Wednesday, May 31, 2017


“Adam Smith - The Inventor of Market Economy I THE INDUSTRIAL REVOLUTION”
Absolute rubbish!
[Beware: the source web site also displays multiple links to “Lonely Asian Women in Edinburgh” …]
F Baum posts 2008 ( May) in Deakin University, Australia by Oxford University Press   HERE
“Politics and ideologies : the invisible hands of public health”

Tuesday, May 30, 2017


David K. Mafabi, private secretary for Political Affairs, State House, posts (May 2017) HERE 
Uganda: The Political Economy of Take-Off (Part I)
“The work of Scottish economist Sir James Stuart, Inquiry into the Principles of Political Economy" (1767), is considered the first systematic work in English on Economics.
It, however, emerged as a distinct field of study in the mid-18th century, largely as a reaction to mercantilism, when the philosophers Adam Smith (1723 - 1790) and David Hume (1711- 1776) and French economist François Quesnay (1694 - 1774) began to approach this study in a systematic manner.
These took a new approach, refusing to explain the distribution of wealth and power purely in terms of God's will and, instead, appealed to political, economic, technological, natural, and social factors and the complex interactions between them.
It was influenced by the individualist orientation of the English political philosophers Thomas Hobbes (1588-1679) and John Locke (1632-1704), the realpolitik of the Italian political theorist Niccolo Machiavelli (1469-1527), and the inductive method of scientific reasoning invented by English philosopher Francis Bacon (1561 - 1626).
Many works by political economists in the 18th century emphasized the role of individuals over that of the state and generally attacked mercantilism. This is perhaps best illustrated by Smith's famous notion of the 'invisible hand' in which he argued that state policies often were less effective in advancing social welfare than were the self-interested acts of individuals.
Individuals intend to advance only their own welfare, Smith asserted, but in so doing they also advance the interests of society as if they were guided by an invisible hand. In the 19th century, English political economist David Ricardo (1772-1823) further developed Smith's ideas.
The holistic study of political economy that characterized the works of Smith, Georg List, Karl Marx, and others of their time was gradually eclipsed in the late 19th century by a group of more narrowly focused and methodologically conventional disciplines, each of which sought to throw light on particular elements of society, inevitably at the expense of a broader view of social interactions.
By 1890, when English neoclassical economist Alfred Marshall (1842-1924) published his textbook Principles of Economics, political economy as a distinct academic field had been essentially replaced in universities by the separate disciplines of economics, sociology, political science, and international relations.
The phenomenal work of John Maynard Keynes (1883-1946) who challenged the foundations of the idea of "the free-market" and that of Milton Friedman and other monetarists in the 1970s have been important nodal points in the development of political economy.
Today, political economy encompasses several areas of study, including the politics of economic relations, domestic political and economic issues, the comparative study of political and economic systems, and international political economy.”
Readers may find David K. Mafabi’s summary of the early history of political economy interesting. it is certainly better informed than most attributions I read from similar sources. Not, of course, that I have no critical comments on aspects of it. Far from that being the case.
Take this sentence:
Individuals intend to advance only their own welfare, Smith asserted, but in so doing they also advance the interests of society as if they were guided by an invisible hand.”
Smith made no such general statement. He discussed the motivated actions of an individual who was what we would call today, ‘risk averse’ towards engaging is foreign trade and thereby preferred to engage in domestic trade only. It most certainly was not a general statement that all individuals who intend to “advance their own welfare” also “advanced the interests of society”.
As Smith showed, many “merchants and manufacturers” motivated to “advance their own welfare” often did so at the expense of the rest of a society by lobbying for tariffs on foreign goods and for general trade prohibitions on foreign imports, which decidedly did not “advance the interests of society”. Instead, such policies were detrimental to the broader interests of society.
Moreover, Smith never said anywhere that individuals were influenced “as if they were guided by an invisible hand.”  Smith taught rhetoric from 1748 to 1763 - longer, incidently than any other subject - and he knew the difference between a similie and a metaphor. “As if” is a comparison by similie, not a metaphor.
Smith said the merchant in his example “was led by an invisible hand” - his moitivated actions definitely led to their consequences. His motives, of course, metaphoricallly were invisible to outsiders and had positive affects in contributing unintentionally to the public good.
Apart from this rhetorical disagreement, I found David K. Mafabi’s post interesting because the history of economics is so neglected at present that modern economists know next to nothing about those individuls who preceded those who now dominate the discipline. 
For that alone I enjoyed reading David K. Mafabi’s well-written essay.
David K. Mafabi mentions the status of Sir James Stuart, “Inquiry into the Principles of Political EconomyI" (1767), as “the first systematic work in English on Economics”. This was a view shared by colleague and friend, the late Professor Andrew Skinner, who edited the modern publication of Stuart’s 2-volume edition of his “Inquiry into the Principles of Political Economy" (1767). 

