Gavin Kennedy sets out all the things that Adam Smith did not mean by "invisible hand," and the historical process of misreading by which the phrase acquired the meaning we give it.
What did Smith mean? These:
- That the love of power and authority by the rich induces them to trade real resources to the poor in return for deference, which has an enormous levelling effect on the true distribution of income.
- That the fear of merchants of the strange and foreign leads them to concentrate their investments at home to the benefit of domestic workers.
Smith focused--quite rightly--on what Kenneday aptly terms "emergent order." "Invisible hand" is a metaphor we use for "emergent order." But Smith did not use it so.
But Daniel Klein comments on Gavin Kennedy, and strikes out. It is not even clear that Klein knows what home plate is, and that he is supposed to swing the bat over it:
We will never know whether Smith intended the phrase invisible hand to serve as a tag for the comparative merit of freedom. It certainly is not outlandish to think that he did. As Minowitz (2004, 407) puts it, Smith all but “evicts God” from WN, making the invisible hand all the more striking.... Gavin notes that the phrase appears only infrequently in Smith’s work.... But... [t]hat the phrase appears close to the center, and but once, in TMS and in WN might be taken as evidence that Smith did intend for us to take up the phrase.
It is fun... to speculate that... Smith had the notion of invisible hand occurring but once in each of his masterworks, and in each case near the center. The invisible hand passage in WN is just about dead center. As for TMS, Hamish Riley-Smith... has kindly informed me that the invisible hand passage occurs at page 273, while the whole is 436 pages plus 10 unnumbered pages including title and contents.... In the 6th edition, however, the passage comes closer to the center. Moreover, the 3rd, 4th, 5th, and 6th editions were published with Smith’s essay on language following the text of TMS, and hence in those editions the passage may have been quite close to the center of the combined pages.... But it does not much matter whether Smith intended the phrase to serve as a tag for the comparative merit of freedom. The phrase is as worthy a tag as any for that worthy idea...