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Date: | Tue Mar 11 08:15:54 2008 |
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Gavin Kennedy wrote:
>'Holy moley!! Out go the invisible hand.' (Pat Gunning)
>
>If that's all that is bothering Pat Gunning, he should relax. The invisible
>hand was never 'in'. It is a modern 20th-century campus myth that
>attributes the invisible hand of markets to Adam Smith despite him never
>crediting the metaphor with anything like the mysterious powers that it has
>been given by, among others, three Nobel prize winners, most of our
>profession and those they influence in the media.
See
http://www.theatlantic.com/issues/98mar/misquote.htm
on the deliberate misquoting of Smith on the invisible hand.
Smith uses the invisible hand exactly twice, once
in the Theory of Moral Sentiments and once in the
Wealth of Nations. And they mean opposite things
in each work. In TMS, it is a distributive
principle, whereby Smith holds that owners of
land will distribute its output in equitable
ways, and do so for their own security. That
theory is obviously untenable, and he does not
repeat it in WON. In the later work, as Gavin
points out, he is merely pointing to the
preference for local investment rather than
foreign adventures. From these slender threads
has been built up the elaborate mythology (or
Smithology?) of the Invisible Hand. The
discussions usually make Smith sound more like an
oriental mystic than a sober economist. The
mythology usually ends up making Smith say the
opposite of what he actually said; it makes him a
champion of globalization (using today's
terminology) when in fact he had a preference for local investment.
John C. M?daille
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