On Demand
The Invisible Hand
In 1776, writer Adam Smith came up with a theory: when lots of buyers and lots of sellers get together, the resulting "market price" that emerges through all that buying and selling is in fact the work of an "invisible hand." He meant god. We think he really meant "emergence." This segment, we go looking for invisible hands in a variety of places: at an ox-guessing contest in Plymoth, England, in the roiling mass of traders in the "pit" of the New York Securities and Exchange, and also in the secret recipe that makes Google such a great search engine. Author Steven Johnson explains the art of Google-bombing. Producer Ben Rubin presents the bottom-up organization of stock trading in sound.
James Surowiecki's Book The Wisdom of Crowds
Steven Johnson's website
Hear more from producer Ben Rubin
- "Three Russian Pieces" Friedrich Lips - Russian and Trepak - Bathtub Music
- "Whip-top" Friedrich Lips - Russian and Trepak - Bathtub Music
- "Feat" Thomas Fehlmann - Lowflow - Plug Research
Podcast
Stay up to date.
Subscribe to the Podcast
Radio Lab Blog
Radio Lab’s got a blog! Check out our rants and ramblings, hear bonus audio, and get all kinds of other goodies like ringtones and videos.
More
Radio Lab Email
Tell Radio Lab What You Think
Have questions about the show? Ideas for topics for Radio Lab to investigate? Heard things you like? Don’t like? Let us know. We’d love to hear from you.
Email us at radiolab@wnyc.org
Comments
Refresh
Adam Smith did not link buyers and sellers to markets or their prices, analysed in Book I. He used, once only in a million words, 'an invisible hand' as a metaphor to the risk aversion of merchants in regard to risking their capital in foreign trade (Book IV). This had nothing to with markets.
That is a notion originating in the 20th century and had nothing to do with his book, An Inquiry into the Nature and Causes of the Wealth of Nations', 1776.
PLS POST MP3
What the heck is a .py file ????
Why can't I get a MP3 download.
It's hard to take Radio Lab seriously, especially since this episode is my first exposure to it. I take issue with two assertions: Radio Lab says that Galton thought the people in the ox weight-guessing contest were "stupid," which made his mathematical discovery all the more amazing. Yet, Galton wrote of the them: "The competitors included butchers and farmers, some of whom were highly expert in judging the weight of cattle; others were probably guided by such information as they might pick up, and by their own fancies. The average competitor was probably as well fitted for making a just estimate of the dressed weight of the ox, as an average voter is of judging the merits of most political issues on which he votes, and the variety among the voters to judge justly was probably much the same in either case." Where did you get the idea that the voters were "stupid?"
You also make a comment about Adam Smith's "invisible hand" metaphor. Smith's comment was about what he believed to be the inherent morality in pure capitalism. He supported a laissez faire government because he believed that capitalism, when practiced in its pure form, would produce a nation of equality as individuals look out for their own concerns, because the market would somehow naturally, and fairly, come to meet the needs of every citizen. In his vision, government intervention (such as our labor laws dealing with with the effects of racism, sexism and child exploitation) would never become necessary.
Leave a Comment
Please stay on topic, be civil, and be brief.
Back to EpisodeEmail addresses are never displayed, but they are required to confirm your comments. Names are displayed with all comments. WNYC reserves the right to edit any comments posted on this site. Please read the WNYC.org Comment Guidelines before posting.