Miss Nichols is a student at the University of California at Davis.

In a recent U.S. History lecture, one of our professors made what seemed to be a scornful reference to Adam Smith’s "invisible hand." His intention seemed to be to dis­credit a 420-page treatise on econ­omics by quoting one metaphor! The context in which this oft-quoted metaphor appears in Smith’s writing is his exposition of the theory that if each person pursues his own good, the good of society as a whole will result.

Every individual is continually ex­erting himself to find out the most advantageous employment for what­ever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society….

He generally, indeed, neither in­tends to promote the public interest, nor knows how much he is promoting it. By preferring the support of do­mestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own in­terest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.¹

How does this good result? Why, through the law of supply and demand, another concept which many pedagogues would have us believe is "outmoded." In a free economy, when demand for a product in­creases, the price goes up, capital is attracted by the prospect of profits, production is increased, the price eventually goes down again as supply fills demand. What Smith wanted to stress is that all this happens automatically without the need for central plan­ning. Indeed, central planning only hampers the process.

Regulating Bodily Functions

Consider your own body, as an analogy. Every minute that you live, your chest is acting as a bellows to fill your body’s demand for oxygen, your heart is pump­ing blood throughout your tissues to distribute oxygen and nutrients, your nervous system carries mes­sages to muscles and glands with­out your conscious knowledge, bio­chemical mechanisms determine what substances are to be filtered out by your kidneys, and so forth. All of this goes on automatically so as to keep your system in a state of dynamic equilibrium. It is the result of natural processes.

Suppose you had to regulate your body’s functions. Do you think you could remember how many times a minute to breathe while telling your heart how fast to beat? Would you know when to tell your pyloric valve to open? Could you decide how much corti­cotrophic hormone the anterior lobe of your pituitary ought to secrete at any given time? No, ad­mittedly you could not. Your body is too complex, and as it is, you can hardly get your automobile to the service station before the gas gauge registers empty or remem­ber to get the oil changed on schedule.

And yet, there are many people who believe that a single brain or a collective brain sitting in the White House can regulate the economy of the United States, which is every bit as complex as the human body. Imagine trying to regulate satisfactorily the daily purchases of 200 million people and setting the wages of a labor force of 80 million people and de­termining the production of 11 million business units! If you had that job, how would you do it so that everyone got what he wanted and nobody was victimized?

Leave It Alone!

The only correct answer would be to do nothing, leave it alone, and let the natural processes of supply and demand do the job. Just as it sometimes happens that a patient’s condition can be wors­ened by the chronic reliance on too many pills of too many varie­ties, so has our economy been sickened by swallowing the pills of tariff, subsidy, price regula­tion, compulsory insurance pro­grams, inflation, urban renewal, farm programs, rent controls, a plethora of taxes, and so forth, ad infinitum, ad nauseam. If we want our patient to recover, we are going to have to take his pills away from him, regardless of his neurotic dependence on them. Fortunately, as long as our pa­tient is still alive, we know that his bodily processes are going on, even though distorted by his un­wise self-doctoring. Just so, to the extent that our economy is func­tioning, it is doing so on the basis of natural processes carried on by individuals working, trading, and seeking their own welfare, regardless of the distor­tions brought about by govern­ment intervention. The law of supply and demand has been vio­lated many times, but to my knowledge, it has never been re­pealed!

—FOOTNOTES—

¹ Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Na­tions. (Chicago: Encyclopaedia Britan­nica, Inc., 1952. Vol. 39, Great Books of the Western World), p. 194.

***

No Plan

Everywhere you look in American history, you find examples of things seeming to happen by accident—without intention. Ameri­cans had no over-all plan. They had something more important. They had personal freedom to plan their own affairs; and the avalanche of human energy resulting from that freedom swept from the Atlantic to the Pacific, from the Great Lakes to the Rio Grande.

In 75 years, within a man’s lifetime, France and Russia had vanished from the continent. England had been pushed back on the north; Spain had yielded the Floridas, New Mexico, Arizona, California, and Texas. The whole vast extent of the country had been covered by one nation, a tumultuous multitude of free men—men of heterogeneous races and creeds—living under the weakest government in all the world. The people who had been left to shift for themselves—who had learned the lessons of realism and learned them the hard way—were creating a new world and carrying forward the revolution which was beginning to shake the foundation of the Old World.

HENRY GRADY WEAVER, The Mainspring of Human Progress