The invisible hand and the cunning of reason

Here is a distilled list of the theses I shall discuss:

* that the idea of the invisible hand has had an impact not only on the eighteenth and the nineteenth centuries but on the twentieth century as well;

* that this idea had a curious ideological career: in previous centuries it had been used to promote ideals of secular, enlightened progress, while in our century it is used inversely, to promote conservative reverence toward traditions;

* that there are two main models for invisible-hand explanations;

* that the current, inverse, ideological use of the idea of the invisible hand by conservative circles as against liberals and social planners springs from not distinguishing between the two models;

* that Hegel's idea of the cunning of reason is historically related to the idea of the invisible hand, and that, like the latter, it is also used in contemporary political argumentation; that despite superficial affinity between these two ideas, they serve profoundly different doctrines.

And now to the details.

F. A. Hayek talks about the "shock caused by the discovery that [not only the kosmos of nature but] the moral and political kosmos was also the result of a process of evolution and not of design" (Hayek, 1978, p. 190). What he alludes to here is the natural human response to the phenomenon of order. Upon encountering orderliness and patterned structures, people tend naturally to interpret these as the products of someone's intentional design. If complex order is exhibited by an artifact--say, a clock--the postulated designer would be a human agent, an artist, or an engineer. If complex order is exhibited by the physical world--say, the lunar period--the postulated designer would be a superhuman agent, God. The "argument from design" (or the cosmological argument, as it is sometimes called) is indeed a most powerful argument, psychologically, for the existence of God. At the very core of religious sensibility is the conviction that the world is not just the product of divine creation, but that it is the manifestation of divine, cosmic design.

It is against this background that the idea that the kosmos can be seen as the result of a process of evolution rather than design is described by Hayek as "shocking." To this shock, moreover, he goes on to attribute a significant contribution in the production "of what we call the modern mind" (p. 190). And since the nineteenth-century notion of evolution, or spontaneous order, is itself rooted in the eighteenth-century notion of the invisible hand, there is a sense in which we may take the notion of the invisible hand as expressing a major antireligious intuition. This notion was meant to replace that of the "Finger of God," or "Divine Providence." It was to play a central role in forging modern, secular sensibility.

In tracing the history of the notion of the invisible hand, it is commonly attributed to the great Scottish Enlightenment figures of David Hume, Adam Smith, and Adam Ferguson. It is Adam Smith who is credited with coining the expression "invisible hand";(1) it is Adam Ferguson who formulated the splendid, formative phrase about people's "stumbling upon establishments, which are indeed the result of human action, but not the execution of any human design" (1767, p. 187); and it is David Hume who is generally acknowledged to have laid the philosophical foundations for these ideas. It is intellectually pleasing, however, to go still further back and to claim, with Hayek (and others), that it was Bernard Mandeville, the Dutch-turned-English doctor, who "made Hume possible" (Hayek, 1978, p. 188). In his famous Fable of the Bees, subtitled Private Vices Public Benefits (1924[1714]), the idea is articulated that complex social order forms itself without design. Orderly social structures and institutions--law, morals, language, the market, money, and many more--spontaneously grow up without men having deliberately planned them or even anticipated them, and it is these institutions that ensure that men's divergent interests are reconciled. In discussing the growth of law, Mandeville says: "We often ascribe to the excellency of man's genius, and the depth of his penetration, what is in reality owing to the length of time, and the experience of many generations" (1924, ii, p. 142).

However, even though the idea that order may form itself without design was expounded by Mandeville, the question how remained unaddressed. The initial breakthroughs in suggesting some sort of mechanisms for the workings of the invisible hand were not to be provided before the appearance upon the stage of the Scottish social and moral thinkers. Their work made it possible to delineate a mechanism that can show in specific detail how the actions of numerous individuals who pursue their own divergent interests may actually aggregate so as to bring about a well-structured yet undesigned social institution. And it is this sort of aggregative mechanism that is the heart of an invisible-hand explanation worthy of its name. Only when an invisible-hand mechanism can be pointed to, can the spell of an explanation that postulates a creator, a designer, or a conspiracy be effectively broken.