On the other (invisible) hand ..
AbstractThe invisible hand as it appears in the Theory of Moral Sentiments is commonly treated as an afterthought in discussions of the version in the Wealth of Nations, but it deserves attention in its own right. I will argue that there is an entirely coherent (if not entirely plausible) economic argument underpinning the invisible hand of the Theory of Moral Sentiments. It is quite different from the invisible hand argument of the Wealth of Nations, not because of any conflict but because they address different questions. The argument in the Theory of Moral Sentiments allowed Smith to maintain an ironic distance from the inequality and greed that he saw around him while arguing that it did no harm, and allowed him to resolve, at least to his own satisfaction, an age-old debate about the ethical and political consequences of luxury consumption. Some of these themes were further developed in the Wealth of Nations, but without the phrase 'invisible hand', which was switched to a different part of the argument.
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Bibliographic InfoPaper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 06/594.
Length: 16 pages
Date of creation: Nov 2006
Date of revision:
Adam Smith; invisible hand;
Other versions of this item:
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-09 (All new papers)
- NEP-HPE-2006-12-09 (History & Philosophy of Economics)
- NEP-PKE-2006-12-09 (Post Keynesian Economics)
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Open Access publications from London School of Economics and Political Science
http://eprints.lse.ac.uk/, London School of Economics and Political Science.
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