The more I try to simplify my understanding of God’s economy, the less sympathy I have with the “invisible hand” as a fundamental principle. I can’t reconcile it with the idea—which I do think is foundational to God’s economy—of dying to self so as to live life for the sake of others. In fact, I think that an economy run on self-interest testifies in all ways to the wrongness of the principle.
According to Wikipedia, Adam Smith only speaks of the ‘invisible hand’ of the economy twice. First, from The Theory of Moral Sentiments, we read this:
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 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,
I’m not sure what enabled Smith to make this statement in 1776—surely the cities were full of workers who had nowhere near what they might have if the earth had been divided into equal portions. Two hundred and fifty years later this sounds even more like wishful thinking.
The second mention comes in The Wealth of Nations:
… 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. 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.
Whether or not a man can unintentionally promote the public good through actions aimed solely at his own security and gain, I can’t figure out how a disciple of Jesus can behave in that way while remaining true to God’s economy as it is explained in the New Testament. Aren’t we to do nothing from selfish ambition or conceit, but in humility count others more significant than ourselves?
David Graeber is a very smart guy, and has just published a book about bureaucracy that I’m itching to read. Here’s an excerpt from an interview about the book:
Self-regulating markets were basically created with government intervention. It was a political project. Certain assumptions of how these things work just aren’t true. People don’t do wage labor if they have any choice, historically, for example. So in order to get a docile labor force, you have to create police and [a] large apparatus to ensure that the people you kick off the land actually will get the kinds of jobs you want them to … this is the very beginning of creating a market.
Basically, we assume that market relations are natural, but you need a huge institutional structure to make people behave the way that economists say they are “supposed” to behave. So, for example, think about the way the consumer market works. The market is supposed to work on grounds of pure competition. Nobody has moral ties to each other other than to obey the rules. But, on the other hand, people are supposed to do anything they can to get as much as possible off the other guy — but won’t simply steal the stuff or shoot the person.
Historically, that’s just silly; if you don’t care at all about a guy, you might as well steal his stuff. In fact, they’re encouraging people to act essentially how most human societies, historically, treated their enemies — but to still never resort to violence, trickery or theft. Obviously that’s not going to happen. You can only do that if you set up a very strictly enforced police force. That’s just one example.
All this rings true to me, especially the parts I’ve bolded. And it lays out an economic model that seems to me very different from the actual grain of the universe.