A post sent to the Energy Bulletin, 13 July, in response to a Post entitled: "Hands That are Invisible" by Craig K. Comstock (originally in Huffington Post):
"I am glad that Craig K. Comstock visited Adam Smith's simple grave site at the Canongate Kirk. He was also only a hundred yards or so from his former Edinburgh home in Panmure House, where he lived with his mother and cousin from 1778-90 (soon to be restored by Edinburgh Business School from private donations).
It is sad, however, that Craig has come to believe the modern myth about Adam Smith's use of a simple, popular Eighteenth-century metaphor, of "an invisible hand" and the accompanying invention that it is "said to convert individual greed or self-interest into public good". That bit about "greed"/"selfishness" was invented by Paul Samuelson in 1948 in his popular Economics 101 textbook, Economics: an analytical introduction, McGraw-Hill.
Adam Smith never proposed such a meaning for his use of "an invisible hand" metaphor. He referred to a merchant's concern for the security of his capital and therefore he avoided "foreign trade", which had the unintended consequence that the merchant added to "domestic industry", adding revenue and employment locally. This was the added public benefit. A simple arithmetical outcome - the whole is the sum of its parts.
The "invisible hand" metaphor referred to concern for his security leading the merchant to invest locally, and it did so by describing the effect of the merchant's insecurity in a "more striking and interesting manner" (see Adam Smith on the role of metaphors in his Lectures on Rhetoric and Belles Lettres", 1763). All the rest of the modern guff about mystical invisible hands, magically at work is pure myth. There is no such entity. It does not exist. Smith showed that self-interest could be, and often was malign, as shown in tariffs and prohibitions, pollution, vile rulers, and crime, all of them the product of the pursuit of the self-interest of the beneficiaries.
Gavin Kennedy, Professor Emeritus, Heriot-Watt University, Edinburgh"