299–300, 387, 388–389 Citigroup, 355 climate change, 229–30, 251, 282, 319 Clinton, Bill, xiv, xv, 187 closing hours, 220 cloves, 230 cognitive capture, 159 Cohesion Fund, 243 Cold War, 6 collateral, 364 collective action, 41–44, 51–52 and inequality, 338 and stabilization, 246 collective bargaining, 221 collective goods, 40 Common Agricultural Policy, 338 common regulatory framework, 241 communism, 10 Community Reinvestment Act (CRA), 360, 382 comparative advantage, 12, 171 competition, 12 competitive devaluation, 104–6, 254 compromise, 22–23 confidence, 95, 200–201, 384 in banks, 127 in bonds, 145 and structural reforms, 232 and 2008 crisis, 280 confirmation bias, 309, 335 Congress, US, 319, 355 connected lending, 280 connectedness, 68–69 Connecticut, GDP of, 92 Constitutional Court, Greek, 198 consumption, 94, 278 consumption tax, 193–94 contract enforcement, 24 convergence, 13, 92–93, 124, 125, 139, 254, 300–301 convergence criteria, 15, 87, 89, 96–97, 99, 123, 244 copper mines, 55 corporate income tax, 189–90, 227 corporate taxes, 189–90, 227, 251 corporations, 323 regulations opposed by, xvi and shutdown of Greek banks, 229 corruption, 74, 112 privatization and, 194–95 Costa, António, 332 Council of Economic Advisers, 358 Council of State, Greek, 198 countercyclical fiscal policy, 244 counterfactuals, 80 Countrywide Financial, 91 credit, 276–85 “divorce”’s effect on, 278–79 excessive, 250, 274 credit auctions, 282–84 credit bubbles, 122–123 credit cards, 39, 49, 153 credit creation, 248–50, 277–78, 386 by banks, 280–82 domestic control over, 279–82 regulation of, 277–78 credit default swaps (CDSs), 159–60 crisis policy reforms, 262–67 austerity to growth, 263–65 debt restructuring and, 265–67 Croatia, 46, 331, 338 currency crises, 349 currency pegs, xii current account, 333–34 current account deficits, 19, 88, 108, 110, 120–121, 221, 294 and exit from euro, 273, 285–89 see also trade deficit Cyprus, 16, 30, 140, 177, 331, 386 capital controls in, 390 debt-to-GDP ratio of, 231 “haircut” of, 350, 367 Czech Republic, 46, 331 debit cards, 39, 49 debtors’ prison, 204 debt restructuring, 201, 203–6, 265–67, 290–92, 372, 390 of private debt, 291 debts, xx, 15, 93, 96, 183 corporate, 93–94 crisis in, 110–18 in deflation, xii and exit from eurozone, 273 with foreign currency, 115–18 household, 93–94 increase in, 18 inherited, 134 limits of, 42, 87, 122, 141, 346, 367 monetization of, 42 mutualization of, 242–43, 263 place-based, 134, 242 reprofiling of, 32 restructuring of, 259 debt-to-GDP ratio, 202, 210–11, 231, 266, 324 Declaration of Independence, 319 defaults, 102, 241, 338, 348 and debt mutualization, 243 deficit fetishism, 96 deficits, fiscal, xx, 15, 20, 93, 96, 106, 107–8, 122, 182, 384 and balanced-budget multiplier, 188–90, 265 constitutional amendment on, 339 and exit from euro, 273, 289–90 in Greece, 16, 186, 215, 233, 285–86, 289 limit of, 42, 87, 94–95, 122, 138, 141, 186, 243, 244, 265, 346, 367 primary, 188 problems financing, 110–12 structural, 245 deficits, trade, see trade deficits deflation, xii, 147, 148, 151, 166, 169, 277, 290 Delors, Jacques, 7, 332 democracy, lack of faith in, 312–14 Democracy in America (Tocqueville), xiii democratic deficit, 26–27, 35, 57–62, 145 democratic participation, xix Denmark, 45, 307, 313, 331 euro referendum of, 58 deposit insurance, 31, 44, 129, 199, 301, 354–55, 386–87 common in eurozone, 241, 242, 246, 248 derivatives, 131, 355 Deutsche Bank, 283, 355 devaluation, 98, 104–6, 254, 344 see also internal devaluation developing countries, and Washington Consensus, xvi discretion, 262–63 discriminatory lending practices, 283 disintermediation, 258 divergence, 15, 123, 124–44, 255–56, 300, 321 in absence of crisis, 128–31 capital flight and, 126–34 crisis policies’ exacerbation of, 140–43 free mobility of labor and, 134–36, 142–44, 242 in public investment, 136–38 reforms to prevent, 243 single-market principle and, 125–26 in technology, 138–39 in wealth, 139–40 see also capital flows; labor movement diversification, of production, 47 Dodd-Frank Wall Street Reform and Consumer Protection Act, 355 dollar peg, 50 downsizing, 133 Draghi, Mario, 127, 145, 156, 158, 165, 269, 363 bond market supported by, 127, 200, 201 Drago, Luis María, 371 drug prices, 219 Duisenberg, Willem Frederik “Wim,” 251 Dynamic Stochastic Equilibrium model, 331 East Asia, 18, 25, 95, 102–3, 112, 123, 202, 364, 381 convergence in, 138 Eastern Europe, 10 Economic Adjustment Programme, 178 economic distortions, 191 economic growth, xii, 34 confidence and, 232 in Europe, 63–64, 69, 73–74, 74, 75, 163 lowered by inequality, 212–13 reform of, 263–65 and structural reforms, 232–35 economic integration, xiv–xx, 23, 39–50 euro and, 46–47 political integration vs., 51–57 single currency and, 45–46 economic rents, 226, 280 economics, politics and, 308–18 economic security, 68 economies of scale, 12, 39, 55, 138 economists, poor forecasting by, 307 education, 20, 76, 344 investment in, 40, 69, 137, 186, 211, 217, 251, 255, 300 electricity, 217 electronic currency, 298–99, 389 electronics payment mechanism, 274–76, 283–84 emigration, 4, 68–69 see also migration employment: central banks and, 8, 94, 97 structural reforms and, 257–60 see also unemployment Employment Act (1946), 148 energy subsidies, 197 Enlightenment, 3, 318–19 environment, 41, 257, 260, 323 equality, 225–26 equilibrium, xviii–xix Erasmus program, 45 Estonia, 90, 331, 346 euro, xiv, 325 adjustments impeded by, 13–14 case for, 35–39 creation of, xii, 5–6, 7, 10, 333 creation of institutions required by, 10–11 divergence and, see divergence divorce of, 272–95, 307 economic integration and, 46–47, 268 as entailing fixed exchange rate, 8, 42–43, 46–47, 86–87, 92, 93, 94, 102, 105, 143, 193, 215–16, 240, 244, 249, 252, 254, 286, 297 as entailing single interest rate, 8, 85–88, 92, 93, 94, 105, 129, 152, 240, 244, 249 and European identification, 38–39 financial instability caused by, 131–32 growth promised by, 235 growth slowed by, 73 hopes for, 34 inequality increased by, xviii interest rates lowered by, 235 internal devaluation of, see internal devaluation literature on, 327–28 as means to end, xix peace and, 38 proponents of, 13 referenda on, 58, 339–40 reforms needed for, xii–xiii, 28–31 risk of, 49–50 weakness of, 224 see also flexible euro Eurobond, 356 euro crisis, xiii, 3, 4, 9 catastrophic consequences of, 11–12 euro-euphoria, 116–17 Europe, 151 free trade area in, 44–45 growth rates in, 63–64, 69, 73–74, 74, 75, 163 military conflicts in, 196 social models of, 21 European Central Bank (ECB), 7, 17, 80, 112–13, 117, 144, 145–73, 274, 313, 362, 368, 380 capture of, 158–59 confidence in, 200–201 corporate bonds bought by, 141 creation of, 8, 85 democratic deficit and, 26, 27 excessive expansion controlled by, 250 flexibility of, 269 funds to Greece cut off by, 59 German challenges to, 117, 164 governance and, 157–63 inequality created by, 154–55 inflation controlled by, 8, 25, 97, 106, 115, 145, 146–50, 151, 163, 165, 169–70, 172, 250, 256, 266 interest rates set by, 85–86, 152, 249, 302, 348 Ireland forced to socialize losses by, 134, 156, 165 new mandate needed by, 256 as political institution, 160–62 political nature of, 153–56 quantitative easing opposed by, 151 quantitative easing undertaken by, 164, 165–66, 170, 171 regulations by, 249, 250 unemployment and, 163 as unrepresentative, 163 European Commission, 17, 58, 161, 313, 332 European Court of Human Rights, 45 European Economic Community (EEC), 6 European Exchange Rate Mechanism (ERM), 30, 335 European Exchange Rate Mechanism II (ERM II), 336 European Free Trade Association, 44 European Free Trade Association Court, 44 European Investment Bank (EIB), 137, 247, 255, 301 European Regional Development Fund, 243 European Stability Mechanism, 23, 246, 357 European Union: budget of, 8, 45, 91 creation of, 4 debt and deficit limits in, 87–88 democratic deficit in, 26–27 economic growth in, 215 GDP of, xiii and lower rates of war, 196 migration in, 90 proposed exit of UK from, 4 stereotypes in, 12 subsidiarity in, 8, 41–42, 263 taxes in, 8, 261 Euro Summit Statement, 373 eurozone: austerity in, see austerity banking union in, see banking union counterfactual in, 235–36 double-dip recessions in, 234–35 Draghi’s speech and, 145 economic integration and, xiv–xx, 23, 39–50, 51–57 as flawed at birth, 7–9 framework for stability of, 244–52 German departure from, 32, 292–93 Greece’s possible exit from, 124 hours worked in, 71–72 lack of fiscal policy in, 152 and move to political integration, xvi, 34, 35, 51–57 Mundell’s work on dangers of, 87 policies of, 15–17 possible breakup of, 29–30 privatization avoided in, 194 saving, 323–26 stagnant GDP in, 12, 65–68, 66, 67 structure of, 8–9 surpluses in, 120–22 theory of, 95–97 unemployment in, 71, 135, 163, 177–78, 181, 331 working-age population of, 70 eurozone, proposed structural reforms for, 239–71 common financial system, see banking union excessive fiscal responsibility, 163 exchange-rate risks, 13, 47, 48, 49–50, 125, 235 exchange rates, 80, 85, 288, 300, 338, 382, 389 of China, 251, 254, 350–51 and competitive devaluation, 105–6 after departure of northern countries, 292–93 of euro, 8, 42–43, 46–47, 86–87, 92, 93, 94, 102, 105, 215–16, 240, 244, 249, 252, 254, 286, 297 flexible, 50, 248, 349 and full employment, 94 of Germany, 254–55, 351 gold and, 344–45 imports and, 86 interest rates and, 86 quantitative easing’s lowering of, 151 real, 105–6 and single currencies, 8, 42–43, 46–47, 86–87, 92, 93, 94, 97–98 stabilizing, 299–301 and trade deficits, 107, 118 expansionary contractions, 95–96, 208–9 exports, 86, 88, 97–99, 98 disappointing performance of, 103–5 external imbalances, 97–98, 101, 109 externalities, 42–43, 121, 153, 301–2 surpluses as, 253 extremism, xx, 4 Fannie Mae, 91 farmers, US, in deflation, xii Federal Deposit Insurance Corporation (FDIC), 91 Federal Reserve, US, 349 alleged independence of, 157 interest rates lowered by, 150 mandate of, 8, 147, 172 money pumped into economy by, 278 quantitative easing used by, 151, 170 reform of, 146 fiat currency, 148, 275 and taxes, 284 financial markets: lobbyists from, 132 reform of, 214, 228–29 short-sighted, 112–13 financial systems: necessity of, xix real economy of, 149 reform of, 257–58 regulations needed by, xix financial transaction system, 275–76 Finland, 16, 81, 122, 126, 292, 296, 331, 343 growth in, 296–97 growth rate of, 75, 76, 234–35 fire departments, 41 firms, 138, 186–87, 245, 248 fiscal balance: and cutting spending, 196–98 tax revenue and, 190–96 Fiscal Compact, 141, 357 fiscal consolidation, 310 fiscal deficits, see deficits, fiscal fiscal policy, 148, 245, 264 in center of macro-stabilization, 251 countercyclical, 244 in EU, 8 expansionary, 254–55 stabilization of, 250–52 fiscal prudence, 15 fiscal responsibility, 163 flexibility, 262–63, 269 flexible euro, 30–31, 272, 296–305, 307 cooperation needed for, 304–5 food prices, 169 forbearance, 130–31 forecasts, 307 foreclosure proposal, 180 foreign ownership, privatization and, 195 forestry, 81 France, 6, 14, 16, 114, 120, 141, 181–82, 331, 339–40, 343 banks of, 202, 203, 231, 373 corporate income tax in, 189–90 euro creation regretted in, 340 European Constitution referendum of, 58 extreme right in, xi growth in, 247 Freddie Mac, 91 Freefall (Stiglitz), 264, 335 free mobility of labor, xiv, 26, 40, 125, 134–36, 142–44, 242 Friedman, Milton, 151, 152–53, 167, 339 full employment, 94–97, 379 G-20, 121 gas: import of, 230 from Russia, 37, 81, 93 Gates Foundation, 276 GDP-indexed bonds, 267 German bonds, 114, 323 German Council of Economic Experts, 179, 365 Germany, xxi, 14, 30, 65, 108, 114, 141, 181–82, 207, 220, 286, 307, 331, 343, 346, 374 austerity pushed by, 186, 232 banks of, 202, 203, 231–32, 373 costs to taxpayers of, 184 as creditor, 140, 187, 267 debt collection by, 117 debt in, 105 and debt restructuring, 205, 311 in departure from eurozone, 32, 292–93 as dependent on Russian gas, 37 desire to leave eurozone, 314 ECB criticized by, 164 EU economic practices controlled by, 17 euro creation regretted in, 340 exchange rate of, 254–55, 351 failure of, 13, 78–79 flexible exchange of, 304 GDP of, xviii, 92 in Great Depression, 187 growing poverty in, 79 growth of, 78, 106, 247 hours worked per worker in, 72 inequality in, 79, 333 inflation in, 42, 338, 358 internal solidarity of, 334 lack of alternative to euro seen by, 11 migrants to, 320–21, 334–35, 393 minimum wage in, 42, 120, 254 neoliberalism in, 10 and place-based debt, 136 productivity in, 71 programs designed by, 53, 60, 61, 202, 336, 338 reparations paid by, 187 reunification of, 6 rules as important to, 57, 241–42, 262 share of global employment in, 224 shrinking working-age population of, 70, 78–79 and Stability and Growth Pact, 245 and structural reforms, 19–20 “there is no alternative” and, 306, 311–12 trade surplus of, 117, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 “transfer union” rejected by, 22 US loans to, 187 victims blamed by, 9, 15–17, 177–78, 309 wages constrained by, 41, 42–43 wages lowered in, 105, 333 global financial crisis, xi, xiii–xiv, 3, 12, 17, 24, 67, 73, 75, 114, 124, 146, 148, 274, 364, 387 and central bank independence, 157–58 and confidence, 280 and cost of failure of financial institutions, 131 lessons of, 249 monetary policy in, 151 and need for structural reform, 214 originating in US, 65, 68, 79–80, 112, 128, 296, 302 globalization, 51, 321–23 and diminishing share of employment in advanced countries, 224 economic vs. political, xvii failures of, xvii Globalization and Its Discontents (Stig-litz), 234, 335, 369 global savings glut, 257 global secular stagnation, 120 global warming, 229–30, 251, 282, 319 gold, 257, 275, 277, 345 Goldman Sachs, 158, 366 gold standard, 148, 291, 347, 358 in Great Depression, xii, 100 goods: free movement of, 40, 143, 260–61 nontraded, 102, 103, 169, 213, 217, 359 traded, 102, 103, 216 Gordon, Robert, 251 governance, 157–63, 258–59 government spending, trade deficits and, 107–8 gravity principle, 124, 127–28 Great Depression, 42, 67, 105, 148, 149, 168, 313 Friedman on causes of, 151 gold standard in, xii, 100 Great Malaise, 264 Greece, 14, 30, 41, 64, 81, 100, 117, 123, 142, 160, 177, 265–66, 278, 307, 331, 343, 366, 367–68, 374–75, 386 austerity opposed by, 59, 60–62, 69–70, 207–8, 392 balance of payments, 219 banks in, 200–201, 228–29, 231, 270, 276, 367, 368 blaming of, 16, 17 bread in, 218, 230 capital controls in, 390 consumption tax and, 193–94 counterfactual scenario of, 80 current account surplus of, 287–88 and debt restructuring, 205–7 debt-to-GDP ratio of, 231 debt write-offs in, 291 decline in labor costs in, 56, 103 ECB’s cutting of funds to, 59 economic growth in, 215, 247 emigration from, 68–69 fiscal deficits in, 16, 186, 215, 233, 285–86, 289 GDP of, xviii, 183, 309 hours worked per worker in, 72 inequality in, 72 inherited debt in, 134 lack of faith in democracy in, 312–13 living standards in, 216 loans in, 127 loans to, 310 migrants and, 320–21 milk in, 218, 223, 230 new currency in, 291, 300 oligarchs in, 16, 227 output per working-age person in, 70–71 past downturns in, 235–36 pensions in, 16, 78, 188, 197–98, 226 pharmacies in, 218–20 population decline in, 69, 89 possible exit from eurozone of, 124, 197, 273, 274, 275 poverty in, 226, 261, 376 primary surplus of, 187–88, 312 privatization in, 55, 195–96 productivity in, 71, 342 programs imposed on, xv, 21, 27, 60–62, 140, 155–56, 179–80, 181, 182–83, 184–85, 187–88, 190–93, 195–96, 197–98, 202–3, 205, 206, 214–16, 218–23, 225–28, 229, 230, 231, 233–34, 273, 278, 308, 309–11, 312, 315–16, 336, 338 renewable energy in, 193, 229 social capital destroyed in, 78 sovereign spread of, 200 spread in, 332 and structural reforms, 20, 70, 188, 191 tax revenue in, 16, 142, 192, 227, 367–368 tools lacking for recovery of, 246 tourism in, 192, 286 trade deficits in, 81, 194, 216–17, 222, 285–86 unemployment in, xi, 71, 236, 267, 332, 338, 342 urgency in, 214–15 victim-blaming of, 309–11 wages in, 216–17 youth unemployment in, xi, 332 Greek bonds, 116, 126 interest rates on, 4, 114, 181–82, 201–2, 323 restructuring of, 206–7 green investments, 260 Greenspan, Alan, 251, 359, 363 Grexit, see Greece, possible exit from eurozone of grocery stores, 219 gross domestic product (GDP), xvii decline in, 3 measurement of, 341 Growth and Stability Pact, 87 hedge funds, 282, 363 highways, 41 Hitler, Adolf, 338, 358 Hochtief, 367–68 Hoover, Herbert, 18, 95 human capital, 78, 137 human rights, 44–45, 319 Hungary, 46, 331, 338 hysteresis, 270 Iceland, 44, 111, 307, 354–55 banks in, 91 capital controls in, 390 ideology, 308–9, 315–18 imports, 86, 88, 97–99, 98, 107 incentives, 158–59 inclusive capitalism, 317 income, unemployment and, 77 income tax, 45 Independent Commission for the Reform of International Corporate Taxation, 376–377 Indonesia, 113, 230–31, 314, 350, 364, 378 industrial policies, 138–39, 301 and restructuring, 217, 221, 223–25 Industrial Revolution, 3, 224 industry, 89 inequality, 45, 72–73, 333 aggregate demand lowered by, 212 created by central banks, 154 ECB’s creation of, 154–55 economic performance affected by, xvii euro’s increasing of, xviii growth’s lowering of, 212 hurt by collective action, 338 increased by neoliberalism, xviii increase in, 64, 154–55 inequality in, 72, 212 as moral issue, xviii in Spain, 72, 212, 225–26 and tax harmonization, 260–61 and tax system, 191 inflation, 277, 290, 314, 388 in aftermath of tech bubble, 251 bonds and, 161 central banks and, 153, 166–67 consequences of fixation on, 149–50, 151 costs of, 270 and debt monetization, 42 ECB and, 8, 25, 97, 106, 115, 145, 146–50, 151, 163, 165, 169–70, 172, 255, 256, 266 and food prices, 169 in Germany, 42, 338, 358 interest rates and, 43–44 in late 1970s, 168 and natural rate hypothesis, 172–73 political decisions and, 146 inflation targeting, 157, 168–70, 364 information, 335 informational capital, 77 infrastructure, xvi–xvii, 47, 137, 186, 211, 255, 258, 265, 268, 300 inheritance tax, 368 inherited debt, 134 innovation, 138 innovation economy, 317–18 inputs, 217 instability, xix institutions, 93, 247 poorly designed, 163–64 insurance, 355–356 deposit, see deposit insurance mutual, 247 unemployment, 91, 186, 246, 247–48 integration, 322 interest rates, 43–44, 86, 282, 345, 354 in aftermath of tech bubble, 251 ECB’s determination of, 85–86, 152, 249, 302, 348 and employment, 94 euro’s lowering of, 235 Fed’s lowering of, 150 on German bonds, 114 on Greek bonds, 4, 114, 181–82 on Italian bonds, 114 in late 1970s, 168 long-term, 151, 200 negative, 316, 348–49 quantitative easing and, 151, 170 short-term, 249 single, eurozone’s entailing of, 8, 85–88, 92, 93, 94, 105, 129, 152, 240, 244, 249 on Spanish bonds, 114, 199 spread in, 332 stock prices increased by, 264 at zero lower bound, 106 intermediation, 258 internal devaluation, 98–109, 122, 126, 220, 255, 388 supply-side