Retrospectives: Ethics and the Invisible Hand
- 1 May 1993
- journal article
- research article
- Published by American Economic Association in Journal of Economic Perspectives
- Vol. 7 (2) , 197-205
- https://doi.org/10.1257/jep.7.2.197
Abstract
As modern economists, we use Adam Smith's "invisible hand" metaphor confident that we all know what it means in our discourse: it reflects our admiration for the elegant and smooth functioning of the market system as a coordinator of autonomous individual choices in an interdependent world. But in Adam Smith's moral philosophy, the invisible hand has a much broader responsibility: if individuals are to enjoy the fruits of a classical liberal society, the invisible hand must not only coordinate individuals' choices, it must shape the individuals into constructive social beings—ethical beings. I begin by presenting the philosophical basis for Smith's invisible hand, describing the sense in which the hand is invisible and whose hand it is. I then describe the story Smith tells of the invisible hand creating and maintaining a constructive classical liberal society and show how Smith's story evolved as his faith in the ability of the invisible hand to shape an appropriate ethical foundation waned. I conclude with some thoughts on the legacy of Adam Smith and of our predecessors in economic inquiry more generally.This publication has 3 references indexed in Scilit:
- Ethics and the Classical Liberal Tradition in EconomicsHistory of Political Economy, 1992
- THE ROLE OF COMMUNITY VALUES IN MODERN CLASSICAL LIBERAL ECONOMIC THOUGHTScottish Journal of Political Economy, 1992
- The Two Voices of Adam Smith: Moral Philosopher and Social CriticHistory of Political Economy, 1987