Invisible-hand Explanations Research Articles

The invisible hand as an intuitive sociological explanation

An invisible-hand explanation explains a situation as the outcome of individual actions, without individuals intending the situation. Invisible-hand explanations have been used for decades to account for all kinds of phenomena, from segregation to traffic norms. But, they have not been studied cognitively and empirically as an intuitive explanation type. We propose and show that US-based adults intuitively prefer invisible-hand over intentional-design explanations. We first validate pairs of explanations as equally likely to cause a social phenomenon (Exp 1). We then show that given that social phenomenon, participants prefer an invisible-hand to an intentional-design explanation, and that the preference for invisible-hand explanations is also negatively linked to conspiratorial beliefs. (Exp 2). We find that when participants are asked to come up with explanations themselves, they are equally fast to come up with invisible-hand or intentional-design explanations (Exp 3), but that both they and other participants prefer the participant-generated invisible hand explanations (Exp 3 and 4). We conclude that US-based adults likely have a prior preference for invisible-hand explanations for social phenomena.

The Structure of Complexity and the Limits of Collective Intentionality

According to Searle’s theory of collective intentionality, the fundamental structure of any society can be accounted for in terms of cooperative mechanisms that create deontic relations. This paper criticizes Searle’s standpoint on the ground that, while his social ontology can make sense of simple systems of interaction like symphony orchestras and football teams, the whole coordinative structure of the modern market society cannot be explained solely in terms of we-intentional collaboration and deontic relations. As clarified by Hayek, because of its complexity, this society is a self-organizing system. It results not only from micro-level agreed constraints, but also from an unintended cybernetic mechanism that affects and shapes both its micro and macro dynamics via a circular causality. Searle ignores the coordination problem posed by complexity and provides strawman arguments against the theory of action underpinning the invisible hand explanation of social phenomena.

Nietzsche: génesis y validez de la moral

<p class='p1'>Si bien en la mayoría de las interpretaciones se afirma que Nietzsche a través de su método genealógico cuestiona la validez universal de los principios morales, cuando se examinan con cuidado sus argumentos se aprecia que el problema es más complejo. Para empezar, Nietzsche sostiene, mediante una variante de lo que se conoce hoy en día como explicación de mano invisible, que la moral es un artificio. Este carácter artificial es precisamente lo que explica la diversidad de morales que encontramos en la historia. Luego cuestiona radicalmente la denominada eticidad de las costumbres; es decir, aquel tipo de moral tradicional que identifica la buena acción con el respeto a las normas establecidas. Pero esta crítica presupone, como él mismo lo reconoce, un criterio de validez que no puede reducirse a la dimensión histórica. Se trata, en este trabajo, de reconstruir de manera crítica dicho criterio de validez.</p>

The virtual reality of the invisible hand

Self-centred based explanations such as invisible-hand accounts look like armchair constructions with no relevance to the real world. Whether and how they nonetheless provide an insight into social reality is a puzzling matter. Philip Pettit’s idea of self-interest virtually bearing on choices offers the prospect of a solution. In order to assess the latter we first distinguish between three variants of invisible-hand explanations, namely: a normative, an historical and a theoretical one. We then show that, while the model of virtual self-interest is a helpful gloss on each variant, it may not convincingly succeed, pace Pettit, in reconciling the economic mind with the common mind.

Mano invisible, cláusulas lockeanas y justicia privada: Emergencia y justificación del Estado en Anarquía, Estado y Utopía

This work analyses the argument provided by Nozick in support of the State’s legitimacy. It will be held that, in fact, this argument deals with two different difficulties: a descriptive one (the harmless and unintended emergence of the State) and another de jure (the legitimacy of the State). The first one is resolved by Nozick via the invisible-hand explanation, and the second one via so-called principle of compensation. I will attempt to demonstrate that this principle is consistent with Locke’s political philosophy and, therefore, with lockean libertarianism.

Spontaneous order and social norms. Hayek’s theory of socio-cultural evolution

Hayek’s theory of socio-cultural evolution is a generalization of his theory on spontaneous market order. Hayek explains both the emergence of market and social institutions serving as a social basis for that order within the framework of a unified evolutionary logic. This logic interprets the emergence and survival of spontaneous order and group-level rules of conduct as an unintended consequence of human action. In order to explain the emergence of social norms exclusively on the basis of methodological individualism, one would have to give up an exclusively evolutionary explanation of these norms. Since Hayek applies the invisible-hand explanation to the investigation of social norms, he combines the position of methodological individualism with functionalist-evolutionary arguments in his analysis. Hayek’s theory of socio-cultural evolution represents a theory in the framework of which methodological individualism and functionalism do not crowd out but complement each other.