effects of, 99, 103–4 International Commission on the Measurement of Economic Performance and Social Progress, 79, 341 International Labor Organization, 56 International Monetary Fund (IMF), xv, xvii, 10, 17, 18, 55, 61, 65–66, 96, 111, 112–13, 115–16, 119, 154, 234, 289, 309, 316, 337, 349, 350, 370, 371, 381 and Argentine debt, 206 conditions of, 201 creation of, 105 danger of high taxation warnings of, 190 debt reduction pushed by, 95 and debt restructuring, 205, 311 and failure to restore credit, 201 global imbalances discussed by, 252 and Greek debts, 205, 206, 310–11 on Greek surplus, 188 and Indonesian crisis, 230–31, 364 on inequality’s lowering of growth, 212–13 Ireland’s socialization of losses opposed by, 156–57 mistakes admitted by, 262, 312 on New Mediocre, 264 Portuguese bailout of, 178–79 tax measures of, 185 investment, 76–77, 111, 189, 217, 251, 264, 278, 367 confidence and, 94 divergence in, 136–38 in education, 137, 186, 211, 217, 251, 255, 300 infrastructure in, xvi–xvii, 47, 137, 186, 211, 255, 258, 265, 268, 300 lowered by disintermediation, 258 public, 99 real estate, 199 in renewable energy, 229–30 return on, 186, 245 stimulation of, 94 in technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 investor state dispute settlement (ISDS), 393–94 invisible hand, xviii Iraq, refugees from, 320 Iraq War, 36, 37 Ireland, 14, 16, 44, 113, 114–15, 122, 178, 234, 296, 312, 331, 339–40, 343, 362 austerity opposed in, 207 debt of, 196 emigrants from, 68–69 GDP of, 18, 231 growth in, 64, 231, 247, 340 inherited debt in, 134 losses socialized in, 134, 156–57, 165 low debt in, 88 real estate bubble in, 108, 114–15, 126 surplus in, 17, 88 taxes in, 142–43, 376 trade deficits in, 119 unemployment in, 178 irrational exuberance, 14, 114, 116–17, 149, 334, 359 ISIS, 319 Italian bonds, 114, 165, 323 Italy, 6, 14, 16, 120, 125, 331, 343 austerity opposed in, 59 GDP per capita in, 352 growth in, 247 sovereign spread of, 200 Japan, 151, 333, 342 bubble in, 359 debt of, 202 growth in, 78 quantitative easing used by, 151, 359 shrinking working-age population of, 70 Java, unemployment on, 230 jobs gap, 120 Juncker, Jean-Claude, 228 Keynes, John Maynard, 118, 120, 172, 187, 351 convergence policy suggested by, 254 Keynesian economics, 64, 95, 108, 153, 253 King, Mervyn, 390 knowledge, 137, 138–39, 337–38 Kohl, Helmut, 6–7, 337 krona, 287 labor, marginal product of, 356 labor laws, 75 labor markets, 9, 74 friction in, 336 reforms of, 214, 221 labor movement, 26, 40, 125, 134–36, 320 austerity and, 140 capital flows and, 135 see also migration labor rights, 56 Lamers, Karl, 314 Lancaster, Kelvin, 27 land tax, 191 Latin America, 10, 55, 95, 112, 202 lost decade in, 168 Latvia, 331, 346 GDP of, 92 law of diminishing returns, 40 learning by doing, 77 Lehman Brothers, 182 lender of last resort, 85, 362, 368 lending, 280, 380 discriminatory, 283 predatory, 274, 310 lending rates, 278 leverage, 102 Lichtenstein, 44 Lipsey, Richard, 27 liquidity, 201, 264, 278, 354 ECB’s expansion of, 256 lira, 14 Lithuania, 331 living standards, 68–70 loans: contraction of, 126–27, 246 nonperforming, 241 for small and medium-size businesses, 246–47 lobbyists, from financial sector, 132 location, 76 London interbank lending rate (LIBOR), 131, 355 Long-Term Refinancing Operation, 360–361 Lucas, Robert, xi Luxembourg, 6, 94, 142–43, 331, 343 as tax avoidance center, 228, 261 luxury cars, 265 Maastricht Treaty, xiii, 6, 87, 115, 146, 244, 298, 339, 340 macro-prudential regulations, 249 Malta, 331, 340 manufacturing, 89, 223–24 market failures, 48–49, 86, 148, 149, 335 rigidities, 101 tax policy’s correction of, 193 market fundamentalism, see neoliberalism market irrationality, 110, 125–26, 149 markets, limitations of, 10 Meade, James, 27 Medicaid, 91 medical care, 196 Medicare, 90, 91 Mellon, Andrew, 95 Memorandum of Agreement, 233–34 Merkel, Angela, 186 Mexico, 202, 369 bailout of, 113 in NAFTA, xiv Middle East, 321 migrant crisis, 44 migration, 26, 40, 68–69, 90, 125, 320–21, 334–35, 342, 356, 393 unemployment and, 69, 90, 135, 140 see also labor movement military power, 36–37 milk, 218, 223, 230 minimum wage, 42, 120, 254, 255, 351 mining, 257 Mississippi, GDP of, 92 Mitsotakis, Constantine, 377–78 Mitsotakis, Kyriakos, 377–78 Mitterrand, François, 6–7 monetarism, 167–68, 169, 364 monetary policy, 24, 85–86, 148, 264, 325, 345, 364 as allegedly technocratic, 146, 161–62 conservative theory of, 151, 153 in early 1980s US, 168, 210 flexibility of, 244 in global financial crisis, 151 political nature of, 146, 153–54 recent developments in theory of, 166–73 see also interest rates monetary union, see single currencies money laundering, 354 monopolists, privatization and, 194 moral hazard, 202, 203 mortgage rates, 170 mortgages, 302 multinational chains, 219 multinational development banks, 137 multinationals, 127, 223, 376 multipliers, 211–12, 248 balanced-budget, 188–90, 265 Mundell, Robert, 87 mutual insurance, 247 mutualization of debt, 242–43, 263 national development banks, 137–38 natural monopolies, 55 natural rate hypothesis, 172 negative shocks, 248 neoliberalism, xvi, 24–26, 33, 34, 98–99, 109, 257, 265, 332–33, 335, 354 on bubbles, 381 and capital flows, 28 and central bank independence, 162–63 in Germany, 10 inequality increased by, xviii low inflation desired by, 147 recent scholarship against, 24 Netherlands, 6, 44, 292, 331, 339–40, 343 European Constitution referendum of, 58 New Democracy Party, Greek, 61, 185, 377–78 New Mediocre, 264 New World, 148 New Zealand, 364 Nokia, 81, 234, 297 nonaccelerating inflation rate of unemployment (NAIRU), 379–80 nonaccelerating wage rate of unemployment (NAWRU), 379–80 nongovernmental organizations (NGOs), 276 nonperforming loans, 241 nontraded goods sector, 102, 103, 169, 213, 217, 359 North American Free Trade Agreement (NAFTA), xiv North Atlantic Treaty Organization (NATO), 196 Norway, 12, 44, 307 referendum on joining EU, 58 nuclear deterrence, 38 Obama, Barack, 319 oil, import of, 230 oil firms, 36 oil prices, 89, 168, 259, 359 oligarchs: in Greece, 16, 227 in Russia, 280 optimal currency area, 345 output, 70–71, 111 after recessions, 76 Outright Monetary Transactions program, 361 overregulate, 132 Oxfam, 72 panic of 1907, 147 Papandreou, Andreas, 366 Papandreou, George, xiv, 60–61, 184, 185, 220, 221, 226–27, 309, 312, 366, 373 reform of banks suggested by, 229 paradox of thrift, 120 peace, 34 pensions, 9, 16, 78, 177, 188, 197–98, 226, 276, 370 People’s Party, Portugal, 392 periphery, 14, 32, 171, 200, 296, 301, 318 see also specific countries peseta, 14 pharmacies, 218–20 Phishing for Phools (Akerlof and Shiller), 132 physical capital, 77–78 Pinochet, Augusto, 152–53 place-based debt, 134, 242 Pleios, George, 377 Poland, 46, 333, 339 assistance to, 243 in Iraq War, 37 police, 41 political integration, xvi, 34, 35 economic integration vs., 51–57 politics, economics and, 308–18 pollution, 260 populism, xx Portugal, 14, 16, 64, 177, 178, 331, 343, 346 austerity opposed by, 59, 207–8, 315, 332, 392 GDP of, 92 IMF bailout of, 178–79 loans in, 127 poverty in, 261 sovereign spread of, 200 Portuguese bonds, 179 POSCO, 55 pound, 287, 335, 346 poverty, 72 in Greece, 226, 261 in Portugal, 261 in Spain, 261 predatory lending, 274, 310 present discount value, 343 Price of Inequality, The (Stiglitz), 154 prices, 19, 24 adjustment of, 48, 338, 361 price stability, 161 primary deficit, 188, 389 primary surpluses, 187–88 private austerity, 126–27, 241–42 private sector involvement, 113 privatization, 55, 194–96, 369 production costs, 39, 43, 50 production function, 343 productivity, 71, 332, 348 in manufacturing, 223–24 after recessions, 76–77 programs, 17–18 Germany’s design of, 53, 60, 61, 187–88, 205, 336, 338 imposed on Greece, xv, 21, 27, 60–62, 140, 155–56, 179–80, 181, 182–83, 184–85, 187–88, 190–93, 195–96, 197–98, 202–3, 205, 206, 214–16, 218–23, 225–28, 229, 230, 231, 233–34, 273, 278, 308, 309–11, 312, 315–16, 336, 338 of Troika, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 202, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 346, 366, 379, 392 progressive automatic stabilizers, 244 progressive taxes, 248 property rights, 24 property taxes, 192–93, 227 public entities, 195 public goods, 40, 337–38 quantitative easing (QE), 151, 164, 165–66, 170–72, 264, 359, 361, 386 railroads, 55 Reagan, Ronald, 168, 209 real estate bubble, 25, 108, 109, 111, 114–15, 126, 148, 172, 250, 301, 302 cause of, 198 real estate investment, 199 real exchange rate, 105–6, 215–16 recessions, recovery from, 94–95 recovery, 76 reform, 75 theories of, 27–28 regulations, 24, 149, 152, 162, 250, 354, 355–356, 378 and Bush administration, 250–51 common, 241 corporate opposition to, xvi difficulties in, 132–33 of finance, xix forbearance on, 130–31 importance of, 152–53 macro-prudential, 249 in race to bottom, 131–34 Reinhardt, Carmen, 210 renewable energy, 193, 229–30 Republican Party, US, 319 research and development (R&D), 77, 138, 217, 251, 317–18 Ricardo, David, 40, 41 risk, 104, 153, 285 excessive, 250 risk markets, 27 Rogoff, Kenneth, 210 Romania, 46, 331, 338 Royal Bank of Scotland, 355 rules, 57, 241–42, 262, 296 Russia, 36, 264, 296 containment of, 318 economic rents in, 280 gas from, 37, 81, 93, 378 safety nets, 99, 141, 223 Samaras, Antonis, 61, 309, 377 savings, 120 global, 257 savings and loan crisis, 360 Schäuble, Wolfgang, 57, 220, 314, 317 Schengen area, 44 schools, 41, 196 Schröeder, Gerhard, 254 self-regulation, 131, 159 service sector, 224 shadow banking system, 133 shareholder capitalism, 21 Shiller, Rob, 132, 359 shipping taxes, 227, 228 short-termism, 77, 258–59 Silicon Valley, 224 silver, 275, 277 single currencies: conflicts and, 38 as entailing fixed exchange rates, 8, 42–43, 46–47, 86–87, 92, 93, 94, 97–98 external imbalances and, 97–98 and financial crises, 110–18 integration and, 45–46, 50 interest rates and, 8, 86, 87–88, 92, 93, 94 Mundell’s work on, 87 requirements for, 5, 52–53, 88–89, 92–94, 97–98 and similarities among countries, 15 trade integration vs., 393 in US, 35, 36, 88, 89–92 see also euro single-market principle, 125–26, 231 skilled workers, 134–35 skills, 77 Slovakia, 331 Slovenia, 331 small and medium-sized enterprises (SMEs), 127, 138, 171, 229 small and medium-size lending facility, 246–47, 300, 301, 382 Small Business Administration, 246 small businesses, 153 Smith, Adam, xviii, 24, 39–40, 41 social cohesion, 22 Social Democratic Party, Portugal, 392 social program, 196 Social Security, 90, 91 social solidarity, xix societal capital, 77–78 solar energy, 193, 229 solidarity fund, 373 solidarity fund for stabilization, 244, 254, 264, 301 Soros, George, 390 South Dakota, 90, 346 South Korea, 55 bailout of, 113 sovereign risk, 14, 353 sovereign spreads, 200 sovereign wealth funds, 258 Soviet Union, 10 Spain, 14, 16, 114, 177, 178, 278, 331, 335, 343 austerity opposed by, 59, 207–8, 315 bank bailout of, 179, 199–200, 206 banks in, 23, 186, 199, 200, 242, 270, 354 debt of, 196 debt-to-GDP ratio of, 231 deficits of, 109 economic growth in, 215, 231, 247 gold supply in, 277 independence movement in, xi inequality in, 72, 212, 225–26 inherited debt in, 134 labor reforms proposed for, 155 loans in, 127 low debt in, 87 poverty in, 261 real estate bubble in, 25, 108, 109, 114–15, 126, 198, 301, 302 regional independence demanded in, 307 renewable energy in, 229 sovereign spread of, 200 spread in, 332 structural reform in, 70 surplus in, 17, 88 threat of breakup of, 270 trade deficits in, 81, 119 unemployment in, 63, 161, 231, 235, 332, 338 Spanish bonds, 114, 199, 200 spending, cutting, 196–98 spread, 332 stability, 147, 172, 261, 301, 364 automatic, 244 bubble and, 264 central banks and, 8 as collective action problem, 246 solidarity fund for, 54, 244, 264 Stability and Growth Pact, 245 standard models, 211–13 state development banks, 138 steel companies, 55 stock market, 151 stock market bubble, 200–201 stock market crash (1929), 18, 95 stock options, 259, 359 structural deficit, 245 Structural Funds, 243 structural impediments, 215 structural realignment, 252–56 structural reforms, 9, 18, 19–20, 26–27, 214–36, 239–71, 307 from austerity to growth, 263–65 banking union, 241–44 and climate change, 229–30 common framework for stability, 244–52 counterproductive, 222–23 debt restructuring and, 265–67 of finance, 228–29 full employment and growth, 256–57 in Greece, 20, 70, 188, 191, 214–36 growth and, 232–35 shared prosperity and, 260–61 and structural realignment, 252–56 of trade deficits, 216–17 trauma of, 224 as trivial, 214–15, 217–20, 233 subsidiarity, 8, 41–42, 263 subsidies: agricultural, 45, 197 energy, 197 sudden stops, 111 Suharto, 314 suicide, 82, 344 Supplemental Nutrition Assistance Program (SNAP), 91 supply-side effects: in Greece, 191, 215–16 of investments, 367 surpluses, fiscal, 17, 96, 312, 379 primary, 187–88 surpluses, trade, see trade surpluses “Swabian housewife,” 186, 245 Sweden, 12, 46, 307, 313, 331, 335, 339 euro referendum of, 58 refugees into, 320 Switzerland, 44, 307 Syria, 321, 342 Syriza party, 309, 311, 312–13, 315, 377 Taiwan, 55 tariffs, 40 tax avoiders, 74, 142–43, 227–28, 261 taxes, 142, 290, 315 in Canada, 191 on capital, 356 on carbon, 230, 260, 265, 368 consumption, 193–94 corporate, 189–90, 227, 251 cross-border, 319, 384 and distortions, 191 in EU, 8, 261 and fiat currency, 284 and free mobility of goods and capital, 260–61 in Greece, 16, 142, 192, 193–94, 227, 367–68 ideal system for, 191 IMF’s warning about high, 190 income, 45 increase in, 190–94 inequality and, 191 inheritance, 368 land, 191 on luxury cars, 265 progressive, 248 property, 192–93, 227 Reagan cuts to, 168, 210 shipping, 227, 228 as stimulative, 368 on trade surpluses, 254 value-added, 190, 192 tax evasion, in Greece, 190–91 tax laws, 75 tax revenue, 190–96 Taylor, John, 169 Taylor rule, 169 tech bubble, 250 technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 and new financial system, 274–76, 283–84 telecoms, 55 Telmex, 369 terrorism, 319 Thailand, 113 theory of the second best, 27–28, 48 “there is no alternative” (TINA), 306, 311–12 Tocqueville, Alexis de, xiii too-big-to-fail banks, 360 tourism, 192, 286 trade: and contractionary expansion, 209 US push for, 323 trade agreements, xiv–xvi, 357 trade balance, 81, 93, 100, 109 as allegedly self-correcting, 98–99, 101–3 and wage flexibility, 104–5 trade barriers, 40 trade deficits, 89, 139 aggregate demand weakened by, 111 chit solution to, 287–88, 290, 299–300, 387, 388–89 control of, 109–10, 122 with currency pegs, 110 and fixed exchange rates, 107–8, 118 and government spending, 107–8, 108 of Greece, 81, 194, 215–16, 222, 285–86 structural reform of, 216–17 traded goods, 102, 103, 216 trade integration, 393 trade surpluses, 88, 118–21, 139–40, 350–52 discouragement of, 282–84, 299–300 of Germany, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 tax on, 254, 351, 381–82 Transatlantic Trade and Investment Partnership, xv, 323 transfer price system, 376 Trans-Pacific Partnership, xv, 323 Treasury bills, US, 204 Trichet, Jean-Claude, 100–101, 155, 156, 164–65, 251 trickle-down economics, 362 Troika, 19, 20, 26, 55, 56, 58, 60, 69, 99, 101–3, 117, 119, 135, 140–42, 178, 179, 184, 195, 274, 294, 317, 362, 370–71, 373, 376, 377, 386 banks weakened by, 229 conditions of, 201 discretion of, 262 failure to learn, 312 Greek incomes lowered by, 80 Greek loan set up by, 202 inequality created by, 225–26 poor forecasting of, 307 predictions by, 249 primary surpluses and, 187–88 privatization avoided by, 194 programs of, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 197–98, 202, 204, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 348, 366, 379, 392 social contract torn up by, 78 structural reforms imposed by, 214–16, 217, 218–23, 225–38 tax demand of, 192 and tax evasion, 367 see also European Central Bank (ECB); European Commission; International Monetary Fund (IMF) trust, xix, 280 Tsipras, Alexis, 61–62, 221, 273, 314 Turkey, 321 UBS, 355 Ukraine, 36 unemployment, 3, 64, 68, 71–72, 110, 111, 122, 323, 336, 342 as allegedly self-correcting, 98–101 in Argentina, 267 austerity and, 209 central banks and, 8, 94, 97, 106, 147 ECB and, 163 in eurozone, 71, 135, 163, 177–78, 181, 331 and financing investments, 186 in Finland, 296 and future income, 77 in Greece, xi, 71, 236, 267, 331, 338, 342 increased by capital, 264 interest rates and, 43–44 and internal devaluation, 98–101, 104–6 migration and, 69, 90, 135, 140 natural rate of, 172–73 present-day, in Europe, 210 and rise of Hitler, 338, 358 and single currency, 88 in Spain, 63, 161, 231, 235, 332, 338 and structural reforms, 19 and trade deficits, 108 in US, 3 youth, 3, 64, 71 unemployment insurance, 91, 186, 246, 247–48 UNICEF, 72–73 unions, 101, 254, 335 United Kingdom, 14, 44, 46, 131, 307, 331, 332, 340 colonies of, 36 debt of, 202 inflation target set in, 157 in Iraq War, 37 light regulations in, 131 proposed exit from EU by, 4, 270 United Nations, 337, 350, 384–85 creation of, 38 and lower rates of war, 196 United States: banking system in, 91 budget of, 8, 45 and Canada’s 1990 expansion, 209 Canada’s free trade with, 45–46, 47 central bank governance in, 161 debt-to-GDP of, 202, 210–11 financial crisis originating in, 65, 68, 79–80, 128, 296, 302 financial system in, 228 founding of, 319 GDP of, xiii Germany’s borrowing from, 187 growing working-age population of, 70 growth in, 68 housing bubble in, 108 immigration into, 320 migration in, 90, 136, 346 monetary policy in financial crisis of, 151 in NAFTA, xiv 1980–1981 recessions in, 76 predatory lending in, 310 productivity in, 71 recovery of, xiii, 12 rising inequality in, xvii, 333 shareholder capitalism of, 21 Small Business Administration in, 246 structural reforms needed in, 20 surpluses in, 96, 187 trade agenda of, 323 unemployment in, 3, 178 united currency in, 35, 36, 88, 89–92 United States bonds, 350 unskilled workers, 134–35 value-added tax, 190, 192 values, 57–58 Varoufakis, Yanis, 61, 221, 309 velocity of circulation, 167 Venezuela, 371 Versaille, Treaty of, 187 victim blaming, 9, 15–17, 177–78, 309–11 volatility: and capital market integration, 28 in exchange rates, 48–49 Volcker, Paul, 157, 168 wage adjustments, 100–101, 103, 104–5, 155, 216–17, 220–22, 338, 361 wages, 19, 348 expansionary policies on, 284–85 Germany’s constraining of, 41, 42–43 lowered in Germany, 105, 333 wage stagnation, in Germany, 13 war, change in attitude to, 38, 196 Washington Consensus, xvi Washington Mutual, 91 wealth, divergence in, 139–40 Weil, Jonathan, 360 welfare, 196 West Germany, 6 Whitney, Meredith, 360 wind energy, 193, 229 Wolf, Martin, 385 worker protection, 56 workers’ bargaining rights, 19, 221, 255 World Bank, xv, xvii, 10, 61, 337, 357, 371 World Trade Organization, xiv youth: future of, xx–xxi unemployment of, 3, 64, 71 Zapatero, José Luis Rodríguez, xiv, 155, 362 zero lower bound, 106 ALSO BY JOSEPH E.

