Adam Smith and the Invisible Hand: From Metaphor to Myth
AbstractAdam Smith and the â€˜invisible handâ€™ are nearly synonymous in modern economic thinking. Adam Smith is strongly associated with the invisible hand, understood as a general rule that people in realising their self-interests unintentionally benefit the public good. The attribution to Smith is challengeable. Adam Smithâ€™s use of the metaphor was much more modest; it was re-invented in the 1930s and 1940s onwards to bolster mathematical treatments of capitalism (Samuelson, Friedman) and to support innovative analysis by associating the metaphor with â€˜spontaneous orderâ€™ (Hayek). The effect has been to ignore insightful explanations about how markets function as a process in favour of semi-mystical beliefs in imagined outcomes, wrapped in an isolated 18th-century literary metaphor, which does not explain anything.
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Bibliographic InfoArticle provided by Econ Journal Watch in its journal Econ Journal Watch.
Volume (Year): 6 (2009)
Issue (Month): 2 (May)
Adam Smith; invisible hand; metaphor;
Find related papers by JEL classification:
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- B0 - Schools of Economic Thought and Methodology - - General
- B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
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