Progress and the Invisible Hand: The Philosophy and Economics of Human Advance

Contemporary Review, Dec, 1998 by Charles Foster

Richard Bronk. Little, Brown and Company. [pounds]20.00. 265 pages. ISBN 0-316-64377-7.

The notion that mankind is progressing is a seductive and flattering one. Everyone likes to think that he is the apex of evolution - the best that has ever been. This is not just a modern form of narcissism. Thucydides thought that 'new methods must drive out old ones.' Aeschylus mocked the confusion and simplicity of aboriginals. That most onanistic of ages, the Enlightenment, bore Descartes, who was famously proud that he had forgotten his Greek.

But it is only fairly recently that people have been so confused that they are thoroughgoing chronological snobs without the preconditions to a belief in human progress which are logically or practically necessary. Those preconditions are: a knowledge of the past; a faith in the ability of humans to engineer and control change; either hard-boiled secularism or a belief in a benign deity; an absence of belief in a lost past paradise; and an absence of belief in recurrent cycles. We now have the remarkable phenomenon of historically ignorant atheists or occultists who look wistfully back to a pastoral eastern Eden or Atlantis, talk about nothing being new under the sun, are miserably pessimistic whenever they read the newspapers, and yet assert that it will not be long before technology wipes every tear from every eye.

The persistence of the notion is perhaps explained by a (historically peculiarly) close identification of people with the economies in which they exist. The rhetoric of the free market has triumphed almost completely. It says that a worker is a 'human resource' and that the world is more prosperous than it ever has been. So the worker begins to define himself primarily in economic terms. He is, first and foremost, a human resource, and the world of human resources is doing very well. Therefore the first words on his lips will be optimistic ones. Only secondarily is he John Smith, lonely and frightened.

For a long time in the West, economics has been the dominant deity. Brokers and bankers are the high priests. At least since Adam Smith promulgated his idea of the 'invisible hand', it has been presumed that if one seeks first the kingdom of Mammon, everything else (social compassion, smiling children, meaning and significance et al) will be given to you as well, as by-products of the free market. The presumption is so ingrained that it persists as a religious dogma long after the despair and isolation of the prosperous and the continued existence of the destitute should have debunked it.

Historically and theoretically there is every reason to distrust the invisible hand. The invisible hand relies upon the classical free-market presumption that, if left to operate freely, a free-market economy will quickly find a competitive equilibrium in which demand equals supply. Keynes exploded that presumption in his General Theory of Employment. He pointed out there that a competitive equilibrium assumes an ability accurately to estimate prospective yield. Such accuracy will enable the rational investment which will in turn generate the equilibrium. But first, there are no scientific methods for assessing prospective yield. And second, as anyone who has ever drunk in a City pub will know, the people who make investment decisions are intellectual sheep. They live by their guts and by their observations of what other sheep are doing.

Richard Bronk's fascinating and important book is a sustained, beautifully argued and compelling indictment of the idea that man is merely an economic animal. Having followed the idea of human progress from the ancients to the slums of the East End via Augustine, Voltaire and Nietzsche, he begins to wonder aloud whether we are really safe in the unshackled arms of naked self-interest. He is worried about the consequences of the privatization of science. He doubts whether the Mertonian norms of scientific research (commonality, universality, disinterestedness, originality and suspicion) can survive in a world where an observation about the universe which we all share is valuable, patentable corporate property. If science is, as the heralds of optimistic humanism trumpet, the source of ultimate happiness, it is scary to think that all the shares in that source might be owned by a public limited company with a registered office in Bermuda.

The author is concerned about the pace of late twentieth century economic change. He points out that none of the economic models used to create the system which is generating wealth has been tested at the rates of economic acceleration which we now have: those rates simply have not occurred before. A real (inflation-adjusted) growth of two per cent per annum is, he notes, considered pitiful in modern economies, but this growth means a tripling of output in 55 years. The historical perspective should make economists queasy: output tripled between AD 500 and 1500. Accordingly we cannot be sure that the invisible hand will continue to be able to distribute even that social good which until now it has been able to distribute. Greater economic pace will probably diminish or eliminate the communally useful by-products which capitalism sheds on its rush towards self-gratification.