A Man for All Markets
by Edward O. Thorp
Published 15 Nov 2016

Smith suggested that in an economy of many small buyers and sellers, each trying to increase his own profit, our collective benefit would be maximized as though guided by an “invisible hand.” The notion is of limited use, because most markets are not as Smith assumed. Take computer chips: 99.8 percent of them, worldwide, are made by just two US companies, and the smaller one is fighting to survive. An opposite concept to the magic of the invisible hand is “the tragedy of the commons,” as explained in 1968 by Garrett Hardin. Imagine a natural resource that anyone can freely use, such as—once upon a time—catching fish in the ocean.

The God Delusion
by Richard Dawkins
Published 12 Sep 2006

Because each is selected to be successful in the presence of the others – which are also being selected in a similar way – cartels of cooperating genes emerge. We have here something more like a free market than a planned economy. There is a butcher and a baker, but perhaps a gap in the market for a candlestick maker. The invisible hand of natural selection fills the gap. That is different from having a central planner who favours the troika of butcher + baker + candlestick maker. The idea of cooperating cartels assembled by the invisible hand will turn out to be central to our understanding of religious memes and how they work. Different kinds of gene cartel emerge in different gene pools. Carnivore gene pools have genes that program prey-detecting sense organs, prey-catching claws, carnassial teeth, meat-digesting enzymes and many other genes, all fine-tuned to cooperate with each other.

Servants: A Downstairs History of Britain From the Nineteenth Century to Modern Times
by Lucy Lethbridge
Published 18 Nov 2013

So high were the standards of management in the well-run wealthy home that the butler needed to develop a passion for detail that often bordered on fetish. It was absolutely crucial that the well-oiled wheels of the home were never on display, that no household necessity or comfort ever looked as though it were not always available in abundance, filled to the brim by invisible hands. Cigarette boxes had therefore to be constantly replenished; soap was always fresh and flowers just picked. ‘Efficiency to me is happiness,’ wrote Ernest King in the 1950s, looking back on half a century of butlering: ‘The aim for perfection I fear becomes a bit of an obsession.’15 By the mid-nineteenth century, the indispensable manservant, the opener of doors, the wearer of black suits, the imperturbable frontman and keeper of the gate, emerged in the form that we would recognise today.

…

Readers of Struther’s first column never found out who it is who answers Mrs Miniver when she rings for tea because the column ends tantalisingly at that moment. Yet to complete the image of perfection, the tea, so beautifully laid just at the moment when it is most required, must be delivered as it always has been delivered: on time, abundant and blessed by the loyal labour of the invisible hands that created it. In 1934, P. L. Travers’s Mary Poppins had flown in on her umbrella to bring magic and order to the Banks family in Cherry Tree Avenue, where chaos had ensued on the departure of their nanny. The quiet efficiency of a well-run household was the 1930s dream but in real life it was under threat, with servants difficult to secure and widely expected to leave at the drop of a hat, leaving catastrophe in their wake.

Red Moon
by Kim Stanley Robinson
Published 22 Oct 2018

Their landing piste was more than two hundred kilometers long, Fred had been told, but going as fast as they were, something like 8300 kilometers an hour at touchdown, their ship would have to decelerate pretty hard for the whole length of the track. And in fact they were still being decisively pushed back into their seats, also pulled upward, or so it seemed, strange though that was. This slight upward force was already lessening, and the main shove was back into the seat, like pressure all over from a giant invisible hand. The view out the window looked like bad CGI. Landing at the speed of their spaceship’s escape velocity from Earth had allowed them to travel without deceleration fuel, much reducing the spaceship’s weight and size, therefore the cost of transit. But it meant they had come in around forty times faster than a commercial jet on Earth landed, while the tolerance for error in terms of meeting the piste was on the order of a few centimeters.

…

That’s the way it used to be. That’s the way it started.” John Semple laughed. “We all want that! We’ve lost that in America too. All this stuff in China, it’s happening in America too. We’re having simultaneous crises.” “Maybe it’s the same crisis. Maybe we’ve all lost it, everywhere. Lost it to the invisible hand. The tong that hides everywhere in plain sight.” “Maybe so.” John and Ta Shu stared at each other. “Can you see if these people brought along a comms device with them?” Ta Shu asked. “It’s one of those quantum key things, very heavy for its size.” John nodded. “I’ll have my people take a look for it when they get these folks in hand.”

The Great Good Place: Cafes, Coffee Shops, Bookstores, Bars, Hair Salons, and Other Hangouts at the Heart of a Community
by Ray Oldenburg
Published 17 Aug 1999

The key to the whole interconnected system seems to be that of leaving the individual never really satisfied but always seeking, always hoping, and forever convinced that commercial establishments and commercialized forms of leisure can offer what is missing in the quest for contentment. The “invisible hand of the market” which, Adam Smith claimed, would usher us toward greater social harmony irrespective of the intentions of businesspeople, has not done so. The “hidden hand,” hardly even disguised anymore, never rests. It fidgets constantly in expectation of new prospects for commercial success.

…

Sexual contact, 250–251 Sexual equality, 245–246 Sexual segregation and the third place, 230–261 the Depression, effect of, 241–242 French rural villages, 234–235 Shades, 69 Shakespeare, William, 168 Shopping malls, 118–122 Community Builders Handbook, 208–209 “corporation country,” 119 hobbyists’ displays in, 120 “juggernaut,” 209 Kentucky Oaks mall, 209 seating, 119 social life of, 120–121 strangers in, 119–120 teenagers’ affinity for, 281–283 Sidewalk cafes, 83, 145–164 as a center of activity, 155–161 de Gaulle’s policy towards, 159 English pubs compared to, 145–146 espresso coffee, 160–161 lovers’ area, 147–148 names, absence of, 148 in New York City, 150–151 physical description of, 146–150 privacy, right to, 149–150 Silver, Nathan, 220 Simmel, Georg, 24–25, 55–56 Sims, Newell, 72–74 Six-packers, 261 Slater, Philip, 32, 236 Small towns, typical. See River Park. Smith, Adam, “invisible hand of the market,” 223 Smith Brothers, 183 Snooker, 224–225 Snow (Professor), 154 Sociability, 24–25, 60–61 Socializing, open-ended, 58–59, 61–62 Soda fountains, 9, 112–114 Soviet Union, 66 Spectator, 190 Star Tavern, 40 Status, surrender of. See Leveling. Steele, 190 Strangers, 13, 35, 119–120 Street, vocabulary related to, 213 Stress in America, 10 Suburban America, 3–7, 71 adolescents.

The Next Shift: The Fall of Industry and the Rise of Health Care in Rust Belt America
by Gabriel Winant
Published 23 Mar 2021

See Mike Davis, Prisoners of the American Dream: Politics and Economy in the History of the US Working Class (London: Verso, 1986), 121–124; David L. Stebenne, Arthur J. Goldberg: New Deal Liberal (New York: Oxford University Press, 1996), 154–232; Nelson Lichtenstein, State of the Union: A Century of American Labor (Princeton, NJ: Princeton University Press, 2002), 98–140; Kim Phillips-Fein, Invisible Hands: The Businessmen’s Crusade Against the New Deal (New York: Norton, 2009). See also Jefferson R. Cowie, Capital Moves: RCA’s Seventy-Year Quest for Cheap Labor (New York: New Press, 2001); Thomas J. Sugrue, The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit, 2nd ed. (Princeton, NJ: Princeton University Press, 2005); Jeremy Milloy, Blood, Sweat, and Fear: Violence at Work in the North American Auto Industry, 1960–1980 (Urbana: University of Illinois Press, 2017); Daniel J.

…

Minutes of Meeting with Grievance Committee, May 19, 1953, box 4, folder 6, USSCDWIRDR; Minutes of Meeting with Grievance Committee, January 19, 1954, box 4, folder 6, USSCDWIRDR; Minutes of Meeting with Grievance Committee, September 21, 1954, box 4, folder 6, USSCDWIRDR; Minutes of Meeting with Grievance Committee, September 19, 1956, box 4, folder 7, USSCDWIRDR; Employee Suggestion Plan Investigation Form, July 11, 1957, box 26, folder 2, USSCDWIRDR; Cost Reduction Project Report, November 1957, box 32, folder 2, USSCDWIRDR; Employee Request, June 18, 1957, box 29, USSCDWIRDR. 42. Memorandum, p. 5, October 16, 1956, box 3, series IV, RCCP. On the managerial offensive of the late 1950s, see Davis, Prisoners of the American Dream, 121–124; Stebenne, Arthur J. Goldberg, 154–232; Phillips-Fein, Invisible Hands, 87–114. 43. Memorandum of Special Third-Step Meeting Concerning Unanswered Grievance—Discharge of Pete Dohanic Jr., May 25, 1956, box 9, folder 2, USSCDWIRDR. On violence of this kind, see Milloy, Blood, Sweat, and Fear. 44. E. P. Thompson, “Time, Work-Discipline, and Industrial Capitalism,” Past and Present 38 (December 1967), 56–97. 45.

When McKinsey Comes to Town: The Hidden Influence of the World's Most Powerful Consulting Firm
by Walt Bogdanich and Michael Forsythe
Published 3 Oct 2022

As these raiders got rich off what Leopold called “the deindustrialization of America,” their apologists praised them for making corporations more efficient. Some companies had indeed become complacent, but raiders often bought companies to break them up and sell off the pieces, leaving thousands of employees without jobs. “This is not the invisible hand of the market,” Leopold said. “This is the financial extraction process.” The Business Roundtable, with a membership of the nation’s most powerful corporate bosses, did not believe that companies should have societal interests beyond their own well-being. The business group had a simple philosophy: a corporation should “generate economic returns to its owners.”

…

GO TO NOTE REFERENCE IN TEXT on a massive corporate reorganization: McDonald, Firm, 183–84. GO TO NOTE REFERENCE IN TEXT “Billions could be made”: Les Leopold, Runaway Inequality: An Activist’s Guide to Economic Justice (New York: Labor Institute Press, 2015), 53. GO TO NOTE REFERENCE IN TEXT “This is not the invisible hand”: Leopold, interview by Bogdanich. GO TO NOTE REFERENCE IN TEXT “It was the corporate downsizing”: Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, The War for Talent (Boston: Harvard Business School Press, 2001), 7. GO TO NOTE REFERENCE IN TEXT “When management consulting untethered”: Daniel Markovits, “How McKinsey Destroyed the Middle Class,” Atlantic, Feb. 3, 2020.

Obliquity: Why Our Goals Are Best Achieved Indirectly
by John Kay
Published 30 Apr 2010

Yes, they seek profits, but they’re equally guided by a core ideology—core values and sense of purpose beyond just making money. Yet paradoxically, the visionary companies make more money than the purely profit driven companies. —Jim Collins and Jerry I. Porras, Built to Last2 He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. —Adam Smith, The Wealth of Nations3 Tell all the truth, but tell it slant. Success in circuit lies. —Emily Dickinson4 The American continent separates the Atlantic Ocean in the east from the Pacific in the west.

The Populist Explosion: How the Great Recession Transformed American and European Politics
by John B. Judis
Published 11 Sep 2016

It had replaced a worldview that stressed a far more limited role for government in the economy. The role of underlying worldviews is characteristic of politics in the United States and Europe, and of all countries that are governed primarily by consent rather than by force and terror. In Great Britain, for instance, laissez-faire capitalism, associated with Adam Smith’s invisible hand, prevailed for much of the nineteenth century, but after World War II it was superseded by Keynesian economics. American politics is structured to sustain prevailing worldviews. Its characteristics of winner takes all, first past the post, single-member districts have encouraged a two-party system.

The Warmth of Other Suns: The Epic Story of America's Great Migration
by Isabel Wilkerson
Published 6 Sep 2010

George took her to the Edd Pearson plantation, a few miles away, where he would sharecrop cotton and she would learn to be a wife. Two weeks later, something called the stock market crashed, and things would get harder than they ever knew they could. Because, if the planters suffered, so much more would the sharecroppers under them. An invisible hand ruled their lives and the lives of all the colored people in Chickasaw County and the rest of Mississippi and the entire South for that matter. It wasn’t one thing; it was everything. The hand had determined that white people were in charge and colored people were under them and had to obey them like a child in those days had to obey a parent, except there was no love between the two parties as there is between a parent and child.

…

Ida Mae lived only a few towns away from Calhoun City, Mississippi, where there were white parking spaces (the ones closest to the bank in the town square) and colored parking spaces (on the other side of the street) well into the 1950s.3 There were no signs for them; it was just the work of the invisible hand. Neither Miss Theenie nor George ever took Ida Mae into Houston or Okolona, where white people transacted their business affairs, and, growing up, Ida Mae had few direct dealings with white people. When she did, it was in the service of them and their whims whether she wished it or not, and, in the short time she was in their presence, it seems they made sure to remind her what her place was in their eyes even when she was too young to understand it.

…

Too many educated colored people, and it would upset the whole balance of power in the caste system and give other colored people ideas. The man turned to some other boys in line, who weren’t in school and didn’t need tuition, and hired them. Pershing had a long memory, and he would nurse that wound for years. Here he was trying to make something of himself, and the invisible hand was punishing the ambitious, and rewarding the servile to keep colored people in their place. Later in the summer, he went looking for work at the sawmill. He saw a classmate there from high school and was told the work wasn’t too hard. It was stacking wood staves to make barrels. Pershing asked the foreman for a job.

Success and Luck: Good Fortune and the Myth of Meritocracy
by Robert H. Frank
Published 31 Mar 2016

POSITIONAL CONCERNS SPAWN WASTEFUL SPENDING, EVEN WHEN EVERYONE IS WELL INFORMED AND RATIONAL. Charles Darwin, the great British naturalist, was heavily influenced by Adam Smith and other economists. He saw that competition in nature, like competition in the marketplace, often produced benefits for both individuals and larger groups, just as in Smith’s Invisible Hand theory. Keen eyesight in hawks, for example, made both individual hawks and hawks as a species more successful. Yet Darwin also saw that many traits and behaviors helped individuals at the expense of larger groups. When success depends on relative position, as it almost always does in competitive struggles, wasteful “positional arms races” often result.

Rethinking Islamism: The Ideology of the New Terror
by Meghnad Desai
Published 25 Apr 2008

฀Nationalism฀and฀ anarchism฀merged฀in฀his฀action.25 Yet,฀ in฀ principle,฀ an฀ adherent฀ of฀ the฀ free฀ market฀ idea฀ can฀ also฀ be฀ an฀ anti-state฀ anarchist฀ but฀ not฀ anti-capitalist.฀ It฀ is฀ possible฀ to฀ adhere฀ to฀ an฀ idea฀ that฀ private฀ property฀ in฀ small฀ amounts฀ can฀ be฀ owned฀ by฀ self-employed฀ people฀ and฀ their฀ mutual฀ interests฀ would฀ establish฀ a฀ peaceful฀ but฀ prosperous฀ society฀ relying฀ on฀ Adam฀ Smith’s฀ famous฀ ‘invisible฀ hand’.฀ Such฀ a฀ society฀ can฀ be฀ stateless฀ and฀peaceful,฀at฀least฀in฀theory.฀There฀is฀a฀variant,฀libertarianism,฀ that฀believes฀in฀the฀need฀for฀a฀minimal฀state.฀Either฀way,฀the฀philosophy฀ is฀ individualist฀ and฀ anti-authority.฀ Henry฀ David฀ Thoreau฀ is฀perhaps฀the฀most฀famous฀American฀anarchist.

The End of Loser Liberalism: Making Markets Progressive
by Dean Baker
Published 1 Jan 2011

Moving the value of the dollar up or down against other currencies by 10 percent has the impact on U.S. employment and wages of a hundred North American Free Trade Agreements. Yet how often might the dollar move that much without a peep from the press or progressive policy makers? Of course, the hand that controls dollar policy is not the invisible hand of the free market. Business and financial interests have the upper hand at the Treasury Department and the Fed, but almost no one is talking about this important lever of economic power. Housing policy Though it is not hard to follow and appreciate Fed policy or the ups and downs of the dollar, we ignore these important economic policies at our peril.

The New Class War: Saving Democracy From the Metropolitan Elite
by Michael Lind
Published 20 Feb 2020

A necessary corollary of this approach was judicial deference to the decisions of Congress and congressionally supervised federal agencies.21 The system that emerged in the US by the 1940s came to be known as “interest group liberalism,” a pluralist system in which public policy emerged from negotiations among economic interest groups, each with its own power brokers, rather than from a technocratic mandarinate of all-wise, altruistic experts insulated from popular pressure, or from the “invisible hand” of the free market. * * * — IN THE REALM of culture or civil society, including the mass media and education, as well as in the economy and politics, a system of democratic pluralism that empowered the working class coalesced in the United States and other Western democracies in the mid-twentieth century.

Team Human
by Douglas Rushkoff
Published 22 Jan 2019

Adherents of this worldview say that it’s already too late to go back. There are already too many people, too much damage, and too much dependence on energy. The only way out is through. Regulating a market just slows it down, preventing it from reaching the necessary level of turbulence for the “invisible hand” to do its work. According to their curated history of humanity, whenever things look irredeemably awful, people come up with a new technology, unimaginable until then. They like to tell the story of the great horse manure crisis of 1894, when people in England and the United States were being overwhelmed by the manure produced by the horses they used for transportation.

Fair Shot: Rethinking Inequality and How We Earn
by Chris Hughes
Published 20 Feb 2018

If we’re honest, we all know how much luck we’ve had.” But luck doesn’t just happen. We have created an economy dominated by forces that reward luck in an outsized way. Some of these changes might be desirable and some not, but they are all the result of political decisions that we purposefully make as a society. There is no invisible hand creating a winner-take-all economy in which luck takes on this disproportionate role. We are its authors and enablers. The natural result of our collective decision-making over the past decades is an economy in which a small number of people hit the jackpot each year. I’m not talking about the local dentist, lawyer, or doctor, the kind of rich folks I grew up around in North Carolina.

Firefighting
by Ben S. Bernanke , Timothy F. Geithner and Henry M. Paulson, Jr.
Published 16 Apr 2019

When possible, the U.S. government imposed tough terms on firms receiving aid; sometimes, the imperative to persuade stronger institutions as well as weaker ones to participate in efforts to strengthen the system and revive confidence limited how tough the terms of the programs could be. But we knew that stepping back and letting nature take its course was not a reasonable choice. The invisible hand of capitalism can’t stop a full-blown financial collapse; only the visible hand of government can do that. And full-blown financial collapses create vicious recessions that kill businesses, limit opportunities, and frustrate dreams. In fact, the financial shocks of 2008 were by many measures greater than the shocks before the Great Depression, and so was the initial economic impact.

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
by Morgan Housel
Published 7 Sep 2020

Richard Feynman, the great physicist, once said, “Imagine how much harder physics would be if electrons had feelings.” Well, investors have feelings. Quite a few of them. That’s why it’s hard to predict what they’ll do next based solely on what they did in the past. The cornerstone of economics is that things change over time, because the invisible hand hates anything staying too good or too bad indefinitely. Investor Bill Bonner once described how Mr. Market works: “He’s got a ‘Capitalism at Work’ T-shirt on and a sledgehammer in his hand.” Few things stay the same for very long, which means we can’t treat historians as prophets. The most important driver of anything tied to money is the stories people tell themselves and the preferences they have for goods and services.

India's Long Road
by Vijay Joshi
Published 21 Feb 2017

The textbook virtue is that under certain well-​defined conditions, in particular the prevalence of perfect competition, market interaction achieves economic efficiency. This is because competitive discipline ensures that whatever is produced is produced at the lowest feasible cost; and, in addition, whatever is produced meets consumer demand at prices which reflect costs of production. The overall outcome, brought about by an ‘invisible hand’, is an ‘efficient allocation of resources’, meaning a state in which all possibilities of making some people better off (without making others worse off) are exhausted.6 This is a useful property, not to be despised. But its significance should also not be exaggerated. This is because an ‘efficient’ allocation of resources, in the sense defined, is compatible with any distribution of income, even one that is wildly inequitable

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There can be more or less state ownership of the means of production in an economy that is largely privately owned. Note that a quite separate argument for private property is its connection with individual freedom. 6. This outcome is called ‘Pareto efficiency’ in the jargon of economics. Pareto efficiency is ensured by the ‘invisible hand’ of competition, if there are no ‘market failures’. 7. See Hayek (1940, 1945). Though better than central planning, the coordinating mechanism of the market is by no means perfect (see below). 8. Moreover, even if planning could somehow mimic a market system, the incentives of managers would not be such as to evoke efficient responses from them (see n. 5 above). 9.

The Forgotten Man
by Amity Shlaes
Published 25 Jun 2007

The typical Republican of his day, he supported tariffs in the belief that they strengthened the United States. His failure to recognize the consequences of his policies, both abroad and for his country, was his greatest shortcoming. Hoover believed that government might help business do better, functioning as a sort of beneficent hand. Coolidge liked Adam Smith’s old invisible hand. The men were different breeds of Republican. Hoover believed that action was necessary to make the country live up to its potential. Coolidge had long ago determined that the world would do better if he involved himself less. Finally, there was a difference in temperament. Hoover strewed around phrases about individuality, but he could not control his own sense of agency.