Invisible-hand explanations: From blindness to lack of we-ness

The unintendedness of the phenomenon that is to be explained is a constraint visible in the various applications and clarifications of invisible-hand explanations. The article casts doubt on such a requirement and proposes a revised account. To have a role in an invisible-hand process, it is argued, agents may very well act with a view to contributing to the occurrence of the social outcome that is to be explained, provided they see what they do as an aggregation of their individual actions rather than as something they jointly perform.

Science and selection: essays on biological evolution and the philosophy of science

Introduction Part I. Selection in Biological Evolution: 1. Interactors versus vehicles 2. Taking vehicles seriously 3. A general analysis of selection, with Rod Langman and Sigrid Glenn Part II. Selection in the Evolution of Science: 4. A mechanism and its metaphysics 5. Why scientists behave scientifically 6. What's wrong with invisible-hand explanations? Part III. Testing our Views about Science: 7. A function for actual examples in philosophy of science 8. The evolution of conceptual systems in science 9. Testing philosophical claims about science 10. That just don't sound right: a plea for real examples in philosophy of science 11. Studying the study of science scientifically.

Carl Menger's theory of invisible-hand explanations

Carl Menger's theory of invisible-hand explanations is rooted in his methodology of the social sciences. Contrary to his 18th-century Scottish forerunners he explains both the emergence and the persistence of unplanned social institutions exclusively by the individual pursuit of perceived self-interest. Contrary to Hayek's evolutionary functionalism, Menger's theory is not confined to the explanation of efficient or beneficial institutions. And contrary to Buchanan and Vanberg's constitutional contractualism, it does not require that people form stable preferences over rules.

Invisible Hands and the Success of Science

David Hull accounts for the success of science in terms of an invisible hand mechanism, arguing that it is difficult to reconcile scientists' self-interestedness or their desire for recognition with traditional philosophical explanations for the success of science. I argue that we have less reason to invoke an invisible hand mechanism to explain the success of science than Hull implies, and that many of the practices and institutions constitutive of science are intentionally designed by scientists with an eye to realizing the very goals that Hull believes need to be explained by reference to an invisible hand mechanism. Thus, I reduce the scope of Hull's invisible hand explanation and supplement it by appealing to a hidden hand explanation.

The Transition to the Market and Corruption in Post-socialist Russia

The end of the State Socialism in Russia was greeted with near universal enthusiasm. The Western public and the people who had endured the economic absurdities of the Soviet system expected economic performance to improve dramatically and the country to turn overnight into a well-functioning and prosperous market economy. Such optimism was loosely based on an `invisible hand explanation': as in Adam Smith's classical example of `the butcher, the brewer or the baker', agents pursuing their own individual interest would produce an unintended bene®t for society as a whole. In practice, this idyllic picture did not quite materialize: the economic system is under great strains and Russia is far from being a well-functioning market economy. According to an index of `economic freedom' recently constructed by the Heritage Foundation, Russia ranks 117 in a list of 150 countries. This index measures how well countries score on a list of ten factors, including trade policy, taxation policy, level of privatization, monetary policy, property rights, antitrust regulations, and the extent of the black market. Not only is Russia at the bottom end of the list, but its position has worsened over the years. The authors of the index point to the strong correlation between economic freedom and development, the implication being that Russia is not likely to prosper economically. This index measures how much `market economy' (or `capitalism') there is in a country. Other indicators show that standards of living have dropped since the beginning of the transition and economic disparities increased substantially. Much of the health-care system has collapsed, mortality rates have risen alarmingly and life expectancy has fallen. Russia has not yet reaped the bene®ts of capitalism but it has lost the safety nets of socialism.

What's Wrong with Invisible-Hand Explanations?

An invisible hand seems to play an important role in science. In this paper I set out the general structure of invisible-hand explanations, counter some objections that have been raised to them, and detail the role that they play in science. The most important issue is the character of the mechanisms that are supposed to bring about invisible-hand effects.

Rules, Function, and the Invisible Hand An Interpretation of Hayek's Social Theory

Hayek's social theory presupposes that rules are unintended consequences of individual actions. This essay explicates one kind of Hayekian explanation of that claim. After noting the kinds of rules that Hayek believes are subject to such a theory, the essay distinguishes three functional explanations advocated by Hayek. He combines one of these functional explanations with an invisible hand explanation. A schema suitable for constructing invisible hand-functional evolutionary theories is employed to outline this combination.

