Introduction -- Unintended consequences -- The origin of money -- Segregation -- The invisible hand -- The origin of money reconsidered -- Models and representation -- Game theory and conventions -- Conclusion.

The notion of a spontaneous social order, an order in human affairs which operates without the intervention of any directly ordering mind, has a natural fascination for social and political theorists. This paper provides a taxonomy under which there are two broadly contrasting sorts of spontaneous social order. One is the familiar invisible hand; the other is an arrangement that we describe as the intangible hand. The paper is designed to serve two main purposes. First, to provide a pure account (...) of the invisible hand, with some indication of the varieties of invisible hand (and, indeed, backhand) available. Second, to develop and motivate the unfamiliar conception of the intangible backhand. We believe that a recognition of the availability of this latter sort of spontaneous organising mechanism — and the mechanism is implicitly recognised in many traditions — is of great importance in political theory; it is of particular importance nowadays when the usual focus is entirely on the invisible hand. (shrink)

Economists disagree about whether they should aim to provide explanations, about what they should aim to explain, and about how they should go about explaining. This essay will address all three of these controversies. I shall argue (1) that explanation is a central task in economics, (2) that one should adopt an explicitly causal model of explanation, (3) that economists cannot avoid explaining individual choices and they should attempt to explain the paths that take the economy from one equilibrium to (...) another, and (4) that explanations in economics cite reasons as well as causes. Most of these points apply across different schools of economics, but “economics” in this paper should thus be read as “mainstream economics.”. (shrink)

An invisible hand seems to play an important role in science. In this paper I set out the general structure of invisible-hand explanations, counter some objections that have been raised to them, and detail the role that they play in science. The most important issue is the character of the mechanisms that are supposed to bring about invisible-hand effects.

The version of the invisible hand argument in Adam Smith's Theory of Moral Sentiments differs in important respects from the version in The Wealth of Nations. Both are different, in turn, from the version invoked by Milton Friedman in Free to Choose. However, all three have a common structure. Attention to this structure can help sharpen our sense of their essential thrust by highlighting the questions (about the nature of economic motivation, the structure of markets, and conceptions of the public (...) interest) to which answers of certain kinds would have to be available for any of the versions to succeed. (shrink)

The morality of an economic system characterized as an Adam Smith type system is compared with one characterized by central planning. A prima facie case is made that, while the latter has attributes that satisfy a necessary condition for having moral attributes, the former does not and, as a result, has no moral attributes. But then a deeper look at the situation reveals that the directed systems really do not satisfy the necessary condition either. Both the directed and undirected systems (...) end up in the same boat. Neither have any moral attributes. (shrink)

When Adam Smith published his celebrated writings on economics and moral philosophy he famously referred to the operation of an invisible hand. Adam Smith's Political Philosophy makes visible the invisible hand by examining its significance in Smith's political philosophy and relating it to similar concepts used by other philosophers, revealing a distinctive approach to social theory that stresses the significance of the unintended consequences of human action. This book introduces greater conceptual clarity to the discussion of the invisible hand and (...) the related concept of unintended order in the work of Smith and in political theory more generally. By examining the application of spontaneous order ideas in the work of Smith, Hume, Hayek and Popper, Adam Smith's Political Philosophy traces similarities in approach and from these builds a conceptual, composite model of an invisible hand argument. While setting out a clear model of the idea of spontaneous order the book also builds the case for using the idea of spontaneous order as an explanatory social theory, with chapters on its application in the fields of science, moral philosophy, law and government. (shrink)

The connection between Adam Smith and Alasdair MacIntyre is not evident at first glance. In fact, those who know MacIntyre’s work might bristle at the association. MacIntyre is inherently anticapitalist. He believes that moral people ought to reject the modern state and large-scale corporations.1 He also rejects what he terms the enlightenment project, claiming not only that it failed but that it was doomed to do so.2 Furthermore, MacIntyre’s perspectivalism seems to run counter to any “impartial spectator” theory such (...) as Smith’s; tradition-bound rationality necessarily assumes partiality.3 In short, MacIntyre regards himself as an opponent of the liberal tradition, that intellectual lineage which is most closely associated with Smith, and, although he rejects association with communitarianism, he holds a similar place in contemporary philosophy. He is liberalism’s critic, not its reformer. But ethics makes strange bedfellows. MacIntyre’s theory of rationality, I contend, provides a useful and important complement to Smith’s moral psychology. It allows for the intermingling of emotion and reason that is so important for Smith’s work.4 It creates a structure for bridging Smith’s individuals and the communities of which they are a part. In essence, I argue, MacIntyre’s work allows us to better understand Smith’s jump from deliberation on the individual level to the development of cultural standards and norms. I conclude that Smith’s emphasis on the individual results in an incomplete theory of communal rationality, and that MacIntyre’s emphasis on tradition leaves out a foundation of individual agency. The two theories, however complement each other well. As a bit of preparation, it is worth mentioning that both thinkers, and Smith, in particular, are often portrayed inaccurately. Smith is not the self-interest focused libertarian that he is made out to be. He is, instead a sophisticated moral theorist whose first book, The Theory of Moral Sentiments was celebrated and influential in its time.. (shrink)