The concepts of ‘invisible hand’ and ‘unintended consequences’ are closely related to each other. It is the task of this chapter to identify the type of unintended conse- quences implied by the ‘invisible hand’. The paradigmatic examples of invisible- hand explanations, as well as Adam Smith’s ‘invisible hands’, are concerned with a small subset of the set of all possible types of unintended consequences. A good understanding of this subset is a prerequisite for a good understanding of the invisible hand and of the wide variety of models and explanations that employ the concept. Yet, common interpretations of the invisible hand do not clarify the relation between ‘unintended consequences’ and the invisible hand. By explicat- ing the exact relationship between these two concepts this chapter prepares the ground for the rest of this book.
Previously, Mäki (1991: 162) characterised the type of unintended conse- quences that are implied by the invisible hand as invisible-hand consequences and argued that they have the following characteristics:
- a single individual’s action is not sufficient to bring about invisible-hand consequences;
- unintended consequences of collective action do not count as invisible-hand consequences;
- invisible-hand consequences relate to macro-social phenomena; and
- invisible-hand consequences are generally beneficial.
Although Mäki’s characterisation is appropriate, it does not present the full range of invisible-hand consequences. Moreover, it is not clear why invisible- hand consequences should be characterised in this manner. The present chapter develops and explicates this account and gives a more detailed picture of the type of unintended consequences that count as invisible-hand consequences. Particu- larly, the chapter presents a classification of unintended consequences of human action which clarifies the exact relation between intentions of the individuals and consequences of individual action. It is shown that an invisible-hand consequence is a specific type of unintended consequence that rests on a special relation be- tween individuals’ intentions and consequences brought about by individuals’ actions.
The plan of the chapter is as follows. The second section introduces and clas- sifies unintended consequences with respect to the targets of individual intentions relative to the level at which the consequences are materialised. The third section identifies the type of unintended consequences that are implied by the invisible hand. The fourth section concludes the chapter.
2. Types of unintended consequences
Apparently ‘unintended consequences of human action’ is not an ambiguous no- tion. Simply, unintended consequences were not intended to be there. Yet, as one starts using this notion, it becomes confusing. In fact, the set of possible unin- tended consequences of human action is very large and when social scientists and philosophers talk about unintended consequences they generally indicate a subset of it. This subset, however, is commonly left unexplained. Similarly, the invisible hand implies a specific subset of the set of possible unintended consequences. In the following pages we will try to identify this subset.
We may identify three elements of confusion in ‘unintended consequences’. The first element is confusion is the concept of ‘intention’. When we talk about an individual’s intention, we imply that the individual has a purpose or a plan. Yet, these two meanings should be distinguished. Although intention necessarily indicates that one has a purpose, it is not necessary that one has a plan. Simply, individuals may fail to plan to do something, although they have a purpose (Kel- ler 1994: 11). To prevent confusion, throughout this book, when we talk about someone having an intention, we mean someone having a purpose, rather than having a plan.
The second element of confusion is the concept of ‘consequence’. In order to be clear about what is implied by unintended consequences of intentional individual action, we need to distinguish between ‘consequences’ and ‘results’. As Keller (1994: 64) argues, ‘the result of an action “A” is an event which has to happen for the action to be considered as having been executed at all’. So, if I intend to have some fresh air by opening the window, my action will be ‘opening the window’, and this is the result of my intention. However, there is something more about my opening the window – that is, ‘having some fresh air’ – and this may be consid- ered as a ‘consequence’ of my action. Moreover, since I intend this consequence, it is an intended consequence of my action. Thus, the effects of my action (the result of my intention) are the consequences of my action. However, not all the possible consequences of my action are intended. For example, when I attempt to install new hardware on the motherboard of my computer, my intention is to up- grade my computer’s components. However, I might obliterate my computer by (mistakenly) discharging the static electricity from my hands to the components of my computer. Although this damage is a consequence of my action, it is not the one that I intended. Thus, we may consider this as an unintended consequence of my action. In this book, the result of one’s intention should be considered as his or her action, and the consequences of an action should be regarded as the things caused by that action, either intended or unintended.
The third element of confusion is the concept of ‘unintended consequence’ itself. It implies a vast variety of relations between intentions and consequences. One can think of many examples to see how broad the notion of unintended con- sequences is. For example, one day I was trying (intending) to lock my bike: however, I happened to pick up the wrong key and as a consequence both the key and the lock were broken. This was, I can assure you, an unintended consequence of my action. But it is also true that if I were to plan the railway timetables as strictly as possible to make everything work perfectly, and if there were a devia- tion from this tight schedule by a train, the accident on the railway would possibly be the unintended consequence of my obsessive planning which left no place for deviations. Now, on a broader scale there may be the unintended consequences of a government tax plan that may develop due to the ‘unexpected’ responses of the citizens to this plan. These simple examples suggest that unintended consequences can be observed in various forms, and behind different kinds of unintended conse- quences we may find different combinations of causal factors.
For an identification of the different types of unintended consequences, one may wish to start from these different causal factors or one may analyse the relationship between intentions and consequences. Since a causal classification presupposes the knowledge of all causal mechanisms that may bring about un- intended consequences, it is impractical. However, it is still useful for a better understanding of the relation between intentions and unintended consequences. Thus, before we start our analysis of this relation, it is beneficial to discuss Mer- ton’s attempt to classify unanticipated consequences according to their causes.
Source: Aydinonat N. Emrah (2008), The Invisible Hand in Economics: How Economists Explain Unintended Social Consequences, Routledge; 1st edition.