On the Other (Invisible) Hand...

Abstract

The invisible hand as it appears in the Theory of Moral Sentiments is commonly treated as an afterthought in discussions of the version in the Wealth of Nations, but it deserves attention in its own right. I will argue that there is an entirely coherent (if not entirely plausible) economic argument underpinning the invisible hand of the Theory of Moral Sentiments. It is quite different from the invisible hand argument of the Wealth of Nations, not because of any conflict but because they address different questions. The argument in the Theory of Moral Sentiments allowed Smith to maintain an ironic distance from the inequality and greed that he saw around him while arguing that it did no harm, and allowed him to resolve, at least to his own satisfaction, an age-old debate about the ethical and political consequences of luxury consumption. Some of these themes were further developed in the Wealth of Nations, but without the phrase 'invisible hand', which was switched to a different part of the argument.

Sensitivity to prosperity and adversity: What would a Smithian function of happiness look like?

“…35 This is particularly salient when 35 The link between Smith's analysis and some typical results in economics of happiness has at times been put to the fore. These contributions mainly focus on the influence of wealth on happiness (Ashraf et al, 2005;Bruni and Porta, 2005;Bruni, 2006;Brewer, 2009). …”

God and the Market: Adam Smith’s Invisible Hand

“…13 Some of the interpreters who see the hand as divine were mentioned in the introduction, notably Viner (1927). The literature specifically on the invisible hand passage in Theory of Moral Sentiments is not extensive, with the two substantial treatments being Macfie (1970) and Brewer (2009). Macfie called attention to the natural theological background of the passage, then concentrated on Stoic natural theologies, though he ended up puzzled by the inconsistencies with the other invisible hand passages, and called for further investigation of the natural theological background.…”

“…What is required is close attention to the texts in their original context, including the religious context. Recent contributions along these lines include Macfie (1970Macfie ( , 1971, Rothschild (1994), Winch (1996Winch ( , 1997, Grampp (2000), Waterman (2004), Kennedy (2008), Brewer (2009), and Harrison (2011. All draw on valuable work on Smith's religious background, such as Ross (1995), Vivenza (2001), Stewart (2003), Long (2002Long ( , 2009 and Oslington (2011), which rests on the huge literature on the Scottish Enlightenment, such as Hont and Ignatieff (1983) and Sher (1985), and the historical literature on relation between science and religion, such as Brooke (1991).…”

The Concept of an Agricultural Surplus, From Petty to Smith

“…Many of the writers discussed here, notably Hutcheson, Hume, and (less obviously) Smith, were explicitly or implicitly responding to the luxury debate while trying to avoid the condemnation that Mandeville had attracted (on Smith, see Brewer 2009). This was the attitude, for example, of Nicholas Barbon, in the late seventeenth century, who distinguished between the limited ''wants of the body'' (necessities) and the unlimited ''wants of the mind.''…”