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:
“Having an identity at work separate from an identity at home means that the work role can help absorb some of the emotional shock of domestic distress. Even a mediocre performance at the office can help a person repair self-esteem damaged in domestic battles.”
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