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Adam smith invisible hand4/29/2023 ![]() ![]() He cites other references which state that: ![]() Rothschild (1994) analyses the controversy surrounding the meaning of IH and concludes that what Smith meant by this metaphor was only a “mildly ironic joke.” Blaug (2007) also shows that Adam Smith cannot be blamed for these ideas. It is used only once in the Wealth of Nations in very limited and narrow context. In a corpus of over a million words, the terms IH appears only twice in the economic writings of Adam Smith. Nonetheless, their interpretation of the term and its significance is not supported either by Adam Smith or by readers of Adam Smith until the late nineteenth century. Kennedy (2009) shows that three leading modern economists laud the IH as the “profoundest” and “most influential” contribution of Adam Smith. There is a growing body of literature (e.g., Grampp, 2000 Minowitz, 2004) which insists that the metaphor used by Smith was never meant to be anything more than a metaphor, and that the meanings inferred from Smith’s idea of IH by the modern economists support only their own interpretation of economic policies. We first note that modern interpretation of the “IH” is radically different from any interpretation of this concept that existed before the second half of the twentieth century. In fact, modern writers borrow the authority of Adam Smith to provide weight to a very dubious idea of recent coinage. The idea that Mankiw (together with other modern economists) attributes to Smith is not actually present in Smith’s writings. The main goal of this section is to show that the modern interpretation of the IH is relatively recent. Section 6: Recent Vintage of the Invisible Hand This shows the huge difference between what is attributed to Adam Smith in the name of Invisible Hand, and the actual writings of Adam Smith: Here is an extract from the paper regarding point (4) above. In fact, free market economists attribute this theory to Adam Smith to create legitimacy for their ideas. ![]() Adam Smith can be blamed for many wrong ideas, but this is not one of them.
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