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He also made clear that he believed America must move toward regulation: “Our mass of regulation of public utilities and our legislation against restraint of trade is the monument to our intent to preserve an equality of opportunity,” he wrote—and, describing Mellon’s Adam Smith, put the word “capitalism” in quotation marks, to signal that he wanted to keep his distance. The message was clear: as far as he was concerned, men like Mellon could have Adam Smith’s invisible hand. In this view Hoover was in line with two academics popular in the 1920s, William Trufant Foster and Waddill Catchings. The pair were the ones who had popularized the phrase “beneficent hand.” Catchings and Foster introduced other novel theories. They deplored the traditional emphasis on supply; economic policy rather should pay attention to the consumer.

All the Money in the World
by Peter W. Bernstein
Published 17 Dec 2008

He denounced CBS’s programming: Goldberg, Citizen Turner, p. 266. 24. Though Turner failed: Museum of Broadcast Communications, museum.tv/archives/ctv/P/htm/P/paleywillia-htm. 25. Captain Outrageous, as Turner was sometimes known: pbs.org/wgbh/theymadeamerica/whomade/turnerhi.htm. 26. Philip Anschutz: Glenn Bunting, “Denver Billionaire’s Invisible Hand Shapes L.A.,” Los Angeles Times, July 23, 2006. 27. Michael Eisner: James B. Stewart, Disney War (New York: Simon & Schuster, 2005). 28. David Geffen: Lisa Gubernick and Peter Newcomb, “The Richest Man in Hollywood,” BusinessWeek, Dec. 24, 1990. 29. William Paley: Christopher Buckley, “Success Was Not Enough,” New York Times, Nov. 4, 1990. 30.

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Texas billionaire Bunker Hunt: Most of the information about Bunker and Lamar Hunt’s sports activities comes from Harry Hurt III, Texas Rich (New York: W. W. Norton, 1982). 67. “All through our school years”: Ibid., p. 329. 68. As Warren Buffett wrote: Janet Whitman, “Open Buffett,” New York Post, Mar. 2, 2007. 69. And at a match between soccer teams: Glenn F. Bunting, “A Denver Billionaire’s Invisible Hand,” Los Angeles Times, July 23, 2006. 70. That cost him $500,000: John Dorschner, “For NBA Owners, a Contrast in Style,” Miami Herald, June 11, 2006. 71. As head of Kroenke Sports Enterprises: Jack Bell, “Thinking Globally, Rapids and Arsenal See Win-Win Deal,” New York Times, Feb. 14, 2007. 72.Carnival Cruise Line heir Arison: Dorschner, “For NBA Owners.” 73.

Fifty Degrees Below
by Kim Stanley Robinson
Published 25 Oct 2005

However, since he had been elected with the help of big oil and everything transnationally corporate, and had done more than any previous president to strip-mine the nation and use it as a dumping ground, he did not appear to be as convincing as Phil. It was getting hard to believe his assertions that the invisible hand of the market would solve everything, because, as Phil put it, the invisible hand never picked up the check. So the election campaign wallowed along in its falsity and tedium, and surprise surprise, as the summer passed it became an ever-tightening race, just as all media hopeful for interested customers might have wished. These summer months were full enough of new weather anomalies and extreme events to keep Phil in the chase, as he liked to put it.

Second World: Empires and Influence in the New Global Order
by Parag Khanna
Published 4 Mar 2008

Many restored buildings already fly the flag of the EU—which is more visible than Bosnia’s own flag. The artificial currency of Bosnia, the “Konvertible Mark,” will surely be replaced by the Euro. EU member-states do not need their own currencies. But EU membership is not itself a cure, rather it is a certificate of health after the invisible hand of the EU’s “Copenhagen criteria” of political, economic, and infrastructural reform have taken effect, connecting the various Balkan limbs to their new European heart. This machinery worked for Macedonia: A preventive peacekeeping deployment staved off spillover from the rest of Yugoslavia, and stabilization forces secured its borders to ensure independence.

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7 Anti-Americanism continues even as America’s dominance fades.8 Americans frequently state that China’s uncertain course is the key “X factor” of the future, but it is the United States that has become the equivalent of the uncertainty principle: From different perspectives there is no agreement on where it stands. America now holds the mantle of Perfidious Albion. Neither democratic idealism nor hegemonic messianism holds much promise for restoring trust in America, which has gone from the invisible hand incarnate to merely one of several competing vendors or brands on the catwalk of credibility. The question for Americans has changed from “What’s in it for us?” to “Why aren’t we there?” International congresses and summits are being held elsewhere with none of the hassles of America’s arbitrary visa restrictions.

The Cigarette: A Political History
by Sarah Milov
Published 1 Oct 2019

The history of the cigarette complicates the historiography of modern conservatism that emphasizes business’s dismantling of New Deal economic commitments. For histories of the political mobilization of business, see Benjamin Waterhouse, Lobbying America: The Politics of Business from Nixon to Nafta (Princeton: Princeton University Press, 2014); Kim Philips-Fein, Invisible Hands: The Businessman’s Crusade against the New Deal (New York: Norton, 2009); Elizabeth Fones-Wolf, Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945–1960 (Urbana: University of Illinois Press, 1995). 50. Campaign for Tobacco-Free Kids, “The Toll of Tobacco in the United States,” updated October 6, 2017, https://www.tobaccofreekids.org/problem/toll-us/. 51.

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See Christopher Ketcham, “The Great Republican Land Heist,” Harper’s Magazine, February 2015. 122. Although scholars have noted the extent to which Charles Reich and Ralph Nader animated Powell’s defense of free enterprise, his reaction to the fairness ruling has gone unremarked upon. For a succinct explication of the Powell Memo, see Kim Philips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009), 156–165. 123. G. Weissman, “Lewis Powell Recommendations Re: Cigarette Industry Environment”, September 22, 1969, Philip Morris Records, https://www.industrydocumentslibrary.ucsf.edu/tobacco/docs/yngb0131. 124.

Economic Dignity
by Gene Sperling
Published 14 Sep 2020

This is not to say that some regulations are not oppressive, poorly constructed, out of date, and worthy of review or repeal. But that review should not start from the presumption that any new rule on market structure interferes with pure markets. Indeed, even Adam Smith, the father of market competition, based his famous argument—that the “invisible hand” of individual pursuit of self-interest in free competitive markets will benefit the common good—on the idea that competition would be structured by government policymakers to prevent government or private sector monopoly power. Three guideposts should instruct our analysis of market structure and economic dignity.

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See economic inequality; educational inequality inflation, 174, 175, 266–67 “inflation inequality,” 175 Ingrum, John, 118 innovation, government’s role, 98–99 in-prison college programs, 54, 55–56 intellectual or developmental disabilities (I/DDs), 194–200 breaking down barriers to purpose, potential, and contribution, 196–200 jobs empowering those with, 210–12 interest rates, 186, 220–21, 266 interest rates fees, 57, 58, 84–85 intergenerational mobility, 42–43, 203 International Ladies’ Garment Workers’ Union (ILGWU), 70 Interstate Commerce Act of 1887, 116 “invisible hand,” 107 involuntary servitude, 260–65 Mother Jones and fight against, 67–68, 72, 77 noncompete clauses, 263–64 visa system, 76, 261–63 wage theft, 264–65 Iora Health, 147 Irwin, Neil, 232–33 Itliong, Larry, 76, 255 ITT Technical Institute, 84 Ivy League, 277 Jacobellis v.

The Finance Curse: How Global Finance Is Making Us All Poorer
by Nicholas Shaxson
Published 10 Oct 2018

It often is, but it also has a particular history and meaning, which in terms of its practical effects has meant financial deregulation, privatisation and globalisation actively promoted and protected by governments. Neoliberalism is an outgrowth of eighteenth-century classic liberalism. There’s political liberalism, which is all about citizens having equal democratic rights in a system of sovereign law, and then there’s economic liberalism, which starts from Adam Smith’s ‘invisible hand’, by which free exchanges or trade in properly functioning markets are supposed to make society better off overall. The more liberal (or free) the exchange, in this view, the better for society as a whole; government’s role is to provide basic functions like defence, to enforce property rights, and to keep a watchful eye out for monopolies, but otherwise to get out of the way.

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This in turn has refocused the attention of corporate managers – away from investment and towards more financial engineering (and even more monopolisation) to improve profits. In the process we’ve traded balanced economies with plentiful, stable well-paying jobs and thriving communities for unbalanced economies, zero-hour contracts, atomised communities and cheap televisions – and they probably aren’t much cheaper, either. We’ve traded Adam Smith’s invisible hand of the well-functioning market for the invisible fist of monopoly power. These changes have joined with other developments such as financial deregulation, independent central banking and the rise of the Euromarkets to create the typhoon-force winds filling the sails of large banks and multinational firms, nearly always to the detriment of smaller domestic competitors and taxpayers.

Amazon Unbound: Jeff Bezos and the Invention of a Global Empire
by Brad Stone
Published 10 May 2021

A major part of his candidacy was his bid to acquire the North Reading, Massachusetts–based robotics startup, Kiva Systems, which made the Roomba-like mobile robots. Instead of pickers walking a dozen miles a day to select items from shelves spread out over giant warehouses, Kiva robots maneuvered portable containers of merchandise around the building, an orchestral symphony conducted by the invisible hand of software. The idea behind Kiva was born from the same disaster that had inspired Doug Herrington to propose Amazon Fresh. After Webvan went bankrupt, one of its executives, Mick Mountz, realized that e-commerce companies were essentially paying people to spend two-thirds of their time walking.

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Still, Porter’s retort, as well as Amazon’s reaction to the criticism of its Covid-19 plans, missed the substantive elements of Bray’s conscientious objection. Bray believed the testimonials of the activist employees reflected understandable anxiety at a harrowing time. But Amazon, in its reflexive defensiveness, didn’t see regular people with genuine concerns but the invisible hand of its opposition, such as organized labor groups. “Sometimes in the noise, it’s hard to tell when it’s our employees talking and when there are some of these paid third-party groups that are, you know, amplifying things,” Dave Clark told me. “There’s a group of people who love us no matter what we do, and there’s a group of people who really don’t like us, no matter what we do.”

Status Anxiety
by Alain de Botton
Published 1 Jan 2004

The rich might be arrogant and coarse, but their vices were transformed, through the operations of the marketplace, into virtues—or so Smith claimed in what has become possibly the most famous passage in the literature of capitalist economics: “In spite of their natural selfishness and rapacity, though they mean only their own convenience, though the sole end which they propose from the labours of all the thousands whom they employ be the gratification of their own vain and insatiable desires, the rich divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessities of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus, without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.”

The Great Derangement: Climate Change and the Unthinkable
by Amitav Ghosh
Published 16 Jan 2018

But even to enter into that argument is to recognize how deeply we are mired in the Great Derangement: our lives and our choices are enframed in a pattern of history that seems to leave us nowhere to turn but towards our self-annihilation. ‘Money flows toward short term gain,’ writes the geologist David Archer, ‘and toward the over-exploitation of unregulated common resources. These tendencies are like the invisible hand of fate, guiding the hero in a Greek tragedy toward his inevitable doom.’ This is indeed the essence of humanity’s present derangement. 9 Imperialism was not, however, the only obstacle in Asia’s path to industrialization: this model of economy also met with powerful indigenous resistances of many different kinds.

The Fire Starter Sessions: A Soulful + Practical Guide to Creating Success on Your Own Terms
by Danielle Laporte
Published 16 Apr 2012

What would surprise even you? Feel the high of the extreme dream. You should be peaking right about now. DREAM TEAM If you “follow your bliss…you will begin to meet people who are in the field of your bliss, and they open the doors to you,” said Joseph Campbell, explaining his theory of the “invisible hands” that help you through life. While you’re still tripping on the Milky Way of potential, call in your invisible elders, angels, or faith leaders. Imagine hanging out with the wisdom keepers or titans of your industry—your idols. Now assume that you are their contemporary—that you’ve earned your place alongside them.

Private Government: How Employers Rule Our Lives (And Why We Don't Talk About It)
by Elizabeth S. Anderson
Published 22 May 2017

“[A]lmost everything that the classical economists considered of interest in economic life—in particular their crucial insights into the social effects of different markets on human capacities and social relationships and the ways that different markets are socially embedded—has been omitted” from the models and evaluative standards of neoclassical economics. Debra Satz, Why Some Things Should Not Be for Sale: The Moral Limits of Markets (Oxford and New York: Oxford University Press, 2010), 61. Smith, in particular, has been misread as a theorist of benign “invisible hand” self-interest and socially disembedded, selfequilibriating markets. Bromwich rightly invokes Polanyi against such illusions, but wrongly supposes that Smith held them. For corrections, see Gavin Kennedy, “Adam Smith: Some Popular Uses and Abuses,” in Adam Smith: His Life, Thought, and Legacy, edited by Ryan Hanley (Princeton, NJ: Princeton University Press, 2016), 461–77. 2.

The Name of the Rose
by Umberto Eco
Published 26 Sep 2006

Then he cried out. I saw clearly that some vague signs, in a yellow-brown color, had appeared on the upper part of the page. William made me give him the lamp and moved it behind the page, holding the flame fairly close to the surface of the parchment, which he heated without setting it afire. Slowly, as if an invisible hand were writing “Mane, Tekel, Peres,” I saw some marks emerge one by one on the white side of the sheet as William moved the lamp, and as the smoke that rose from the top of the flame blackened the recto; the marks did not resemble those of any alphabet, except that of necromancers. “Fantastic!”

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I believe the glazier is eager for an opportunity of this kind, to try something new. As long as he has the right tools for grinding the bits of glass. When it comes to bits of glass, he has plenty in his workshop.” As we roamed, seeking the way, suddenly, in the center of one room, I felt an invisible hand stroke my cheek, while a groan, not human and not animal, echoed in both that room and the next, as if a ghost were wandering from one to the other. I should have been prepared for the library’s surprises, but once again I was terrified and leaped backward. William must have had an experience similar to mine, because he was touching his cheek as he held up the light and looked around.

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Then he cried out. I saw clearly that some vague signs, in a yellow-brown color, had appeared on the upper part of the page. William made me give him the lamp and moved it behind the page, holding the flame fairly close to the surface of the parchment, which he heated without setting it afire. Slowly, as if an invisible hand were writing “Mane, Tekel, Peres,” I saw some marks emerge one by one on the white side of the sheet as William moved the lamp, and as the smoke that rose from the top of the flame blackened the recto; the marks did not resemble those of any alphabet, except that of necromancers. “Fantastic!”

Capital in the Twenty-First Century
by Thomas Piketty
Published 10 Mar 2014

To behave in this way is only human, especially since the necessary information is, in objective terms, highly imperfect. It may be excessive to accuse senior executives of having their “hands in the till,” but the metaphor is probably more apt than Adam Smith’s metaphor of the market’s “invisible hand.” In practice, the invisible hand does not exist, any more than “pure and perfect” competition does, and the market is always embodied in specific institutions such as corporate hierarchies and compensation committees. This does not mean that senior executives and compensation committees can set whatever salaries they please and always choose the highest possible figure.

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Like Ricardo, Marx based his work on an analysis of the internal logical contradictions of the capitalist system. He therefore sought to distinguish himself from both bourgeois economists (who saw the market as a self-regulated system, that is, a system capable of achieving equilibrium on its own without major deviations, in accordance with Adam Smith’s image of “the invisible hand” and Jean-Baptiste Say’s “law” that production creates its own demand), and utopian socialists and Proudhonians, who in Marx’s view were content to denounce the misery of the working class without proposing a truly scientific analysis of the economic processes responsible for it.7 In short, Marx took the Ricardian model of the price of capital and the principle of scarcity as the basis of a more thorough analysis of the dynamics of capitalism in a world where capital was primarily industrial (machinery, plants, etc.) rather than landed property, so that in principle there was no limit to the amount of capital that could be accumulated.

The Lights in the Tunnel
by Martin Ford
Published 28 May 2011

The Basis of the Free Market Economy: Incentives The free market economy is a natural system that pushes consumers, businesses, investors and workers to act in ways that ultimately propel society as a whole toward advancement and greater prosperity. In other words, as each of us pursues our own self-interest, collectively we move everyone forward. Through the logic of the market, these collective actions automatically allocate resources in the most efficient way so that economic output is maximized. This, of course, is the “invisible hand” that Adam Smith spoke of. We can divide the logic of the free market into three broad sets of incentives: Individual consumers act to find the best values for products and services. In other words, consumers shop around. No one wants to overpay, and no one wants to end up with an inferior product.

American Made: Why Making Things Will Return Us to Greatness
by Dan Dimicco
Published 3 Mar 2015

A mercantilist trading policy is one in which a government protects and heavily subsidizes key industries, exporting as much as possible and importing as little as possible. The great Scottish philosopher and economist Adam Smith said the remedy to mercantilism was laissez-faire capitalism. The “invisible hand” of capitalism has always struggled with the heavy hand of government meddling. The U.S. trade deficit, which had fallen 60 percent during Reagan’s second term and into the elder Bush’s presidency, began to expand again in the early 1990s.7 The move toward free trade (which we’ll discuss at greater length in chapter 5) left U.S. industries vulnerable once again to predatory foreign trade practices.

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa
by Dambisa Moyo
Published 17 Mar 2009

, Fondazione Eni Enrico Mattei, October 2005 Neumayer, E., ‘The Determinants of Aid Allocation by Regional Multilateral Development Banks and United Nations Agencies’, International Studies Quarterly, 47 (2003), pp. 101–22 North, Douglass, The Economic Growth of the United States, 1790–1860, Eaglewood Cliffs, NJ: Prentice-Hall, 1961 —, Institutions, Institutional Change and Economic Performance, Cambridge: CUP, 1990 Olson, Mancur, Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships, Oxford: OUP, 2000 Olson, Mancur (with Martin C. McGuire), ‘The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force’, Journal of Economic Literature, March 1996 O’Neill, J., A. Bevan, T. Yamakawa and T. Miura, ‘Refuting the JGB Downgrade: JGB’s Deserve Aaa’, Goldman Sachs Global Economics Paper No. 76, June 2006 Organisation for Economic Co-operation and Development, ‘Untying Aid to the Least Developed Countries’, Policy Brief, OECD Observer, 2001, at http://www.oecd.org/dataoecd/16/24/2002959.pdf —, ‘Aid flows top USD 100 billion in 2005’, 4 April 2006, at http://www.oecd.org/document/40/0,2340,en2649201185364183441111,00.html —, ‘Is It ODA?’

Attention Factory: The Story of TikTok and China's ByteDance
by Matthew Brennan
Published 9 Oct 2020

Using the metaphor of immigration between countries was Alex’s roundabout way of saying Musical.ly set the rules of the game. They drove vast traffic to specific individuals such as Baby Ariel, catapulting them overnight to online influencer status. As the platform grew, this group became outright celebrities, in some part due to their creativity, persistence, and hard work, in most part due to the invisible hand of the Shanghai content operations team tilting the attention game heavily in their favor. Younger than Snapchat Once the platform had grown large enough to garner mainstream media attention, the first thing reporters picked up on was the users’ age. “This is no question the youngest social network we’ve ever seen,” exclaimed online marketing guru Gary Vaynerchuk in an article profiling the platform. 158 “Snapchat and Instagram skew a little bit young… but with Musical.ly, you’re talking about first, second, third grade.”

"They Take Our Jobs!": And 20 Other Myths About Immigration
by Aviva Chomsky
Published 23 Apr 2018

Fast food, child care, elder care, and home health care became rapid-growth sectors. These were jobs that could not be moved abroad. But if workers without social and economic rights might be recruited, they could provide a low-wage labor force. Economist Nancy Folbre calls this aspect of the economy the “invisible heart”—as opposed to the “invisible hand” that classical economists argue governs the marketplace. The paid world of work and business, she explains, couldn’t exist without the unpaid, invisible network of care provided mostly by women. The economic shifts that began in the 1970s both demanded more working hours outside the home and cut back on public services and benefits, creating what Barbara Ehrenreich and Arlie Hochschild have termed a “care deficit” in the first world.8 Much of the new wave of immigrants that began after 1965 moved in to fill this care deficit.

This Could Be Our Future: A Manifesto for a More Generous World
by Yancey Strickler
Published 29 Oct 2019

You didn’t have to force or beg a butcher to be a butcher. Because this was what enabled people to survive and meet the needs of their family, it’s what they would do on their own. This was an empowering idea. A society built on trusting people to look out for themselves was possible—and preferable. Smith believed that the “invisible hand” of our collective individual wills would maintain a balance of power between capital, land, and workers. This balance would create a continuous cycle of production, reinvestment, and improvement that would benefit everyone. Quite a lovely idea, don’t you think? But note that Smith didn’t say that the butcher must maximize hog slaughter rates, lower standards to an acceptable minimum, and underpay and overwork laborers to maximize those profits, and then redirect that money to executives and investors instead.

Land of Big Numbers: Stories
by Te-Ping Chen
Published 2 Feb 2021

When they reached the house, we heard them shout up to the window. The window slid open, and a bucket tied to a rope was flung out. From our vantage point, the woman and her child looked as small as dolls. It was hard to see what happened next, but then the bucket was rising, slowly and jerkily pulled by an invisible hand. “See? There’s someone inside,” Gao’s mother said. For a moment, I thought I saw a flash of a face at the window, but it disappeared too quickly to be sure. All I could see was the rope, and the bucket that hung from it, dangling. We got back into the car. The light was fading, and we were two strangers anxious to get home.

Having and Being Had
by Eula Biss
Published 15 Jan 2020

The historian led Eric to a roped-off area and told him to stay within it. The trading floor was filled with men. The countdown to the bell began. It was a round, flat bell, like the fire alarm bells in public schools, but it was gold. Eric’s view was blocked, so he could see only the bell, not the hand that rang it. It was, he tells me, the invisible hand of capitalism. The bell rang, and it kept ringing. The only thing like it that he had ever experienced was the solar eclipse. The world went dark, crickets chirped, birds panicked. People around him were clapping and laughing. Tears came to his eyes, which embarrassed him, but nobody noticed.

