Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Retrospectives: Ethics and the Invisible Hand
Journal of Economic Perspectives
vol. 7,
no. 2, Spring 1993
(pp. 197–205)
(Complimentary)
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.Citation
Evensky, Jerry. 1993. "Retrospectives: Ethics and the Invisible Hand." Journal of Economic Perspectives, 7 (2): 197–205. DOI: 10.1257/jep.7.2.197JEL Classification
- A13 Relation of Economics to Social Values
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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