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