Karl Mittermaier, Adam Smith, and Economic Methodology: A Comment on 'The Invisible Hand and Some Thoughts on the Non-Existent in What We Study'

Abstract

This article is a comment on Karl Mittermaier’s article The Invisible Hand and Some Thoughts on the Non-Existent in What We Study, written in the early 1990s, but published only now. In this article, Mittermaier attempts to make two contributions. First, he provides a novel interpretation of Adam Smith’s well-known expression of the invisible hand, thereby highlighting a rather neglected method in Smith’s works. He uses this interpretation to introduce a methodological argument that “fictions may play a vital, or even essential, role in economic analysis”, touching on Roy Bhaskar’s New Realism, or Critical Realism, as it would be described today, as well as on Austrian Economics. This is his second contribution. We discuss both contributions, especially in the light of newer scholarship on Adam Smith and in the Philosophy of Economics.

Keywords: Adam Smith, Karl Mittermaier, Invisible Hand, Roy Bhaskar, Philosophy of Economics, Economic Methodology, Austrian Economics