The ‘Invisible Hand’ Metaphor in
Economics and Social Theory
Hüseyin Özel*
Abstract: This study will argue that the “invisible hand” metaphor, one of key
hypotheses of economic and social theory, can be a helpful causal hypothesis
in explaining the emergence of a social order only if it offers a causal mechanism. Otherwise, this might be reduced to a contextless ‘Panglossian’ metaphysical hypothesis concerning simply optimal and unintended consequences. The study maintains that such a functionalist and/or teleological understanding of the metaphor would limit both its viability and realisticity. Therefore, it is argued that adopting an “evolutionary hand” approach that allows
for disequilibria, inefficiencies and instabilities will be more helpful in respect of the generality and realisticity of the analysis.
Key Words: Invisible Hand, functionalism, adaptationist program, evolutionary hand.
INTRODUCTION
The ‘Invisible Hand’ metaphor, which was first devised by Adam
Smith, is still one of the core hypotheses of not only economics, but
also social theory as a whole. Since Smith, probably one of the key
problems of economics has been to propose an analytical framework
for an exclusively individual choice-driven market system, capable of
bringing solutions to ‘economic’ problems, i.e. providing inclusive and
satisfactory answers to the questions of ‘what to produce’, ‘for whom
to produce’ and ‘how to produce’. In fact, the answers to these three
questions set out how resource allocation is determined particularly
in the environment of capital accumulation and change. Being capable
of providing answers to these questions, the ‘Invisible Hand’ metaphor is still an indispensable tool in the economist’s toolbox. Nevertheless, Invisible Hand not only provides a solution for economic
problems, but also responds to the question, ‘What is the basic mechanism that ensures cohesion in a society consisting of self-interestdriven individuals?’ In this respect, the Invisible Hand metaphor,
along with its embedded hypothesis, ‘unintended consequences of intentional action’, constitutes one of the vital components of social
theory as well. Therefore, it is not wrong to assert that Smith is
*
Associate Professor, Hacettepe University, FEAS, ozel@hacettepe.edu.tr.
TODAİE’s Review of Public Administration, Volume 3 No 2 June 2009, p. 51-74.
52
TODAİE’s Review of Public Administration, Vol. 3 No 2
among ‘the founding fathers’ of not only economics, but also of social
science in general.
This paper is a methodological note that considers the use of the
Invisible Hand approach both in economics and social theory. The
paper argues that the Invisible Hand approach cannot be useful for
social theory unless a causal mechanism is embedded in its context
and that otherwise, it might be reduced to an empty metaphysical
theory. The paper also maintains that providing Invisible hand with a
context in terms of causal explanation would only be possible by abstaining from both ‘mechanistic’ analogies and a functionalism-based
‘Panglossian’ evolutionary approach. For this purpose, the first section will focus on the Invisible Hand understanding of liberal approach in economics. In the second section, functionalistic and the
Panglossian perspective behind the Invisible Hand understanding as
a form of social theory will be discussed and its drawbacks will be
presented. Finally, the paper will attempt to demonstrate that a nonfunctionalistic ‘evolutionary hand’ approach that allows disequilibria,
inefficiencies and instabilities would be more useful.
LIBERAL ECONOMICS AND ‘INVISIBLE HAND’
As it is known, ‘Invisible Hand’ has been the most important metaphor employed by economists to explain the working of the market
system since Adam Smith. Economists most particularly expect the
market system to solve ‘economic’ problems. In other words, they
seek answers to the questions, ‘what to produce’, ‘for whom to produce’ and ‘how to produce’. According to economists who defend the
market system, the economic problem is solved by the decisions
made by interacting individuals, each of whom struggles to maximize
his/her utility (or profit) within the markets. While observing
his/her own interest, each individual will in fact ensure social ‘good’,
i.e. efficient allocation of resources even though he/she has no such
intent or wish. According to this argument, economic ‘equilibrium’,
where supply-demand in the markets equalizes, also points to a state
of compatibility among the optimal decisions of individuals: When all
markets are concurrently in equilibrium, ‘efficient’ or, in technical
terms, a ‘Pareto optimal’ resource allocation will materialize; no individual can be made better off without making at least one individual
worse off. In other words, every individual will be in the best situation he/she can achieve in view of his/her preferences and income.
Therefore, the market is capable of solving the problem of resource
allocation – as expected from it - without any need for an external intervention. The market achieves it via setting prices as to relative re-
‘Invisible Hand’ Metaphor in Economics and Social Theory
53
source scarcities, thus establishing equilibrium of the overall economy without any intervention from outside.
Therefore, the ‘Invisible Hand’ suggests that each individual’s act
in his/her own interest leads to a spontaneous efficient resource allocation even though nobody intends or desires such a result. Smith
maintained that each individual, seeking only his/her own gain, ‘is led
by an invisible hand to promote an end which was no part of his intention’ (Smith, 1776: 477).1 Smith’s doctrine, with his immortal
words, ‘give me what I want, and you shall have what you want’ lies
behind individuals’ exchange actions, the basic mechanism that ensures efficient resource allocation:
‘It is not from the benevolence of the butcher, the brewer or the baker
that we expect our dinner, but from their regard to their own selfinterest. We address ourselves, not to their humanity but to their selflove, and never talk to them of our own necessities but of their advantages’ (Smith, 1776: 18).
As every individual’s act in self-interest will increase benefit and
gain via exchange, this will generate a general level of contentment
that satisfies everybody.
This hypothesis still constitutes the foundation of contemporary
economic theory, especially that of Walrasian theory of general equilibrium.2 The economic mentality of the hypothesis can be summaNevertheless, it is argued that Smith used the term ‘Invisible Hand’ rather sarcastically (Rotschild, 1994 and 2001: 116-56) or, at least, it can be interpreted in different
ways (Gramp, 2000). It was also maintained that the Invisible Hand approach conflicted with Smith’s own understanding (Rothschild, 1994). For the criticism of this
assumption, see: Aydınonat (2006). As a matter of fact, Smith’s usage of this term
does not appear to support the approach identified with him today. Smith used the
term ‘invisible hand’ in his three works. He first used it in The History of Astronomy
(Smith, 1795) as ‘the Invisible Hand of Jupiter’ while discussing the way of thinking
in the antiquity; then he used the term in The Theory of Moral Sentiments (Smith
1759: 184) while arguing that the use of resources would result in equal distribution
of income; and finally, in The Wealth of Nations, (Smith, 1776: 477) while discussing
international trade (Smith, 1759: 184n). Nevertheless, this study will be conducted
over the standard interpretation of the term ‘Invisible Hand’, which suggests a liberal
point of view – at the cost of doing injustice to Smith. For the Invisible Hand interpretations that adopt this standard approach, see: Edna Ullmann-Margalit (1997),
Nozick (1994), Brennon - Pettit (1993). For the use of Invisible Hand in the scientific
field, see: Ylikoski (1995). For an article that accentuates its ideological aspect, see:
Martin (1990).
