Original divine proportions of general competitive equilibrium
MPRA Paper from University Library of Munich, Germany
The proof of the invisible hand discovers many interesting peculiarities of the general competitive equilibrium at times when Adam Smith was working on the ‘Wealth of Nations’. If his self-interested producer allocates his time between production and delivery to the ‘the door’ of the buyer with zero search costs and unintentionally maximizes customer’s consumption-leisure utility, both the marginal rate of transformation of production into delivery and the marginal rate of substitution of leisure for consumption become equal to the golden ratio conjugate whereas the sales-costs of production ratio becomes equal to the golden ratio itself. While the golden ratio was called by Luca Pacioli, the founder of the modern accounting, as the divine proportion, this paper contributes to the deeper understanding of the Adam Smith’s natural theology approach to the analysis of social processes.
Keywords: golden ratio; invisible hand; divine proportion; general competitive equilibrium (search for similar items in EconPapers)
JEL-codes: D11 D63 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-hpe and nep-upt
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https://mpra.ub.uni-muenchen.de/111272/1/MPRA_paper_111272.pdf revised version (application/pdf)
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