The Blindness Assumption in
Invisible-hand Explanations
Emma Tieffenbach
Invisible-hand explanations (hereafter IHE) are notoriously diverse. They vary in
form (they are narratives, games, game theoretical models, mathematical theorem,
etc.), in scope (within and beyond the economic realm), and are compatible with
many different mechanisms (labelled as “functional-evolutionary”, “aggregative”,
“equilibrium”, “filter”, etc.). But these are explanations that also invariably depict
agents as not intending to produce the social pattern they nonetheless contribute to
bring about. This feature is diversely put in terms of the “self-centeredness”,
“blindness”, or “lack of awareness” of agents who “are supposed to be minding their
own business unaware of and a fortiori not intending to produce the ultimate overall
outcome” (Ullmann-Margalit 1978, 267; see also Robert Nozick 1974, 18; Barry
Smith, 1986; Uskali Mäki 1990). For short, we will refer to the “blindness
assumption”.
The blindness assumption is often regarded as a point in favour of invisible-hand
explanations, as what make them “lovely” (Nozick 1974, 18), or contributes to their
“success and interest” (Ullmann-Margalit 1978, 268). Even those who are sceptical
about IHE often criticize them for not being obviously based on that assumption.
They object that they refer to individuals whose lack of awareness of the explained
outcome is not clearly established. For example, Christina Petsoulas argues, against
an interpretation of Mandeville, David Hume and Adam Smith, that these thinkers
assigned a central role to “reflection” and “imitation” in the development of
institutional rules that is incompatible with the alleged unintended character of these
rules (Petsoulas 2001). Hillel Steiner criticizes Menger’s explanation of the money
system on similar ground. He argues that money is a “public good” which
presupposes a “pre-commitment” on the part of agents to relinquish their goods in
exchange of others’ money. And this, in turn, “presuppose(s) a general contractual
understanding among individuals to accept money in exchange for goods” (Steiner
2013, 2013). Likewise, Gerald Gaus objects to Nozick’s account of the minimal state
that “the actions and reasoning of the dominant protective agency in prohibiting
unauthorized enforcement by independents is too close to aiming at [the minimal
state] to constitute a satisfying invisible hand explanation of [the minimal state]”
(Gaus 2011).
So, for both proponents and opponents to IHE, the success of an invisible-hand
explanation mainly depends on whether it convincingly dispenses with an awareness
of the outcome to be explained on the part of agents. The question addressed in this
chapter is: “What sort of achievement is then accomplished ?”.
Is assuming blindness more truthful to the way certain institutions actually arise?
The related merit of an IHE would then, as it is sometimes argued, to offer “an
accurate description of the empirical reality of social life” (Smith 2009, 11) and that
implies rejecting “intentional-design explanations” such as “social contracts theories,
Great Legislator’ myths or divine right arguments” (Smith 2009, 14). However, even
if factual accuracy is admittedly a concern for some invisible-hand explainers1, it
would be restrictive to approach invisible-hand explanations as mere historical
explanations. Nozick claims to have provided a “state of nature explanations of the
political realm [which] packs explanatory punch and illumination, even if incorrect”
(Nozick 1974, 8, my emphasis). On this issue, Edna Ullmann-Margalit concurs with
Nozick: “even if the invisible-hand explanation turns out not to be the correct account
of how the thing emerged”, she claims, “it may still not be devoid of validity with
regard to the question of how (and why) it is maintained (Ullmann-Margalit 1978,
24). IHE remains valuable, according to Aydinonat, “even if they do not get the fact
right” (Aydinonat 2008, 6). So tracking the truth is not what invisible-hand explainers
seem to be mainly preoccupied with. So that even if the sort of invisible-hand
processes described by Menger, Shelling and Nozick had never been instantiated, still
recounting them remain a valuable activity. The search for unintended consequences,
which they exemplify, is therefore not for the purpose of restoring historical truth2.
Could it be, conversely, that invisible-hand explanations are then just good
narratives? It surely is a prowess to conceive a coherent, sophisticated process,
composed of stages smoothly following one another, through which the actions of
many unexpectedly end in the emergence of property rules (Hume 1741), the money
system (Menger 1771), a minimal State (Nozick 1974). The quest for unintended
consequences provides good plots and is thus inherently stimulating. However, as it is
often recognized, if IHE are to explain anything, and not be mere stylistic
accomplishments or exercises in rhetoric, their worth cannot solely depend on the
internal standards listed above.
So if IHE are neither “stories” nor “histories”, what are they and what their
explanatory merit? What is it that we now discover about, say, money, states or
property rules, when they are described as unintended, which an intentional-design
explanation of the same social phenomena is unable to highlight?” To address this
question, we will proceed as follow. The idea that agents are blind is pervasive in
social sciences and the first section sorts out cases relevant to the invisible hand from
those that are not. The second section spells out various conceptions of the blindness
assumption, all germane to the invisible hand, namely, the (i) ‘lack of theoretical
perspective’, (ii) ‘profit motive’, (iii) ‘lack of the sense of the aggregate shape of
things’, (iv) ‘lack of we-ness’, (v) ‘no Great Men’, (vi) ‘no legislation’ and the (vii)
1
For example, Hume criticizes the social contract theory about the origin government for its historical
inaccuracy. He claims that “almost all governments which exist at present, or of which there remains in
history, have been founded originally, either on usurpation or conquest, or both, without any pretence
of a fair consent or voluntary subjection of the people (Hume, Of the Original Contract 360; cf. 361-3).
Also, Menger offers historical evidence in support of his accounts of money. He writes that “money is
not the product of an agreement on the part of economizing men nor the product of legislative acts” and
then, a couple of paragraphs latter, recalls that “the trade and commerce of the most cultured people of
the ancient world, the Greeks, whose stages of development history has revealed to us in fairly distinct
outlines, showed no trace of coined money even as later as the time of Homer” (Menger [1871], 2007,
263).
2
If invisible-hand explanations were conjectural accounts, as some argue (cf. Keller 1994) their
historical truth would matter. The conjectural method, as Höpfl defines it, “is simply a faute de mieux,
a way of filling out the lacunae in the documentary record” (Höpfl 1978, 20). To say that invisiblehand explanations are conjectural histories is therefore to accept that they could fill out the lacunae
correctly and would be praiseworthy for hitting the truth, even if only by chance. Conversely, the worth
of a conjecture would be diminished if evidences revealed that it is incorrect. On all accounts,
invisible-hand explanations are not vulnerable to the same fate if proved incorrect.
‘no agreement’ accounts. The alleged increased explanatory value of that assumption,
in either of the senses just distinguished, is discussed in section III, where different
views — in terms of 1) explanatory unification, 2) methodological individualistic
commitment 3) non-circularity, 5) the observer-independency of institutions, 6) the
discovery of a priori truths about the social realm —are critically reviewed.
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