Scientific realism and Austrian explanation∗

In the recent writing on the methodology of economics there has been a shortage of systematic analyses of realism and explanation and an absence of analysis of their inter-relationships. This article attempts to provide a detailed account of the structure of economic explanation built upon realist and essentialist premises. Invisible-hand explanations characteristic of Austrian economics and the question of using the quantity theory for explaining inflation are used as illustrations. From another perspective, the analysis amounts to providing a reconstructive interpretation of the deep structure of the Austrian approach to explaning economic phenomena. It is suggested that realist-essentialist explanations be analysed in terms of redescription, reduction, ontological identification, and unification: Austrian (as well as some other) explanaions can be analysed as reductive theoretical redescriptions of economic phenomena using ontological identification statements and pursuing ontological unification of apparently diverse phenomena. Among these and other things, questions related to the deductive-nomological model, prediction, the implications of subjectivism and the role of common sense are discussed.

Invisible-hand theory and language evolution

Natural language are characterized by their unplanned purposefulness. They come into existence and change by an interaction of variation and selection. Their genuine mode of explanation is the invisible-hand explanation. It mirrors the three essential features of language: (1) Language is a dynamic process, (2) it consists of a micro and macro level, and (3) it shares certain characteristics as well as with natural phenomena. An invisible-hand theory explains the explanandum as the casual cumulative consequence of intentional actions. It is functional, reductional and individualistic. Every theory of linguistic change that claims to have explanatory force will be an invisible-hand theory.

The Spontaneous Evolution of Commercial Law

Jeremy Bentham contended that property and state-made law born and must die together. Before the [state's] law there was no property: take away the law, all property ceases [4,309]. Most economists have taken this argument to heart. Clearly, some system of defining and then protecting and enforcing property rights (property law) and rules of exchange (contract law) is needed for a market system to develop. But does the state have to develop and enforce property and contract law? One purpose of the following presentation is to demonstrate that the commercial sector is completely capable of establishing and enforcing its own laws. A second purpose is to illustrate that modern commercial law is, in fact, largely made by the merchant community despite governmental efforts to take over provision of such law. Commerce is an evolving process of interaction and reciprocity which is simultaneously facilitated by and leads to an evolving system of commercial law. Carl Menger [17] proposed that the origin, formulation and the ultimate process of all social institutions including law is essentially the same as the Adam Smith [20] described for markets. Markets guided by Smith's invisible hand coordinate interactions, and so does customary law [6; 7]. These systems develop because, perhaps through a process of trial and error, it is found that the actions they are intended to coordinate are performed more effectively under one institutional arrangement or process than under another. The more effective institutions and practices replace the less effective. In the case of customary commercial law, traditions and practice evolve to produce the observed spontaneous order. As Hayek explained, however, while Smith's and Menger's insights are firmly established in economics, the study of jurisprudence has been almost completely unaffected by their arguments [9, 101]. One reason, of course, is that the invisible hand explanation for the emergence of market order is highly plausible because there is an obvious mechanism-the mechanics of individual but interrelated market prices-which provides the necessary coordination we call the price system. The mechanism of evolution for a legal order is much less obvious. Thus, the legal positivist view, which holds that law is the product of deliberate design, has a strong following among economists. Another major purpose of this discussion of commercial law, therefore, is to demonstrate that the rules of property and contract necessary for a market economy, which most economists and legal scholars feel must be imposed, have evolved without the

Spontaneous Order Analysis and Anthropology

Spontaneous order analysis is applicable to patterned social phenomena that are the results of human action but not of human design. For example, the spontaneous, unplanned social orders of the market and common law codes contrast with their planned counterparts, i.e. central economic plans and statutory legal codes. The tradition of spontaneous order analysis can be traced through Mandeville, Hume, Ferguson, Smith, Menger, Hayek, and others. Invisible-hand explanation is the method of spontaneous order analysis. Convincing invisible-hand explanations must be methodologically individualistic and must not rely upon the supposition of any unusual abilities of the participants or unusual events in the process. All steps in an invisible-hand explanation must be plausible accounts of the normal course of events in the society in question. Menger's (1892, 1981, 1985) explanation of the origins of money is the paradigmatic example of an invisible-hand explanation of a spontaneously ordered social phenomenon. Anthropologists may be able to apply spontaneous order analysis to many areas of interest, including economic anthropology, the study of kinship systems, and legal anthropology.