Consider the paragraph where the invisible hand appears in HA:
Fire burns, and water refreshes; heavy bodies descent, and lighter substances fly upwards, by the necessity of their own nature; nor was the invisible hand of Jupiter ever apprehended to be employed in those matters. But the thunder and lightening, storms and sunshine, those more irregular events, were as- cribed to his favour, or his anger.
(Smith 1795: 49, emphasis added)
Smith’s use of the invisible hand in HA seems to be radically different from his uses in WN and TMS. For this reason, we need to examine the context in which he uses it in order to understand how it relates to the invisible hands in WN and TMS. In HA Smith uses the phrase ‘invisible hand of Jupiter’ to argue that in the very early stages of the society people used to explain irregular events as the acts of invisible beings such as gods. He states that in those days people had ‘little curiosity to find out the hidden chains of events which bind together the seemingly disjoined appearances of nature’ (Smith 1795: 48, emphasis added). He argues that in the first ages of society individuals would consider the regular and usual acts of nature as given and in need of no explanation, but they would explain the irregular events with reference to the acts of gods.
With him, therefore, every object of nature, which by its beauty or greatness, its utility or hurtfulness, is considerable enough to attract his attention, and whose operations are not perfectly regular, is supposed to act by the direction of some invisible and designing power.
(Smith 1795: 48, emphasis added)
Smith thinks that this behaviour is ‘the origin of Polytheism and vulgar supersti- tion which ascribes all the irregular events of nature to the favour and displeasure of intelligent, though invisible beings, to gods, daemons, witches, genii, fairies’ (Smith 1795: 48). It is in this context that Smith uses the phrase ‘invisible hand of Jupiter’.7 So according to Smith, savage man would not think about the acts of Jupiter when he observes the regular events of nature, rather he would explain the apparently irregular events with the invisible hand of Jupiter.
Since some authors interpret the invisible hand in WN and TMS as the hand of God (e.g. Denis 1999) or associate the concept with some sort of deity (e.g. Davis 1989: 65) it is important here to note that Smith does not approve the explanatory strategy used by the savage man. These individuals failed to see the connecting chains of nature and tried to explain some natural phenomena as the consequences of the actions of invisible and powerful beings. Smith suggests that in order to understand nature one has to search for these apparently invisible chains of con- necting events. Thus, it is highly improbable that he would adopt a strategy which is similar to that of savage man in his other works. In fact, Smith is very clear about what he considers to be the proper explanatory strategy. He argues that it is the task of philosophy to explicate the apparently invisible chains of nature.
Smith suggests that with the development of society and specialisation some of the individuals in the society had the security and time to investigate these causes. These individuals became ‘less disposed to employ, for this connecting chain, those invisible beings whom the fear and ignorance of their rude forefathers had engendered’ (Smith 1795: 50). Strikingly, a similar argument appears in WN:
The great phenomena of nature, the revolutions of the heavenly bodies, eclipses, comets; thunder, lightning, and other extraordinary meteors; the generation, the life, growth, and dissolution of plants and animals; are objects which, as they necessarily excite the wonder, so they naturally call forth the curiosity, of mankind to inquire into their causes. Superstition first attempted to satisfy this curiosity, by referring all those wonderful appearances to the immediate agency of the gods. Philosophy afterwards endeavoured to ac- count for them from more familiar causes, or from such as mankind were better acquainted with, than the agency of the gods.
(Smith 1789: V.1.152, emphasis added)
Philosophy, according to Smith, ‘is the science of the connecting principles of nature’ (Smith 1795: 45):
Philosophy, by representing the invisible chains which bind together all these disjoined objects, endeavours to introduce order into this chaos of jarring and discordant appearances, to allay this tumult of the imagination, and to restore it.