The Passenger: Berlin
by The Passenger
Published 8 Jun 2021

The upshot was that at the most recent prices the figure for the basic rent of my flat was as high as it had been when I moved in fifteen years earlier – only now the currency was euros not Deutschmarks. The rent had doubled, but the flat had not got any more comfortable or any lighter, airier or sunnier. It remained a north-facing apartment that tilted, preventing the doors from closing properly, which sometimes assisted invisible hands to open them during the night. The tilt had been caused in part by an unexploded shell that had ripped through the building during the Second World War and in part by the chain mines and high-explosive bombs that had also wiped out almost half the houses along the street. I looked up the address of the owners of my flat on Google Street View and found a single-family home on the outskirts of the city.

Who Stole the American Dream?
by Hedrick Smith
Published 10 Sep 2012

Paul Volcker: The Lake Wobegon Syndrome CEOs and their corporate boards boldly argued that rising CEO pay was merited because CEOs increased shareholder value; moreover, they said, the rise was dictated by the invisible hand of the market. Shareholder activists and scholars dispute this. Princeton economist Paul Krugman suggested that the seedbed for CEO fortunes was the cozy fraternity inside corporate boards of directors. “The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation …,” Krugman said. “So it’s not the invisible hand of the market that leads to those monumental executive incomes; it’s the invisible handshake in the boardroom.”

The Third Pillar: How Markets and the State Leave the Community Behind
by Raghuram Rajan
Published 26 Feb 2019

FREEING THE MARKETS In his book An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776, Adam Smith argued that by producing for the market and maximizing his own profits, the manufacturer maximized the size of the public pie, and thus the wealth of the nation. Smith thus made the case for allowing the invisible hand of the competitive market, working through self-interest, to drive economic prosperity. The real damage was not caused by avarice or even the self-indulgence of the rich, it emanated from restraints on competition and the resulting distorted prices and quantities. Seen in this light, Adam Smith was pro-market, not pro-business.

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Milton Friedman was characteristically bold in his answer to these questions: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”40 Since profits are what go to shareholders, Friedman was saying management should maximize the value of the corporation’s shares, allowing each shareholder the maximum freedom to use her valuable shares to fund causes dear to her heart. Let her support the local football team in her neighborhood or donate to the firefighters’ fund if she chooses to, Friedman insisted; after all, it is her money, earned from bearing risk. Friedman’s dictum had an “invisible hand” aspect to it—by maximizing the value of the only claim to the corporation that was not fixed, management would not just be maximizing shareholder value but also the corporation’s value, and thus the corporation’s contribution to society. Friedman firmly rejected any role for the corporation in helping the state do its job, for example, in containing inflation, or in undertaking charitable activities, especially if it impinged on its profitability.

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated
by Gautam Baid
Published 1 Jun 2020

Rockefeller, a mere one hundred years ago.) A big part of America’s success has come by combining the benefits of its abundant natural resources with a system of government that has allowed its citizens the freedom to work hard, pursue innovative ideas, and risk capital in pursuit of financial gain. Adam Smith’s “invisible hand” has played a significant role in unleashing the market forces of capitalism. Immigrants and capital are always attracted to countries with rule of law. Where there is rule of law, there is also more trust in business relations. America will continue to attract the best talent from around the world and to create some of the world’s best companies that provide innovative products and services to customers.

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See also compound interest Internet, 219–220; bubble, 87; diversity and, 291 interrelatedness, 224 intrinsic value, 169; Buffett on, 161–162, 209–210; in business models, 216 inventory turnover ratio, 132 inversion, 23; Munger on, 57–58 investing: Bhagavad Gita on, 331–332; Buffett on, 11, 60, 68–69, 99–100, 109, 148, 219; comparison of results in, 216; control in, 237; in cyclicals, 197–198; delayed gratification and, 104–105; edges in, 104–108; empathy in, 184–186; equity, 103; in expanding businesses, 317–318; flexibility in, 75–76; game-changing, 188; Graham on, 117, 176–177, 273; hidden opportunities for, 203; of Keynes, 106; long-term, 103; Lynch on, 60, 103; of Munger, 107, 155, 245; outcomes, 195; politics and, 277–281; with sector tailwind, 315–317; sidecar, 313–315; Templeton on, 299; value, 163–164 Investing Between the Lines (Rittenhouse), 124 investment banks, 182 investor frenzy, 182 invisible hand, 278 IPOs. See initial public offerings irrational exuberance, 235 irrational statements, 303 ittaikan, 34–35 Ivanov, Ivaylo, 233, 236 Jackson, Michael, 67 Jacobi, Carl Gustav Jacob, 57 James, William, 72–73 J-curve, 107 jealousy, 135 Jefferson, Thomas, 35, 64 jiko jitsugen, 34–35 Jobs, Steve, 39, 304 Johnson, Samuel, 35 Jun, Jae, 205 junior bonds, 240 Kahneman, Daniel, 141, 237–238, 288–289, 292, 328, 344; on outside and inside views, 294–295; on stereotyping, 238–239; on WYSIATI, 305 kai, 33 kaizen, 111, 112, 352 Kant, Immanuel, 93–94 karma, 66, 95; Munger on, 67 Kaufman, Henry, 258 Kaufman, Peter, 28, 90, 91, 129, 156 Kelkar, Swanand, 291 Keller, Gary, 74 Kelly, John L., 249 Kelly criterion, 249–251 Kennon, Joshua, 354 Keynes, John Maynard, 69, 154, 165, 187, 247, 284; on compound interest, 215; on diversification, 245; as investor, 106; on market conditions, 235; on short-term thinking, 108 Khandelwal, Vishal, 333–334 Khare, Anshul, 103 Kiewit, Peter, 64–65 Kiewit corporation, 225 Kindleberger, Charles, 340 King, Stephen, 144 Kipling, Rudyard, 376–377 Kiyosaki, Robert, 61, 79 Klarman, Seth, 24, 76, 102, 149–150, 171; on spinoffs, 201 knowledge: Buffett on, 368; building, 2–3; compounding, 367–370; Einstein on, 51–52; expert, 51–52; factor, 313; Graham on, 92; growth of, 11; Matthew effect in acquisition of, 18–19; Munger on, 335; Musk on, 21 Koller, Tim, 101; on value creation, 221 Korean Stock Exchange, 60 Krishna, 331–332 Kurzweil, Ray, 318 Lakonishok, Josef, 348 Lampert, Eddie, 47–48 Lapthorne, Andrew, 183 Latimore, Ed, 34 learning: Buffett on, 36; Munger on, 1, 6; passion for, 13–16; reading and, 14; from role models, 46; time management and, 11–13; vicarious, 10–11, 23, 46.

End This Depression Now!
by Paul Krugman
Published 30 Apr 2012

True, just after Lehman Brothers fell, Greenspan declared himself in a state of “shocked disbelief,” because “the whole intellectual edifice” had “collapsed.” By March 2011, however, he was back to his old position, calling for a repeal of the (very modest) attempts to tighten financial regulation in the wake of the crisis. Financial markets were fine, he wrote in the Financial Times: “With notably rare exceptions (2008, for example), the global ‘invisible hand’ has created relatively stable exchange rates, interest rates, prices, and wage rates.” Hey, what’s an occasional world-economy-destroying crisis? The political scientist Henry Farrell, in a blog post, quickly responded by inviting readers to find other uses for the “notably rare exceptions” construction—for example, “With notably rare exceptions, Japanese nuclear reactors have been safe from earthquakes.”

Economic Gangsters: Corruption, Violence, and the Poverty of Nations
by Raymond Fisman and Edward Miguel
Published 14 Apr 2008

Because of this daily deluge of updates and the differences of opinion among investors in how to interpret the news—How much of the UPS price hike will Amazon be able to pass on to its customers? How much of what we read in the morning paper is rumor versus reality?—prices bounce around a lot. A share price reflects investors’ consensus view of future profits—the invisible hand of the market at work—and this collective wisdom of thousands of well-informed buyers and sellers is captured by the daily ups and downs of stock prices. How does this fit into our corruption discussion? Recall the West End Corporation (WEC) discussed in chapter 1 that was set up by journalists to sting politicians and military brass by trying to bribe its way into selling night-vision cameras to the Indian army.

What's Yours Is Mine: Against the Sharing Economy
by Tom Slee
Published 18 Nov 2015

In an extended report written in 2013,3 journalist Kevin Carhart unpacked many of the problems with TaskRabbit. Carhart quotes a TaskRabbit blog post (now removed) “rhapsodizing over networked mobile devices as an exciting kind of metaphor for spontaneous order,” which goes back to Adam Smith’s idea of the “invisible hand” of the free market. Here is TaskRabbit: [Adam] Smith is saying that governments should simply provide an unrestricted market system for people to easily exchange goods and services, and then get the heck out of the way! Market forces will take care of the rest. Yep, we totally agree! . . . The interconnectedness and transparency offered by the Internet and social networks make it possible for Smith’s vision to be realized for individuals in a community . . .

A Mathematician Plays the Stock Market
by John Allen Paulos
Published 1 Jan 2003

Whether we’re negotiators in business, spouses in a marriage, or nations in a dispute, our choices can often be phrased in terms of the prisoner’s dilemma. If both (all) parties pursue their own interests exclusively and do not cooperate, the outcome is worse for both (all) of them; yet in any given situation, any given party is better off not cooperating. Adam Smith’s invisible hand ensuring that individual pursuits bring about group well-being is, at least in these situations (and some others), quite arthritic. The dilemma has the following multi-person market version: Investors who notice some exploitable stock market anomaly may either act on it, thereby diminishing its effectiveness (the non-cooperative option) or ignore it, thereby saving themselves the trouble of keeping up with developments (the cooperative option).

How PowerPoint Makes You Stupid
by Franck Frommer
Published 6 Oct 2010

The concept of multidivisional form was devised by the economist and business historian Alfred Chandler. In one of his best known books, The Visible Hand, on the basis of an analysis of American economic history, Chandler concludes that the “visible hand” of managers of modern companies has replaced the “invisible hand” of the market that dominated traditional small business.2 He shows how large American companies, such as Standard Oil, General Electric, and DuPont, integrated all the functions needed to supply a product or service: design, production, distribution, and so on. Known as a multidivisional firm, this organization became the model of the largest companies, particularly in America.3 These more “horizontal” organizations had to have means of communication for the exchange and comparison of data.

Why Information Grows: The Evolution of Order, From Atoms to Economies
by Cesar Hidalgo
Published 1 Jun 2015

The idea of information also found its way into the social sciences, and in particular into economics. Friedrich Hayek, an Austrian economist and a contemporary of Shannon, argued famously that prices transmitted information about the supply of and demand for goods. This helped reveal the information needed for Smith’s “invisible hand” to work. As Hayek wrote, “In a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coördinate the separate actions of different people.”4 The idea of information also helped economists understand some important market failures. George Akerlof became famous by showing that markets could fail to operate when people had asymmetric information about the quality of the goods they wanted to exchange.5 On a parallel front, Herbert Simon, a polymath who contributed to economics, organizational theory, and artificial intelligence, introduced the idea of bounded rationality, which focused on the behavior of economic actors who had limited information about the world.

Avogadro Corp
by William Hertling
Published 9 Apr 2014

Since ELOPe was born, the percentage of news stories covering these chance encounters leading to a news-worthy positive outcome was at least five times as higher than previous years. ELOPe had woven itself into human existence, becoming an intrinsic part of the human ecosystem. The more Mike looked, the more he was convinced that the AI’s invisible hand was everywhere. Mike had a pet theory. ELOPe’s original goal, as defined by David, had been to maximize the success of the project. To meet that goal, mere survival of ELOPe was necessary but insufficient. Maximizing success meant maximum use of ELOPe. And maximizing use meant maximizing the human users of Avogadro email.

What About Me?: The Struggle for Identity in a Market-Based Society
by Paul Verhaeghe
Published 26 Mar 2014

Hence the importance of education, because we live in a rapidly evolving knowledge economy that requires highly trained individuals with flexible competencies. A single higher-education qualification is good, two is better, and lifelong learning a must. Everyone must continue to grow because competition is fierce. That’s what lies behind the current compulsion for performance interviews and constant evaluations, all steered by an invisible hand from central management. This is a brief summary of the grand narrative that controls our culture today and that consequently forms our identity. Culture needs to be broadly interpreted here, because this narrative has meanwhile taken over all sectors of society, from science and education to health care and the media.

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs
by Andy Kessler
Published 1 Feb 2011

The stock market allocates precious capital to companies it thinks can maximize profits and starves those that can’t. In other words, the stock market is democracy’s half-evil henchman, whose tool is the size of the carrot, not the use of the stick. The tenets of capitalism’s great economists, from Adam Smith’s Invisible Hand to Joseph Schumpeter’s Creative Destruction and Gordon Gekko’s Greed Is Good, are all powerful concepts, but it’s profits and the stock market that carry out the dirty work. No Five-Year Plans. All men are created equal, but a few of you need to be canned and retrained so progress can happen again.

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy
by Jonathan Taplin
Published 17 Apr 2017

The libertarian belief that the supremacy of the free market is the natural order of things is in reality nothing more than an “imagined order,” which the historian Yuval Noah Harari defines in his book Sapiens as the shared myths we use to induce cooperation. “In order to safeguard an imagined order,” Harari writes, “continuous and strenuous efforts are imperative.” Adam Smith’s “invisible hand” is no more a law of nature or physics than Moses’s Ten Commandments. Of course Thiel’s comment about capitalism and democracy being incompatible points to an even darker part of the libertarian cult that Charles Koch flirted with, sometimes known as anarcho-capitalism or paleo-libertarianism.

Shampoo Planet
by Douglas Coupland
Published 28 Dec 2010

In no particular order: YOU DISGUISE YOUR LAZINESS AS PRIDE YOU ARE PARALYZED BY THE FACT THAT CRUELTY IS OFTEN AMUSING YOU PRETEND TO BE MORE ECCENTRIC THAN YOU ACTUALLY ARE BECAUSE YOU WORRY YOU ARE AN INTERCHANGEABLE COG YOU MISTAKE MOTION FOR GROWTH AND ARE LURED INTO VEXING SITUATIONS YOU DEFEND OTHER PEOPLE'S IDEAS AT THE EXPENSE OF YOUR OWN YOU STILL DON'T KNOW WHAT YOU DO WELL YOU ARE UNABLE TO VISUALIZE YOURSELF IN A FUTURE YOUR INABILITY TO SUSTAIN SEXUAL INTEREST IN JUST ONE OTHER PERSON DRAINS YOUR LIFE OF THE POSSIBILITY OF INTIMACY YOUR OWN ABILITY TO RATIONALIZE YOUR BAD DEEDS MAKES YOU BELIEVE THE ENTIRE UNIVERSE IS AS AMORAL AS YOURSELF YOU WILLFULLY IGNORE THE SMALL, GENTLE OBSERVATIONS IN LIFE WHICH YOU KNOW ARE THE MOST IMPORTANT Stephanie is mutilating cash, too, garnishing my mottoes with messy red lipstick kisses as we bring into the foreground the secret language of money--biting the invisible hand that feeds us. YOUR FEAR OF CHANGE IS TOO CLEARLY VISIBLE IN YOUR EYES YOU ARE WASTING YOUR YOUTH, YOUR TIME, AND YOUR MONEY BECAUSE YOU WON'T ACKNOWLEDGE YOUR SHORTCOMINGS YOUR REFUSAL TO ACKNOWLEDGE THE DARK SIDE OF HUMANITY MAKES YOU PREY TO THAT DARK SIDE YOU WORRY THAT IF YOU LOWER YOUR GUARD, EVEN FOR ONE SECOND, YOUR WHOLE WORLD WILL DISINTEGRATE INTO CHAOS YOU WAIT FOR FATE TO BRING ABOUT THE CHANGES IN LIFE WHICH YOU SHOULD BE BRINGING ABOUT YOURSELF YOU ARE DAZED BY THE EASE WITH WHICH OBLITERATION CAN BE OBTAINED YOU FEEL YOU HAVE MORE MEMORIES THAN YOU HAVE ENERGY TO PROCESS THOSE MEMORIES YOU ARE UNABLE TO DIFFERENTIATE BETWEEN FACADE AND SUBSTANCE Hours later we pay the Comfortmobile's hospital bill with some of our "tragic cash."

The Rare Metals War
by Guillaume Pitron
Published 15 Feb 2020

But according to a London analyst, the prices set by the LME still serve as a benchmark, and he didn’t believe that it would change anytime soon.44 He did concede, however, that ‘Indonesia applied a very original idea’. Indeed, to support its industrial policy, the nation needed to build road networks, electricity grids, ports, train stations, and airports. It would take strong and stable mineral prices to pay off and maintain these investments. So Indonesia warded off the invisible hand of the market by using the controls of the stock market. This inspired other Asian markets. In 2015, the Shanghai Futures Exchange included tin among the metals for trade on its futures market,45 and announced in 2018 that it would soon include copper.46 Malaysia followed suit in 2016.47 Other trading floors also introduced trading platforms for copper, nickel, and zinc.48 But Indonesia’s nationalisation of its mining resources did not meet with the same success as its Chinese counterpart, for it failed to put the necessary means behind its policy.

A Culture of Growth: The Origins of the Modern Economy
by Joel Mokyr
Published 8 Jan 2016

As Rowe (2001, p. 114) shows, Chen was an unusually progressive scholar, who in some ways resembled the physiocrats and Adam Smith and decried the ivory-tower antiquarianism of the kaozheng scholars, who he thought were too “mired in the past.” He strongly believed in markets and the power of commerce to bring out efficiency in production and came close to Smith’s concept of an invisible hand. Rowe (2001 p. 214) points out that the one element that Enlightenment Europe had, which was entirely missing in Chen, is the strong belief in the economic virtue of emulation, which was a central element of the European Enlightenment ideology. But equally striking is the absence in his work of a concept of useful knowledge as a source of economic progress.14 Chen was deeply interested in creating prosperity, and his proposals included active economic policies to encourage mining, commerce, and manufacturing.

…

“Twisting the Lion’s Tail: Practice and Theory at the Court of Henry Prince of Wales.” In Bruce T. Moran, ed., Patronage and Institutions: Science, Technology and Medicine at the European Court, 1500–1750. Rochester, NY : Boydell Press, pp. 67–83. Cosmides, Leda, and John Tooby. 1994. “Better than Rational: Evolutionary Psychology and the Invisible Hand.” American Economic Review Vol. 84, pp. 327–32. Cowan, Brian. 2005. The Social Life of Coffee: The Emergence of the British Coffeehouse. New Haven, CT and London: Yale University Press. Cranmer-Byng, J.L., and Trevor Levere. 1981. “A Case Study in Cultural Collision: Scientific Apparatus in the Macartney Embassy to China, 1793.”

The Price of Time: The Real Story of Interest
by Edward Chancellor
Published 15 Aug 2022

If Schumpeter is widely remembered today, it’s because he owns the intellectual copyright on creative destruction – the evolutionary process by which new technologies and business methods displace older, less efficient ways of doing things. Schumpeter’s borrowing from Darwin’s theory of natural selection is as important to our understanding of the nature of capitalism as Adam Smith’s ‘invisible hand’. Most discussion of creative destruction revolves around the adoption of new technologies, the roles played by entrepreneurs as harbingers of change and by competition in selecting the most efficient businesses. Less recognized is the important part played by interest in this dynamic process.

…

If their issuance was limited to no more than the economy’s trend growth rate, this money would be as good as gold.16 A digital Gold Standard would have some of the advantages, and fewer of the disadvantages, of the classical Gold Standard. One advantage is that central bankers would no longer be able to pursue an active monetary policy. The cost of borrowing would more accurately reflect the supply of and demand for actual savings. Guided by the market’s invisible hand, the rate of interest would find its natural level. 1. This basalt stele from c. 1760 BC depicts the sun god Shamash (seated) handing a body of laws to the Babylonian king, Hammurabi. The cuneiform text below contains regulations limiting the maximum rate of interest and prescribing conditions for loan forgiveness. 2.

Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity
by Daron Acemoglu and Simon Johnson
Published 15 May 2023

If the market process was already incentivizing businesses to offer safe and high-quality products, additional regulations would only divert effort and reduce profitability, forcing businesses to increase prices or reduce labor demand. These ideas about the idealized market process have been part of economic theory ever since Adam Smith’s The Wealth of Nations introduced the notion of the invisible hand—a metaphor for the notion that the market provides good outcomes for everyone, if there is enough competition. There has always been debate on this point, with the other side taken by people like John Maynard Keynes, who points out that markets do not function in an idealized way. For example, as we have seen, the productivity bandwagon collapses when there is not enough competition in the labor market.

…

Philippon, Thomas. 2019. The Great Reversal: How America Gave Up on Free Markets. Cambridge, MA: Harvard University Press. Philippon, Thomas, and Ariell Reshef. 2012. “Wages in Human Capital in the U.S. Finance Industry: 1909‒2006.” Quarterly Journal of Economics 127:1551‒1609. Phillips-Fein, Kim. 2010. Invisible Hands: The Businessmen’s Crusade Against the New Deal. New York: W.W. Norton. Piff, Paul K., Daniel M. Stancato, Stéphane Côté, Rodolfo Mendoza-Denton, and Dacher Keltner. 2012. “Higher Social Class Predicts Increased Unethical Behavior.” Proceedings of the National Academy of Sciences 109, no. 11: 4086‒4091.