2 For a detailed presentation of general equilibrium theory, see: Arrow - Hahn (1971).
The most detailed presentation of the theory, see: Bulutay (1979). For the criticism of
methodological framework adopted by the theory, see: Özel (2000). For the welfare
approach of general equilibrium theory, see: Bonner (1986); for the criticism of this
approach, see: Hunt (1981).
1
54
TODAİE’s Review of Public Administration, Vol. 3 No 2
rized as follows (Dixit - Nalebuff, 1991: 224): When I buy a certain
good, it means that I use some resource (labor, capital, land, etc.) that
has a social value. The only thing that keeps me from overusing this
resource is its price because I would be willing to pay this price only
if the value of this good for me is greater than this price. Since in a
market in which competition works efficiently the price would be
equal to the costs of production (to be defined to include profit as
well) of the good in question, this means that I would be willing to
consume that good only if its value to me is greater than or at least
equal to its social value. That is to say, the market mechanism ensures
that I will consume that good only in “necessary” amount because the
price I will pay for this good will be exactly equal to the social total
cost of the resources that are used in the production of that good.
Therefore, in an economic system that consists of efficient markets,
that is, markets in which prices fully reflect the relative scarcities of
resources, efficient resource allocation will take place automatically.
General equilibrium theory is concerned with the formal presentation
of this hypothesis. A significant result in the theory is set forth by
‘Two Fundamental Theorems of Welfare Economics’: 1) any competitive equilibrium or Walrasian equilibrium leads to a Pareto-efficient
allocation of resources 2) any efficient allocation can be made a competitive equilibrium (Bulutay, 1979: 115-125).
Another version of the Invisible Hand doctrine in economics is the
Austrian economics approach that opposes such formal general equilibrium analysis, particularly Friedrich A. Hayek’s ‘Spontaneous Order’ approach (Hayek, 1973, 1976, 1979). Unlike standard economic
interpretation, the Austrian understanding of competition emphasizes that competition is a dynamic process, which also involves change.
Here the point is that the Invisible Hand emerges even in such a dynamic environment. The need for perceiving the operation of the
market, thus competition as a process is an integral part of Hayek’s
theory (Hayek, 1948; Caldwell, 1997, 2004). Equilibrium is not a
state where no economic agents have an incentive to change their behavior. An equilibrium situation refers to one in which individual
plans are fully coordinated. Given that there is constant change in individuals’ knowledge, it is apparent that an external coordination unit
(i.e. central planning) can hardly establish this equilibrium. The one
and only mechanism that ensures this equilibrium will be competition. The reason is that as long as prices reflect relative resource
scarcity, individuals do not need additional knowledge to make their
decisions and thus, resources are efficiently allocated. The ‘Spontaneous Order’ created by the market owns its existence primarily to the
‘Invisible Hand’ Metaphor in Economics and Social Theory
55
function of prices in conveying knowledge. Hayek and the Austrian
School regard the market system as a tool for conveying and using information. This tool operates via competition, which is idealized like
competitive equilibrium and which is characterized by a dynamic
process rather than a stationary state.
Even though such a point of view sees time, change and capital accumulation as important conceptual problems that stipulate enterprise activity (Caldwell, 2004: 26), Hayek regarded the role of entrepreneurs as a type of ‘discovery procedure’, whereby they constantly
search for unexploited opportunities that can also be taken advantage
of by others (Hayek, 1984: 259). The basic function of entrepreneurs
is to pursue information about the relative scarcity and utilize profit
opportunities. As long as price mechanism’s function of conveying information is not hindered, entrepreneurs will be able to access
knowledge about profit opportunities via prices, thus leading to the
materialization of resource allocation in an efficient manner. An outstanding aspect of Hayek’s views is that knowledge is captured by different individuals in society and everybody can in some way access
this knowledge in tacit form. The profit gained by an entrepreneur
becomes the reward he/she receives for pursuing and utilizing information. This refers to the efficient processing of information by
the whole system, thus creating ‘spontaneous order’.
Accordingly, both Smith and succeeding liberal economic understanding and the Austrian economic approach explain the operation
of the Invisible Hand mechanism by means of its consequences, which
stand for ensuring efficiency in resource allocation and/or the processing of knowledge and coordination of separate actions of different decision-making agents. This refers to a functionalist point of
view, which links the existence of the market mechanism to its functions. As the problems created by functionalism will be discussed later, merely pointing to an important methodological problem embodied in these approaches is deemed enough at this point. In both approaches, instead of describing the mechanisms that avoid the emergence of disequilibria, equilibrium mechanisms are exogenously taken in the models by some type of deus ex machina approach. For instance, in Walrasian general equilibrium theory (Bulutay, 1979, Arrow - Hahn, 1971), the model contains two types of deus ex machina
that establish equilibrium. The first one is the auctioneer, who is
deemed to establish coordination between decision-making agents
and thus ensure equilibrium in the system; the second deus ex
machina is the entrepreneur, who acts so as to ensure equilibrium
though his/her profit will be zero (marginal profit that covers costs
56
TODAİE’s Review of Public Administration, Vol. 3 No 2
only) in the event of equilibrium (Hunt 1992: 377-379). In Hayek’s
model, the role of entrepreneur is similarly restricted to his/her role
in the establishment of equilibrium. Hayek argued that tacit
knowledge is captured by individuals, though scattered among many
individuals, and it is conveyed by the market via prices. 3 In fact, such
a point of view refers to the minimized role of the entrepreneur, because in that case, entrepreneurship restricts itself exclusively to the
activity of the search for ‘tacit knowledge’, which is produced without
its contribution. In other words, as seen in Walrasian general equilibrium theory, Hayek also reduces the entrepreneur to a functional
unit, whose primary function is to act as some type of deus ex machina in the formation of spontaneous order. The major reason for this
situation is the tension between Hayek’s approach to competition as a
dynamic process that leads to occasional equilibrium and ‘spontaneous order’ understanding. If competition, as a dynamic process, causes not only equilibrium, but also disequilibrium, then how can spontaneous order be ensured? Unfortunately, Hayek, instead of describing how such order emerges, merely assumes that this order appears
and continues to exist as long as there is no outside intervention.
Hence, Hayek uses spontaneous order, which is actually explanandum, as explanan. In other words, he makes use of the point, which in
fact he should explain, as a means in providing an explanation, thus
starting cyclical reasoning. Hence, similar to liberal economic theory,
in Hayek’s analysis, the Invisible Hand hypothesis assumes that equilibrium materializes spontaneously, but it fails to present any causal
mechanism, thus leaving the context of the hypothesis empty. In other words, Invisible Hand, which is nothing but merely a metaphor, is
ascribed a role beyond its capacity and is used as a causal mechanism.4 Leaving the content of Invisible Hand empty assumes imThis means that no other collective or ‘social’ institution or structure, but price mechanism generated as an outcome of the behaviors of individual decision-making units
and individuals performs the function of producing, processing and transferring
knowledge. In other words, such an approach that sees the market as the only institution with the capacity of processing and transferring knowledge denies the status of
vocational organizations, public libraries, universities, artisan institutions and municipal government as decentralized organizations, which distribute knowledge and
preserve traditions (Glasman, 1996: 26). Besides, Hayek’s notion of ‘tacit knowledge’
assumes that all economically important knowledge is no-cost knowledge and it can
be easily accessed as long as the cost of searching is tolerated. However, considering
the fact that knowledge itself is also a commodity, Hayek overlooks the fact that this
knowledge might be specifically produced (Arrow, 1996: 6).
