Your editorial (11 March) is correct in insisting that the economist and philosopher Adam Smith used “invisible hand” only once in The Wealth of Nations: to discuss investing at home or abroad, not as a general description of economic structure.
If the capital is invested at home, the decision to do that being purely a selfish and personal one, then, as if led by an invisible hand, this benefits the domestic economy.
Which is true, so we’d better be careful about deterring investment at home through the confiscatory taxation of either the wealth or the profits from having benefited the society by investing at home.
Tim Worstall
Senior fellow, Adam Smith Institute, London
• You address one popular legend with evidence from another; the idea that Marx was an advocate of the “iron law of wages”. In reality, Marx, like Smith, believed that growth could lift wages and living standards in a society defined by wage labour and capital; but he also believed that the transcendence of the wages system was desirable, or else workers would be temporarily “encrusting their chains with gold”.
Daniel Ferrett
Oxford
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