I.O.U.: Why Everyone Owes Everyone and No One Can Pay
by John Lanchester
Published 14 Dec 2009

This is his summary of what the bankers asked for and got: From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing: • insistence on free movement of capital across borders • the repeal of Depression-era regulations separating commercial and investment banking • a congressional ban on the regulation of credit-default swaps • major increases in the amount of leverage allowed to investment banks • a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement • an international agreement to allow banks to measure their own riskiness • and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation7 The undoing of the Depression-era banking legislation was a critical component in this.

Microchip: An Idea, Its Genesis, and the Revolution It Created
by Jeffrey Zygmont
Published 15 Mar 2003

It is also the noble generosity that trusts in democratic outcomes, letting people make their own choices, individually and unimpeded. But those attitudes only permitted the innovations. The work also required motivation and encouragement. That came from commerce. That came from familiar capitalism, with Prologue xxi Adam Smiths invisible hand moving faster than it's ever moved, competitively selecting the most beneficial discoveries and developments. The story of the microchip is a story about incentives available and choices made in intensely competitive businesses. It is about discoveries pursued for the promise of rewards—rewards that included wealth, personal independence, public recognition, and the intensely private satisfaction of unscrambling puzzles and revealing mysteries.

Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream
by Arianna Huffington
Published 7 Sep 2010

They had, but rather than Ponce de León, it was Ronald Reagan who led the income-boosting expedition, marching into Washington under the banner of lowering the taxes of America’s moneyed elite.14 But, the Reagan Revolution of the 1980s was about more than shifting the tax burden—it was about shifting the way America looked at itself. In short order, government was no longer seen as a solution—it was fingered as the problem. Tocqueville’s “welfare of the greatest possible number” was replaced by the notion that the invisible hand of the free market could best determine society’s winners and losers—until, that is, the winners got into trouble in 2008 and the government rushed to the rescue in the name of preventing Armageddon. In books such as The Virtue of Selfishness and Atlas Shrugged, Ayn Rand, the high priestess of free-marketeers such as Alan Greenspan, championed the notion that by doing what is best for yourself, you end up doing what is best for everyone.

Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics
by Francis Fukuyama
Published 27 Aug 2007

A nationwide deployment of flex-fuel cars, plug-in hybrids, and alternative fuels could take place within two decades. But such a transformation will not occur by itself. In a perfect world government would not need to intervene in the energy market, but in a time of war, the United States is taking an unacceptable risk by leaving the problem to be solved by the invisible hand. This is especially true since the energy market is anything but free. It is manipulated by a cartel, heavily rigged in favor of the status quo, and, as the case of Brazilian ethanol shows, riddled with protectionism. In the absence of appropriate public policy, hundreds of millions of petroleum-burning cars ill-suited to address the changing geopolitics and geology of oil will roll onto our roads in coming decades, with profound implications for the future.

Rebel Cities: From the Right to the City to the Urban Revolution
by David Harvey
Published 3 Apr 2012

They thereby realize far- reaching control over production and marketing, and hence stabilize their business environment to allow for rational calcula­ tion and long- term planning, the reduction of risk and uncertainty, and 94 REBEL CITIES more generally guarantee themselves a relatively peaceful and untrou­ bled existence. The visible hand of the corporation, as Alfred Chandler terms it, has consequently been of far greater importance to capitalist his­ torical geography than the invisible hand of the market made so much of by Adam Smith, and paraded ad nauseam before us in recent years as the guiding power in the neoliberal ideology of contemporary globalization.7 But it is here that the mirror image of the first contradiction comes most clearly into view: market processes crucially depend upon the indi­ vidual monopoly of capitalists (of all sorts) over ownership of the means of production, including finance and land.

Social Democratic America
by Lane Kenworthy
Published 3 Jan 2014

“Free Trade and Fair Trade.” SIEPR 2008 Economic Summit Conference, Stanford, CA. DeLong, J. Bradford. 2009. “Slow Income Growth and Absolute Poverty in the North Atlantic Region.” Unpublished paper. DeLong, J. Bradford. 2012. “The Changing Structure of Prices since 1960.” Grasping Reality with Both Invisible Hands, December 8. DeLuca, Stefanie and Peter Rosenblatt. 2010. “Does Moving to Better Neighborhoods Lead to Better Schooling Opportunities? Parental School Choice in an Experimental Housing Voucher Program.” Teachers College Record 112: 1443–1491. DeParle, Jason. 2004. American Dream. New York: Penguin.

The Economic Singularity: Artificial Intelligence and the Death of Capitalism
by Calum Chace
Published 17 Jul 2016

On the rare occasion when human intervention is needed, the gig economy[ccx] can probably furnish one quickly enough. Once it is economically feasible to replace human drivers with machines, it is a very short step to being economically compelling. Drivers account for 25-35% of the cost of a trucking operation.[ccxi] You can't escape the invisible hand of economics for long. In a free market, once one firm replaces its drivers the rest will have to follow suit, or go out of business. Of course, trade unions and sympathetic governments may try to stop the process in some jurisdictions. They may succeed for a while, but only by rendering their industry uneconomic, and burdening their customers with unnecessary costs which will damage them in turn.

How to Run the World: Charting a Course to the Next Renaissance
by Parag Khanna
Published 11 Jan 2011

Americans who cynically ask what a world led by Asia would look like should get out of their chairs and go there. Good luck finding the border between state and market. Since China favors state capitalism to unbridled laissez-faire, that is how it will be. In the thirteenth century, the Chinese state already played a strong but invisible hand in partnership with its merchants. Today, as Shanghai joins Hong Kong—what some call “Shangkong”—as a world financial hub, corporate rules are bending the Chinese way. Among China’s more than one hundred thousand state-owned enterprises are the Industrial and Commercial Bank of China and the China Construction Bank, the two largest banks in the world by market capitalization.

Chomsky on Mis-Education
by Noam Chomsky
Published 24 Mar 2000

According to some specialists, half of U.S. trade worldwide consists of such centrally managed transactions, and much the same is true of other industrial powers,47 though one must treat with caution conclusions about institutions with limited public accountability. Some economists have plausibly described the world system as one of “corporate mercantilism,” remote from the ideal of free trade. The OECD concludes that “oligopolistic competition and strategic interaction among firms and governments rather than the invisible hand of market forces condition today’s competitive advantage and international division of labor in high-technology industries,”48 implicitly adopting a similar view. Even the basic structure of the domestic economy violates the neoliberal principles that are hailed. The main theme of the standard work on U.S. business history is that “modern business enterprise took the place of market mechanisms in coordinating the activities of the economy and allocating its resources,” handling many transactions internally, another large departure from market principles.49 There are many others.

Finding Your Element: How to Discover Your Talents and Passions and Transform Your Life
by Ken Robinson and Lou Aronica
Published 14 Jul 2013

I’ve seen this happen many times: when you pursue what truly inspires you, opportunities open up that you might never have imagined. You gravitate toward people who share your passion, your combined efforts create a higher state of energy and proximity to these people increases the chance of your taking the pursuit to a new level—the opening of doors of which Campbell speaks. Campbell likens this to being helped by “invisible hands.” It’s impossible to avoid the spiritual connotation there, and depending on your inclination you might interpret that in any number of ways. What seems clear, regardless of how you look at it, is that following your bliss, or exploring your passions—Paulo Coelho calls it the personal legend—makes the world more alive for you and makes you more alive within it.

Wanderland
by Jini Reddy
Published 29 Apr 2020

There were plenty who spoke out about the climate emergency too. I supported the protesters, I joined them, but the longing that I felt was the longing that I felt. I could not deny myself. I could appreciate the physical beauty of the land and its creatures but I also wanted to be led by nature’s invisible hand, the wildness you could not see. I realised I was happiest with a foot in both worlds. A Woman of the Old Ways That wildness you could not see – well, some could see it. A shaman could. I was acquainted with a white shaman from Botswana who’d been diagnosed with the ‘illness of calling’, as he put it, when he was 11.

Humans as a Service: The Promise and Perils of Work in the Gig Economy
by Jeremias Prassl
Published 7 May 2018

Arun Sundararajan of New York University Stern Business School draws on a wide range of literature to suggest that platforms ‘represent a new structure for organizing economic activity, one that is an interesting hybrid of a market and a hierarchy, and that could signal the evolution of 20th century managerial capitalism into 21st-century crowd-based capitalism’.5 The starting point for this assertion is a juxtaposition between two models for organizing modern economies: ‘Markets . . . where Adam Smith’s famed “invisible hand” determines the prices that balance supply and demand. And then there is the “visible hand”—the “hierarchies” that we typically think of as firms or organizations (or govern- ment entities).’6 Drawing on the work of Massachusetts Institute of Technology (MIT) economists Tom Malone, Joanne Yates, and Robert Benjamin, Sundararajan suggests that gig-economy innovation will fundamentally reshape our economy by incentivizing entrepreneurs to move away from the hierarchical organization of business in large corporations towards open markets: ‘[A]s digital technologies progress, the coordination costs associated with hand- ling complex product descriptions through markets decrease, thus making market-based activity feasible for a larger set of activities.’7 The result?

All Families Are Psychotic
by Douglas Coupland
Published 14 Jun 2002

The Impala was at a red light; the quieted engine made this last word of William's sound as if an ogre had belched it out. The moment was charged and needed defusing. 'Helena, turn on the radio,' Janet piped up. 'I feel like hearing Dean Martin.' William said, 'That wop?' 'Daddy, he's not a wop.' William accelerated through the newly green light. Invisible hands pulled Janet into the rear seat's foam. Helena asked to be dropped off at home, near the corner of Bloor and St. George, so William had to make a detour. Once there, Helena pointed out the house in which she was renting an upper floor. 'What a dump, eh, Mr. Troo?' 'You're the arty type, Helena.

Cogs and Monsters: What Economics Is, and What It Should Be
by Diane Coyle
Published 11 Oct 2021

Nudds, 2006, Rational Animals?, Oxford: Oxford University Press. Hutton, W., 2012, ‘Argentina’s Oil Grab Is Timely Retort to Rampaging Capitalism’, The Guardian, 22 April, https://www.theguardian.com/commentisfree/2012/apr/22/will-hutton-argentina-oil-grab-justified. IDEI, Toulouse School of Economics, 2011, ‘The Invisible Hand Meets the Invisible Gorilla: The Economics and Psychology of Scarce Attention’, Summary of a conference held at IDEI, Toulouse School of Economics, September, http://www.idei.fr/doc/conf/psy/2011/summary.pdf, accessed 4 May 2012. Ioannidis, J.P.A., T. D. Stanley, and H. Doucouliagos, 2017, ‘The Power of Bias in Economics Research’, The Economic Journal, 127, F236–F265, doi:10.1111/ecoj.12461.

The Midnight Library
by Matt Haig
Published 12 Aug 2020

In fact, while staring at the open pages of the book, the pain was actually worse than it had been wandering around Bedford. The power of all the regrets simultaneously emanating from the book was becoming agony. The weight of guilt and remorse and sorrow too strong. She leaned back on her elbows, dropped the heavy book and squeezed her eyes shut. She could hardly breathe, as if invisible hands were around her neck. ‘Make it stop!’ ‘Close it now,’ instructed Mrs Elm. ‘Close the book. Not just your eyes. Close it. You have to do it yourself.’ So Nora, feeling like she was about to pass out, sat back up and placed her hand under the front cover. It felt even heavier now but she managed to close the book and gasped in relief.

Prediction Machines: The Simple Economics of Artificial Intelligence
by Ajay Agrawal , Joshua Gans and Avi Goldfarb
Published 16 Apr 2018

Some might be open-minded about exploration, discovery, and peace, while others may be paper-clip makers. So long as interests compete, competition will flourish, meaning that the paper-clip AI will likely find it more profitable to trade for resources than fight for them and, as if guided by an invisible hand, will end up promoting benefits distinct from its original intention. Thus, economics provides a powerful way to understand how a society of superintelligent AIs will evolve. That said, our models do not determine what happens to humanity in this process. What we have called AI in this book is not general artificial intelligence but decidedly narrower prediction machines.

The War on Normal People: The Truth About America's Disappearing Jobs and Why Universal Basic Income Is Our Future
by Andrew Yang
Published 2 Apr 2018

The United States has reached a point where its current form of capitalism is faltering in producing an increasing standard of living for the majority of its citizens. It’s time for an upgrade. THE NEXT STAGE OF CAPITALISM Adam Smith, the Scottish economist who wrote The Wealth of Nations in 1776, is often regarded as the father of modern capitalism. His ideas of an invisible hand that guides the market, division of labor, and that self-interest and competition lead to wealth creation have been so deeply internalized that today we take most of them for granted. Our general thinking today is to contrast capitalism with socialism, which arose in the 1800s and advocated social ownership or democratic control of industries.

Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones
by James Clear
Published 15 Oct 2018

If I walk into the kitchen and see a plate of cookies on the counter, I’ll pick up half a dozen and start eating, even if I hadn’t been thinking about them beforehand and didn’t necessarily feel hungry. If the communal table at the office is always filled with doughnuts and bagels, it’s going to be hard not to grab one every now and then. Your habits change depending on the room you are in and the cues in front of you. Environment is the invisible hand that shapes human behavior. Despite our unique personalities, certain behaviors tend to arise again and again under certain environmental conditions. In church, people tend to talk in whispers. On a dark street, people act wary and guarded. In this way, the most common form of change is not internal, but external: we are changed by the world around us.

The New Silk Roads: The Present and Future of the World
by Peter Frankopan
Published 14 Jun 2018

Asian Development Bank Special Report: Coming up Fast (April 2018). 32‘China to establish court for OBOR disputes’, Asia Times, 25 January 2018. 33Saptarshi Ray, ‘China to tunnel beneath Himalayas for Nepal railway link’, The Times, 23 June 2018. 34Anil Giri, ‘China looks at Nepal as potential gateway to South Asia, expands footprints in market’, Hindustan Times, 19 October 2017. 35Turloch Mooney, ‘New Asia–Europe rail services added amid weak ocean rates’, Journal of Commerce, 31 May 2016. 36An additional ten containers were unloaded at Duisberg, Railway Gazette, ‘First China to UK rail freight service arrives in London’, 18 January 2017. 37Dirk Visser, ‘Snapshot: The World’s Ultra-Large Container Ship Fleet’, The Maritime Executive, 2 June 2018. 38Quoted in the Economist, ‘Western firms are coining it along China’s One Belt, One Road’, 3 August 2017. 39Goldman Sachs, ‘The Rise of China’s New Consumer Class’ at http://www.goldmansachs.com/our-thinking/macroeconomic-insights/growth-of-china/chinese-consumer/ 40Zhidong Li, Kokichi Ito and Ryoichi Komiyama, Energy Demand and Supply Outlook in China for 2030 and A Northeast Asian Energy Community – The automobile strategy and nuclear power strategy of China (2018). 41Robin Mills, ‘China’s Big Play for Middle East Oil’, Bloomberg, 10 May 2017; Elena Mazneva, Stephen Bierman and Javier Blas, ‘China Deepens Oil Ties With Russia in $9 Billion Rosneft Deal’, Bloomberg, 8 September 2017; Anthony Dipaola and Aibing Guo, ‘China’s CNPC pays $1.18 billion for concessions in Abu Dhabi’, World Oil, 21 March 2018. 42US Energy Information Administration, ‘China surpassed the United States as the world’s largest crude oil importer in 2017’, 5 February 2017. 43Reuters, ‘Kazakhstan to produce nuclear fuel for China’, 26 May 2017. 44Fred Gale, James Hansen and Michael Jewison, China’s Growing Demand for Agricultural Imports, US Department of Agriculture, (2014), pp. 11–12. 45China Water Risk, ‘North China Plain Groundwater’, statement, 26 February 2013. 46South China Morning Post, ‘Air quality worsening in China’s Yangtze River Delta in 2018, figures show’, 23 May 2018. 47Li Gao, ‘Greening Chinese Patent Law to Incentivize Green Technology Innovation in China’, in Yahong Li, The Role of Patents in China’s Industrial Innovation (Cambridge, 2017), pp. 79–105. 48See, for example, Xinhua, ‘President vows vast battle with pollution’, 19 May 2018. 49International Monetary Fund, Press release 18/200, ‘IMF Staff Completes 2018 Article IV Mission to China’, 29 May 2018. 50Yan Chunlin, ‘Visible and invisible hand in creating and reducing overcapacity’, in Scott Kennedy (ed.), State and Market in Contemporary China: Toward the 13th Five-Year Plan (Lanham, 2016), pp. 30–32; Peter Ferdinand, ‘Westward ho – The China dream and “one belt, one road”: Chinese foreign policy under Xi Jinping’, International Affairs 92.4 (2016), pp. 941–57. 51Andrei Kirillov, ‘В Казахстане регулярно говорят о некачественном ремонте дорог’, Kapital, 26 June 2014. 52Asian Development Bank, Meeting Asia’s Infrastructure Needs (2017). 53ICE, PeopleResearch on India’s Consumer Economy, 360° survey 2016. 54Tom Hancock, ‘US fast food chains chase growth in small-town China’, Financial Times, 18 October 2017; Salvatore Babones, ‘China’s middle class is pulling up the ladder behind slowly’, Foreign Policy, 1 February 2018. 55Tom Hancock and Wang Xueqiao, ‘China’s smaller cities compete to increase population’, Financial Times, 20 July 2018. 56Zhao Lei, ‘Xinjiang’s GDP growth beats the national average’, China Daily, 20 October 2017; Frank Tang, ‘Xinjiang halts all government projects as crackdown on debt gets serious’, South China Morning Post, 4 April 2018. 57Joseph Hope, ‘Returning Uighur Fighter and China’s National Security Dilemma’, China Brief 18(13), 25 July 2018. 58Emily Feng, ‘Crackdown in Xinjiang: Where have all the people gone?’

China's Superbank
by Henry Sanderson and Michael Forsythe
Published 26 Sep 2012

Instead, the government needed to take up that role; otherwise, there would be inflation and growing unrest. “The market can function on its own but its needs certain interventions, for example, industrial policies and control on aggregate demand,” he wrote. “Those people who think the market is the invisible hand and can perfectly allocate resources is what I call ‘market utopia’ or ‘market omnipotence.’” The “recentralization” he called for meant that the state needed to exert influence in strategically important areas and let go of nonstrategic areas where enterprises could have more power. To be a strong country, China needed to develop its own system, and the experience of all industrial countries showed they had first developed with the backing of a strong state.

Your Life in My Hands: A Junior Doctor's Story
by Rachel Clarke
Published 14 Sep 2017

NHS detractors often dismiss these sentiments as nothing more than obfuscatory fluff. For them, the cold, hard, unpalatable truth is that the NHS is a monolithic dinosaur, a clunky, plodding relic of old that underperforms, overspends and should, by rights, have been extinct long ago were it not for the mawkishness of those who ignore the benefits of the free market’s invisible hand. As political strategist John McTernan claims, writing for the right-wing think tank the Institute of Economic Affairs, Facts and arguments don’t matter when it comes to the NHS – only emotion and sentiment register. Commentators often talk about us living in a ‘postfact’ world. If that is so the NHS led the way – debate about its future has been conducted in post-factual terms for quite some time.80 This, of course, is a glib overstatement.

Good Profit: How Creating Value for Others Built One of the World's Most Successful Companies
by Charles de Ganahl Koch
Published 14 Sep 2015

Such companies have a much harder time making silk stockings that are affordable for factory girls than the companies that do so through beneficial incentives and generalized rules of conduct. Smith and Hayek demonstrated that prosperity can take place only through spontaneous order, an order that results from unscripted human action, not human design. Smith described this as the “invisible hand” by which, in the proper system, man is led “to promote an end which is no part of his intentions.”14 Hayek showed how prosperity requires that the knowledge dispersed throughout society be put to productive use, saying it “cannot be gathered and conveyed to an authority charged with the task of deliberately creating order.”15 This point was memorably illustrated by economist Thomas Sowell in his book Knowledge and Decisions: “When Soviet nail factories had their output measured by weight, they tended to make big, heavy nails, even if those big nails sat unsold on the shelves while the country was crying out for small nails.”16 In other words, when governments plan how people should run their lives, everybody (but those in power) loses.

Abolish Silicon Valley: How to Liberate Technology From Capitalism
by Wendy Liu
Published 22 Mar 2020

If they are the main justification for VC’s continued existence, then VC’s utility seems limited, only suited for a subpar environment where money is indiscriminately dumped into private enterprises under the assumption that the market will sort it out. And what guarantees do we have that the market will optimise for the right ends? The logic of the market is to encourage self-interest in the belief that the invisible hand will make everything right, on the grounds that economic activity is a good in itself. But the measurements we use for the health of the economy — GDP growth, unemployment rates, stock market capitalisations — are not themselves infused with ethical values, and it’s becoming increasingly clear that they are a poor proxy for tracking societal wellbeing.

New York 2140
by Kim Stanley Robinson
Published 14 Mar 2017

We live in a world where people pretend money can buy you anything, so money becomes the point, so we all work for money. Money is thought of as value.” “Okay, I get that. We’re broke and I get that.” “So good, keep hanging with me. We live by buying things with money, in a market that sets all the prices.” “The invisible hand.” “Right. Sellers offer stuff, buyers buy it, and in the flux of supply and demand the price gets determined. It’s crowdsourced, it’s democratic, it’s capitalism, it’s the market.” “It’s the way of the world.” “Right. And it’s always, always wrong.” “What do you mean wrong?” “The prices are always too low, and so the world is fucked.

…

In other words, taken all in all, a place that might make for a very high rate of return on investment! So a situation was developing. Push was coming to shove. And when push comes to shove—well, who knows? Anything can happen. PART FOUR EXPENSIVE OR PRICELESS? Property becomes a claim to the yield. —Maurizio Lazzarato, Governing by Debt The invisible hand never picks up the check. a) Franklin By the time I got back from rescuing the two little drowned rats with the building’s super, I was late to pick up Jojo. “God damn you guys,” I said as we gurgled into the boathouse, “you’ve made me late.” “For a very important date,” Vlade added heavily.

