A Study On Adam Smith’s "Invisible Hand" Theory Connotation And Its Ethical Value

Adam Smith is not only an outstanding economist, but also an excellent ethicist.After more than two hundred years, his two famous books《The theory of moralsentiments》and《The wealth of the nations》now still have influence on our society. Hiseconomic ethics also provides the most initial theoretical resources for modern businessethics research. The article begins with the historical background and theoretical originof Adam Smith’s economic ethics, and then through the interpretation of the two books,analyzes the invisible hand’s theory connotation and explores the invisible hand’smechanism of action and its ethical value. From historical and practical aspects, thearticle also expounds the limitations of the theory itself and its modern values.Smith thinks that self-interest is the driving force of social development. If thisnature can work within the proper range, then it is morally rational, which will becomethe invisible hand’s prerequisite for the role. Through the analysis of the special contextwhich Adam Smith’s mentioned “invisible hand” for three times, the article considersthat the "invisible hand "is complied with the natural order and harmoniousdevelopment and it not only creates wealth continuously, but also distributes socialwealth to everyone naturally. However,"invisible hand" has been affected by a series ofenvironmental factors. The superiority of the theory will be fully realized in the liberallegal system society and the ethical environment in good public order, and its operationneeds the reasonable setting of the social system. Consequently, the market environmentwith impartial competition, the inner supervision with impartial spectators and theformulation of legal justice will become the objective mechanism for the "invisible hand" to play its role. On the one hand,"invisible hand” can guarantee the human rights;on the other hand, it also coordinates the equal and fair social relations between humanbeings to achieve the shift from self-interest to mutual benefit. At the same time, it leadsthe personal interests and social interests ultimately towards consistency and makespeople not only pursue their own interests, but also meet the needs of the developmentof social economy.The "invisible hand" in the social activity can spontaneous adjust interests relationsand always maintain a balance, thus it has become the inner strength to sustain thesocial ethical order. But its inherent blindness, spontaneity and other features will alsodisrupt this order, and the unfairness of the distribution of wealth will cause a series ofsocial ethical problems. At the same time, the theory itself only appeals to create thesociety with good order and wealth, but fails to establish the economic society full ofvirtues, that is to say, it lacks the sublimation of ethical values.Certainly, the inherentlimitations of " Invisible hand "theory do not affect its playing role during thedevelopment of the market economy and its ethical value. The analysis and thesummary of the theory’s merits and demerits are aiming to provide a beneficialreference for the reality.