Monday, December 29, 2008

Something For the New Year?

On Judeopundit, HERE:

According to Fred Barnes, Obama has some "unusual ideas about the economy":’

"The American economy has worked in large part," he said last week, "because we've guided the market's invisible hand with a higher principle: that America prospers when all Americans can prosper." ‘That's not exactly the way Adam Smith described the invisible hand of free markets

The fact is Adam Smith never described anything about how ‘free markets’ were led by ‘an invisible hand’.

That is a myth, only sustainable by not reading Wealth Of Nations and, instead’ relying on statements about it by other who have not read Wealth Of Nations too.

If they did read Wealth Of Nations they would read through Books I and II, where Adam Smith describes and explains in detail how markets work without once mentioning the metaphor of ‘an invisible hand’.

They would also read Book III on ‘progress towards opulence’, which doesn’t mention the ‘invisible hand once’. The same with Book V, on government expenditure an taxation.

This leaves Book IV on mercantile political economy and the French Physiocrats, which does mention ‘an invisible hand’ for the first and only time in Wealth Of Nations, but this was not about markets and the invisible hand.

Strange, given the prominence associated with the myth that Adam Smith applied the fairly common literary metaphor to his theory of markets, and given the absolute confidence with which this myth is perpetuated by academe, including Nobel prize winners (who should know better), tutors across university campuses, graduates, and media commentators.

You can read my paper, “Adam Smith and the invisible hand: from metaphor to myth”, by returning the Lost Legacy Home page, and clicking on the link (in red 'ink'; you can't miss it).



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