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ERIC Number: EJ775134
Record Type: Journal
Publication Date: 2007
Pages: 18
Abstractor: Author
Reference Count: 54
ISBN: N/A
ISSN: ISSN-0022-0485
The Treatment of Smith's Invisible Hand
Wight, Jonathan B.
Journal of Economic Education, v38 n3 p341-358 Sum 2007
Adam Smith used the metaphor of an invisible hand to represent the instincts of human nature that direct behavior. Moderated by self-control and guided by proper institutional incentives, actions grounded in instincts can be shown to generate a beneficial social order even if not intended. Smith's concept, however, has been diluted and distorted over time through extension and misuse. 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. The author argues that the invisible hand operates within a variety of institutional settings and that a number of arrangements are compatible with economic progress. (Contains 9 notes.)
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Publication Type: Journal Articles; Opinion Papers; Reports - Descriptive
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A