4 This seems to be current for the ‘Natural Selection’ mechanism too, which constitutes
the foundation of evolutionary approaches that are frequently used in social theories.
The use of natural selection as a causal mechanism in biology does not mean that it
3
‘Invisible Hand’ Metaphor in Economics and Social Theory
57
portance not only with respect to economics, but also to social theory.
The reason is that the role of this metaphor in social theory is as important as – may be more important than– its role in economic theory.
INVISIBLE HAND AS A SOCIAL THEORY
The ‘Invisible Hand’ concept, the response of liberal economics to
the problem of resource allocation, does not solely consider the question of whether the market system is capable of solving the problems
of resource allocation and capital accumulation. Another important
dimension of the concept is the assumption that the market system is
also capable of constantly and smoothly reproducing social and institutional structure, which it is based on, in line with individual behavior. These two dimensions of the Invisible Hand concept define the
boundaries of the discipline of economics since Adam Smith. The Invisible Hand approach, not only maintains that in market economies,
the coordination between different decision-making agents is spontaneously established without any need for another authority, but it
also argues that this harmony can generate a sustainable stable economic and social order, even though not intended or desired by anybody. In this respect, Adam Smith seems to deserve to be named
among the founders of not only economics, but also other social sciences. The reason is that Smith was one of the first philosophers, who
could give a satisfactory answer to the ‘order’ problem, which is still
among today’s solution seeking problems. As a matter of fact, it is not
possible to say that since Smith, the answer to the question of what
ensures social cohesion in modern societies, i.e. the hypothesis of ‘ unintended consequences of intentional human action’, has changed.5
We can say that the ‘spontaneous order’ approach (and, even the
evolution of the market system itself) is generally the product of modernity. Since the embedding of the order concept carved out by Galileo and Newton’s laws of motion of the planets and celestial bodies
after the Copernican revolution in the 16th century (Koyré, 2000;
Westfall 1994), the question of whether a similar order exists in the
world of individuals has become one of the major problems pondered
by the modern individual. The said problem, which can briefly be
called the ‘order’ issue, still assumes importance in respect of social
theory: Why does the gathering of individuals, whose actions are
can bear the same burden in social theory too because these two fields are completely different.
5 For the consideration of ‘unintended consequences’ in the modern social theory, see:
Giddens (1984: 9-14).
58
TODAİE’s Review of Public Administration, Vol. 3 No 2
driven by their own thoughts, ambitions and self-interests, generate
an order instead of conflict (or does an order really emerge)?
The three answers given to this question by modern thought can
be explained via an allegory (Gordon, 1991: 213): How can harmony
be established in an orchestra consisting of many musicians? 1)
Preestablished harmony: The orchestra musicians are very familiar
with the relevant piece of music; therefore, they perform in harmony
(Newtonian or Leibnizian Order); 2) Centrally-established harmony:
Harmony among musicians can be established by the conductor, who
knows the piece of music very well and who can change it from time
to time (Hobbesian Order); 3) Spontaneous Order: Musicians achieve
harmony by using knowledge, which they acquire by listening to the
sound of instruments played by other musicians. The third example
rather recalls a musical group without a conductor that makes improvised music (Invisible Hand).
The above-mentioned Newtonian or Leibnizian “preestablished
harmony” (Russel, 1945: 583), designs a preestablished (by God)
mechanical order that does not need any external intervention for its
smooth operation. For instance, in Leibniz’s ‘monadology’ approach,
this order resembles a state of affairs, where numerous concurrently
wound-up watches work side by side, but independently of all other
watches. As all watches are wound up simultaneously, the harmony
among them will last forever. The Newtonian system encompasses a
similar design; the inter-planet synchronization is ensured by a
preestablished mechanical order, which the force of gravity 6 keeps
together.7
Newton believed that the force of grativity manifested its mechanical effect only
through the object. Therefore, he says in one of his letters, "That gravity should be innate, inherent, and essential to matter, so that one body may act upon another, at a
distance through a vacuum, without the mediation of anything else, by and through
which their action and force may be conveyed from one to another, is to me so great
an absurdity, that I believe no man who has in philosophical matters a competent
faculty of thinking, can ever fall into it." (cited by Koestler, 1964: 344).
7 Leibniz also criticized his English contemporaries for insulting God by the insinuation
that he had been unable to make a perfect machine: “Sir Isaac Newton, and his followers, have also a very odd opinion concerning the work of God. According to their
doctrine, God Almighty wants to wind up his watch from time to time, otherwise it
would cease to move. He had not, it seems, sufficient foresight to make it a perpetual
motion. Nay, the machine of God's making is so imperfect according to these gentlemen, that he is obliged to clean it now and then by an extraordinary concourse, and
even to mend it as a clockmaker mends his work; who must consequently be so much
the more unskilful a workman, as he is oftener obliged to mend his work and set it
right” (cited by: Burtt, 1924: 289).
6
‘Invisible Hand’ Metaphor in Economics and Social Theory
59
The question of whether society might also embody such a concept of order that exists in nature, or if so, what was ‘the force of
gravity’ that would establish such order would undoubtedly be asked
sooner or later. However, the major difficulty here is the fact that
human beings are not objects that move entirely mechanically like
planets; they behave according to their feelings, thoughts and intentions. In other words, human beings are capable of deviating from the
original version of song by changing the notes and spontaneity and
intentionality are the main characteristics of human behavior. Nevertheless, this did not denote that such order could not exist in human
society. This concept of order was first introduced by the ‘social contract’ theory, which was founded on the doctrine of natural rights developed by Thomas Hobbes (1588-1679).
Hobbes, in his famous work ‘Leviathan’ published in 1651
(Hobbes, 1968), formulated the problem which social theory is still
struggling to solve: if individuals behave to further their own self interest, then how will they prevent society from drowning in chaos? In
other words, how can the conflict between individual interest and social interest be eliminated? Hobbes’s response to this question was
that the only way of achieving social order was that the state created
by social contract would forcibly establish it. Hobbes postulates that
people are not safe in a condition which he calls the state of nature
(Russel, 1945: 557), In that state, each person would have a right, or
license, to everything in the world. This inevitably leads to conflict, a
"war of all against all" (bellum omntum contra omnes), for “man is
wolf to man” (homo homini lupus). To escape this state of war, men
in the state of nature accede to a social contract and establish civil society. According to Hobbes, the despotic state is the only way out of
anarchy.
