Gavin Kennedy's mail is very helpful and interesting. I want to think more 
about it, but my first reaction is that although I may have overstated the 
case - clearly the phrase, 'invisible hand' appears in a discussion of 
foreign trade and investment, and the risk-avoiding preference for home 
investment mattered to Smith - I still think that home v foreign investment 
is not the main point. The first two sentences of the invisible hand 
paragraph read:

'But the annual revenue of every society is always precisely equal to the 
exchangeable value of the whole annual produce of its industry, or rather 
is precisely the same thing with that exchangeable value. As every 
individual, therefore, endeavours as much as he can both to employ his 
capital in the support of domestic industry, and so to direct that industry 
that its produce may be of the greatest value; every individual necessarily 
labours to render the annual revenue of the society as great as he can.' 
(WN IV.ii.9)

The basic argument seems to me to be independent of trade issues. For a 
closed economy, one could delete the words 'both to employ his capital in 
the support of domestic industry, and', without destroying the main thrust 
of the argument. Smith never did consider a closed economy, of course, but 
it is the allocation of capital to the highest return that seems to me to 
be the main thrust of the argument, and it is not one that can be lightly 
dismissed. The home v overseas investment argument then becomes a 
complementary point, covering a possible counterargument that the revenue 
which is maximized might be somewhere else.

Tony Brewer