The Invisible Hand

I’m fascinated and repelled by the idea of the artistic marketplace–as in “right now the romance marketplace is constricted in terms of historicals.” I say this sort of thing all the time. And indeed since at least Adam Smith, people have been invested in thinking about the marketplace as if it were sentient. Smith coined the term “invisible hand” in The Theory of Moral Sentiments (1759), where it describes how rich people’s consumption helps the poor. But he most famously used the phrase in An Inquiry into the Nature and Causes of the Wealth of Nations (1776):

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. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

And thus were a thousand neoliberal economic policies launched. But I digress.

What Smith is saying (I think) is that we’re running around acting irrationally in terms of our self-interest but unbeknownst to us, our production and consumption decisions are being shaped by (and are shaping) the market in which we participate. This market is greater than the sum of all the choices the producers and consumers in it make. If we try to shape the market consciously–for good, but maybe also for profit–we will fail. The market is uncontrollable but real.

Or you know, something like that.

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