On Kennedy's Literary Proof of the Impossibility that Smith Had a 'Theory of the Invisible Hand of Markets' in the Wealth of Nations

23 Pages Posted: 10 Jan 2018 Last revised: 26 Jan 2018

See all articles by Michael Emmett Brady

Michael Emmett Brady

California State University, Dominguez Hills

Date Written: January 7, 2018

Abstract

G. Kennedy carefully examined the conflict that Smith covered in The Wealth of Nations brought about by Upper Income citizens that Smith classified as “Projectors, Imprudent risk takers, and Prodigals”. Their behavior led to very detrimental, negative outcomes in the macro economy as a whole. There was no Invisible Hand that turned the self interested, self serving interests of the Projectors, Imprudent risk takers, and Prodigals into benefits for society as a whole. Instead, there was massive bankruptcy, economic decline, and depression. Kennedy’s literary proof has been ignored, as has Smith’s extensive discussion of this problem in The Wealth of Nations.

The reason for this may be that most modern economists have forgotten how the use of the English language can be applied to provide an effective economic analysis of an economic problem as demonstrated by Smith.

A separate paper provides a purely mathematical treatment on this problem. It is available at SSRN. That article translates Smith’s analysis of the impact of Projectors, Imprudent risk takers, and Prodigals on the macro economy into mathematics.

Keywords: Kennedy, Smith, prodigals, imprudent risk takers, projectors, speculators, banking, virtue ethics, Prudent behavior

JEL Classification: B10, B12, B14, B16, B20, B22

Suggested Citation

Brady, Michael Emmett, On Kennedy's Literary Proof of the Impossibility that Smith Had a 'Theory of the Invisible Hand of Markets' in the Wealth of Nations (January 7, 2018). Available at SSRN: https://ssrn.com/abstract=3097609 or http://dx.doi.org/10.2139/ssrn.3097609

Michael Emmett Brady (Contact Author)

California State University, Dominguez Hills ( email )

1000 E. Victoria Street, Carson, CA
Carson, CA 90747
United States

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