Countless times I have heard the phrase “the invisible hand of the market” used as justification and as a defense of neoliberalism. The” invisible hand” is used as an argument to support deregulation, free trade, privatization among other things. Invariably, people mention Adam Smith’s 1776 work “The Wealth of Nations”.
I have never read “The Wealth of Nations” and I doubt that most experts who quote from the book have read it. However, I decided to download “The Wealth of Nations” and see for myself. (Here is the link to the book: http://political-economy.com/wealth-of-nations-adam-smith/)
The book is approximately 1400 pages. I searched for the term “invisible hand” fully expecting it to appear numerous times. It occurs only once. This sole occurrence it is not defending free markets at all. It seems to be offering an argument that British businesses will not exploit British citizens because the British companies will be bound by some sense of compassion for their fellow citizens. The “invisible hand” of decency will regulate British corporate interests at home. (How corporations acted towards non-British citizens is not addressed.)
I skimmed various parts of the book to attempt to get the gist of it. The book appears to be arguing for regulations to control corporate hegemony. From what I have gleaned, it seems to be an argument against free markets!
The “invisible hand” that is such a fundamental part of the neoliberal argument is nonsense. It is only a passing reference by Adam Smith.
How desperate for those that defend neoliberalism to have to reach back 240 years to find some sliver to defend neoliberalism. And when they do find something, “the invisible hand”, it is merely a tangential reference. This is their best argument?
Now, when I hear someone mentioning “the invisible hand” of the market or the “free market”, I dismiss them knowing that they know not of what they speak. They have not read Adam Smith.
Robin Sukhu