Even though such a concept assumes importance in describing the
functioning of the system as it is based on the self-interest motive, i.e.
the driving engine of the market, it is at the same time problematic,
because it refers to the individual’s renouncement of his/her freedom
in the market. The basic question here is if there is a way of establishing social order that would not compel the individual to surrender
his/her freedom. Locke’s answer to this question is still the one,
which liberal social theory cannot abandon even today. Though Locke
defended the doctrine of natural rights and social contract, contrary
to Hobbes, he maintained that people need not be ‘a wolf’ to one another. Locke, by contrast, thought that ‘the state of nature’ was not a
description of the life of savages, but of an imagined community of
‘virtuous anarchists’ who needed no police or law-courts because
60
TODAİE’s Review of Public Administration, Vol. 3 No 2
they relied on their reasoning (Russell, 1945: 625). Nevertheless, a
state of nature, where humans were in an unprotected and unsafe
state; they still acted as their own judge; and they had to protect their
rights themselves, was replaced by a state of government via social
theory. Locke stresses individual consent as the mechanism by which
political societies are created (Russell, 1945: 632). However, this
does not mean that individuals will renounce their rights, which are
inseparable from them, to the state; on the contrary, the state will exist to preserve these natural rights; the legal system should be compliant with ‘natural law’. Nevertheless, it is far from being a satisfactory envisagement of a society, because this refers to the recognition
of the existence of a conflict between the self-interest motive and social welfare in one way or another.8 The defect of Locke’s theory was
that it lacked the mechanism that ensured reconciliation between individual interests and social interests. It was Adam Smith (17231790), who first presented such mechanism. 9
Smith’s challenge was to find a way of reconciling individuals’ virtuous behavior and their self-interest motive on the one hand and,
individual interests and social welfare on the other hand. In this respect, Smith’s two famous books, The Theory of Mental Sentiments
(1759) and The Wealth of Nations (1776) can be regarded as the
fruits of such efforts. While in the first book, the Newtonian force of
gravity that keeps society together is the sentiment, which Smith calls
‘sympathy’, in the latter, it is the self-interest motive that lies behind
the Invisible Hand. According to Smith, ‘sympathy’ is an individual’s
capacity of predicting someone’s behavior by putting himself/herself
into his/her place (Gordon, 1991: 133-35). Smith, one of the followers of the doctrine of natural rights, believed that human beings were
Actually there has always been such kind of tension within the liberal approach. Even
Bentham, the founder of utilitarianism, deduced in his last years of life that individual
interests could be harmonized with social welfare only by state intervention (Fusfeld,
2002: 51). Likewise, Michael Hechter (1981: 399-429) argues that the Invisible Hand
doctrine is not consistent with utilitarianism. Hechter, like Bentham, states that utilitarianism driven by self-interest would inevitably lead to conflict among individuals,
thus resulting in the intervention of the state, the only institution that can avoid social restlessness through intervention in the market (1981: 414).
9 In fact, before Smith, Bernard de Mandeville (1670-1733), in his famous poetical
book, The Fable of Bees (Mandeville, 1962), which was published in 1704, argued
that the development of civilization is based on vices rather than virtues. According
to Mandeville, economic growth and welfare are not the consequences of individuals’
hard work and economy, and their thinking of others, but their pursuit of selfinterest, pleasure, comfort and luxury.
8
‘Invisible Hand’ Metaphor in Economics and Social Theory
61
very much alike and they had equal rights and characteristics.10
Therefore, people were capable of understanding each other’s behavior patterns. This would lay down the preconditions for the creation
of an order, where rights and freedoms could be protected by individuals’ mutual understanding of one another. Adam Smith described
the characteristics of this order in his book, The Wealth of Nations.
Smith argued that the ‘system of natural freedom’ would emerge as a
consequence of people acting in their own self-interest. This system is
based on Invisible Hand understanding, which proposes that individuals, while pursuing their own interests, increase social welfare as
well. The Invisible Hand approach maintains that social order is not
merely the consequence of sympathy among people, but also an outcome of the tendency to exchange and social division of labor. Invisible Hand can solve the ‘problem of order’ without any need for outside intervention or an authority. This order is achieved by the ‘unintended consequences of the intended behaviors of individuals’. Nobody behaves because of his/her concern about social welfare; what
they seek is their own self-interest. Nevertheless, such patterns of
behavior enable the realization of social welfare in a manner they
never expect or aspire to. This ‘spontaneous order’ does not emerge
by force; quite the reverse, it an exchange activity based on the selfinterest motive. The functioning of such system relies on freedom of
individual enterprise and free competition. There is no need for intervention of the state or any other authority for the smooth operation of the order; as a matter of fact, such intervention will not only
have a deteriorating effect on resource allocation, but will also eliminate individual freedom, the most precious value (Hayek, 1944).
Therefore, Invisible Hand assures a stable social order, which is
formed as a consequence of behaviors of individuals, who seek their
own private interests, albeit dependent of their intentions; in other
words, rather than a conflict, contrary to Hobbes’s assertion, there is
harmony between the individual’s self interests and the interests of
society.
As a general social theory model, the Invisible Hand metaphor encompasses two basic mechanisms or processes (Ullmann-Margalit,
1997: 181-99): Firstly, Invisible Hand should have a ‘filtering mechaThe Scottish Enlightenment tradition, of which Smith was also a member, argued
that human nature was uniform. David Hume, one of the leading representatives of
this approach, says, "Mankind is so much the same, in all times and places, that history informs us of nothing new or strange in particular. Its chief use is only to discover
the constant and universal principles of human nature." (cited by Gordon, 1991:
116).
10
62
TODAİE’s Review of Public Administration, Vol. 3 No 2
nism’, which keeps out all beings, impacts or processes that might ruin the achievable pattern. Secondly, as each piece or element will also
affect the harmonization of other pieces or other elements while
adopting local changes, Invisible Hand should contain an ‘equilibrating mechanism’, which ensures the generation of a specific pattern as
a consequence of all these harmonizations. The simultaneous functioning of these two mechanisms not only exclude the impacts that
might ruin the order, but they also assure the emergence of a specific
pattern as an outcome of very different incidents that seem completely unrelated to one another in an anticipated or intended manner. As
it is known, these two mechanisms, which are employed chiefly in
economics and social theory, are rational choice theory and equilibrium mechanism. The actions of numerous individuals, who pursue
their own divergent interests, combine to bring about a wellstructured yet undesigned structure. However, such supposition is
nothing other than the preassumption of the consequence. The reason is that a functionalist and/or teleological approach adds an ‘explanatory’ dimension to Invisible Hand: The primary function of Invisible Hand is to ensure optimal resource allocation and a stable social order. However, not presenting, but merely assuming these causal mechanisms is not an ‘explanation’. This will be better understood
with a closer look at functionalist and/or teleological approaches.
