Conclusions

My study of the concept of the invisible hand encompasses a wide range of types of literature but especially that of economics. The most important are writings that use the term as explanation and/or judgment and/or a means of communication; attempt to sharpen or otherwise make sense of the term; and/or critique the foregoing uses. Given the enormous multiplicity of every aspect of the term’s use, it is not always possible to categorize particular writings. And then there is the term’s use in religion, fiction, the business press, politics, and so on. The overall conclusions from the study include the following:

1. That the use of the concept of an invisible hand is widespread, variegated, and imaginative, yet overwhelmingly amounts to pure assertion.

2. That the typical piece of writing on the invisible hand in economics, dealing with its ostensible identity and function(s), for example, the proposition that “the invisible hand of the market automatically allocates resources,” adds nothing to knowledge that is not already contained in the proposition “the market allocates resources.”

3. That it is neither necessarily nor altogether correct that it is the market that allocates resources. Inasmuch as the market can be seen as an institution and as both the product of institutions and the means through which those institutions operate, it is not the market per se that allocates resources – it is institutions. But to say that “the invisible hand of institutions allocates resources” also adds nothing to knowledge that is not already contained in the proposition “institutions allocate resources.” Although many economists seem to be wedded to some version of the notion of competition, the topic of institutions is richer with regard to the factors and forces that help form and operate through markets. That is not to decry the use of different modeling strategies. It is, however, to emphasize the importance of institutions in determining whose interests are to count, and to caution against the blind and unthinking application of any conceptual model to any actual economy.

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