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What Did Smith Mean by the Invisible Hand?

2000/06/01 by William D. Grampp · 2 citations
Economics, Econometrics and Finance · #Economic Theory and Institutions #Argument (complex analysis) #Rhetorical question #Exposition (narrative) #Power (physics) #Capital (architecture) #Economics #Stock (firearms) #Neoclassical economics #Law and economics #Invisible hand #Classical economics #Law #Philosophy #Political science #History #Art #Literature

paper · doi:10.1086/262125

openalex publication_date 2000/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

The invisible hand is not a power that makes the good of one the good of all, and it is not any of a number of other things it is said to be. It is simply the inducement a merchant has to keep his capital at home, thereby increasing the domestic capital stock and enhancing military power, both of which are in the public interest and neither of which he intended. Smith's exposition discloses how his rhetorical sallies could disfigure his economics, confuse his argument for free trade, and make him play fast and loose with facts and the ideas of others.

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