INVISIBLE HAND AND TELEOLOGISM
The two mechanisms that assure the self-functioning of the order
generated by Invisible Hand, which always produce optimal outcomes (in terms of both resource allocation and a stable order) is the
equilibrium approach that describes the operation of the markets via
Rational Choice Theory, which suggests optimizing behavior. Rational
Choice Theory, which rather focuses on the conformity between individual’s means and ends, assumes that individuals choose the best action according to stable preference functions and constraints facing
them and use their resources in the most efficient manner to achieve
the best. This denotes that when every individual acts rationally, the
outcome will be social rationality. In other words, resources will be
utilized in such a way so as to make everybody happy without them
being wasted. This is achieved by the system’s attainment of equilibrium. The state of equilibrium refers to a state, where individuals’
benefits and gains are maximized and the optimal plans of buyers and
sellers are in complete harmony. The state of equilibrium is determined by the scarcity level of resources as well as prices set in line
with individuals’ preferences. These two mechanisms also ensure op-
‘Invisible Hand’ Metaphor in Economics and Social Theory
63
timal (i.e. in such a way so as to result in efficient resource allocation)
behavior of the system as a whole in a totally unconsidered, unintended and unpredicted manner. In this respect, such kind of reasoning recalls Hegel’s famous notion of the ‘The Cunning of Reason’
(Sarfati, 2007).11 Even if individuals seem to act of their own free will,
there might actually be some ‘cosmic’ forces, whose existence they
are unaware of, that lead them towards achieving a more noble goal.
Such an explanation, which claims that individuals are in fact nothing
but puppets to be employed for attaining certain goals, will guide us
either to a Hegelian kind of metaphysical teleologism, or at least to
functional ‘explanations’ that link the cause of the existence of the
whole economic and social system to the fulfillment of certain functions. Another problem is that especially liberal approaches employ
teleologism or functionalism to support their proposition that the
system always produces the best results. That is to say, this notion
might make us adopt Dr. Pangloss’s12 viewpoint, who says in Voltaire’s Candide, ‘this world is the best of all possible worlds’.
Such teleological or functionalist explanations argue that any being, organism, system, institution or social practice exists because of
their function in the first place. In other words, the ‘explanation’ for
the functioning of the system involves the achievement of preset
goals or functions. In social sciences, functionalism argues that social
systems have certain ‘needs’, therefore it should be decided how societies or social systems will meet these needs. How any component
of society can create the conditions that would be helpful for a more
extensive system is still among the basic questions, to which functionalism seeks an answer.13 Yet, a social component, practice or system’s fulfillment of some functions does not explain how the component, practice or system in question emerged in the first place.14 Functionalism may be helpful in explaining the working of artificial systems designed for attaining specific goals via characteristics or proYet Edna Ullmann-Margalit (1997) states that Invisible Hand and the Cunning of
Reason should not be mistaken for each other and argues that Hegel used the notion
of the ‘Cunning of Reason mostly for explaining the behavior of historical personalities who shaped history.
12 Bertrand Russel (1945: 581) stated that it was Leibniz (defender of the notion of
preestablished harmony), whom Voltaire caricatured as Doctor Pangloss.
13 For the notion of functionalism and its criticisms, see: Hollis (1994: 95-100); Giddens
(1984: 293-97); Little (1991: 91-93), Mahner - Bunge (2001).
14 Another factor that makes this situation more complicated is that same institution
can fulfil more than one function. Besides, according to Karl Polanyi, this is a rule rather than an exception: “no institution ever survives its function—when it appears to
do so, it is because it serves in some other function, or functions, which need not include the original one” (Polanyi, 1944: 183).
11
64
TODAİE’s Review of Public Administration, Vol. 3 No 2
cesses, some of which are chosen; however, Invisible Hand clearly rejects the existence of such kind of design.
In general, it seems helpful to touch on two different forms of
functionalism that can be easily mistaken for each other: ‘adaptationist’ and ‘teleological’ functionalism.15 It is not surprising to mistake
them for one another, because adaptationist functionalism was actually derived from teleological functionalism. Even though functionalism, which is of metaphysical nature in essence and which proposes
that everything has a purpose or a ‘duty’ as in the Hegelian system,
does not seem scientifically acceptable, today, adaptationist understanding based on the same notion has replaced it mainly in social
theory. For instance, if observation shows that A (e.g. market mechanism) does B (e.g. efficient resource allocation), the adaptationist,
who asserts that all characteristics or qualities are eventually adaptationary or functional, will say that A has been designed to do B, or
that B has evolved to be beneficial to its bearer (Mahner - Bunge,
2001: 86). This actually indicates that the functionalist aspect of adaptationism comes into prominence. In this respect, it seems possible
that the Invisible Hand Understanding in social theory (chiefly economics) is not an exception to this rule.
It is noteworthy that the Invisible Hand metaphor and teleological
or functionalist points of view that lie behind it are also grounded on
some other metaphors. In this respect, two alternative metaphors
that are chiefly used in explaining the market system are the machine
metaphor and organism (i.e. evolution) metaphor. These two different metaphors have been widely employed during the evolution process of economics in different periods in line with scientific developments.
Considering the historical introduction provided above, it can be
clearly seen that Newton’s conception of mechanics or, more generally, the machine metaphor lies behind the Invisible Hand metaphor
since Smith.16 Akin to the mechanical watch allegory, this system is
Mahner - Bunge (2001) distinguish four different varieties of functionalism: formalist, black boxist, adaptationist and teleological. However, adaptationist, and teleological functionalism appear to be more prominent particularly in the Invisible Hand debate. Nevertheless, it would not be wrong to say that liberal Invisible Hand approach
lean on some sort of ‘black box’ functionalism, where basic causal mechanism is left
unexplained in terms of assuming something that needs to be explained or, expecting
its spontanous emergence.
16 In his book, The History of Astronomy, Adam Smith stated what he wanted to do was
to apply Newtonian planet mechanics to society (Smith, 1795: III.2). Nevertheless, for
the assertion that it might not be right to compare Smith and Newton’s notions to the
extent that even Newton himself was not ‘Newtonian’ enough, see: (Montes, 2003).
15
‘Invisible Hand’ Metaphor in Economics and Social Theory
65
just like a machine consisting of gears; machines are devices having
small parts that perform or assist in performing a specific function.
There is a mechanical causality relationship between these parts. All
parts of a machine work simultaneously so as to ensure the system‘s
fulfillment of a predetermined goal or function. As a natural extension
of the conceptualization of Invisible Hand, in order to identify the role
of each machine part in the working of the machine, these small parts
should be selected as the agents. In other words, the working of the
Invisible Hand mechanism can only be comprehended by understanding the functions of gears, i.e. the behaviors of individuals, comprising it. The analysis of individuals’ behavior will allow us to understand the operation of the machine as a whole.
