The influence of Adam Smith: The Hayekian narrative, honest profit, and the Invisible Hand

Adam Smith's contributions to the world and to the field of economics cannot be overstated. College level economics students and even most lay people likely know Smith for his Invisible Hand metaphor, division of labor examples, or promotion of earning honest profit. Though such subjects are over 200 years old and often outwardly accepted as straightforward, debate remains active and divided regarding several of Smith's ideas. The main chapters of my dissertation address three separate, but related, issues to further advance the broad frames of Smith's scholarship. The first paper, Adam Smith's Congruence with the Hayekian Narrative, searches for congruence between Smith's ideas and the epic socio-political story that Professor Daniel Klein dubs "The Hayekian narrative." Several elements comprise the Hayekian narrative, with evolution and atavisms being prominent. The paper explains the narrative, discussing how humanity's instincts, which are carried over from the primeval band, often conflict with the extended order, and how social-democratic worldviews may be interpreted as atavisms. The paper compares several of Smith‘s and Hayek‘s ideas to illustrate Smith‘s similarities with the narrative. The second paper, Seeking Honest Profit as Smithian Distributive Justice, investigates whether seeking honest profit can be viewed as Smithian distributive justice. Before, and certainly since, the industrial revolution many writers and scholars have considered profit seeking to be an unbecoming trait. The paper uses Smith‘s ideas about justice and honest profit to develop a framework showing how seeking honest profits can meet the goals of distributive justice and establish a presumption of innocence rather than guilt for profit seekers. The third paper, In a Word or Two, Placed in the Middle: The Invisible Hand in Smith’s Tomes, is co-authored with Dr. Daniel Klein. The paper measures and analyzes Smith‘s use of the Invisible Hand in his two major works, The Theory of Moral Sentiments and The Wealth of Nations. The paper shows the phrase to be physically central in Smith‘s works and that the significance of centrality and middleness as a rhetorical device was well understood by Smith—both findings support deliberate placement and use by Smith.