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- In Book IV, chapter 2, of An Inquiry into the Nature and Causes of the Wealth of Nations (1776), arguing against import restrictions and explaining how individuals prefer domestic over foreign investments, Smith uses the phrase to summarize how self-interested actions are so coordinated that they advance the public interest.
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invisible hand, metaphor, introduced by the 18th-century Scottish philosopher and economist Adam Smith, that characterizes the mechanisms through which beneficial social and economic outcomes may arise from the accumulated self-interested actions of individuals, none of whom intends to bring about such outcomes.
Jan 5, 2018 · The usual method of presenting Smith’s use of the ‘Invisible Hand’ is as a rhetorical metaphor in a linked historical progression, beginning with its first (calendar) appearance in Smith’s Works and then in his unpublished ‘juvenile essay’, The History of Astronomy, which was mainly written during his Balliol days (1740–1746), and ...
- Gavin Kennedy
- gavink9@gmail.com
- 2017
- Life and Influences
- B. Smith’s Writings
- The Theory of Moral Sentiments
- An Inquiry Into The Nature and Causes of The Wealth of Nations
- References and Further Reading
a. Early Life and Influences
Adam Smith was born in June, 1723, in Kirkcaldy, a port town on the eastern shore of Scotland; the exact date is unknown. His father, the Comptroller and Collector of Customs, died while Smith’s mother was pregnant but left the family with adequate resources for their financial well being. Young Adam was educated in a local parish (district) school. In 1737, at the age of thirteen he was sent to Glasgow College after which he attended Baliol College at Oxford University. His positive experien...
Smith echoes these words throughout A Theory of Moral Sentiments. In this book, he embraces Hume’s conception of sympathy, but rejects his skepticism and adds, as we shall see, a new theory of conscience to the mix. However, focusing on Hume’s observations also allow us to see certain other themes that Smith shares with his Scottish Enlightenment c...
a. Sympathy
Hutcheson, Hume, and Smith were unified by their opposition to arguments put forth by Bernard Mandeville. A Dutch-born philosopher who relocated to England, Mandeville argued that benevolence does no social good whatsoever. His book, The Fable of the Bees: Private Vices, Public Benefits, tells the whole story. Bad behavior has positive social impact. Without vice, we would have, for example, no police, locksmiths, or other such professionals. Without indulgence, there would be only minimal co...
b. The Impartial Spectator
Using the imagination, individuals who wish to judge their own actions create not just analogous emotions but an entire imaginary person who acts as observer and judge: The impartial spectator is the anthropomorphization of the calm and disinterested self that can be recovered with self control and self reflection. In today’s world, someone might advise us to “take a deep breath and step back” from a given situation in order to reflect on our actions more dispassionately. Smith is suggesting...
c. Virtues, Duty, and Justice
Smith emphasizes a number of virtues along with duty and justice. Self-command, he argues “is not only itself a great virtue, but from it all the other virtues seem to derive their principle lustre” (TMS VI.iii.11). This should not be surprising since, for Smith, it is only through self-command that agents can modulate their sentiments to the pitch required either by the community or the impartial spectator. Self-command is necessary because “the disposition to anger, hatred, envy, malice, [a...
a. Wealth and Trade
The Wealth of Nations (WN) was published in March of 1776, four months before the signing of the American Declaration of Independence. It is a much larger book than The Theory of Moral Sentiments—not counting appendices and indices, it runs 947 pages. To the first time reader, therefore, it may seem more daunting than Smith’s earlier work, but in many ways, it is actually a simpler read. As he grew older, Smith’s writing style became more efficient and less flowery, but his authorial voice re...
b. History and Labor
Smith’s account of history describes human civilization as moving through four different stages, time periods that contain nations of hunters, nations of shepherds, agricultural nations, and, finally commercial societies (WN V.i.a, see, also, LJ(A) i.27; see also LJ(B) 25, 27, 149, 233). This is progress, Smith insists, and each form of society is superior to the previous one. It is also natural. This is how the system is designed to operate; history has a logic to it. Obviously, this account...
c. Political Economy
The Wealth of Nations is a work of political economy. It is concerned with much more than the mechanisms of exchange. It is also concerned with the ideal form of government for commercial advancement and the pursuit of self-interest. This is where Smith’s reputation as a laissez faire theorist comes in. He is arguing for a system, as he calls it, of “natural liberty,” one in which the market largely governs itself as is free from excessive state intervention (recall Smith’s use of the invisib...
All references are to The Glasgow Edition of the Correspondence and Works of Adam Smith, the definitive edition of his works. Online versions of much of these can be found at The Library of Economics and Liberty.
Parenthetically, in smith’s usage, the ‘invisible hand’ did not act ‘as if’ it led people; the metaphor in his two examples were definitely ‘led by an invisible hand’ (Tms, 184; Wn, 456). The words, ‘as if’, would act as a softener of the stronger imperative, ‘was led by’, and change its character.
This paper seeks to remedy this deficiency, offering a history of “the invisible hand” with a particular focus on the seventeenth and early eighteenth centuries. What clearly emerges from this survey is that the concept was relatively common by the time Smith came to use it.
Apr 18, 2022 · From Macbeth to Ovid, where the hero is stabbed in the back, “twisted and piled his invisible hand, causing a wound within a wound.” Specific speculation has been raised about Smith’s real definition of “the invisible hand”, saying that all references to it were done sardonically or sarcastically.
Jan 1, 2011 · This paper seeks to remedy this deficiency, offering a history of "the invisible hand" with a particular focus on the seventeenth and early eighteenth centuries. What clearly emerges from this survey is that the concept was relatively common by the time Smith came to use it.