Professor Andrew Skinner, at the time, the leading authority in the UK on Adam Smith’s life and works, was critical of Stuart’s treatment by Adam Smith of criticising Stuart’s ideas in Wealth of Nations, without mentioning Stuart’s name as the author of the ideas he criticised. Andrew thought this was rather shabby of Smith. I agreed. Anyway, Stuart’s 2-volume book is available in print (try Amazon). I loaned my copy to someone but it was not returned and he died before returning it. From memory, Stuart was a bit of a mecantalist and wide open to Smith’s criticism.

Monday, May 29, 2017


Two Illustrations for Lost Legacy
One is my recent photo (by Gordon Wright (2017) and the other an award for Lost Legacy’s coverage on economics and finance (2017).
I am generally grateful for recognition, though I prefer that my books, papers, and Blogs are read.
My latest book is en route to publication:
                An Authentic Account of Adam Smith 
      I shall post notice when publication is imminent (probably in late Autumn).

Sunday, May 28, 2017


Mariah Brown posts (26 May) on the Invisible Hand blog HERE
“Based in New York, the Invisible Hand is an economics blog targeted towards millennials. We offer lightning fast reports on key U.S. market indicators.”
“Americans Ditch Food Places to Dine-In”
Minhaaj Rehman posts on PT (Pakistan Today)
Beyond the budget What do we really need?”
“The invisible hand of Adam Smith, as acclaimed as it is, has failed to explain the fiascos of trade liberalisation. In third world countries like ours where law sides with the powerful, litigation stands no chance against the monopolistic cult.”
Minjaaj Rehman tells a sorry tale both historically and economically. Watt Tyler gets a look in, but not the usual nonsense about Adam Smith’s invisible hand. 
There is no invisible hand in the terms wrongly asserted by Paul Samuelson in 1948 and the 19 editions of his book that followed and is now widely disseminated by most modern economists.  Samuelson’s invisible hand is a myth. It does not exist beyond the very limited terms enunciated by Adam Smith in 1776.
My new book, An Authentic Account of Adam Smith, forthcoming from Palgrave-Macmillan, explains all about the most successful blunder by Modern Economists, following Paul Samuelsom, 1948, who erected an enormous myth out of a simple metaphor to mislead and misinform generations of otherwise highly intellegent experts. 

The motivated actions of individuals have consequences, some benign and, we must not forget, some malign, of which the latter were a prominent target of Adam Smith amongst “merchants and manufactures” and by governments influenced by them.

