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The Invisible Hand

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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.

Comments [9]

Neal Hemmelstein from Lemont, PA


Read "Reinventing the Sacred: A New View of Science, Reason, and Religion" by Stuart A. Kauffman (2008). He's a biologist who writes about how the phenomenon of emergence (my understanding of it is: "whatever works") rules ALL systems, biological, economic, and otherwise.

In it he talks about “adjacent possible”:

“I want to introduce an idea that will become of the deepest importance in the rest of this book: the adjacent possible. Consider a reaction history itself arises out of the adjacent possible. Consider a reaction graph with N molecular species, polymer sequences of A, and B monomers of diverse lengths. Call this initial N the actual. Now ask the organic chemist to draw all the reactions that these N species might undergo (in conditions defined as above). It may well be that the products of some of these single-step reactions will not be among the initial N in the “actual” but will be new molecular species. Call the set of new molecular species reachable in a single-reaction step from the actual, the adjacent possible. The adjacent possible is perfectly well defined for chemical-reaction networks. The initial actual plus its adjacent possible can be considered a new actual, which will then have a new adjacent possible. Over several iterations, the chemical-reaction graph may persistently reach into ever new adjacent possibles, indefinitely expanding the total diversity of molecular species in the chemical reaction graph, unless this interactive expansion is limited, for example by limiting the total number of monomers “allowed” per polymer.” (pg. 64)

May. 15 2016 03:14 PM
Btaylor from D.C.

Isn't this the same phenomena behind the fact that you can get tens of thousands of people--say at a concert or a stadium to sing together and the pitch averages out to more on-pitch than not, even though there may be a significant percentage of people in the crown that can't sing on-pitch?

May. 14 2016 04:35 PM
Susan Urban from Silver Spring, Maryland

Given that this program segment was first aired 4 1/2 years ago, I'm surprised that nobody has mentioned Jad Abumrad's error, nor has it been corrected: He referred to the "average, midpoint, or mean" of a set of numbers. When referring to a set of numbers, "average" and "mean" are equivalent terms. However, "midpoint"--also known as "median"--is an entirely different concept and is often different from the "average" or "mean" of the set.

Nov. 23 2014 12:42 PM
Les

There is a typo in the description "Plymoth, England" is misspelled I think.

Nov. 10 2013 09:12 PM
Dawn

Hi this is somewhat of off topic but I was wondering if blogs use WYSIWYG editors or if you have
to manually code with HTML. I'm starting a blog soon but have no coding skills so I wanted to get advice from someone with experience. Any help would be enormously appreciated!

Mar. 07 2013 10:57 AM
David Tennant from Bay City, MI

Radiolab is mind expanding. Adam Smith was not pointing to GOD with his "invisible hand". He was refering to the spontanious organization which occurs when many who have (necessarily) incomplete information comprise a larger (and more complete) market. A Thinking Beings "emergence". (Well, we like to "think" that we are "Thinking Beings")

Jan. 28 2012 03:23 PM
Brad from Earth

Allison -

Have you ever read Smith's major works? The Theory of Moral Sentiments and An Inquiry into the Cause and Nature of the Wealth of Nations are both extremely nuanced works (of a deep genius in my view.) Smith deserves more than that - to close yourself off to him on a false assumption that he was simple "a man who held a pipe dream" is an anti-intellectual caricature. Once you have read him thoroughly try to write that statement again - you won't be able to, I suspect.

Sep. 06 2010 08:53 PM
Allison from Nevada

Adam Smith was theorizing about the "emergence" of a force that was supposed to naturally guide people into making self-oriented economic decisions that somehow manage to benefit all the members of capitalistic societies. We now know that the emergence of an invisible hand has not occurred and that his idea of pure capitalism was a pipe dream.

Jun. 28 2008 04:48 PM
Gary (I wish it had been Cooper) Betts from Suburb of Lexington, KY, (Versaillesj

Radio Lab is about the best thing (and one of
the few good things left) on radio. I am blown away (at almost 70) by what I did not know, and still do not know, but have the privilege (for I do not know how long) of pondering as a result of listening to Radio Lab. It is amazing and I am grateful to all the people who put it together and make it available.

As a retired whatchamacallit, who moved back to the place where I thought I had roots (they have since withered away, maybe, or maybe not at least i know which way is N, I think) after living and working in the NYC metro area most of my adult life, you might consider, "what's in a name?
or "why do we want roots, anyway?" or
"what does the word 'home' actually mean?"
or "why are we so insistent upon being banal as a society" (be sure you spell that properly. I have just listened to "Emergence" the second time. I have also heard several others more than once....

May. 25 2008 07:20 PM

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