That is to say, understanding Invisible Hand requires a reductionist approach, i.e. methodological individualism. Methodological individualism17 refers to a reduction of the explanation of all large entities, i.e. social phenomena, systems or relationships, by reference to
smaller ones without loss of meaning. Even some individualists argue
that terms such as ‘society’ or ‘social system’ only refer to abstract,
fictional models used by researchers for making their postulations
easy to understand. In the most general term, methodological individualism maintains that some beings, characteristics and particularly forces such as society and social relations can be explained via
their components like individuals, or they can be presupposed based
on the behavior of these components.18
Assuming that an individual is the ultimate explanatory category,
the Invisible hand model is founded on ‘representative individuals’,
who are not different from one another; whose main form of interaction in the market is exchange relations and each of who displays optimization behavior (Kirman, 1992). Undoubtedly, this understanding neither refers to social and institutional contexts, where individual behavior takes place, nor to social interactions between individuals. Individuals are solely expected to behave so as to pursue their
own interests similar to the gears that have to work in a particular
For methodological individualism, see: Giddens (1984: 214), Little (1991: 183-88).
Another important dimension of this mechanical approach is that causality is perceived as constant conjunctions between atomic events independent of one another
like in the Humean conception of lawlike statements, and its philosophy of existence
is based on the corpuscularian view of matter according to this approach, the causes
that lead to change and all causes are efficient and external to the thing in which
change occurs; besides, the internal structures of these corpuscles are not complex.
See: Harré (1984: Chapter 5); Bhaskar (1975: 83). For criticism of the philosopy of
existence adopted by the Neoclassical General Equilibrium approach, which takes Invisible Hand as a basis, see: Özel (2000).
17
18
66
TODAİE’s Review of Public Administration, Vol. 3 No 2
manner. Thus, the possibility of non-optimal consequences such as
inefficiency in resource allocation or social conflicts is eliminated at
the very beginning. But, the achievement of unintended consequences
does not always assure Panglossian consequences. On the other hand,
these two hypotheses are jointly used in Invisible Hand’s mechanical
conceptualizations and therefore, for instance, the thought of the possibility that the functioning of the system might produce tendencies
that might hinder its smooth operation is totally excluded as it will
contradict with such functionalist or teleological explanations.
An Invisible Hand understanding that establishes functionalism
on an evolutionary approach is provided by the notion of evolution
that appears to be adopted by Austrian economics. According to this
approach,19 Invisible Hand or ‘spontaneous order’ is a process, which
emerges and matures in the form of a by-product after undergoing
gradual changes over a long period of time. Even though the said evolutionary thought is superior to the mechanical Invisible Hand approach since it not only takes change into consideration, but it also
seems to use the ‘machine’ metaphor instead of ‘organism’ metaphor,
it can be asserted that its evolution process perspective still follows
an ‘adaptationist’ methodological principle. 20 This ‘adaptationist’ program considers natural selection, the fundamental mechanism of the
evolution process, as an agent that goes after optimization. This notion has two basic assumptions: the organism is still comprehended
within the context of a mechanical logic, i.e. as a being composed of
atomized ‘characteristics’. These characteristics have been designed
by natural selection so as to perform specific functions in the best
possible manner. Each atomized characteristic or element’s story of
adaptation to environmental conditions is different. Secondly, after
the failure of part-by-part optimization, interaction is acknowledged
via the dictum that an organism cannot optimize each part without
imposing expenses on others. The notion of 'trade-off' is introduced,
and organisms are interpreted as best compromises among compeThis notion was first defended by Carl Menger. Carl Menger regarded the emergence
of money as the process of unintended consequences (Menger, 1990, 1985). For a
criticism of Menger’s notion of unintended consequences, see: Özel (1988). Nevertheless, the most vigorous defender of the evolutionary approach in economics was unquestionably Hayek. See Hayek (1967, 1973, 1976, 1979). For an inclusive criticism
of Hayek’s views on evolution, see: Hodgson (1993: Chapter 12).
20 For the ‘Adaptationist’ biological evolution approach and its criticism, see: “Gould Lewontin (1979: 581-98); Lewontin (1991: 145-46) and Lewontin (2007). For an
economic evolution based on this notion, see: G. Hodgson (1991). For a criticism of
Gould – Lewontin, see: Queller (1995: 485-89) and Smith (2001). For the social evolutionary thought in general and its relationship with sciences, see: Thayer (2004).
19
‘Invisible Hand’ Metaphor in Economics and Social Theory
67
ting demands. Thus, interaction among parts is retained completely
within the adaptationist programme. Any suboptimality of a part is
explained as its contribution to the best possible design for the whole.
The notion that suboptimality might represent anything other than
the immediate work of natural selection is usually not entertained.
The adaptationist program is truly Panglossian. ‘Our world may not
be good in an abstract sense, but it is the very best we could have.
Each trait plays its part and must be as it is’ (Gould - Lewontin, 1979:
151).
At first, the use of this principle, which is basically employed for
explaining biological evolution, in the notion of Invisible Hand - overlooking the difference between the biological world and social world may seem interesting. However, it should be borne in mind that the
common point of the two approaches is the principle of optimization,
i.e. rational choice theory. It is evident that such type of ‘Invisible
Hand’ understanding based on rational choice (whether considered
at organism level or social level) and equilibrium mechanism is not
much different from mechanical understanding. According to Invisible Hand, non-optimal states are excluded on the assumption the system always finds the best solution. In fact, this is the very question,
i.e. how Invisible Hand always produces optimal consequences, that
needs to be answered. In other words, the basic problem is how the
filtering and equilibrating mechanisms of the system will be able to
impede non-optimal states. That is to say, assuming that these mechanisms will always work denotes the pre-acceptance of the hypothesis that has to be explained.
However, an evolutionary process may not always generate an
‘Invisible Hand’ in the optimal sense; Faced with consequences such
as Invisible Backhand’ (Ylikovski, 1995: 34), or ‘malign’ Invisible
Hand (Taylor, 1985: 170), or even ‘Evolutionary Hand’ with dissipative structures (Dosi, et al., 1988) is always possible. Such ‘Evolutionary Hand’ approaches do not consider evolution as an optimization
process. They entail a dynamic conception of evolution involving
complexity, in which the idiosyncracies and interactions among various parts that form the organism (or the system) may change or even
deteriorate the operation of the system as a whole (Schumpeter,
2005; Foster 2000). This process is an evolutionary process, where
repeated hikes, ‘mutations’ occur. But these mutations do not necessarily generate optimal outcomes. If ‘an emergent process with an
unknown outcome’, (Foster, 2000: 311-328) where the ‘norms’ of the
system change by themselves, is in question, then the ‘development’
of the system leads to the mutation of the parameters or ‘norms’ that
68
TODAİE’s Review of Public Administration, Vol. 3 No 2
define the system; thus, the system moves from one norm to another.
However, ‘this transition cannot be decomposed into infinitesimal
steps’ (Schumpeter, 2005: 115). According to this understanding,
equilibrium should be approached not as a ‘state of rest’ that comes
out as a consequence of balance between forces, i.e. the Newtonian
notion, with a ‘Boltzmanian’ point of view, i.e. changes not involving
structural changes. Within the context of a nonequilibrium analysis,
in which the change in the ‘norms’ of the system is not an exception
but a rule, a framework involving nonlinear, irreversible change, selforganization, complexity and dissipative structures, a notion of order
that emerges within change should be taken into consideration (Foster 2000). The difference between these two evolutionary viewpoints
is presented in Table 1.
