How The Invisible Hand Changed The World

What is the invisible hand?

The invisible hand is a “metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence to promote the general benefit of society at large.” This term was introduced by Adam Smith in his famous Wealth of Nations book.

The amazing thing Adam Smith did was simply figure out that this invisiblle hand theory was occuring. Smith was able to observe the world, economy, and market place around him and conclude that this “invisible hand” theory had changed the world.

Ideas Behind The Invisible Hand:

— Voluntary trades in a free market produce unintentional and widespread benefits

— These benefits are greater than those of a regulated, planned economy

The invisible hand has changed the market world. It plays a part in guiding business productivity and became one of the primary justifications for an economic system of free market. Without Smith’s understanding of the invisible hand, the business world would not be the same today.

Staff, Investopedia. “Invisible Hand.” Investopedia. N.p., 11 Dec. 2014. Web. 15 Nov. 2017.