Monday, September 21, 2015

Smith Makes Full Sense Only With Bastiat

My reading of the invisible hand principle is not that if everyone follows their self-interest, socially optimal outcomes will result, but that the best way to satisfy one's self-interest is to satisfy the interests of others. In other words, the former is true, but only given the recognition of the economic harmony of all peaceful interests: Smith starts to make full sense only when combined with Bastiat.

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