Table 1. Two Evolutionary Perspectives and Invisible Hand
CHANGE
EQUILIBRIUM
ORDER
EVOLUTIONARY
PROCESS
‘ADAPTATIONIST’/
PANGLOSSIAN
EVOLUTION
DYNAMIC EVOLUTION
‘Causal’ quantitative:
Functional,
Linear, Reversible:
Many-to-one-mapping
‘Development’, Novelty
Adaptationist, Nonlinear,
Irreversible
One-to-many-mapping
Linear Development/determinism
Bifurcation
‘Newtonian’: Equilibrium Between Forces
Thermodynamic: Absence
of Structural Change
Equilibrium and
Disequilibrium
Punctuated Equilibrium
Spontaneous/Stable
Emergent
(Optimization; continuous)
Dissipative
Adaptationist Natural
Selection:
Random Mutation
Nonequilibrium
Definite, determined
and efficient (unintended) consequences:
Emergent, indeterminate
and
unknown (unintended)
consequences
‘Invisible Hand’
‘Invisible Backhand’ /
‘Invisible Hand’ Metaphor in Economics and Social Theory
69
‘Evolutionary Hand’
Source: Compiled from Foster (2000) and Schumpeter (2005).
In conclusion, the efforts towards filling the content of the Invisible Hand metaphor with functional or teleological ‘causal’ mechanisms have caused two important problems in respect of the methodology (Rothschild, 1994: 319-321): Firstly, this notion, which is
based on the ‘representative individual’ construct, overlooks idiosyncracies among individuals as well as differences in responses to the
same effects on the part of different individuals and sections of the
society. The Invisible Hand approach assumes that all decisionmaking agents (or ‘organisms’) act only to perform a specific function. Secondly, even though metaphysical consequences like ‘the cunning of reason’, or religious outcomes like ‘creation’ are avoided, the
optimization understanding that lies behind the Invisible Hand approach will eventually lead to a Panglossian state, which will result in
the exclusion of non-optimal states from the very beginning. Therefore, all these efforts to provide Invisible Hand with a causal mechanism cannot produce any other result but the preassumption of a
state that needs an explanation. So, abandoning such a ‘Panglossian’
approach and adopting nonequilibrium and non-optimal states will
not only provide Invisible Hand with a causal context, but will also allow for a more realistic conceptualization in economics and social
theory.
CONCLUSION
The liberal ‘Invisible hand’ approach, whether Smithian version
adopted by liberal economics or its Austrian/evolutionary version,
fails to explain why efficient or intended consequences are always
achieved. The approach assumes that teleological functions, the cause
of the existence of the system, are performed under any circumstances. However, it is clear that the lack of any causal explanation will
leave Invisible Hand empty. Therefore, in order to give validity to Invisible Hand, at least such a ‘Panglossian’ approach should be abandoned. Moreover, when it is accepted that not only might there be
70
TODAİE’s Review of Public Administration, Vol. 3 No 2
disequilibria and inefficiencies, but also ‘unintended consequences’
might sometimes turn out to be ‘unfavorable’ or undesirable consequences will increase both the level of generality and applicability of
the Invisible Hand approach.
REFERENCES
Arrow, Kenneth (1994), “Methodological Individualism and Social
Knowledge”, American Economic Review, Papers and Proceedings, May.
Arrow, Kenneth - Frank Hahn (1971), General Competitive Analysis, North
Holland.
Aydınonat, N. Emrah (2006), “Is the Invisible Hand un−Smithian? A Comment on Rothschild”, Economics Bulletin, Vol. 2, No. 2, p. 1-9.
Bhaskar, Roy (1975), A Realist Theory of Science, Leeds: Leeds Books Ltd.
Bonner, John (1986), Introduction to the Theory of Social Choice, Baltimore:
The Johns Hopkins University Press.
Brennon, Geoffrey - Philip Pettit (1993), “Hands Invisible and Tangible”, Synthese, Vol. 94, p. 191-225.
Bulutay, Tuncer (1979), Genel Denge Kuramı, Ankara: SBF Yayınları.
Burtt, Edwin Arthur (1924), The Metaphysical Foundation of Modern Physical Science: A Historical and Critical Essay, London: Routledge and Kegan
Paul Ltd. (tıpkıbasım, Routledge 2001),
Caldwell, Bruce (1997), “Hayek and Socialism”, The Journal of Economic Literature, Vol. 35, No. 4, p. 1856-1890.
Caldwell, Bruce (2004), Hayek’s Challenge: An Intellectual Biography, Chicago: Chicago University Press.
Coestler, Arthur (1964), The Sleepwalkers: A History of Man’s Changing Vision of the Universe, Harmonsworth: Penguin.
David A. Martin (1990), “Economics as Ideology: on Making ‘The Invisible
Hand’ Invisible”, Review of Social Economy, Vol. 48, No. 3, Autumn, p.
227-43.
Dixit, Avinash K. - Barry J. Nalebuff (1991), Thinking Strategically: The Competitive Edge in Business, Politics, and Everday Life, New York: W. W.
Norton & Company.
Dosi G. - C. Freeman - R. Nelson - G. Silverberg - L. Soete (Eds.) (1988), Technical Change and Economic Theory, London: Francis Pinter and New
York: Columbia University Press.
Foster, J. (2000), “Competitive Selection, Self-organization, and Joseph A.
Schumpeter”, Journal of Evolutionary Economics, Vol. 10, p. 311-328.
Fusfeld, Daniel (2002), The Age of the Economist, Boston: Addison Wesley.
Giddens, Anthony (1984), The Constitution of Society: Outline of the Theory
of Structuration, Cambridge: Polity Press (Türkçe çevirisi, Toplumun Ku-
‘Invisible Hand’ Metaphor in Economics and Social Theory
71
ruluşu: Yapılaşma Kuramının Anahatları, (Çev. Hüseyin Özel), Ankara: Bilim ve Sanat Yayınevi, 1999).
Glasman, Maurice (1996), Unnecessary Suffering: Managing the Market Utopia, Londra: Verso.
Gordon, Scott (1991), The History and Philosophy of Social Science, New
York: Routledge.
Gould, Stephen J. - R. C. Lewontin (1979), “The Spandrels of San Marco and
the Panglossian Paradigm: A Critique of the Adaptationist Programme”,
Proc. B. Soc. Lond. B, Vol. 205, p. 581-98.
Gramp, William D. (2000), “What Did Smith Mean by the Invisible Hand?”,
Journal of Political Economy, Vol. 108, No. 31, p. 441-465.
Harré, Rom (1975), The Philosophies of Science: An Introductory Survey, 2.
baskı, Oxford: Oxford University Press.
Hayek, Friedrich von (1944), The Road to Serfdom, Chicago: University of
Chicago Press.
