Friday, April 5, 2013

Donald Rumsfeld was much ridiculed for his sensible distinction between known and unknown unknowns. Bhagwati and Panagariya seem to have a similar distinction between two types of invisibles in mind: visible and invisible invisibles. They write on p. xii of their new book “Why growth matters”: “… the heavy hand of the government in economic activity was so pervasive that one of us had remarked that the problem with India (and many other developing countries) prior to the reforms of the early 1990s was that Adam Smith’s Invisible Hand was nowhere to be seen.” I am now searching for economies where Adam Smith’s invisible hand can be seen everywhere.

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