Ratio Working Papers
No 133:
Unfolding the Allegory behind Market Communication and Social Error and Correction
Daniel Klein ()
Abstract: Adam Smith’s moral theory considered a number of sources
of moral approval and at each turn he invoked an accompanying spectator,
however sketchy. In judging an action, at each turn we consult our sympathy
with a spectator that is natural or proper to the occasion. In this paper I
suggest that common economic talk of market communication, market error and
correction, and policy error and correction similarly invokes such a
spectatorial being and similarly appeals to our sympathy with such being.
Behind such common economic talk, I suggest, are implicit allegories
wherein an allegorical figure communicates knowledge, errs in its
instructions, and corrects its instructions. The allegory behind such talk
is vital and necessary because without it the talk of market communication,
error, and correction cannot be sustained. Unfolding the allegory behind
such theorizing helps to clarify the meaning, limitations, and value of
such talk. Making what had been implicit explicit helps economists to avoid
overstating their generalizations or making those generalizations sound
more precise and accurate than they are. I explore the connections between
the allegorical features and the doings of the economic agents. I suggest
that the cogency of such economic theorizing depends on such
correspondences, and that they are matters of culture, of both the context
within which the theorizing is done and of the context theorized about. I
suggest that there is a duality in Smith between the impartial spectator
and the being with an invisible hand.
Keywords: Market communication; price system; error; correction; coordination; Adam Smith; Friedrich Hayek; impartial spectator; invisible hand; (follow links to similar papers)
JEL-Codes: A10; B10; B40; (follow links to similar papers)
34 pages, March 26, 2009, Revised May 5, 2009
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
dk_unfolding.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Niclas Berggren ()
Report other problems with accessing this service to Sune Karlsson ()
or Björn Thodenius ().
Programing by
Design by Joachim Ekebom
