February 10, 2005 | Graham

Another use for the ‘Invisible Hand’

It might not be quite what he was intending to say, but Keith Suter appears to have found another use for Adam Smith’s “Invisible Hand”. The invisible hand is Smith’s description of the phenomenon where, by pursuing self-interest, individuals actually work to the common good – “…by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” The Wealth of Nations
In his latest essay on On Line Opinion, he essentially argues that we can spread democarcy by making commerce not war. That is, if countries develop economically, globalise and create a middle class, then democracy will follow. This sounds just like Adam Smith’s prescription, administered with a slightly different illness in mind. I don’t diagree with either of them.

Posted by Graham at 1:40 pm | Comments (1) |
Filed under: Australian Politics

1 Comment

  1. How right you are Graham. Was it Montesquieu who said commerce brings out the politeness in us?

    Comment by Sukrit Sabhlok — February 14, 2005 @ 3:56 pm

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