Tuesday, July 12, 2011

Journalists and Professors Should Check their Sources

Melissa Fyfe writes in the Age (Melbourne Australia (HERE)

‘Degrees of separation in a heated debate’
Grattan Institute's chief executive, Professor John Daley, argues that:

The harder sell politically is a market mechanism, such as a carbon tax. "The problem of the invisible hand," Professor Daley says, using a free-market phrase coined by Adam Smith (father of modern economics and subject of much Liberal Party genuflection), "is that it's also politically invisible".

Experience here and overseas shows markets produce unforeseen, surprising and sometimes boring ways to cut pollution.

Read more: HERE

Journalists, if not professors, should check their sources.

Adam Smith did not ‘coin’ the phrase, ‘the invisible hand of the market’. That is a 20th-century invention originating in an oral tradition at Cambridge University (Professor Pigou and others), and perhaps at Chicago too (Paul Samuelson’s tutors), and popularised by Oscar Lange (a Marxist, supposedly favoured by Stalin) in his book, ‘On The Economics of Socialism’, 1936), and Samuleson’s Economics: and introductory analysis’, 1948.

Adam Smith did not mention anything about ‘the invisible hand of the market’.

Nor, in fact, did he coin the metaphor of ‘an invisible hand’. It was already widely popular among the literate (authors and preachers) before Smith was born. He only used in twice: once only in Moral Sentiments (1759) and once only in Wealth Of Nations (1776), and on neither occasion were markets mentioned (nor supply and demand, prices, or costs).



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