Three Invisible Hands

Abstract

This chapter discusses the three versions of the invisible hand mentioned by Adam Smith in light of each other. It offers detailed contextual analysis in order to argue that Smithian invisible hand processes are not identical to Smithian social explanations. Any given iteration of a Smithian invisible hand process is a relatively short-term process in which an agent produces unintended and, to him or her, unknown consequences. In invisible hand processes the consequences are, in principle, knowable to the right kind of observer (either theoretically informed or by accumulated common sense) at the time. By contrast, Smithian social explanations involve cases where the consequences are visible or knowable only after the fact. Generally they take place over much longer amounts of time than any given invisible hand process. Smithian social explanations can include invisible hand processes as sub-components (or mechanisms) but should not be conflated with these.