Friday, May 26, 2017


I came across this headline this morning:
"On Language Change: The Invisible Hand In Language"


Sponsored by the History of Economics Society
Vol. 12, No. 27: May 26, 2017

SSRN HERE  PETER J. BOETTKE, George Mason University - Department of Economics Email: PBOETTKE@GMU.EDU
“Economics, properly understood, makes sense out the complex web of historical relations that constitute reality, namely by utilizing economic theory. Economics without price theory is not economic theory, and measurement without theory isn’t empirically meaningful. However, graduate students are being increasingly trained in sophisticated procedures of optimization and statistical testing, remaining largely ignorant of economic theory as a tool to understanding economic history. This address is a renewed call for my fellow economists to continue to instill in their teaching the beauty of economic theory, as well as the empirical importance of economic history. In short, economic teaching and training must instill an understanding of economic forces at work, and properly done, instills the principles that constitute a golden key that unlocks the deepest mysteries in the human experience. Without learning the governing dynamics of human action and the mechanisms that produce the social cooperation under the division of labor, modern civilization will be left undefended against the fallacious claims that market processes are exploitative, monopolistic, and unfair.”
Interesting. Peter Boettke is a most literate writer/teacher on economics. I am pleased he has noticed the consequences inherent in the contemporary mathematisation of economics, including the absorption of economics departments into departments of pure and applied mathematics. That trend may well continue.
Of relevance, see David Warsh and hisKnowledge and the Wealth of Nations: A Story of Economic Discovery”, Norton. Here the ever-changing development of macro-models of financial economics are revealed, and presumably continues, along with Nobel prizes.
I remain unconvinced that human behaviour can be modelled mathematically. Even the simple supply and demand curve diagrams are suspect, along with the asssociated ideas of equilibrium.  They make excellent tools for teaching and examinations, but do they exist in the long-chains of productive activity in the real world? 
Even Smith’s account of the labourers common coat in Wealth of Nations showed the complexity involved in making it by people several links along the chain. He showed similar complexity in his Lectures on Jurisprudence which addresses another even more complex description of the inter-connecting chains innolved in the distinctive living standards of the poorest consumer in societies, compared to the even greater abject poverty of humans living off the forests.

NB: Nothing said above diminishes my long standing admiration for Peter Boettke’s scholarship as a teacher of economics.

Wednesday, May 24, 2017


I was sent this snippet by a reader. It appears to be quite interesting and worth a look. Unfortunately I am more or less housebound and the last time I tried to enter Edinburgh University Library, I was adamantly refused entry by an over-officious, uniformed security guard, whose firm refusal was not open to discussion. So I could not get a day’s pass without accessing the library’s information desk, located inside while I pleaded on the street-side of the security desk.
Hence, my commemt is confined to the paragraph below:
Journal of Scottish Philosophy HERE  Lisa Hill
‘The Poor Man's Son’ and the Corruption of Our Moral Sentiments: Commerce, Virtue and Happiness in Adam Smith”
“In order to operate effectively, modern capitalism depends on agents who evince a rather morally undemanding type of moral character; one that is acquisitive, pecuniary, recognition-seeking and merely prudent. Adam Smith is considered to have been the key legitimiser of this archetype.
In this paper I respond to the view that Smith is actually sceptical about the value of material acquisition and explore whether he really believed that the pursuit of tranquillity and virtue—especially beneficence—offers a superior route to happiness than the commercial world of materialist acquisition. I approach these issues partly by considering the roles of beneficence and sympathy in Smith's system and partly by analysing the story of ‘The Poor Man's Son’ related in Book IV of The Theory of Moral Sentiments. As he narrates this story, Smith seems highly critical of the unrelenting drive for worldly success. But what is the real moral of the story? Should people contain their ambition for recognition and material success and pursue tranquillity and virtue instead?
I suggest that Smith's discussion in and around the story of ‘The Poor Man's Son’ points to a significant tension between his personal ideal of happiness and his observations and recommendations as a social scientist.”
I agree that the ‘Poor Man’s Son” parable is a trifle paradoxical. On the one hand, Smith points to the dubious benefit for the poor man’s son of seeking to establish the material aquisitions available to a ‘rich man’s son’, who is born into affluence. The poor man’s son is going to suffer a lot on the road to acquisition, in which Smith speaks in his best imitation of a Calvinist preacher (to which Smith was exposed each Sunday when he escorted his mother to Church).
On the other hand, Smith slides into the unrelenting positivity of such sacrifices by ambitious folk which led to the oceans being crossed, the forests felled, to create farmland, and to the building of great city centres of prosperity (I paraphrase). 
Of course, Smith was born into the social class of educational opportunity, another route to a comfortable, if not a wealthy, over-abundance in material possessions. Smith did accumulate an abundance of books, which was (and is) more ceditable than sets of tweezers, watches, decorative chairs (and the rooms to display them), and other consumables producing stylish manners to suit.
Smith recognised that “the commercial world of materialist acquisition” made everything that created the ‘wealth of nations’ possible. The alternative was to have remained in the ‘Forest’ where the indigenous “king” ruled the tribe absolutely amidst an economy where the lowest members of the tribe were so destitue that the lowest members of a society with developed ‘commerce’ were incomparably richer than the tribal ‘King” of the Forest, who ruled with absolute power his tribal poor. 
It was better to be poor in a commercial/farming society than even to be ‘king’ in an indigenous forest society, let alone to be one of his tribe.

