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
Date Written: January 7, 2018
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: Suggested Citation