31 Jan 2012

the invisible hand of Adam Smith

Chomsky takes apart the notion so loved by neo-con/neo-liberal/neo-classical economics of the invisible hand of the market coined by the economist Adam Smith. Smith used the exact phrase just three times in his writings and in The Wealth of Nations in 1776 he thought the interests of merchants and manufacturers were fundamentally opposed to those of society in general, and that they had an inherent tendency to deceive and oppress society while pursuing their own interests. Quite the opposite of what Smith is usually thought to argue, ie that the result of everyone pursuing their own interests will be the maximization of the interests of society. Many people, although Smith did not, draw a moral corollary from this argument, and use it to defend the moral acceptability of pursuing one's own self-interest.
Watch Noam Chomsky on Adam Smith and the "invisible hand" - extra scene from the 2008 documentary "American Feud: A History of Conservatives and Liberals" at