“Once it is said that the realm of the ‘natural’ consists of everything that is the result neither of human action nor of human design” (Ullmann-Margalit, 1978). Adam Smith’s metaphor of the ‘invisible hand’ has long fascinated economists, including Ullmann-Margalit and Maki. At first glance, their works might appear to diverge: Ullmann-Margalit classifies two types of invisible-hand explanations—aggregate process and functional-evolutionary—while Maki engages in a methodological critique of hermeneutic approaches. Yet a closer look reveals their perspectives are highly compatible. This review contends that Ullmann-Margalit and Maki can be read as complementing each other. Ullmann-Margalit defines the conceptual scope of invisible-hand explanations, while Maki reinforces their scientific legitimacy, particularly through his emphasis that “invisible-hand consequences are causally generated”
First, both agree that a mere storytelling of invisible hand is not enough of explanation. Both authors demonstrate that the invisible-hand explanation must include a plausible mechanism showing how dispersed individual actions aggregate into a collective pattern. According to Ullmann-Margalit, explaining social order requires detailing the mechanism that links individual behaviour to collective outcomes. The more unexpected and clear this mechanism, the stronger the explanation. Maki then agrees but sharpens the point. He critiques purely hermeneutic approaches (like von Wright’s “practical syllogism”) for failing to explain unintended consequences. He defends the need for causal explanations, not just narratives of agents’ beliefs and intentions.
Second, both authors agree that many important social phenomena are the unintended result of individual actions, not products of collective design or intentional coordination. Ullmann-Margalit states invisible-hand explanations as addressing patterns that are the “result of human action, but not of human design.” She emphasizes that what appears to be designed (like money or state institutions) can be explained without invoking a planner. Makiunderscores the same by discussing the Austrian tradition (e.g. Menger’s theory of money), where institutions emerge spontaneously through individuals’ goal-oriented actions—but without anyone intending the outcome.
More importantly, both authors defend invisible-hand explanations as legitimate and powerful tools for understanding social phenomena, not just metaphors or myths. Maki builds on this by emphasizing that invisible-hand explanations are scientifically respectable. It can and should be treated as causal, realist accounts of how economic institutions or equilibria emerge. In many ways indirectly, both agree that the invincible-hand hand can be used for analysis of markets, institutions, and social order.
In conclusion, Ullmann-Margalit and Maki offer complementary contributions to our understanding of invisible-hand explanations. Ullmann-Margalit articulates the ‘what’, clarifying the conceptual features and structure of such explanations — while Maki provides the ‘how’ and ‘why,’ defending their causal integrity and methodological value. Of the two, Maki’s position stands out for its firm commitment to causality as the foundation of invisible-hand explanations. Both authors, in different ways, reinforce the power of invisible-hand explanations to illuminate complex social phenomena.
Reference:
- Ullmann-Margalit, E. (1978). Invisible-hand explanations. Synthese, 39(2), 263-291.
- Maki, U. (1991). Practical syllogism, entrepreneurship and the invisible hand. Economics and hermeneutics, 146.
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