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:
“Contrary to all we hear about women and their empty-nest problem, it may be fathers more often than mothers who are pained by the children’s imminent or actual departure—fathers who want to hold back the clock, to keep the children in the home for just a little longer. Repeatedly women compare their own relief to their husband’s distress”
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