How cute dogs help us understand Adam Smith’s ‘invisible hand’

Adam Smith’s Wealth of Nations (1776) is often regarded as the “Bible” of capitalism. It is usually remembered for slogans that have become second nature to neoliberal advocates and governments around the world.

These include the importance of self-interest (a recoded greed) for social wellbeing, freedom of the market, the propensity for human beings to barter and exchange, and the invisible “hand” that guides the market.

But a careful study of Wealth of Nations reveals that its influence lies not in Smith’s ability to construct an argument but in his skill as a storyteller.

Indeed, many have noted that this two-volume work is rambling, polemical, and rather cavalier with evidence. It is not a work of science in any conventional sense. Instead, this “Bible” of capitalism is full to overflowing with fables, sayings, moral tales, vignettes, parables and myths. Let me give a few of the more significant examples.

Fables

Adam Smith, 1790. Wikimedia Commons

Perhaps the most significant fable is the one that follows the well-known saying: there exists, Smith writes, a “certain propensity in human nature,” which is “the propensity to truck, barter, and exchange one thing for another”.

Aware that this is a highly contested suggestion, he offers not detailed argument to back it up – but a cute fable concerning dogs. They stand in for all animals, whose nature is said to be different from that of human beings.

Do animals too exchange with one another? Of course not. “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”

Indeed, “Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that”.

The only way a dog can obtain something it wants is to fawn over its master. Exchange or barter simply does not enter into the equation. Obviously a fable such as this is no replacement for argument. But it is readable, entertaining perhaps, designed to appeal at another and more persuasive level.

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