The Invisible Hand; L.E. Read

-Adam Smith FOR YEARS I have quoted this fam ous line from The Wealth of N a, bions, but have often wondered precisely what Adam Smith meant by "invisible hand." The answer is not to be found in his monu mental book. Smith was a moral philosopher, so it is my guess that he referred to the Divine Will, the order-producing factor in the uni verse. Invisible? Yes! Knowable? To some extent! If what I appre hend of the Divine Will is any where near correct, then I am ob liged to try once more to explain the correlation between freedom and the remarkable outburst of creative energy experienced by the American people. If freedom is not seen to be the reason for progress, it may be neglected and abandoned as of no value. When that happens, we are beset by all sorts of authoritarian controls, along with shortages and rationing. Does this not justify my attempt to explain? 114 The lives of all persons, be they dictocrats or practitioners of the Golden Rule, are identified with self-interest. The differences have to do with how intelligently self interest is interpreted. The man to whom Adam Srni th referred interpreted his self-interest as best served by producing goods or services of the greatest possible value that he might gain the most for himself. In a word, he was minding his own business. He in tended nothing more; indeed, like most people then and now, he was utterly unaware of anything more - of consequences beyond his own gain.

However, have a look at the man who minds his own business; for certain, he is not minding anyone else's business. By reason of this fact, no other person is restrained by him. All others, insofar as his actions are concerned, are free men, even though that thought does not occur to him. Just a man 1974 THE INVISIBLE HAND 115 tending to his own knitting, ob livious of the beneficial overall ef fects of such behavior - "led by an invisible hand to promote an end which was no part of his inten tion." The end? Clear as crystal: the freedom of everyone to express his uniqueness and seek his own gain! No restraints - none whatsoever against the release of creative hu man energy. It is this end and this alone which has accounted for the Am.erican miracle. The Power of Attraction Adam Smith's man, releasing his own talents and permitting all others to release theirs, acts cor rectly, ideally. Correct action bears fruits unimaginable in· quantity and quality. True, this astounding result is no part of his intention he intends only his own gain. Fur ther, the freedom which his kind of action assures is beyond the scope of sensory perception; it is not seen with the eyes or heard with the ears. It is in this sense invisible. As in a magnetic field, the forces of attraction are invis ible; they cannot be seen or· heard; nonetheless, they work. Freedom its attractive forces likewise invis ible - works!

When it is recognized that most people regard as reality only that which comes within the range of their sensory perceptions, it becomes clear why invisible freedom is so rarely correlated with human progress .. The progress they ob serve is credited instead to what they can see or feel or hear: co ercive gadgetry such as compul sory unionism, social security, medicare, socialized mail delivery, government education, dilution of the money supply, wage and price controls, rationing and, to top it off, national self -sufficiency, isola tionism, call it what you will. Few, indeed, are those who realize that it is the attractive force of in visible freedom that accounts ex clusively for whatever progress there is or ever will be. It would be very well if Adam Smith's economic man would per sist in his ways - "by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." He would, in this circum stance, "be led by an invisible hand to promote an end which was no part of his intention." But that man, to whom freedom is invisible, is the very one who, more than likely, is drawn. off course, who correlates what is visible to him with the progress he observes. Un wittingly, he joins the interven tionist parade, s~king gain not by improving his own industry but by trying to seize the fruits of the industry of others. Blindly, he be comes his own worst enemy. Adam 116 THE FREEMAN February Smith, be it noted, spoke of what ought-to-be, rather than what-is.

Thank heaven, there are two ways of seeing. True, no one can see freedom with his eyes or hear it with his ears. Freedom, in this sense, is invisible. Were this the only way of seeing, the case for freedom would be hopeless. No one would ever correlate progress with men acting freely. All would be lost! Seeing with Insight The other way of seeing? I n sig ht, with which a few are graced and many others could be. Insight, rather than the out ward, superficial glimpse of things and events, is an inward, behind the-scenes observation - "the abil ity to understand and see clearly the inner nature of things." It is achieved, if at all, by reflecting on what one sees when looking un der the covers, so to speak, for causal sequences. Perhaps such in sights can be attributed to inter ceptions of the Divine Will. But without resort to mysticism, we do know that seekers after light ex perience more insights than non seekers. "Seek and ye shall find,"

so it was said of old; and it is true today. However, one does not need to reflect very deeply to see why all progress stems from individuals acting creatively as they freely choose without violating the right of others to do likewise. Merely assess your own life. Is it not obvi ous that no other could identify your uniqueness, be he acclaimed the wisest who ever lived. Adam Smith comments on this: The states~an who should attempt to direct private people in what man ner they ought to employ their capi tals would not only load himself with a most unnecessary attention, but as sume an authority which could safely be trusted, not only to no single per son, but to no council or senate what ever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exer cise it. Further, so far as you are con cerned, whoever you may be, all insights, flashes of intuition, dis coveries, inventions are exclusively personal outcroppings; these en lightenments never have been or can they be the coercive imposi tions of any other person. Insights are not implants but outgrowths of the inner self.

Onels Social Duty Freedom, while invisible to the eye that only looks outward, is clearly and easily visible to the eye that can and does see within. Free dom undeniably has the case. What is lacking is the insight. Of course, ever so many people 1974 THE INVISIBLE HAND 117 in today's world will look down upon Adam Smith's man who "in tends only his own gain." They will charge that he is devoid of social consciousness, and so he may be; but not of social behavior. William Graham Summer pos sessed the insight to reveal this apparent contradiction. Every man and woman in society has one big duty. That is, to take care of his or her own self. This is a social duty. For, fortunately, the matter stands so that the duty of making the best of one's self individually is not a separate thing from the duty of filling one's place in society, but the two are one, and the latter is accomplished when the former is done. 1 Freedom is indeed the invisible hand, the magnetic force that draws to the use of each the unique talents of everyone. As a part of this mysterious attractive force which governs the whole uni verse, it is not a surface thing for outward observation. Further, even those who see "the inner na ture of things" do not know pre cisely what it is; they do, however, know that it is - and they know of the magic it works. May their tribe increase, for to the bounties of freedom there is no end. ~ 1 William Graham Sumner, What So cial Classes Owe to Each Other (Cald well, Idaho: Caxton Printers, 1954), p.

98. IDEAS ON LIBERTY People Control THE NEXT TIME you hear a politician or a neighbor advocating price supports or rent control or some similar subsidy, ask him why he favors people control, and forcing other peaceful persons to do what he wants them to do, and taking money from people who have earned it and giving it to others who haven't. At that point, however, you had better duck. For the nature of the ambitious politician and the well-intentioned do-gooder is to consider only the "fine objectives" of their plans and to ignore completely the shoddy means used to enforce them. They won't appreciate your calling this to their attention. DEAN RUSSELL, "Price Control Is People Control"