Whatever is imputed as Smith’s moral stance, I do not think it was “to pursue tranquillity and virtue instead”. Smith was quite definite in his actions in pursuit of academic “recognition” and as determined for “material success” to fund his scholarly ambitions, such as the free-time and “tranquility” to spend over ten years writing “Wealth of Nations”, funded by his life-pension from the Duke of Buccleugh.

Monday, May 22, 2017


Adam Smiths invisible hand in a velvet glove by S. Herbert Frankel, ... Invisible Hand Definition Investopedia Big Three In Economics; Adam Smith, …
Reviving The Invisible Hand: The Case For Classical Liberalism In The Twenty-first Century
The Dilemmas Of Laissez-faire Population Policy In Capitalist Societies: When The Invisible Hand Controls Reproduction |
Three of a daily kind of headline from Russia on the invisible hand in the archives, trawled out by ‘ru’ sources. The headline sources appear to be genuine, which is not the same as saying that the ideas expressed in their headlines are valid. They are part of the western/asian misreading of Adam Smith’s use of a now famous metaphor in Wealth of Nations. 
Plus a late press post received today:
Mao's Invisible Hand: The Political: Foundations of Adaptive Governance in China (Harvard Contemporary China Series)
Advert received this morning:

PDF online The Dilemmas Of Laissez-faire Population Policy In Capitalist Societies
The Dilemmas Of Laissez-faire Population Policy In Capitalist Societies: When The Invisible Hand Controls Reproduction |

Wednesday, May 17, 2017


"Denver's trying to mess with the invisible hand, and the invisible hand is going to smack them." 
"Economics and Ethics: Hayek Get the best online deal for Accepting the Invisible Hand: Market- Based Approaches to Social-. Economic Problems"
"Virtuosity in Business: Invisible Law Guiding the Invisible Hand."
"The Invisible Hand Of Planning: Capitalism, Social Science, And The State In The 1920s" 
Jacob Frommer posts (16 May) on SCRIBE HERE
Why Are Most Kosher Restaurants So Terrible?” 
“Why are kosher restaurants so bad?

More specifically, why do proprietors and their patrons willingly accept gaping inconsistencies in service, food, price and cleanliness? Is it because of the Talmudic laws disallowing competition between Jewish-owned businesses? Does this lack of Adam Smith’s invisible hand encourage kosher restaurants to limp lamely to just above tolerable? Or might kosher dining and its concomitant failures fall on the patrons who refuse to treat the wait staff or their fellow diners with anything approaching civility? Are we too worried about surviving the next Holocaust to say excuse me? Or are we so heady a people that we simply don’t notice taste and ambiance, don’t have time for courtesy and respect of employees and each other?
Stuart Jackson posts (17 May) on Conservative Home HERE
A ‘relative’ cap on the difference between standard variable tariffs and acquisition tariffs, along the lines proposed by John Penrose, could untie Adam Smith’s ‘invisible hand’ in the retail energy market.”