Lords of Finance: The Bankers Who Broke the World
by Liaquat Ahamed
Published 22 Jan 2009

European central bankers had been dealing with financial crises for more than a century. They had long absorbed the lesson that while most of the time the economy works very well left in the care of the invisible hand, during panics, that hand seems to lose its grip. Markets, particularly financial markets, became unthinkingly fearful. To reestablish sanity and restore some sort of equilibrium in these circumstances required a very visible head to guide the invisible hand. In a word, it required leadership. After 1929, responsibility for world monetary affairs ended up in the hands of a group of men who understood none of this, whose ideas about the economy were at best outmoded and at worst plain wrong.

The Enlightened Capitalists
by James O'Toole
Published 29 Dec 2018

Quite remarkably, given that they were all committed capitalists, none of our enlightened leaders was driven to do good by market demand: their virtuous actions were seldom, if ever, in response to customer desire for responsible corporate behavior. And there is a clear explanation for why those practical businesspeople ignored (at least in this regard) the dictates of Adam Smith’s invisible hand. In a 2006 review of corporate attempts to do good while doing well, business scholar David Vogel found that “the market for virtue” was, at best, a small one, with precious little evidence that consumers opted to buy products based on the admirable deeds of the companies that made them, or that companies reaped financial gain from acts of social responsibility.2 And there is even less evidence that shareholders reward ethical leaders.

…

F., 134 “scientific management” system, 81, 106–7 Scott, Mary, Companies with a Conscience, 497n29 Seabra, Luiz, 359 Seagate, 260 Sears, Roebuck and Company, 37, 47, 48, 49, 112, 211, 330 Sellars, Richard, 163, 167, 170 Semler, Ricardo, 353 “servant leadership,” 136–37, 161, 233, 317–18 Shakespeare, William, Julius Caesar, xi Shamrock Holdings, 326 Shaw, George Bernard, 68–70 Major Barbara, 69–70 Shaw, Kathryn, 271 Shultz, George, 333 Sieff, David, 220 Sieff, Edward, 217 Sieff, Ephraim, 208 Sieff, Israel, 209, 214, 431 as Baron, 217 economic philosophy, 209–10 employee lunchrooms and, 212 friendship with Simon Marks, 208, 209 institutionalization of practices, 435 marriage and family, 209 paternalism and, 213 retirement of, 217 Weizmann’s influence on, 210, 211, 428 Sieff, Marcus, 212, 214, 215, 399 business practices, 218–19 CEOs reject his practices, 219 Don’t Ask the Price, 217 The Ethics of the Fathers, 218 as future Marks & Spencer CEO, 215 as Lord Sieff of Brimpton, 217 as Marks & Spencer CEO, 217–19 personality of, 218–19 socializing with the rich and famous, 217–18 social responsibility and, 218 wealth and upbringing, 217 Weizmann’s influence on, 218 Sieff, Michael, 217 Sieff, Rebecca Marks, 209 Siegel, Sam, 273, 275 Sierra Club, 307 “single tax” theory, 115 sin investing, 460 Sisodia, Rajendra, 454–55 60 Minutes (TV show), 171–72 Skoll World Forum, 452 Smith, Adam, 154 business as human commonality, xxi case against business idealism, xxxiv free markets and, 21 invisible hand, 428 opposition to corporate do-goodism, xxxvii The Wealth of Nations, xxxiv, 7 Smith, Liz, 329 Snavely, Mattie, 73, 74, 75 Social Contract, The (Rousseau), 9 social Darwinism, xxxi, 155 Social Enterprise Business Centre, 457 social enterprise movement, 404 social entrepreneurship, 456–59 social investment funds, 459 socialism, 7, 21, 59, 432 Lincoln’s system as alternative to, 97, 111, 114 social responsibility, xi, xii, xv, xvi, xvii, xx, 497n29 Arco and, 307–9 Ben & Jerry’s and, 383, 387–88, 393–94, 497n29 CDC and, 249, 254, 261 changing investor attitudes and, 459–62 company failure, relationship of, 426–27 consortia of enlightened capitalists and, 451–56 consumerist behavior overriding social conscience, 467 of corporate capitalism, xxxviii–xl critics of, 424 Davos 2018 and, xiv, 461 Drucker on, 431 ethical compasses and, xx Friedman on, 439, 507n13 future prospects for, 442–72 global in scope, xxxix–xl Herman Miller Company and, 238 Hershey Chocolate Company and, 89 as job of government not business, xxxvi John Lewis Partnership and, 132 Johnson and, 150–51, 157–58 large corporations rejection of, 425 Levi Strauss and, 178, 184, 186–89, 202 Levi Strauss’s global sourcing guidelines, 202–3, 204 Marks & Spencer and, 210, 213, 216, 218, 222 MBA programs and, 424–25 no financial gain from, 429 opposition to corporate do-goodism, xxxvi, xxxvii, xli, 462 Patagonia and, 400–403, 497n29 paternalism and, xxxvii, xlii Penney and, 39 Polman as outspoken advocate, 66–68 profit vs. virtue and, xl–xli promotion of diversity and, xxxvi proponents of corporate do-goodism, xxxviii–xl public demand for, 463–72 questions business leaders need to ask, xli–xliii Roddick, the Body Shop, and, 349–54 SWA and, 295–97 Tom’s of Maine and, 372 Unilever and, 65–68, 393–94, 444–45 Weizmann and, 210 Social Venture Network, 349, 451 sole proprietorship, 396 Solheim, Jostein, 393 Sony, 325 Soul of a Business, The (Chappell), 361–62, 367–68 Southwest Airlines (SWA), 117n, 426 big airlines oppose creation of, 288 business model, 289, 296 culture committee, 291–93 customer service and, 293–94 employee focus of company, 289–93 employee volunteers, 296 environmental issues, 295–97 exemplary practices, 293–94 FDA fine, 294 Fortune’s Most Admired Corporations list, 294 future of, 297 hiring women and people of color, 292–93 Kelleher as CEO, 288–94 Kelly as CEO, 292, 295, 296–97 Kelly as CFO, 293 management and employee involvement, 291–93 profitability and, 289, 296 social responsibility and, 295–97 Southwest Airlines One Report, 295–96 stock ownership plan, 290, 406 stock price, 294 wages, 290 Spencer, Herbert, xxxi, 155 Spencer, Thomas, Jr., 209 Spencer, Thomas, Sr., 208–9 partnership with Marks, 208 retirement, 208–9 Sperry Rand, 244 Springfield, Mo., 409 SRC Holdings, 407–9, 426, 476 business education at, 407 community relations, 409 cost control at, 407–8 employee ownership, 407 employees and, 407–9 number of employees, 409 “open-book management,” 407 share price, 409 Springfield Re and, 407, 408, 409, 410 Stack, Jack, 395, 407–9, 411, 428, 451 “exit money” and, 409 The Great Game of Business, 407 leadership philosophy of, 407 “open-book management,” 407 stakeholder benefits, xii Standard Oil, xxvii Starbucks, 425, 444, 464, 467 acquisition of La Boulange, 448 State Street Global Advisors, 470 Stern, David, 176, 177 Stern, Sigmund, 178–79, 180 Stevens Aviation, 290 stock exchanges, 46–47 Stonyfield Farms, 454–55 Stout, Lynn, 438, 458 Strauss, Levi, 176–79, 495n1 death and estate of, 178 heirs of, 177, 395 philanthropy of, 178 Sulzberger family, 399 Sumner, William Graham, 155 Sunset Scavengers, 415–16 Syntegra, 260 Tawney, R.

The Essays of Warren Buffett: Lessons for Corporate America
by Warren E. Buffett and Lawrence A. Cunningham
Published 2 Jan 1997

(We are aware of the pie-expanding argument that says that such activities improve the rationality of the capital allocation process. We think that this argument is specious and that, on balance, hyperactive equity markets subvert rational capital allocation and act as pie shrinkers. Adam Smith felt that all noncollusive acts in a free market were guided by an invisible hand that led an economy to maximum progress; our view is that casino-type markets and hair-trigger investment management act as an invisible foot that trips up and slows down a forward-moving economy.) Contrast the hyperactive stock with Berkshire. The bid-andask spread in our stock currently is about 30 points, or a little over 2%.

Methland: The Death and Life of an American Small Town
by Nick Reding
Published 1 Jul 2009

This squeezes out all but the heartiest souls, like the Leins, who care enough about their way of life to essentially take a vow of poverty. Douglas Constance characterizes the changes in rural America in terms of Karl Marx’s critique of the theory of political economy posited by Adam Smith. With many buyers and many sellers, says Constance, there is perfect competition and no need for government intervention. Smith’s “invisible hand of capitalism” works, in theory, to effect the highest amount of economic blood flow at all levels. In reality, says Constance, Marx’s countertheory has unfortunately proved more insightful. Strapped with the mandate to “grow or die,” businesses are encouraged to cannibalize competition until there are no longer many buyers and many sellers, but rather, many buyers and an increasingly limited number of sellers.

Walkable City: How Downtown Can Save America, One Step at a Time
by Jeff Speck
Published 13 Nov 2012

●Moreover, thanks to meager federal commitment, a significant uptick in wind, solar, hydro, tidal, or even nuclear generation seems at least a generation away. It is almost inevitable that the path to energy independence, so important to our nation’s security and solvency, will take us through a sooty valley of even greater carbon expulsion. As David Owen notes in Green Metropolis, “sometimes the invisible hand goes for the throat” (66). See also Daniel Gros, “Coal vs. Oil: Pure Carbon vs. Hydrocarbon,” achangeinthewind.com, December 28, 2007. Electricity generation is also responsible for about 20 percent of all water consumption in the United States (John F. Wasik, The Cul-de-Sac Syndrome, 60). ●LEED refers to the now widely adopted standards of the U.S.

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives)
by David Birch
Published 14 Jun 2017

The revaluation and exchange limits triggered panic, particularly among market traders with substantial hoards of the worthless old money. Gresham’s Law took immediate effect: the new currency disappeared from the marketplace and people began to use whatever hard currencies they could get their hands on, forcing the Dear Leader to grab hold of the invisible hand. He banned everyone from using dollars or euros and the national TV network began exhorting the populace to immediately report counter-revolutionary elements using dollars. I’m not saying that it’s only dictators who don’t understand how money works, and I’m certainly not trying to imply that money cannot be debased under a democratic government, as it was under Henry VIII, but I do want to emphasize the point that the marketplace needs a circulating medium of exchange and that it is the marketplace that is the source of wealth – something that Sir Thomas Gresham understood very well.

Admissions: A Life in Brain Surgery
by Henry Marsh
Published 3 May 2017

This is about as bad as it gets, I thought with disgust as I started to remove several cubic centimetres of Mr Williams’s brain, the sucker slurping obscenely. What’s the glory in this? This coarse and crude surgery. This evil tumour, changing this man’s very nature, destroying both himself and his family. It’s time to go. As I watched my sucker down the microscope, controlled by my invisible hands, working on the poor man’s brain, teasing and pulling out the tumour, I told myself that I wouldn’t have panicked in the past. I would just have shrugged and got on with it. But now that my surgical career was coming to an end, I could feel the defensive psychological armour that I had worn for so many years starting to fall away, leaving me as naked as my patients.

The Four: How Amazon, Apple, Facebook, and Google Divided and Conquered the World
by Scott Galloway
Published 2 Oct 2017

More significant is that we, as a nation, decided to shift the consumer to the front of the line, in every way. At Home Depot, you could pick out your own lumber. At Best Buy you could shop every possible TV and take your choice home in your car. Getting our stuff at the lowest possible price was now more important than any specific company, sector, or even the health of the broader community. The invisible hand began bitch-slapping small or inefficient retailers all over the United States and Europe. Mom-and-pop stores, previously a large part of community life, faced towering competition. The era also saw a new generation of retail infrastructure technology, including the first barcode scanner, installed in a Kroger in 1967.29 Until the sixties there were laws against retailers offering discounts for bulk purchases.

What's the Matter with White People
by Joan Walsh
Published 19 Jul 2012

My father also made sure that I saw the scaffolding beneath our family, the help they had climbing out of poverty. I knew we were responsible to help those coming up behind us. In New York, the capital of liberalism, strong unions, churches, neighborhood groups, and extended family helped my grandparents rise. In my parents’ generation, the invisible hand of government felt like wind at our backs, guiding all of us gently but steadily into the middle class. It turned out that I was growing up at the dreamiest moment of the American Dream. My family’s move to Long Island—to the humble town of Oceanside, used by Tom Wolfe to symbolize downscale suburban dowdiness in his tales of radical chic—was subsidized by a government-powered building boom and highway construction.

The Happiness Industry: How the Government and Big Business Sold Us Well-Being
by William Davies
Published 11 May 2015

Michael Hardt and Antonio Negri, Empire, Cambridge, MA: Harvard University Press, 2000; Adam Arvidsson and Nicolai Peitersen, The Ethical Economy: Rebuilding Value After the Crisis, New York: Columbia University Press, 2014; Jeremy Gilbert, Common Ground: Democracy and Collectivity in an Age of Individualism, London: Pluto Press, 2014. 5 The Crisis of Authority 1‘Full Text: Blair’s Newsnight Interview’, theguardian.com, 21 April 2005. 2Richard Wilkinson and Kate Pickett, The Spirit Level. 3ESPNcricinfo staff, ‘We Urge the Development of Inner Fitness’, espncricinfo.com, 1 April 2014. 4‘Competitiveness and Perfectionism: Common Traits of Both Athletic Performance and Disordered Eating’, medicalnewstoday.com, 22 May 2009. 5Tim Kasser, The High Price of Materialism, Cambridge, MA: MIT Press, 2003. 6See Toben Nelson et al., ‘Do Youth Sports Prevent Pediatric Obesity? A Systematic Review and Commentary’, Current Sports Medicine Reports 10: 6, 2011. 7This is according to the Gini coefficient. 8Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan, New York: W. W. Norton & Company, 2009. 9Jessica Grogan, Encountering America: Humanistic Psychology, Sixties Culture and the Shaping of the Modern Self, New York: Harper Perennial, 2013. 10Hadley Cantril, The Pattern of Human Concerns, New Brunswick: Rutgers University Press, 1966. 11Quoted in Jamie Peck, Constructions of Neoliberal Reason, Oxford: Oxford University Press, 2010, 117. 12Andrew McGettigan, ‘Human Capital in English Higher Education’, paper given at Governing Academic Life, London School of Economics and Political Science, 25–26 June 2014. 13Edmund Kitch, ‘The Fire of Truth: A Remembrance of Law and Economics at Chicago, 1932–1970’, Journal of Law and Economics 26: 1, 1983. 14Ibid. 15George Priest, ‘The Rise of Law and Economics: A Memoir of the Early Years’, in Francesco Parisi and Charles Rowley, eds., The Origins of Law and Economics: Essays by the Founding Fathers, Cheltenham: Edward Elgar, 2005, 356. 16Milton Friedman, ‘The Social Responsibility of Business Is to Increase Its Profits’, The New York Times Magazine, 13 September 1970. 17Will Davies, The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition, London: Sage, 2014. 18Nikolas Rose, ‘Neurochemical Selves’, Society, November/December, 2003; Nikolas Rose, Politics of Life Itself: Biomedicine, Power and Subjectivity in the Twenty-First Century, Princeton, NJ: Princeton University Press, 2007. 19Peter Kramer, Listening to Prozac, London: Fourth Estate, 1994. 20Alain Ehrenberg, The Weariness of the Self: Diagnosing the History of Depression in the Contemporary Age, Montreal: McGill-Queen’s University Press, 2010. 21David Healy, The Antidepressant Era, Cambridge, MA: Harvard University Press, 1997. 22As has been widely researched and commented on, antidepressants are only marginally more effective than placebos, and the effectiveness of placebos has been growing year on year.

Who Gets What — and Why: The New Economics of Matchmaking and Market Design
by Alvin E. Roth
Published 1 Jun 2015

Along with a handful of colleagues around the world, I’ve helped create the new discipline of market design. Market design helps solve problems that existing marketplaces haven’t been able to solve naturally. Our work gives us new insights into what really makes “free markets” free to work properly. Most markets and marketplaces operate in the substantial space between Adam Smith’s invisible hand and Chairman Mao’s five-year plans. Markets differ from central planning because no one but the participants themselves determines who gets what. And marketplaces differ from anything-goes laissez-faire because participants enter the marketplace knowing that it has rules. Boxing was transformed from brawl to sport when John Douglas, the ninth Marquess of Queensberry, endorsed the rules that bear his name.

Tubes: A Journey to the Center of the Internet
by Andrew Blum
Published 28 May 2012

She weighs the relative merits of describing the Internet as a Tootsie Roll, a hot tub, a highway, or a plane, before finally acknowledging how ugly the Internet—the real Internet, the one I’ve been visiting—actually is. “I wish,” she concludes, “the Internet looked like Matt Damon, or like lines of light written by an invisible hand in the night sky.” And so she finds our old friend again: the amorphous blob, the infinite universe, vast, uncontainable, and expanding. The poets’ metaphors all nestle together under the same starry night. But comedians, I’ve noticed, tend to go in the other direction, toward “the Internet” as a single machine.

How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present
by Thomas J. Dilorenzo
Published 9 Aug 2004

Because of private property and the free-market capitalism it enables. Under a free-market system, all of these thousands of people, very few of whom actually know one another, have an economic incentive to cooperate with one another under a division of labor and produce pencils. There’s no magic or invisible hand involved. It is the common sense of everyday life under capitalism. As long as there is a consumer demand for pencils—and thus the potential for profit—people will cooperate with others to figure out a way to produce and market pencils. Consumers get the pencils they want, and the people who produce them improve the standard of living for themselves and their families.

Dark Summit: The True Story of Everest's Most Controversial Season
by Nick Heil
Published 3 Feb 2009

Many veteran mountaineers have at least one story of extraordinary, even inexplicable good luck—the avalanche that swept within feet of their tent, the sketchy anchor that held them during a fall—and here was one of Brice’s. As he led the way down, facing the slope, the blizzard lashing them, he bumped into a bamboo wand marking the edge of a bergschrund, an ice cliff that fell away into the murk. It was as though some invisible hand had reached out to prevent him from simply stepping backward into space, yanking his rope team with him. “We could have all died there,” Brice recalled. “But we kept on and camped a little further down, and took care of ourselves.” To have come so close on the West Ridge was technically a failure, but practically it was a fine success.

What They Do With Your Money: How the Financial System Fails Us, and How to Fix It
by Stephen Davis , Jon Lukomnik and David Pitt-Watson
Published 30 Apr 2016

When challenged, economists point out that most economics is about market failures and problems. To say that financial economics is about simple market mechanisms is a “straw man and a textbook model.” But that model gets used, and misused. As the economist Andrew Scott told us, “We teach it as a benchmark, of what is the best you can do thanks to Adam Smith’s invisible hand, and then every thing is about how you get back to that first best given an imperfect world. And of course most people with limited economics remember just that very clear result—competition is good and markets work well.”33 But whether the economics profession is to blame, or its pupils, or its interaction with the finance industry, is a moot point.

An Edible History of Humanity
by Tom Standage
Published 30 Jun 2009

Taking a long-term historical perspective also provides a new way to illuminate modern debates about food, such as the controversy surrounding genetically modified organisms, the relationship between food and poverty, the rise of the “local” food movement, the use of crops to make biofuels, the effectiveness of food as a means of mobilizing political support for various causes, and the best way to reduce the environmental impact of modern agriculture. In his book The Wealth of Nations, first published in 1776, Adam Smith famously likened the unseen influence of market forces, acting on participants who are all looking out for their own best interests, to an invisible hand. Food’s influence on history can similarly be likened to an invisible fork that has, at several crucial points in history, prodded humanity and altered its destiny, even though people were generally unaware of its influence at the time. Many food choices made in the past turn out to have had far-reaching consequences, and to have helped in unexpected ways to shape the world in which we now live.

The Vanishing Middle Class: Prejudice and Power in a Dual Economy
by Peter Temin
Published 17 Mar 2017

Accessed September 22, 2016. Pfaff, John. 2016. “A Mockery of Justice for the Poor.” New York Times, April 29. Philippon, Thomas, and Ariell Reshef. 2012. “Wages and Human Capital in the U.S. Finance Industry: 1909–2006.” Quarterly Journal of Economics 127 (November): 1551–1609. Phillips-Fein, Kim. 2009. Invisible Hands: The Businessmen’s Crusade Against the New Deal. New York: Norton. Pierce, Justin R., and Peter K. Schott. 2016. “The Surprisingly Swift Decline of US Manufacturing Employment.” American Economic Review 106 (7) (July): 1632–1662. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press.

The People's Platform: Taking Back Power and Culture in the Digital Age
by Astra Taylor
Published 4 Mar 2014

Although new-media celebrants claim to crusade on behalf of the “yeoman creator,” they treat the kings of the digital domain with unwavering reverence, the beneficence of their rule evident in the freedom that their platforms and services allow. Praising the development of what he calls “hybrid economies,” where sharing and selling coexist, Lessig argues that advances in advertising will provide adequate support for the creation and dissemination of culture in a digital age. “As if by an invisible hand,” the ways we access culture will dramatically change as the dinosaurs “fall to a better way of making money” via hypertargeted marketing. Lessig is deeply concerned about control of culture and appalled that a generation has been criminalized for downloading copyrighted content, yet he ignores the problem of commercialism and is sanguine about the prospect of these same youth being treated as products, their personal data available for a price.23 Though the reviled traditional broadcast model evolved the way it did to serve the interests of advertisers, Internet enthusiasts brush away history’s warnings, confident that this time will be different.

