Monday, May 18, 2009

Invisible Handjob

Evidently "Invisible Hand" is right up there with "Survival of the Fittest" as a phrase the "author" maybe only muttered once or twice and probably meant it as a joke and probably regretted it greatly after saying it.

Freakonomics blog: The Invisible Hand Hoax
Adam Smith’s “invisible hand” theory of efficient markets is one of the first lessons taught to young economics students. James Tobin, a Nobel prize-winning economist, once described the theory as "... one of the great ideas of history and one of the most influential." But in this new paper, Gavin Kennedy argues that Smith actually had no invisible-hand theory, pointing out that the phrase appears only three times in Smith’s writings. One scholar believes that Smith’s use of the phrase was a “mildly ironic joke.” (HT: Brad DeLong)
Referenced paper: "Adam Smith and the Invisible Hand: From Metaphor to Myth" by Gavin Kennedy (Econ Journal Watch, Volume 6, Number 2, May 2009, pp 239–263)

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