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