At the turn of the 19th century, Adam Smith's arguments were invoked by Samuel Whitbread in favor of a minimum wage and by William Pitt against it. ''There is something of Smith,'' Ms. Rothschild wryly observed, ''on both sides of the parliamentary debate.''

Or consider taxes. Dick Armey does not miss an opportunity to enlist Adam Smith in support of his flat tax. Smith did favor low taxes and argued that subjects ''ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities.'' But he also argued, ''It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.''

Would Mr. Armey support a tax on luxury carriages? Smith did.

Smith also supported universal government-financed education because he believed the division of labor destined people to perform monotonous, mind-numbing tasks that eroded their intelligence, not because education led to economic gain. His economic policy had social and moral objectives, not just the maximization of national income. To Smith, enlightenment was for the masses.

Smith saw people as usually rational decision makers, although sometimes seduced by ''romantic hopes'' to disregard the dangers inherent in their decisions.

Ms. Rothschild's most controversial point is that Smith was skeptical of the notion that an ''invisible hand'' would lead individuals to unintentionally promote the public interest by pursuing their own self-interest. She even suggests that Smith used the famous metaphor as an ironic joke. This conclusion is speculative and sure to enrage critics. But there can be little doubt that Smith's faith in the invisible hand has been exaggerated by modern commentators. Smith used the metaphor only once in ''The Wealth of Nations,'' applied it narrowly and presented the idea with more than his usual number of caveats.

He persistently worried that if merchants and manufacturers pursued their self-interest by seeking government regulation and privilege, the invisible hand would not work its magic -- a worry that applies with equal force to George W. Bush's energy bill and many other contemporary policies.

Most of postwar economics can be thought of as an effort to determine theoretically and empirically when, and under what conditions, the invisible hand turns out to be all thumbs.