Tony Brewer wrote:
>Who is misquoting Smith?
>
>Certainly, Smith did not have a concept of an 
>invisible hand - it was a striking phrase that 
>he used once per book for emphasis, no more. But 
>the way he used it is not as John C. Medaille 
>suggests. The TMS invisible hand is about the 
>distribution of food, not goods in general. The 
>rich landlord has command of huge amounts of 
>food, but cannot eat it all himself. Instead he 
>spends on luxuries thereby enabling his servants 
>and the producers of 'baubles and trinkets' to 
>earn and eat. Smith did not give up this 
>argument but kept it in the final edition of 
>TMS, long after the writing of the WN. The WN 
>repeats essentially the same argument (Glasgow 
>ed, pp. 180-1), but switches the phrase, 
>'invisible hand' to a different (but not 
>conflicting) argument. The WN invisible hand is 
>not only, not even mainly, about home investment 
>v investment abroad. Smith claimed that 
>investing where the return is highest 
>distributes capital between activities in a way 
>which maximizes the annual revenue of society.
>
>This is not, of course, the same as the first 
>theorem of modern welfare economics, but it is 
>not as inconsequential as John tries to make out.


Here is the passage from TMS. I leave the interpretation to others:


[The rich] consume little more than the poor, and 
in spite of their natural selfishness and 
rapacity, though they mean only their own 
conveniency, though the sole end which they 
propose from the labours of all the thousands 
whom they employ, be the gratification of their 
own vain and insatiable desires, they divide with 
the poor the produce of all their improvements. 
They are led by an invisible hand to make nearly 
the same distribution of the necessaries of life, 
which would have been made, had the earth been 
divided into equal portions among all its 
inhabitants, and thus without intending it, 
without knowing it, advance the interest of the 
society, and afford means to the multiplication 
of the species
.In ease of body and peace of 
mind, all the different ranks of life are nearly 
upon a level, and the beggar, who suns himself by 
the side of the highway, possesses that security 
which kings are fighting for .[1]


[1] Adam Smith, The Theory of Moral Sentiments, 
6th ed., The Conservative Leadership Series 
(Washington, D.C.: Regnery Publishing Co., 1997), IV.I p. 249.



John C. M?daille