Foundational to our exceptional nation’s sacred private property rights, a business must have freedom to locate where it wishes. In a free market, if a business makes a mistake (including a marketing mistake that perhaps Carrier executives made), threatening to move elsewhere claiming efficiency’s sake, then the market’s invisible hand punishes. Thankfully, that same hand rewards, based on good business decisions. But this time-tested truth assumes we’re operating on a level playing field. When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest is one big fail.

Both the fragmentation of power and the conflicting government policies are rooted in the political realities of a democratic system that operates by enacting detailed and specific legislation. Such a system tends to give undue political power to small groups that have highly concentrated interests, to give greater weight to obvious, direct, and immediate effects of government action than to possibly more important but concealed, indirect, and delayed effects, to set in motion a process that sacrifices the general interest to serve special interests, rather than the other way around. There is, as it were, an invisible hand in politics that operates in precisely the opposite direction to Adam Smith’s invisible hand. Individuals who intend only to promote the general interest are led by the invisible political hand to promote a special interest that they had no intention to promote.

There is an invisible hand in politics that operates in the opposite direction to the invisible hand in the market.

"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."1

Adam Smith's invisible hand does exist, but as an emergent property of a complex system. It has a fuzzy tendency to reduce big price discrepancies, but it acts in a rather haphazard way.

People forget the fundamental distinction between Adam Smith's version of The Invisible Hand and what I suppose you could regard as Bastiat's version. The French idea was that there is somehow a harmony in nature so that by natural forces if people were left free to pursue their own interests they would benefit everybody. Adam Smith's was a much more subtle and sophisticated argument, that it is possible to set up institutions under which people pursuing their own interests will benefit everybody. His invisible hand required the right set of institutions and I think that's the case. After all, the distinction between a collectivist society and a market or individualist society is not whether people pursue their own interests. If I take Russia, for example, the people in Russia are all pursuing their own interests but the institutions set up in Russia make what is in each person's own interest different from what it would be in the United States or in Britain.

The invisible hand is an emergent property of this system, which never reaches an optimal equilibrium, but instead is fundamentally dynamic and unstable, with complex effects on society.

As against the "invisible hand" of Adam Smith, there has to be a visible hand of politicians whose objective is to have the kind of society that is caring and humane. I worked to put this view of social justice into effect throughout my years in office.

People who intend to serve only the public interest are led by an invisible hand to serve private interests which was no part of their intention.

The reason that the invisible hand often seems invisible is that it is often not there.

I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.

No hard-and-fast rule can be laid down as to where our legislation shall stop in interfering between man and man, between interest and interest. All that can be said is that it is highly undesirable, on the one hand, to weaken individual initiative, and, on the other hand, that in a constantly increasing number of cases we shall find it necessary in the future to shackle cunning as in the past we have shackled force. It is not only highly desirable but necessary that there should be legislation which shall carefully shield the interests of wage-workers, and which shall discriminate in favor of the honest and humane employer by removing the disadvantage under which he stands when compared with unscrupulous competitors who have no conscience and will do right only under fear of punishment. Nor can legislation stop only with what are termed labor questions. The vast individual and corporate fortunes, the vast combinations of capital, which have marked the development of our industrial system create new conditions, and necessitate a change from the old attitude of the state and the nation toward property.

A market need no longer be run by the Invisible Hand, but now could create itself-its own logic, momentum, style, from inside. Putting the control inside was ratifying what de facto had happened-that you had dispensed with God. But you had taken on a greater, and more harmful, illusion. The illusion of control. That A could do B. But that was false. Completely. No one can do. Things only happen, A and B are unreal, are names for parts that ought to be inseparable...

The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith’s invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency. The only question that has been raised concerns the ability of government to remedy the deficiencies of the market. Within academia, a significant fraction of economists are involved with developing and expanding on the ideas of imperfect information (and imperfect markets) that I explored. For instance, Edmund Phelps, this year’s Nobel Prize winner, belongs to this "school" of thought. But in political discourse, simplistic “market fundamentalism” continues to exert enormous influence.