Readers may be curious about Spearman. He is, in fact, fictitious, clearly modelled on Milton Friedman, and was created by two economists, William L Breit and Kenneth G Elzinga, working under the alias Marshall Jevons. In this 2014 crime fiction, The Mystery of the Invisible Hand, Spearman relies on his most astute economic insights and theories of monopolies and Coase conjecture, auction theory and, crucially, Adam Smith’s work to find a connection between the artist’s marketability and his death, as well as the connections between economics and the art world.
The ‘Invisible Hand’ of Adam Smith is just as significant as the Hand of God — the Creator’s, not Maradona’s. Even those who detest the notion of the self-regulating nature of the marketplace, a vast number of economic theories have been created on its premise. In each of Smith’s two books, The Theory of Moral Sentiments (1759) and The Wealth of Nations (1776) — full title, ‘An Inquiry into the Nature and Causes of the Wealth of Nations’ — Smith only used the phrase once.
Incidentally, early economists were not particularly enthused with the Invisible Hand, despite the fact that Smith’s model of ironic morality even influenced the works of literary stalwarts like Jane Austen, Charles Dickens, Elizabeth Gaskell, and George Eliot. Contemporary economist David Ricardo was, to put it mildly, not a fan of the Scot’s analysis of merchant capital. For Karl Marx, the Invisible Hand was a mere charade, a sleight of, well, hand.
Still, this is probably the single-most important proposition-cum-controversial metaphor in economic theory. Contrary to Henry Spearman’s success in cracking mysteries, however, researchers had difficulties unlocking its secrets.
For the proponents of markets, it’s synonymous with free individuals having their commercial interactions informed and guided by the feedback mechanism of the price system. It’s tainted, say market critics, because it guides people whose fundamental motivation is greed.Recent attempts have been made to take a stab at interprating the Invisible Hand fairly. These have brought Smith forward in time, made him more modern, and fashioned him in the image of the modern welfare theorist. Even Amartya Sen stated in a 2010 paper that ‘…Smith’s thoughts are of much relevance in explaining the present global crisis and in suggesting ways and means of not only overcoming it but also of building a tolerably decent society in the world.’ Well, is the Invisible Hand of the market a better way for the economy to operate than by government dictate? And is it invisible? In Arthur Conan Doyle’s story, A Case of Identity, Dr Watson thought Sherlock Holmes could see the invisible. ‘Not invisible but unnoticed, Watson. You did not know where to look, and so you missed all that was important,’ clarified Holmes.
A more recent avatar of ‘Sherlock’ may help understand the nature of invisibility. In ‘The Invisible Hand’, a 2016 episode of the TV series, Elementary, Sherlock’s nemesis, who in this updated version is Jane Moriarty, has proven that she doesn’t need to be present ‘to be present’.
In his final lecture at Monte Vista, Henry Spearman explained how Smith’s Invisible Hand allows one to achieve both personal and social success. The whales were saved by John Rockefeller’s production and marketing of cheap kerosene — marking a switch from whale oil — but at a price for New England whalers. However, consumers (and, certainly, whales) in general benefited, as well as Rockefeller, of course. Spearman concludes, ‘Parents and dieticians tell us we can’t have our cake and eat it too. But the principle of the invisible hand says you can.’
This month marks Adam Smith’s tricentenary. The mystery of his Invisible Hand will continue to haunt economists for years to come, while the ‘unnoticed paw’ — ‘claw’ for its critics — will continue to influence all of us. Or will it?