I had the good fortune, or perhaps, misfortune to teach macro and microeconomics for several sections many years ago. Whether you’ve ever taken it or not, the name “Adam Smith” should ring a bell. Adam Smith (1723-1790) was a Scottish economist and is often referred to as the “Father of Economics” or the “Father of Capitalism.” He was such a bedrock in economics, particularly because of his premier work “The Wealth of Nations” that it is impossible to not mention him in both macro and micro classes. Now, teachers have their likes and dislikes about famous people and their reasons why. One thing that I found interesting about Smith was his discussion on property acquisition, particularly on how wealth aggregates wealth. Another thing that caught my eye was his notion of the invisible hand. He only mentions it once in The Wealth of Nations and two other times in his minor works. I’ve included the essence of his description below, and it is worthwhile to give it a careful read:

ALL THINGS WORK TOGETHER

Smith writes:

“. . . every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and 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. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”

Here is what he’s saying (I think):

• People work and are (for example) taxed on their earnings which benefit the society as a whole.
• The worker invests his/her money and spends it not to benefit society, but to promote their own self, and perhaps selfish, interests.
• Whenever possible (i.e., all things being equal), the consumer will purchase domestic goods over foreign imports. In Smith’s time, imports were probably more expensive than domestic equivalents. But in today’s global economy, the reverse is true. Of course, if the consumer needs a new car, the consumer may purchase a pricier Saab over an American SUV, but then again, this person sees the Swedish import as the better choice given their personal circumstances. Here’s where it gets spooky however. . .
• Unbeknownst to the consumer, he or she is being guided by an invisible hand in a way that the best outcomes for this individual are coincidentally the best outcomes for our American society as a whole. Again, the consumer doesn’t realize this. Possibly the purchaser doesn’t even care one way or another. The result is the same, according to Smith.
• This unintended benefit provided by the invisible hand is better for our society as a whole than if the buyer deliberately tried to support his (her) country, left to their own intuition, advice or devices.

Sounds like Voodoo economics, eh? Charles E. Wilson, a former president of GM was once (falsely) quoted as saying: “What’s good for General Motors is good for the country.” No doubt GM was one of the top five corporations back in the day, and if Wilson had actually said that, he might have reasoned that companies like GM make America strong, and when you buy GM (over a foreign import), you are creating jobs for American auto workers. These are GM workers in Detroit (plus steelworkers in Pittsburg, the tens of thousands of workers making American tires back then for GM products in Dayton, the GM car dealerships and salesmen across the U.S. and Canada) as well. And these people in turn are taxed on their income. This tax revenue supports U.S. public health, defense, disability, education and so on.

Now, I’m not certain how many full-time economists and professors of economics give any credence to Smith’s invisible hand today. But the notion still stands. To me, it seems at least plausible. More so than, say, supply-side economics which keeps raising its ugly head every time billionaires get still another tax break.

OTHER CASES OF INVISIBLE HANDS?

Maybe one reason I find this concept interesting is that I have benefited from an invisible hand at times in my life, and it had nothing to do with economics. For example, in Vietnam on July 4, 1971 only a second before a rocket or perhaps a mortar round exploded only feet away from me, I felt two invisible hands on my shoulder blades shove me roughly to the ground as I heard the fragments of the bomb zing over where i was standing only a fraction of a second earlier. Other U.S. soldiers died in that attack, but I was spared. Why did they have to die? Why was I fated to survive? Who pushed me?

Another example. This evening, Deena and I were reflecting on 2024. We both had serious health challenges in 2024. Each of us had a ride in an ambulance to the hospital followed by surgery. We felt like we were caught in the current of a powerful river with rocks and rapids and it was fairly scary as those of you who have ever experienced this can attest. But we avoided the obstacles and passed through the rapids and the falls without capsizing or dashing ourselves on the rocks. There was nothing we did to evade the obstacles in our path. How do you avoid an aneurysm in your brain if you have the genes for one? Instead, it was an invisible hand pushing us one way against the current, or perhaps holding us back a bit, or shoving us forward when an opportune moment arrived. This was again an invisible hand at work, and she and I have no doubt whose hand it was that preserved us from impending doom. This is not to say that we didn’t have our moments of anxiety, fear or doubt. But the longer we live and the more experience we have with the things that life throws at us, the more confidence we have that God will be very near in a time of need (Psalm 46:1.) We also know that there will be a time when our life on earth is over and we understand that no one escapes the aging process and the end of life.

Invisible hands guided me throughout my life. Doors mysteriously opened or shut concerning career choices that I only understood and appreciated many years later. None of these involved capitalism, but Adam Smith might have smiled to hear of them.

Before we met, Deena and I lived only thirty-five miles or so apart. She wanted to move back to New York, but she had a feeling she needed to wait one more year to put in her notice. Meanwhile, my late wife only had several months left to live at that same time. If Deena had not followed her leading to stay, we would never have met.

Deena and I are no different than anyone else. We were not born under some lucky star. We have done absolutely nothing to earn God’s favor, and we do not live charmed lives. Each of us have suffered the death of a spouse. We have placed our lives and destiny in God’s hands, however, come what may. And we give thanks to Him for as little or as much as we have.

i’m not sure how many people still make New Year’s resolutions. Here’s a challenge, though. In prayer, acknowledge God to be your Creator and to reveal Himself to you in His own way. Surrender your life to Him as He knows what’s best for you. If you haven’t done so, try reading a chapter of the Bible each day or week, starting with the Gospel of John. See what difference that might make in the months ahead. Perhaps some invisible hand will suddenly pluck you out of harm’s way or lead you to open doors in the future.