The Treatment of Smith's Invisible Hand

Publication: Journal of Economic Education

Volume: Volume 38, No. 3

Issue: Summer 2007

Pages: 341-359

Author(s): Jonathan B. Wight

Address:

Jonathan B. Wight

Associate Professor of Economics

Robins School of Business

University of Richmond

University of Richmond, VA 23173

Phone: 804-289-8570

E-mail: jwight@richmond.edu

Title: The Treatment of Smith's Invisible Hand

Abstract: Adam Smith’s use of the invisible-hand metaphor has been diluted and distorted over time.  Common misperceptions are that Smith unconditionally endorsed laissez faire markets, selfish individualism, and Pareto efficiency.  The author draws upon recent literature to clarify Smith’s meaning and to discuss ways of improving its classroom presentation.