Invisible hand

The invisible hand is a metaphor that describes the self-regulation of the market.

History

The metaphor of the invisible hand was known by the Scottish economist and moral philosopher Adam Smith. Adam Smith used the metaphor of the invisible hand in his entire works, however, only a total of three times. First, the formulation of the invisible hand of Jupiter appears in an essay on the history of astronomy. A second time Adam Smith used the metaphor in the fourth chapter of his book, Theory of Moral Sentiments. There he describes how the wealthy, without intending it consciously, are led by an invisible hand to share their wealth with the poor. Best known today is without a doubt the use of the metaphor in 1776 published work The Wealth of Nations. Smith uses them there in the second chapter of the fourth book, in which he deals critically with restrictions on imports of foreign goods.

Adam Smith was certainly not the inventor of the metaphor of the invisible hand, but it was in his time a quite common phrase. When, in 1703, the battleship Prince George survived a violent storm, the number of other ships fell victim to the commander Martin wrote in the ship's log: The invisible hand of Providence has saved us. It is disputed whether the metaphor of the invisible hand of Adam Smith was understood religiously. Anyway, he kept the metaphor for a convenient means to illustrate his contemporaries particular contexts.

Tomáš Sedlacek traces the intellectual history of the "invisible hand" - an evil endeavor of an individual performs in society to a common good - further back and points before Smith still on Bernard Mandeville and the Fable of the Bees (see Mandeville paradox ), on Thomas Aquinas and finally to the poet Aristophanes: " According to a legend from ancient times all our foolish and vain conceit plans are ordered to the common good. "

Economics

Merchants, as Smith explains in his book The Wealth of Nations, often invest their capital in their own interest rather than in their own country in the distance. He concludes then later in the same chapter:

"As every individual, THEREFORE, endeavors as much as he can, Both to employ his capital in the support of domestic industry, and so to direct did industry did its produce maybe of the greatest value; every individual Necessarily labors to render the annual revenue of the society as great as he can. Hey gene rally, indeed, neither Intends to promote the public interest, nor knows how much he is promo ting it. By preferring the support of domestic to foreign industry of did, he Intends only his own security; and by directing industry did in seeking 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 to end Which was no part of his intention. Nor is it always the worse for the society did not it what part of it. By pursuing his own interest, he frequently did Promotes society more effectually than of the When He really Intends to promote it. "

" Therefore, if any individual as much as possible then seeks to use its capital to support local employment and thus this so directs, that their earnings can expect the highest increase in value, then also sought each quite inevitable that the national income in the year so will be large as possible. In fact, he promotes usually not aware the public good, yet he knows how much is the own contribution. If he prefers to support their own national economy rather than foreign, he thinks only of his own safety, and though it also promotes the work so that their earnings can achieve the highest value, he seeks only its own profit. It is run in this as in many other cases, by an invisible hand to promote an end which was not his intention. It is not always the worst thing for society that this has not been intentional. By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it. "

No individual market participants sought right after the national income to maximize; everyone wants to cover only its goods required. And yet the market mechanism leads through his invisible hand to the economic optimum. The selfish pursuit of economic man or business wear with the " system of natural liberty " for the good of society as a whole. With natural freedom Smith said a system that is free of monopolies, so one-sided possibility of control of a market. Only with this limitation, the principle of the invisible hand can be effective. It is striking that this condition had not been to Smiths times. Rather, Smith discusses the role of the political economy of his time ( mercantilism ) in his work. In modern economics are cases in which the market mechanism does not produce the total economically efficient allocation of goods, referred to as market failure.

The concept of the invisible hand was known among other things, by Paul A. Samuelson million times printed textbook " Economics". There it is shown how the mechanism of the invisible hand leads to an efficient allocation of resources, as well as the limiting conditions that must be met for it.

According to Niklas Luhmann, the invisible hand was used since the 17th century the paradoxification of scarcity paradox and the symbolization of a progress guarantee.

" After they began increasingly to suffer from osteoarthritis, the desideratum of economic growth itself took over this function. "

The North American business historian Alfred D. Chandler Jr., the invisible hand in the unplanned market operations, the visible hand of management planning in the business over.

Linguistics

After Rudi Keller arise ( by analogy to Adam Smith) and the applicable standards of language use change in an evolutionary process of the invisible hand: language of Keller explained as a phenomenon of the third order; this means that speech acts are indeed selected at the individual level targeted for specific conditions, the resulting frequent use of certain forms of speech of different speakers with partly similar intentions, however, follow up parent natural laws, which is itself no intention based.

Keller borders phenomena such as language change thus of intended products ( artifacts ) of human design and natural phenomena from. A traffic jam is therefore a phenomenon of the third type, the driver braked but not from so, to bring about a clogging of the road. Everyone slowed down for safety reasons from something more than the vehicle in front, until finally a car must complete stop. No one has the jam planned ( certainly not the first braking ) and yet come to a standstill.

Socio-cultural

According to Robert Nozick you can use the declaration by the invisible hand to describe socio-cultural systems, which give the impression that they were created by a central planning authority.

As an example, Rudi Keller leads the trail Theory: About the University campus runs a network of dirt tracks, which are the shortest connections between the main buildings and facilities. This network is much more logical and economical than those that planned by the architect concrete paths. Although the production of these trails far less sense was used as for applying the concrete paths, the system is still much more efficient than the artificial way. The invisible-hand theory for this system is thus the following: At the beginning stands the hypothesis that most people prefer shorter paths longer. It can be observed, however, that the cobbled pathways of this tendency does not correspond, as they often do not show the shortest possible connections between the common points of contact of the students. It is well known that the lawn in places where it is frequently committed stunted. Keller concludes that the system of trails is the unintended consequence of those causal ( intentional, final ) actions, consisting in certain goals to reach on foot, under the maxim of energy savings.