Edna Ullmann-Margalit

The Invisible Hand viewed and reviewed

An explicit and laudable aim of the author of The Invisible Hand in Economics is to try to get economists and philosophers to talk to each other, or at least to start reading one another. And once they do, he wants them to do so out of respect rather than distrust, and with a clearer sense of what they can offer each other and – at least as important – of what they cannot. The book’s choice of the topic with which economists and philosophers could start engaging each other cannot be improved on. The notion of the invisible hand, and the type of explanations it gives rise to, of social patterns of behavior as unintended consequences of individual actions and interactions, are just right for the cross-fertilization between a variety of philosophical fields, prominently including the philosophy of science, on one side, and economic theory, prominently including game theory, on the other. Moreover, the experience of reading this book leaves the reader feeling that the choice of author for this undertaking can hardly be improved on either. Trained both in economics and in philosophy, Emrah Aydinonat has formal and technical skills as well as a historical sensibility and a keen intellectual curiosity, and he has the tenacity to go on digging for gem-stones where previous visitors to the same terrain seem content with surface pebbles. Setting himself the task of developing a framework capable of making sense of the marketplace of extant models, and then to use this framework to ‘gain new insights into the contemporary literature that characterizes institutions and macro-social structures as unintended consequences of human action’ (p. 7), he has produced a book that is pleasingly disciplined and well organized. Starting out with a chapter clarifying the notion of ‘unintended consequences’, Aydinonat proceeds to present and discuss, in two successive chapters, two prominent examples, Menger’s model of the origin of money and Schelling’s model of residential segregation. These lead to a chapter devoted to explicating the idea of invisible-hand explanations and to another in which the money-origin question is revisited. The last two chapters before the concluding one deal, respectively, with the general question of models and how and what they represent, and with the particular way game theory models conventions. Following the concluding chapter there are four appendices of a more technical nature, elaborating some of the book’s arguments and examples in formalized language. The book has a thoughtful index and a marvel of a bibliography – comprehensive, up-to-date and honest. It will surely be of much use for students and for anyone who will be doing future research on any of the book’s topics. As a conceptual tool, the notion of the invisible hand has had a prominent place in the Western world’s intellectual toolbox for more than two centuries now, and it is likely to remain there. It is as hugely powerful a metaphor as it is an attractive one. Aydinonat’s

Practical Reasoning — The Bottom Line: A Comment

Let me begin by suggesting that perhaps there is an original sin, or a primordial fault, in regarding practical reasoning as an inference. This in itself invites the various questions that immediately crowd in: Is the conclusion the action? Are the premisses propositions? Is truth the invariant? Does it preserve the classical distinction between judgments and performances (Pears’ terms) or, to use Hume’s terminology, between “representations” and “original existences”?