(Smith 1795: 45–46, emphasis added)
The proper explanatory strategy for the philosopher (i.e. scientist) is to uncover the apparently invisible chains that connect phenomena, or to replace the ‘invis- ible hand of Jupiter’ with connecting principles of nature.8 Thus, Smith could not have used the invisible hand in WN and TMS to imply the work of some invisible power or some sort of god. Rather, the invisible hand in WN and TMS is better un- derstood as a place holder for the connecting principles of nature which have been already explicated by Smith. In HA Smith criticises the use of invisible powers in science but he uses the phrase ‘invisible hand’ in WN and TMS. The invisible hand in WN and TMS is ironic. It is used to express what Smith seems to consider himself to have accomplished; making explicit the apparently invisible chains that connect social phenomena.
In effect, the discussion of the invisible hand of Jupiter in HA provides the methodological background for the use of the invisible hand in WN and TMS. For this reason it is useful to have a better understanding of Smith’s philosophy of science. Smith approaches the questions about understanding nature from a cognitive perspective. He argues that when we see two distant phenomena that seem to be somehow related, our imagination feels uncomfortable and tries to fill in the gap between these phenomena. As the savage man used to fill in the gap by imagining the acts of invisible beings, philosophers fill in the gap by explaining them with more familiar causes, and by trying to find out the chain of events that connects these phenomena, which were invisible to us at first sight.
[Imagination] endeavours to find out something which may fill in the gap, which, like a bridge, may so far at least unite those seemingly distant objects, as to render the passage of the thought betwixt them smooth, and natural, and easy. The supposition of a chain of intermediate, though invisible, events, which succeed each other in a train similar to that in which the imagination has been accustomed to move, and which link together those two disjointed appearances, is the only means by which, if one may say so, can smooth its passage from the one object to the other.
(Smith 1795: 41–42)
Smith discusses the history of astronomy to demonstrate these points, and to show the several ways in which philosophers tried to discover the connecting principles of celestial appearances. HA is an essay where Smith tries to demon- strate the validity of his arguments about imagination and of his basic argument that wonder, surprise and admiration are the main sentiments behind scientific discovery. In the essay, he tries to abstract from the relation between the several models, which he calls systems, of astronomy and reality. He merely wants to show how these models were created to ‘sooth the imagination’:
without regarding their absurdity or probability, their agreement or inconsist- ency with truth and reality, let us consider them only in that particular point of view which belongs to our subject; and content ourselves with inquiring how far each of them was fitted to sooth the imagination, and render the theatre of nature more coherent.
(Smith 1795: 46)
At the end of his essay (1795: 104–105), he argues that Newton’s system is the most successful system in the history of astronomy with respect to soothing our imagination. Yet he cannot resist adding a couple of more comments about the relation of Newton’s system to the real world. First of all, he argues that in addition to its coherence, its power of unification, and explanatory breath, New- ton’s system explains the most distant objects with the ‘most familiar’ and known property: the gravity of matter. He states that ‘we never act upon it without having occasion to observe this property’ (Smith 1795: 104). Thus, according to Smith, Newton’s system connects with what is real at least at a basic level. Moreover, he also appreciates the explanatory and predictive power of Newton’s system which implies that Newton’s system may be true:
They [Newton’s principles] not only connect together most perfectly all the phaenomena of the Heavens, which had been observed before his time, but those also which the preserving industry and more perfect instruments of later Astronomers have made known to us; have been either easily and imme- diately explained by the application of his principles, or have been explained in consequence of more laborious and accurate calculations from these prin- ciples, than had been instituted before.
(Smith 1795: 105)
Smith then asks the reader (and himself) whether Newton’s theory may be consid- ered as being true about the real world:
And even we, while we have been endeavouring to represent all philosophi- cal systems as mere inventions of the imagination [. . .] have been drawn in, to make use of language expressing the connecting principles of this one [i.e., of Newton’s system] as if they were the real chains which Nature makes use of to bind together her several operations. Can we wonder then, [. . .] that it should now be considered, not as an attempt to connect in the imagination the phaenomena of the Heavens, but as the greatest discovery that ever was made by been and sublime truths, all closely connected together, by one capital fact, of the reality of which we have daily experience.
