1987 Volume 42 Issue 3 Pages 193-208
Adam Smith used the phrase‘invisible hand’only in one place in the Wealth of Nations. But his thinking expressed by this phrase is found throughout the book.
The thinking of Adam Smith is not easy to be interpreted, for many sources of thought at that time have been holded in his thinking. We must tackle with problems as to religious faith versus knowledge, individual versus social and normative versus positive.
After Adam Smith, most of rationalists make efforts to visualize‘invisible hand’by the formation of equilibrium theory of perfectly competitive market. However, from empirical point of view, the idea of general equilibrium in perfect competition seems to be dubious, although the idea of partial equilibrium is empirically admitted. Some interpreters insist on‘invisible hand’as the individualistic and spontaneous order without governmental interventions. But other interpreters admit intervention or planning, not wholly but partially, as far as individuals are not necessarily rational.
In conclusion, it seems to me that Smithian phrase‘invisible hand’becomes a subject of discussion even today. Here, I want to refer, according to K. Popper, to the words of a greek philosopher:“Nicht vom Beginn an enthüllen die Götter uns Sterblichen alles. Aber im Laufe der Zeit finden wir, suchend, das Bess're.”