from day 06/03/2020

Ubiquitous yet nowhere to be found: on the Invisible Hand’s success

Adam Smith’s invisible hand is a tremendously successful metaphor. Quotes abound to state how important and pervasive the idea is (and was) for both economics and social sciences at large. Yet, the invisible hand also happens to also be a remarkably ill-defined metaphor. It seems nearly impossible to find an agreement through the literature as to what the metaphor is, exactly, or which phenomena would count as occurrences of the invisible hand. I want to suggest that the lack of a precise definition was not a problem, but the precise reason why it got so successful: it offered a versatile label that could be used to refer to causal links across scales of analysis, while avoiding to commit to any more precise mechanistic explanation.

Hand with a Stick, and Four People Sharing a Meal (Vincent van Gogh, 1885)

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