Review of “The Hesitant Hand: Taming Self-Interest in the History of Economic Ideas”

The Hesitant Hand: Taming Self-Interest in the History of Economic Ideas. By Steven
Medema, Princeton University Press, Princeton, 2009. $35.00 ISBN 978—0-691-
12296-0

David Colander

Middlebury College

There are far too few nuanced accounts of economic policy, so Steven Medema’s
The Hesitant Hand: Taming Self-Interest in the History of Economic Ideas is a welcome
addition to the economics literature. It should be widely read and discussed. The essence
of Medema’s argument is that economists have been much more nuanced in their use of
the invisible hand theorem as a guide for policy than is often understood. His argument is
that good economists have always been arguing that economic theory does not tell us that
the market is the preferable method of organizing the economy. Instead, good economist
have been making a “least worst’ practical argument for laissez-faire and the market:
When you consider the alternatives, based on historical considerations, the market tends
to be a better way to organize economies than alternative methods. His book shows that
when you read past economists, you will find that that is their view.

The book consists of a prologue, seven chapters and a short epilogue. The
prologue serves as an introduction to the book. It points out that “nearly all of the
economic literature prior to the later eighteenth century expressed significant qualms
about the effects of self-interested behavior on social welfare and held out state
intervention as the only means to mitigate these problems.” (p 3) The first three chapters

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