On Language Change: The Invisible Hand In Language


Photo: Gordon Wright, April 2017

Yes, my NEW BOOK, "An Authentic Account of Adam Smith" is with the Palgrave-Macmillan, the publisher and beginning to get on its way, subject to the usual proof corrections, both mine and the publisher's and the usual editorial discussions.

It has dominated my life for several months and while there is more to do before publication, the long hours - 12-hour days - the hard bit of creative writing and personal focus is behind me.

My writing space is a clutter of books used in reference checking and theme creating.  That is to be cleared and tidied up today - domestic orders from the family!

LOST LEGACY is getting back to normal. 

Apologies to those who wrote to me recently without replies. I shall start working though them - soon!

Saturday, May 13, 2017


My days and late nights are fully taken-up just now with preparing my new book for the publisher's deadline of the 15th May.
 I hope to get back to normal later this week.
Despite 12 hour writing shifts, final progress is slow as I reconcile references with text.

Monday, May 08, 2017


Virtuosity in Business: Invisible Law Guiding
the Invisible Hand by Kevin T. Jackson (27-
Oct-2011) Hardcover
“Guiding The Invisible Hand: Economic Liberalism And The State In Latin American History”
Paradoxes Of Political Ethics: From Dirty Hands To The Invisible Hand ... the invisible hand / John M. Parrish ... of political responsibility shape and ...
Antony Last
zaThe 'invisible hand' of economic growth – transformation has become an important topic of debate in South …
Outlook First

“Adam Smith called it the invisible hand: you do something for yourself, and if you succeed you are actually promoting a social interest.”

Tuesday, May 02, 2017


Mungo MacCallum posts (1 May) on ECHO NET DAILY HERE
Even as he prepared to remove the velvet glove from his iron fist, Malcolm Turnbull spoke more in sorrow than in anger : ‘the market is not working as it should,’ he mourned.
But this was, like so many of his lawyerly assertions, at best a half truth. As Turnbull, a businessman and a banker – a graduate from Goldman Sachs no less—must know, the market was working precisely as it was meant to.
The gas producers saw a better price and latched on to it. This was text book supply and demand: if there was a shortage of gas available for all, the highest bidders got what was around.
Certainly there were unexpected consequences when a glut of the stuff forced international prices down while the domestic buyers were stuck with soaring costs to secure whatever was left, but hey, that’s just Adam Smith’s invisible hand at work, or perhaps more of a rapacious, grasping talon, a predator red in tooth and claw.”
Mungo MacCallum sports that Aussie predilection for using somewhat coarse language to express themselves. 
At base, Mungo’s idea of the “invisible hand” as a “rapacious, grasping talon, a predator red in tooth and claw” is typical of Aussie bar-talk used to shock first-year students from up-tight communities in the suburbs into loosening up.

There is no invisible hand in the market. Just VISIBLE prices. That’s how markets operate.

Monday, May 01, 2017


John Cassar White published today (1May) in The Times of Malta HERE
“Business students of my generation may recall the scanty training we received in the art of business negotiations. I remember distinctly the amusing bestseller business book, entitled Everything is Negotiable by Gavin Kennedy, a practical guide on how to negotiate the best deals. The EU and Britain must be honing their negotiating strategies in the next few weeks to create the best chance of achieving their objectives.”
Fair takes me back to my old day-job at Edinburgh Business School, Heriot-Watt University, and my business, Negotiate Ltd, now owned and run by my daughter, Florence Kennedy Rowlands: 
+44 (0131) 445 1545, 4 Winton Grove, Edinburgh, EH10 7AS Scotland, UK

My book, Everything is Negotiable! is still in print for practitioners, as is ‘Kennedy on Negotiation’, Routledge, 2017, for academic teachers of Negotiation theories and practitioners.