Invisible Hand Ethics

"[B]y directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention….By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." (Adam Smith, The Wealth of Nations, IV.2.9)

Doing right by others is difficult and time-consuming. Hence the attraction of what I call Invisible Hand Ethics, in which we mind our own business and the ethics takes care of itself.

This is modelled on Adam Smith's famous account of how the overall outcome of lots of self-interested actions in the economic sphere can be good for society as a whole. Bakers just want to make a buck, but their self-interest produces the bread that feeds the people. Their competition for sales keeps prices down. The customers in turn just want the cheapest best bread, but wind up helping the best bakers make a good living. You get the idea. Smith argued that in the economic domain this could be a far more reliable mechanism for achieving good outcomes than good intentions.

The real Adam Smith problem: How to 'live well' in commercial society

Adam, Adam, Adam Smith
Listen what I charge you with!
Didn’t you say
In the class one day
That selfishness was bound to pay?
Of all doctrines that was the Pith,
Wasn’t it, wasn’t it, wasn’t it, Smith?
(Stephen Leacock, Hellements of Hickonomics, 1936)

If Obama is a socialist, so was Adam Smith

James Otteson, professor of philosophy and economics and author of learned books on Adam Smith and other weighty subjects recently wrote a short paean to capitalism - An Audacious Promise: The Moral Case for Capitalism. He begins by noting that "President Obama has oddly claimed that we’ve tried free-market capitalism, and it 'has never worked'." Yet by the criterion Otteson is using - criticising the sufficiency of free markets in any way - Otteson's own libertarian hero, Adam Smith, must also have been against capitalism.

Recovering Adam Smith's ethical economics

While some men are born small and some achieve smallness, it is clear that Adam Smith has had much smallness thrust upon him (Amartya Sen)

Adam Smith is famous for founding economics as an independent field of study by synthesising and systemizing classical economics in The Wealth of Nations. But he was also a significant moral philosopher in his own right who deserves to be recognised alongside his close friend David Hume as a key figure in the Scottish Enlightenment. Smith saw economics as a branch of moral philosophy, and he saw capitalism as an ethical project whose success required political commitment to justice and freedom, not merely an understanding of economic logistics. 

Bad Arguments from History: The Case Against Free Trade

Ha-Joon Chang argues that there is a paradox at the heart of free trade economics: if it's so great why didn't the countries who are now rich do it when they were developing? My answer: because governments have always been willing to listen to protectionists like Chang who flatter their vanity and give intellectual cover to their venality.