Reconciling the Invisible Hand and innovation

Eduardo Pol

Economics of Innovation and New Technology, 2013, vol. 22, issue 5, 431-446

Abstract: It is generally agreed that Adam Smith invoked the Invisible Hand to send the message to posterity that a free-market economy is the best form of economic organization. Strictly speaking, the Invisible Hand of Adam Smith is a conjecture about the virtues of a free-market economy. There are three claims in this paper concerning the interpretation of the Invisible Hand conjecture. First, the neoclassical interpretation engenders a conceptual confusion -- identified here as the 'double paradox' of the Invisible Hand. Second, the interpretation of Adam Smith's conjecture on the beneficial effects of the free-market economy cannot -- and should not -- be confined to the production and consumption of existing products. Failure to distinguish the Invisible Hand Theorem from the Invisible Hand Doctrine distorts thinking about Adam Smith's message, creating the misconception that the Invisible Hand passage excludes business innovation. Third, the central message conveyed by Invisible Hand is to be read in the context of modern evolutionary economics.

Date: 2013
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/10438599.2012.759706 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:22:y:2013:i:5:p:431-446

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GEIN20

DOI: 10.1080/10438599.2012.759706

Access Statistics for this article

Economics of Innovation and New Technology is currently edited by Professor Cristiano Antonelli

More articles in Economics of Innovation and New Technology from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().