Home Bias Interpretation
See also: Equity home bias puzzleNoam Chomsky argues that Smith (and more specifically David Ricardo) used the phrase to mean a "home bias" for investing domestically in opposition to outsourcing production and neoliberalism. In this interpretation, Smith meant that merchants in the act of "preferring the support of domestic to that of foreign industry" as if "led by an invisible hand", benefited society.
The implications are that Smith saw outsourcing and neoliberalism as damaging to society and "the invisible hand" helped steer society away from these things. However, even in this view Smith's objection is on practical grounds and outsourcing would still be allowed in a market system.
Read more about this topic: Invisible Hand
Famous quotes containing the words home and/or bias:
“As I came home through the woods with my string of fish, trailing my pole, it being now quite dark, I caught a glimpse of a woodchuck stealing across my path, and felt a strange thrill of savage delight, and was strongly tempted to seize and devour him raw; not that I was hungry then, except for that wildness which he represented.”
—Henry David Thoreau (1817–1862)
“The solar system has no anxiety about its reputation, and the credit of truth and honesty is as safe; nor have I any fear that a skeptical bias can be given by leaning hard on the sides of fate, of practical power, or of trade, which the doctrine of Faith cannot down-weigh.”
—Ralph Waldo Emerson (1803–1882)