Formal and computational model of Adam Smith’s Invisible Hand

Abstract

Since 1756 Adam Smith's Invisible Hand phenomena is considered an unproven, even harmful myth. This paper proves that a computational model of this phenomena can be proposed on the basis of spontaneous, unconscious computations over a social structure. Such computations can be described with the help of molecular model of computations. For needs of Invisible Hand detection, an Extended Turing Test has been proposed. It compares two anonymous social structures, to detect if the Invisible Hand emerged in one without authority, allowing the social structure to perform better. This allows us to assemble together Smith's, Hayek's and Nozick's thoughts on the Invisible Hand, into one consistent formal and computational model. From this a new control paradigm can be derived. This explains how ants build bridges with their bodies, to provide further optimization of their supply routes. As a result, practical applications can be proposed, on how to structure Collective Intelligence of team of ant-like robots, for rescue works after earthquake.