Hayek, F. A. (1948), Individualism and Economic Order, Chicago: The University of Chicago Press.
Hayek, Friedrich von (1973), Law Legislation and Liberty, Vol. I. London:
Routledge and Kegan Paul.
Hayek, Friedrich von (1976), Law Legislation and Liberty , Vol. II. London:
Routledge and Kegan Paul.
Hayek, Friedrich von (1979), Law Legislation and Liberty , Vol. III. London:
Routledge and Kegan Paul.
Hayek, Friedrich von (1984), “Competition as a Discovery Procedure”,
Nishiyama, C. - K. Leube (Eds.), The Essence of Hayek, Stanford, Ca.: Hoover Institution Press, p. 254-265.
Hechter, Michael (1981), “Karl Polanyi’s Social Theory: A Critique”, Politics
and Society, Vol. 10, No. 4, p. 399-429.
Hobbes, Thomas (1968), Leviathan, C. B. Macpherson (Ed.), Harmondsworth:
Penguin.
Hodgson, Geoffrey M. (1991), “Economic Evolution: Intervention Contra
Pangloss”, Journal of Economic Issues, Vol. 25, No. 2 (June), p. 519-533.
Hodgson, Geoffrey M. (1993), Economics and Evolution: Bringing Life Back
into Economics, Ann Arbor: The University of Michigan Press.
Hollis, Martin (1994), The Philosophy of Social Science: An Introduction,
Cambridge: Cambridge University Press, 1994.
Hunt, E. K. (1981), “A Radical Critique of Welfare Economics”, E. J. Nell (Ed.),
Growth, Profits and Property, Cambridge: Cambridge University Press
Hunt, E. K. (1992), History of Economic Thought: A Critical Perspective, 2.
Baskı, New York: Harper Collins Publishers.
Kirman, Alan P. (1992), “Whom or What Does the Representative Individual
Represent?”, Journal of Economic Perspectives, Vol. 6, No. 2, p. 117-36.
72
TODAİE’s Review of Public Administration, Vol. 3 No 2
Koyré, Alexandre (2000), Bilim Tarihi Yazıları I, Ankara: TÜBİTAK Popüler
Bilim Kitapları.
Lewontin, Richard (1991), “Facts and the Factitious in Natural Sciences”, Critical Inquiry, Vol. 18, Autum, p. 145-46.
Lewontin, Richard (2007), Üçlü Sarmal: Gen, Organizma ve Çevre, Ankara:
TÜBİTAK Popüler Bilim Kitapları.
Little, Daniel (1991), Varieties of Social Explanation: An Introduction to the
Philosophy of Science, Boulder: Westview Press.
Mahner, Martin - Mario Bunge (2001), “Function and Functionalism: A Synthetic Perspective”, Philosophy of Science, Vol. 68, No. 1 (March), p. 7594.
Mandeville, Bernard (1962), The Fable of the Bees, or Private Vices, Publick
Benefits, I. Primer (Ed.), New York: Capricorn Books.
Menger, Carl (1985), Investigations into the Method of the Social Sciences
With Special Reference to Economics, Louis Schneider (Ed.), New York:
New York University Press.
Menger, Carl (1990), “On the Origin of Money”, Economic Journal, Vol. 2, June,
1892, p. 239-55; tıpkıbasım: Austrian Economics, Vol. II, Stephen Littlechild (Ed.), Edward Elgar, p. 179-95.
Montes, Leonidas (2003), “Smith and Newton: Some Methodological Issues
Concerning General Economic Equilibrium Theory”, Cambridge Journal of
Economics, Vol. 27, p. 723-47.
Nozick, Richard (1994), “Invisible Hand Explanations”, American Economic
Review, Papers and Proceedings, Vol. 84, No. 2, May, p. 314-318.
Özel, Hüseyin (1998), “Methodological Individualism in Carl Menger: An
Evaluation”, Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi
Dergisi, Sayı 16, No. 1-2, s. 47-70.
Özel, Hüseyin (2000), “The Explanatory Role of the General Equilibrium Theory: An Outline into a Critique of Neoclassical Economics”, Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Sayı 18, No. 1, s. 25785.
Polanyi, K. (1944), The Great Transformation: The Political and Economic Origins of Our Time, New York: Rinehart & Co.
Putnam, Robert D. (1994), “Social Capital and Public Affairs”, Bulletin of the
American Academy of Arts and Sciences, Vol. 47, No. 8 (May), p. 5-6.
Queller, David C. (1995), “The Spaniels of St. Marx and the Panglossian Paradox: A Critique of a Rhetorical Programme”, The Quarterly Review of Biology, Vol. 70, No. 4, December, p. 485-89.
Rothschild, Emma (2001), Economic Sentiments: Adam Smith, Condorcet and
the Enlightenment, Cambridge, Massachusetts: Harvard University Press.
Rotschild, Emma (1994), “Adam Smith and the Invisible Hand”, American
Economic Review, Papers and Proceedings, May, p. 319-322.
‘Invisible Hand’ Metaphor in Economics and Social Theory
73
Russel, Bertrand (1945), A History of Western Philosophy, New York: Simon
and Schuster.
Sarfati, Metin (2007), “Smith’de Bütünlük Sorunu”, İktisat Dergisi, Sayı 490,
(Ekim-Kasım), s. 32-47.
Schumpeter, J. A. (2005), “Development”, Journal of Economic Literature, Vol.
43, p. 108-120.
Smith, Adam (1776), An Inquiry into the Nature and Causes of The Wealth of
Nations, Edwin Cannan (Ed.), The University of Chicago Press, 1976.
Smith, Adam (1795), The History of Astronomy - Adam Smith, Glasgow Edi-
tion of the Works and Correspondence Vol. 3 Essays on Philosophical
Subjects, Essays on Philosophical Subjects, W. P. D. Wightman - J. C. Bryce
(Eds.), Vol. III of the Glasgow Edition of the Works and Correspondence of
Adam Smith, Indianapolis: Liberty Fund, 1982.
Smith, John Maynard (2001), “Reconciling Marx and Darwin”, Evolution, Vol.
55, No. 7 (July), p. 1496-98.
Taylor, Charles (1985), “Foucault on Freedom and Truth”, Philosophy and the
Human Sciences, Philosophical papers, Cilt 2, Cambridge: University of
Cambridge Press.
Thayer, Bradley A. (2004), “Evolution and the American Social Sciences: An
Evolutionary Social Scientist's View”, Politics and the Life Sciences, Vol.
23, No. 1 (March), p. 2-11.
Ullmann-Margalit, Edna (1997), “Invisible Hand and the Cunning of Reason”,
Social Research, Vol. 64, No. 2, Summer, p. 181-99.
Westfall, Richard S. (1994), Modern Bilimin Oluşumu, Ankara: TÜBİTAK
Popüler Bilim Kitapları.
Ylikoski, Peter (1995), “The Invisible Hand and Science”, Science Studies, Vol.
8, p. 32-43.