(Smith 1795: 105)
Since Smith is not conclusive, we cannot have a decisive account of Smith’s ‘philosophy of science’, but given these comments we can speculate about two possibilities. The first possibility is that he has an account of scientific theories that considers them as ‘mere inventions of imagination’, or as systems that helps us to ‘save the observed phenomena’, which do not have to be true or false.10 Thus, they are simply conjectures. The second possibility is that Smith indeed thinks that scientific systems (models, theories) are quests for understanding real relations in nature, but also that we can never be exactly sure about the truth of our theories (see Thomson 1965). Thus, since there is no guarantee of truth, they are conjectures about what may be real. Indeed, Smith’s comments about Newton’s system suggest the second minimal realist reading. Of course, he may have enter- tained both of these views, in a sense that the first applies to natural philosophy and the later applies to moral philosophy:
A system of natural philosophy may appear very plausible, and be for a long time very generally received in the world, and yet have no foundation in nature, nor any sort of resemblance to the truth.12 But it is otherwise with systems of moral philosophy, and an author who pretends to account for the origin of our moral sentiments, cannot deceive us so grossly, nor depart so very far from all resemblance to the truth.
(Smith 1790: VII.II.106)
Whatever the type of realism he may have entertained, Smith considers philo- sophical systems (i.e. models, theories) as being somewhat similar to thought experiments:
Systems in many respects resemble to machines. A machine is a little system, created to perform, as well as to connect together, in reality those differ- ent movement and effects which the artist has occasion for. A system is an imaginary machine invented to connect together in the fancy those different movements and effects which are already in reality performed.
(Smith 1795: 66)
A philosophical system is similar to a machine in that the machines, as man- made systems, connect the acting forces of nature; theories and models, on the other hand, connect the forces of nature in our fancy, or in our thoughts. Smith believed that philosophy tries to find out the connecting principles of nature; that it is a quest for a more coherent view of nature; and that instead of powerful and intelligent beings (such as Jupiter) philosophy attempts to explicate the connect- ing principles of nature. Moreover, this attempt involves conjectures concerning these principles. This is the context within which we should understand his use of the invisible hand in TMS and WN.
Smith is a philosopher, and considers himself as a philosopher, whose task is to conjecture about the connecting principles of nature and society, to create a coherent body of thought that would render it more easy to our imagination how the nature and causes of the wealth of nations, as well as the basic sentiments and dispositions of man, are related to each other. Smith, both in TMS and in WN, is at pains to show how things are connected to each other. In TMS he tries to explain how the self-regarding actions of the rich may work for society as a whole, despite the fact that the land is unevenly distributed. In WN he tries to show why and how, without import restrictions, society may be better off by virtue of the interac- tion between the self-regarding actions of individuals. In these texts he indeed tries to show how the actions of the individuals (and additionally in TMS, that of nature) work for the good of society, although they are acting self-regardingly. He tries to show how two apparently distinct things, self-interested action and beneficial social consequences, are connected to each other.13 He tries to provide those connecting principles of the society that at first glance were invisible. Smith is at pains to show how people who are following their own interests (intentions targeted at the individual level) bring about unintended social consequences. It is the interaction of these familiar individual mechanisms (i.e. individuals pursuing their own interests) that bring about unintended social consequences. In WN and TMS there is nothing invisible in the invisible hand. Thus, the phrase that ‘indi- viduals are led by an invisible hand to promote an end which was no part of their intention’ may indeed be considered as an ironical statement, but not in a sense that conflicts with Smith’s own views. Or rather, it can be read as a metaphorical statement that implies the explication of some of the connecting principles of the society (also see Evensky 200414). In HA the invisible hand is the invisible hand of Jupiter, which is called upon by the superstitious savage man. In TMS and WN it indicates the explication of some of the apparently invisible forces in society by a philosopher: Adam Smith. Briefly, from the point of view of Smith’s ideas about philosophy, there seems to be nothing about the invisible hand that is un-Smithian. But this does not yet answer Rothschild’s concerns. We should now inquire into the relation between the invisible hand and unintended consequences.
Source: Aydinonat N. Emrah (2008), The Invisible Hand in Economics: How Economists Explain Unintended Social Consequences, Routledge; 1st edition.