Monday, January 30, 2017

A LITERATE AUTHOR SHOULD START AGAIN BY READING ADAM SMITH AND THE 'LOST LEGACY' BLOG

 Berbard Weiner (‘author, historian, economist’) posts (30 January, 2017) HERE http://bernardweiner.com/tag/invisible-hand/
The Weiner Component Vol.2 #3 – The Purpose of Government
Adam Smith began modern economics with the publication of his work,  “An Inquiry into the Wealth of Nations,” in 1776.  In this work, among other things, he developed the Market Model, which functioned through the use of the “invisible hand.”  The invisible hand is the profit motive.  Smith believed that the profit motive would best make all the Market decisions of what to produce and how to produce it.” 
COMMENT
The invisible hand is NOT the ‘profit motive’. It is not clear from the rest of his text - part of a series he has written (volume 2, no 3, no less!) - that Bernard has read anything that Adam Smith published.
Still, he obviously means well and to that extent I would encourage Bernard to start reading Smith’s Works.
Incidentally, there is absolutely nothing invisible about prices. 

All prices are visible and the price system could not work without visible prices. So, whatever Smith meant by his use of the metaphor of ‘an Invisible Hand’, it had nothing at all to do with invisible prices!

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