23 Things They Don't Tell You About Capitalism
by Ha-Joon Chang
Published 1 Jan 2010

Often, government regulation works, especially in complex areas like the modern financial market, not because the government has superior knowledge but because it restricts choices and thus the complexity of the problems at hand, thereby reducing the possibility that things may go wrong. Markets may fail, but … As expressed by Adam Smith in the idea of the invisible hand, free-market economists argue that the beauty of the free market is that the decisions of isolated individuals (and firms) get reconciled without anybody consciously trying to do so. What makes this possible is that economic actors are rational, in the sense that they know best their own situations and the ways to improve them.

China's Great Wall of Debt: Shadow Banks, Ghost Cities, Massive Loans, and the End of the Chinese Miracle
by Dinny McMahon
Published 13 Mar 2018

Rules are simply a tool of governance, not to be adhered to but rather to be applied—or ignored—in the service of any given agenda. In a 2008 interview with CNN, Premier Wen Jiabao explained the interplay of markets and government power like this: “We have one important piece of experience of the past 30 years, that is to ensure that both the visible hand and invisible hand are given full play in regulating the market forces,” he said. That sounds reasonable. After all there’s no such thing as a perfectly free market. Even in liberal democracies, the government’s visible hand is everywhere, imposing rules to regulate safety and health standards, and environmental emissions, and workers’ pay, and financial-sector risks.

The Strange Order of Things: The Biological Roots of Culture
by Antonio Damasio
Published 6 Feb 2018

The problem is that even one’s typical disposition tends to flicker between light and dark when it comes to so much trouble and uncertainty. Meanwhile, we can approach the problem with equanimity and conclude as follows. The human condition encompasses two worlds. One world is made up of the nature-given rules of life regulation, the strings of which are pulled by the invisible hands of pain and pleasure. We are not conscious of the rules or of their undergirding; we are only conscious of certain outcomes we call pain or pleasure. We had nothing to do with the making of the rules—nor, for that matter, with the existence of the powerful forces of pain and pleasure—and we cannot modify them any more than we can change the movements of the stars or prevent earthquakes.

Skin in the Game: Hidden Asymmetries in Daily Life
by Nassim Nicholas Taleb
Published 20 Feb 2018

You populate markets with zero intelligence agents, that is buying and selling randomly, under some structure such that a proper auction process matches bids and offers in a regular way. And guess what? We get the same allocative efficiency as if market participants were intelligent. Friedrich Hayek has been, once again, vindicated. Yet one of the most cited ideas in history, that of the invisible hand, appears to be the least integrated into modern psyche. Furthermore: It may be that be that some idiosyncratic behavior on the part of the individual (deemed at first glance “irrational”) may be necessary for efficient functioning at the collective level. More critically for the “rationalist” crowd, Individuals don’t need to know where they are going; markets do.

The Wisdom of Frugality: Why Less Is More - More or Less
by Emrys Westacott
Published 14 Apr 2016

Thus Vice nursed Ingenuity, Which join’d with time; and Industry Had carry’d Life’s Conveniencies, It’s real Pleasures, Comforts, Ease, To such a Height, the very Poor Lived better than the Rich before.28 Adam Smith more or less endorsed this idea in arguing that when individuals single-mindedly pursue “the gratification of their own vain and insatiable desires,” they unintentionally, as if “led by an invisible hand,” benefit society as a whole.29 In making this argument, he was reflecting and assisting a broad shift in moral perspective, shared by his friend David Hume, according to which traits should be classified as virtues and vices not by reference to some idealized personality type or lifestyle, but according to their social utility.30 Thus Hume, in a similar fashion, criticizes “the men of severe morals [who] blame even the most innocent luxury,” and offers an early defense of consumerism: The increase and consumption of all the commodities, which serve to the ornament and pleasure of life, are advantageous to society; because, at the same time that they multiply those innocent gratifications to individuals, they are a kind of storehouse of labour, which, in the exigencies of state, may be turned into a public service.

How Did We Get Into This Mess?: Politics, Equality, Nature
by George Monbiot
Published 14 Apr 2016

He either ignores or glosses over the costs of ever-expanding trade and perpetual growth. His timing, as BP fails to contain the oil spill in the Gulf of Mexico, is unfortunate. Like the collapse of Northern Rock, the Deepwater Horizon disaster was made possible by weak regulation. Ridley would weaken it even further, leaving public protection to the invisible hand of the market. He might not have been chastened by experience, but it would be wrong to claim that he has learnt nothing. On the contrary, he has developed a fine line in blame-shifting and post-rational justification. He mentions Northern Rock only once in his book, where he blames the crisis on ‘government housing and monetary policy’.23 It was the state wot made him do it.

The New Rules of War: Victory in the Age of Durable Disorder
by Sean McFate
Published 22 Jan 2019

What makes this possible is the enabling power of mercenaries. When anyone can hire mercenaries to wage war, the ultrarich can become a new kind of power in world affairs. This may sound preposterous, but it’s not. Actually, it’s the law of supply and demand. War is becoming marketized, and mercenary supply will attract new demand through the invisible hand of the marketplace. But that demand won’t just be states; it will be anyone who has money and wants security. That’s a lot of people. We live in an increasingly insecure world, and mercenaries sell security. Clients will emerge, and some will grow powerful in the decades to come. They will become a new ruling class in international relations.

Talk on the Wild Side
by Lane Greene
Published 15 Dec 2018

No language’s speakers have ever found that they could do without the subject-object distinction, leaving any sentence of the “John killed Jim” type ambiguous as to who killed and who was killed. People care about that kind of thing. Language organises itself in order to carry out the tasks needed of its users. Adam Smith created the image of an “invisible hand” guiding the economy. But of course what he meant was that lots of uncoordinated decisions by many participants in a market were efficient at creating order – setting prices that were neither too low to deter sellers nor too high to put off buyers – that no planner could have achieved alone. Modern scientists and social scientists have come up with a less vivid but more accurate description of such situations: spontaneous order.

The Slow Fix: Solve Problems, Work Smarter, and Live Better in a World Addicted to Speed
by Carl Honore
Published 29 Jan 2013

“He’s a crack-of-dawn, leaving-after-dark kind of guy who meets with all the schools, the teachers, the parents, the management, the security, and you run everything by him,” says Phil Wolfson, head of Locke’s special education department. “Kelly is the glue that holds it all together.” Even David Edwards, a crusader for collaboration, remains the invisible hand behind many projects at Le Labo. “The vision and passion of a core creator is essential,” he says. Though Apple relies on collaboration and teamwork to forge its game-changing gadgets, it also encourages project leaders to act as “auteurs,” who lead from the front and stamp their personality all over the final product.

Palaces for the People: How Social Infrastructure Can Help Fight Inequality, Polarization, and the Decline of Civic Life
by Eric Klinenberg
Published 10 Sep 2018

They are the kinds of places where the public, private, and philanthropic sectors can work together to reach for something higher than the bottom line. Not everyone believes this. In recent decades, political leaders driven by the logic of the market have proclaimed that institutions like the library don’t work any longer, that we’d be better off investing in new technologies and trusting our fate to the invisible hand. The influence of these arguments is reflected in the way we treat what was once a sacred public institution. Today, libraries in most places are starved for resources. Across the country, branch libraries have reduced their hours and days of operation despite rising attendance and circulation, leaving those with weekday obligations like work and school with fewer opportunities to visit.

The Globotics Upheaval: Globalisation, Robotics and the Future of Work
by Richard Baldwin
Published 10 Jan 2019

The Communist Manifesto was published in 1848 and thus was part of the historical turning point that history failed to take. But history did take this turning in 1917 in the form of the Russian Revolution. The communist solution was to remove the market from the system entirely. Society’s great choices were not to be made by individuals based on self-interest and guided by the market’s invisible hand. They were to be made in the interest of the people and guided by the very visible hand of the Communist Party. The market was out; the plan was in. This would shelter people from the side effects of progress. The degree of economic control that this implied required absolute political control, so communism soon slipped into a form of dictatorship.

Strategy Strikes Back: How Star Wars Explains Modern Military Conflict
by Max Brooks , John Amble , M. L. Cavanaugh and Jaym Gates
Published 14 May 2018

They can go on their way.” The stormtroopers parrot his words and wave the speeder away. An Imperial officer on the Death Star mocks the futility of Darth Vader’s “sorcerer’s ways.” Vader, standing some two yards away, makes a small hand gesture. The officer starts choking as if being strangled by invisible hands. In the swamps of Dagobah, aspiring Jedi Luke Skywalker practices psychokinesis by lifting large rocks with his mind. His abilities seem remarkable until his teacher, the small, green-skinned Jedi master Yoda, challenges him to raise his crashed X-wing fighter from the swamp. Luke fails. Yoda closes his eyes.

Live Work Work Work Die: A Journey Into the Savage Heart of Silicon Valley
by Corey Pein
Published 23 Apr 2018

Not to us mortals, anyway. The quasimythical tech industry elite would never be expected to mingle with the rest of us; they inhabited a higher plane, one with robot servants and Bay views. I recognized the freebies for what they were—not simple acts of personal generosity, but manna from above, bestowed by the invisible hand of venture capital. The first free thing I got was a bright pink coupon that I fished out of a basket next to a cash register. The coupon bestowed a free introductory taxi ride from the city’s second-largest “app-based pickup service,” Lyft. I found the corporate vowel swapping obnoxious. (Couldn’t it just be Lift?)

The Demon in the Machine: How Hidden Webs of Information Are Finally Solving the Mystery of Life
by Paul Davies
Published 31 Jan 2019

He discovered it was even possible to disaggregate the developing ball of cells at the four-cell stage and grow each individual cell into a complete sea urchin. Results such as these gave Dreisch the impression that the embryonic cells possessed some ‘idea in advance’ of the final shape they intended to create and cleverly compensated for the experimenter’s meddling. It was as if some invisible hand supervised their growth and development, effecting ‘mid-course corrections’ if necessary. To Dreisch, these facts constituted strong evidence for some form of vital essence, which he termed entelechy, meaning ‘complete, perfect, final form’ in Greek, an idea closely related to Aristotle’s notion of teleology.

Bootstrapped: Liberating Ourselves From the American Dream
by Alissa Quart
Published 14 Mar 2023

a “massive transfer of wealth”: In Freedom from the Market, Konczal writes that the word freedom should be used to describe “free land,” or “free time,” rather than “freedom” from, where we are supposedly entirely independent of our society. Mike Konczal: Freedom from the Market: America’s Fight to Liberate Itself from the Grip of the Invisible Hand (New York: The New Press, 2021). he was not such a great farmer: This is described in Caroline Fraser, Prairie Fires: The American Dreams of Laura Ingalls Wilder (New York: Henry Holt, 2017). Pa Ingalls, Fraser writes, also had a “moral ambiguity missing from the portrait his daughter would one day so lovingly polish.”

Please Report Your Bug Here: A Novel
by Josh Riedel
Published 17 Jan 2023

Wires ran from its base all the way up the inside of the trunk, yellow and blue lights flashing overhead. I sat on a small wooden stool. The trunk slid closed and darkness swallowed me as the lights faded. “Hey!” I shouted, and tried to pry open the door, but it wouldn’t budge. I shouted again. “Noma!” The sequoia absorbed my voice. Then it seemed to absorb me. An invisible hand pressed hard on my chest, pinning me to the tree. 3, 2, 1, Noma’s recorded voice said. My body soaked into the fibrous bark and traveled upward, extending out to the sequoia’s awl-shaped leaves. * * * The grass rolled in waves as I trudged through the windy meadow. I hiked for a long time, longer than I ever had before, out to the edge of my world, and sat there, legs dangling into empty space.

Gravity's Rainbow
by Thomas Pynchon
Published 15 Jan 2000

"No, my dear," her cheeks molded with previous tears, "I'm listen-ing." "It's control. All these things arise from one difficulty: control. For the first time it was inside, do you see. The control is put inside. No more need to suffer passively under 'outside forces'—to veer into any wind. As if... "A market needed no longer be run by the Invisible Hand, but now could create itself—ils own logic, momentum, style, from inside. Putting the control inside was ratifying what de facto had happened— that you had dispensed with God. But you had taken on a greater, and more harmful, illusion. The illusion of control. That A could do B. But that was false.

…

It is a situation not without its chances for a good practical joke now and then—poor Nora will be suckered into seances that wouldn't fool your great-aunt, visits from the likes of Ronald Cherrycoke in a Jesus Christ getup, whistling down the wires into a hidden ultraviolet baby spot where he will start fluorescing in most questionable taste, blithering odd bits of Gospel together, reaching down from his crucified altitudes to actually cop feels of Nora's girdled behind . . . highly offended, she will flee into hallways full of clammy invisible hands—poltergeists will back toilets up on her, ladylike turds will bob at her virgin vertex, and screaming ugh, ass dripping, girdle around her knees, she will go staggering into her own drawing-room to find no refuge even there, no, someone will have caused to materialize for her a lesbian elephant soixante-neuf, slimy trunks pistoning symmetrically in and out of juicy elephant vulvas, and when she turns to escape this horrid exhibition she'll find some playful ghost has latched the door behind her, and another's just about to sock her in the face with a cold Yorkshire pudding. . . .

…

And the data happen to hump up in poor sections, Jewish sections, drug, homosexual, prostitute, and magic sections of the capital. Here are the most logical bulbsnatchers, in terms of what the crime is. Look at all the propaganda. It's a moral crime. Phoebus discovered—one of the great undiscovered discoveries of our time—that consumers need to feel a sense of sin. That guilt, in proper invisible hands, is a most powerful weapon. In America, Lyle Bland and his psychologists had figures, expert testimony and money (money in the Puritan sense—an outward and visible O.K. on their intentions) enough to tip the Discovery of Guilt at the cusp between scientific theory and fact. Growth rates in later years were to bear Bland out (actually what bore Bland out was an honorary pallbearer sextet of all the senior members of Salitieri, Poore, Nash, De Brutus and Short, plus Lyle, Jr., who was sneezing.

Americana: A 400-Year History of American Capitalism
by Bhu Srinivasan
Published 25 Sep 2017

Functions for trading hubs required the type of work known today as white collar: coordinating logistics, arranging for insurance, negotiating trade terms, extending trade capital, maintaining wholesale facilities, and others. Trading spawned other activity. Trading ports were the prime conduits of information, the aggregate of which Adam Smith would call the “invisible hand” of the market: information used by entrepreneurs and businessmen to adjust their activity to maximize profit. The more dynamic the information flow, the more fluid the opportunities were to profit from the shifting tides of the market. The more fluid the opportunities, the easier it was for new entrants and upstarts to make a name.

…

Such policies were successful in diversifying and growing the industrial base: America did emerge as the largest steel producer in the world by the end of the century. From here the growth of the American steel industry paved the way for a variety of ancillary and dependent industries over the next few decades. Even military might in the next century would be firmly rooted in steelmaking capacity. But laissez-faire capitalism it was not. The invisible hand of Adam Smith’s free market was accompanied by the guiding hand of government policy. Fourteen MACHINES The Gilded Age had a philosopher who seemed perfect for the times. Herbert Spencer built upon his fellow countryman Charles Darwin’s observations on natural selection and developed a social treatise that flowed from this evolutionary spirit.

Americana
by Bhu Srinivasan

Functions for trading hubs required the type of work known today as white collar: coordinating logistics, arranging for insurance, negotiating trade terms, extending trade capital, maintaining wholesale facilities, and others. Trading spawned other activity. Trading ports were the prime conduits of information, the aggregate of which Adam Smith would call the “invisible hand” of the market: information used by entrepreneurs and businessmen to adjust their activity to maximize profit. The more dynamic the information flow, the more fluid the opportunities were to profit from the shifting tides of the market. The more fluid the opportunities, the easier it was for new entrants and upstarts to make a name.

…

Such policies were successful in diversifying and growing the industrial base: America did emerge as the largest steel producer in the world by the end of the century. From here the growth of the American steel industry paved the way for a variety of ancillary and dependent industries over the next few decades. Even military might in the next century would be firmly rooted in steelmaking capacity. But laissez-faire capitalism it was not. The invisible hand of Adam Smith’s free market was accompanied by the guiding hand of government policy. Fourteen MACHINES The Gilded Age had a philosopher who seemed perfect for the times. Herbert Spencer built upon his fellow countryman Charles Darwin’s observations on natural selection and developed a social treatise that flowed from this evolutionary spirit.

Empire of Guns
by Priya Satia
Published 10 Apr 2018

This was the age of the “polite and commercial people,” and guns helped propertied people build that reputation of politeness even while they were antagonistically engaged against the propertyless. Emotion was invested in the property they defended but actively denied in the relationship to the person threatening it. The gun’s threat was as impersonal, like the new mode of social discipline embodied by Smith’s “invisible hand.” Capitalism alienates nature as private property, but property also helps people identify with a place. Guns ensured that physical identification between property owner and place, keeping threats at a polite distance. If property is the power to exclude others from taking or using certain things, the gun was the handheld instrument that made it effective (along with the law).

…

By launching a sugar boycott, the abolition movement illuminated the remote effects of market decisions, sensitizing eighteenth-century Britons to their complicity in slavery, but Galton turned that awareness on its head, arguing that complicity in gun production was so general that it rendered individual acts of abstinence futile. He imagined himself a cog in an enormous, inescapable wheel of highly divided industrial production in which many individuals earned profits too modest to impinge on any conscience. Cognizance of the impersonal efficiency of the “invisible hand” inhibited perception of a need for radical individual action; the system was always already in an optimal equilibrium. Opponents of abolition similarly considered the “intricate web of mutual dependencies” between buyers and sellers an insuperable obstacle. Competing views of market relationships coexisted: in some, the market enabled new understandings of complicity and possibilities for individual remedial action; in others, the market freed all from particular responsibility and constrained their scope of action as individuals.

Liberalism at Large: The World According to the Economist
by Alex Zevin
Published 12 Nov 2019

With few exceptions, the hundred or so staff in London and abroad toil anonymously – common enough at nineteenth-century newspapers, but almost unheard of today. Individualism may be the editorial line, but as a result of this Victorian holdover, the editorial leaders are written in an unusually cooperative and collegial manner, as if guided by invisible hands.11 Anonymity was always designed to amplify the voice of the Economist. Today, so do the covers, with Photoshop acting as a slingshot for pop-cultural lèse-majesté: Kim Jong Il blasts into space as ‘Rocket Man’; Angela Merkel appears as Kurtz, groaning in horror at Greeks in ‘Acropolis Now’; Hu Jintao and Barack Obama are the cowboy lovers from Brokeback Mountain.

…

Or to at last throw open the ports, in which case, ‘any supply that America could afford would then be brought hither by the regular course of trade, and employment – not eleemosynary aid – would enable people to purchase it.’71 The result of following the Economist’s prescriptions was a utopian social experiment on par with the better-known holocausts of the twentieth century.72 During the worst of the famine years of 1845–1849, one and a half million people died out of a population of 8 million, and another million fled. The British government showed its commitment to the invisible hand of the market throughout, with the Economist critical of even the smallest departure from its rigours. In 1845–1846 Peel had shown insufficient firmness. He had ordered small batches of Indian corn to be bought discreetly by Baring Brothers in North America, as a reserve to keep prices in check; but the severity of the famine forced him to release small dribbles at select government depots.

The True and Only Heaven: Progress and Its Critics
by Christopher Lasch
Published 16 Sep 1991

In the "languor of disease and the weariness of old age," the moral insignificance of worldly goods appeared in its true light, according to Smith, since neither possessions nor even the beauty and utility so universally admired in "any production of art" proved capable, under conditions of adversity, of bringing true happiness. People seldom looked at the matter in this "abstract and philosophical light," however; and "it is well that nature imposes upon us in this manner," Smith wrote in The Theory of Moral Sentiments, in a passage that alluded for the first time to the "invisible hand" that leads men and women to accumulate wealth and thus inadvertently to serve as social benefactors in their pursuit of deceptively attractive but ultimately empty possessions. "It is this deception which rouses and keeps in continual motion the industry of mankind." Smith's Misgivings about "General Security and Happiness" Smith's work is instructive, in the unfamiliar context of the development of progressive ideology, not only because it enables us to see what was really distinctive about that ideology—the exemption of the modern world from the judgment of time—but because it illustrates the persistence of certain reservations that qualified the optimism produced by the modern discovery of abundance.

…

Small, Adam Smith and Modern Sociology (1907); Rexford G. Tugwell, The Industrial Discipline and the Governmental Arts (1933); and Kallen, Decline and Rise of the Consumer. For Henry George's understanding of the "prevailing belief' in progress, see Progress and Poverty (1879); and for the statement about "managed capitalism," Guy Alchon, The Invisible Hand of Planning: Capitalism, Social Science, and the State in the 1920s (1985). My discussion of Keynes rests on the biographies by Roy Harrod (1951), Charles H. Hession (1984), and Robert Skidelsky (1983), and on Robert L. Heilbroner, The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers (1953).

How to Fix Copyright
by William Patry
Published 3 Jan 2012

Just as the shift from the cultural industries to the creative industries led to a shift away from the expressive nature of authors’ and artists’ contributions and toward commodity sales, so too culture is now seen as merely another aspect of the “knowledge economy,”163 judged by how it performs in an invisible hand marketplace. But you can’t economically measure how an increase in knowledge will lead to productivity gains. If we want more creative works and more knowledgeable citizens, we will have to disassociate these goals from commodity markets, and focus on why people create and learn. We must then be willing to commit public monies to their encouragement where market forces have proved inadequate to the task.

Unhealthy societies: the afflictions of inequality
by Richard G. Wilkinson
Published 19 Nov 1996