Hands-Free Shopping

If Adam Smith were alive today, he might rely on InvisibleHand for his online shopping. The service, a Firefox add-on, notifies users if a product is available for less elsewhere, eliminating the need for price-comparison websites. The invisible hand never worked so quickly. [%comments]


Caliphilosopher

On what page of his book did Adam Smith actually use the phase "The Invisible Hand"? Can someone find that for me?

asmith

@Caliphilosopher - just go to the etext version of "Wealth of Nations" and search for the word 'invisible':

http://www.gutenberg.org/files/3300/3300-h/3300-h.htm

Grant

If you search for Wealth of Nations in google books, click the first link, and then search within that you can find the first reference to an invisible hand on page 32.

DaveyNC

It might be kind of hard to see. ;)

Caliphilosopher

Thanks everyone! I appreciate it. :-)

Avi Rappoport

It turns out that I shop on more than lowest price. I want confidence that the product description is accurate, that the product is well-made, comprehensible checkout, receipt and packing list, timely service, and someone to call if things go wrong.

I'm willing to pay a bit more for items from a vendor with reliable service: I buy stuff from Lands End, Small Dog Electronics and REI for those reasons. It's been cost-effective: I spend less time dealing with errors and their products last for decades.

Dave

I believe that Smith mentions the invisible hand once in all of _Wealth of Nations_ and once in all of _Moral Sentiments_

Riz Din

From James Buchan's short (but what I found to be quite unreadable) biography of Smith:

'The phrase 'invisible hand' occurs three times in the million words of Adam Smith's that have come down to us, and on not one of those occasions does it have anything to do with free-market capitalism or awesome international transactions.'

Al

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

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Corey

The free market would be a great idea if all those assumptions he makes about people being rational actors were accurate (they're not)

EJ

I agree with Avi Rappoport.

There are more important things than dollar cost - buying good quality, supporting local manufacturers and stores, fair trade, second hand etc.

Look at the planetary mess our obsession with cheap stuff has gotten us into.

Brian G.

So some of you use more than just price to determine what to buy. Great, so does everyone else. That doesn't mean knowing the price of a good at other places isn't useful.

srb

Avi, EJ -

Your complaints don't really make sense here. This app is comparing identical products offered at different websites. They will have the same manufacturers, the same parts, will both be "fair trade" or not, etc...

Certainly you may prefer some online vendors to others, but it is still a useful app to see if you are vastly overpaying relative to another website (which may be having a special sale on that item, for instance) for an identical good.

Garvit Sah

Finally something to give power and information in the hands of the consumer. Though would wait to see if it really can scan all the sites and really suggest the lowest possible price.

Marko

Avi, EJ are missing the point.

What is relevant is that Avi and EJ shop based on self-determined criteria. Both Avi and EJ admit they shop based on qualities they deem worthy.

The invisible hand described by Adam Smith says that as Avi and EJ pursue their own self interest, they are promoting a public good whether intended or not.

The public good is this: by Avi and EJ pursuing their own interests, they are directing the industry to produce and sell more of that particular product or service.

This may seem obvious today, but it was a revelation when Smith first wrote it.

Alan

The invisible hand as popularly understood has little to do with Adam Smith. There is no theory of the invisible hand in WoN or any of Smith's works. This popular misunderstanding of Smith derives from Paul Samuelson and has been promulgated by economists and the mass media ever since. The book can be read online. Read it and discover that most of what is written in the name of Adam Smith is nonsense.

He uses the phrase invisible hand exactly once in WoN and the use has absolutely nothing to do with a theory of markets. Smith catalogs numerous instances in WoN in which the action of self-interest is detrimental to free markets and in those instances favors regulations to control self-interest.

Here's Smith writing on the need to regulate banking. How many financial crises will we go through before we heed this advice, one wonders?

"To restrain private people, it may be said, from receiving in payment the promissory notes of a banker, for any sum whether great or small, when they themselves are willing to receive them, or to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty which it is the proper business of law not to infringe, but to support. Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments, of the most free as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty exactly of the same kind with the regulations of the banking trade which are here proposed. "

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