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:
“He makes his home where the living is best.”
—Latin proverb, quoted in Alan L. Mackay, The Harvest of a Quiet Eye (1977)
“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)