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The invisible hand is a metaphor inspired by the Scottish moral philosopher Adam Smith that describes the incentives which free markets sometimes create for self-interested people to act unintentionally in the public interest. Smith originally mentioned the term in two specific, but different, economic examples.
The notion of the invisible hand has been employed in economics and other social sciences to explain the division of labour, the emergence of a medium of exchange, the growth of wealth, the patterns (such as price levels) manifest in market competition, and the institutions and rules of society.
May 15, 2024 · The invisible hand is a metaphor for how, in a free market economy, self-interested individuals operate through a system of mutual interdependence. This interdependence...
Nov 30, 2018 · The Invisible Hand is perhaps the most important—and most controversial—metaphor in economics. For fans of markets, it is synonymous with free individuals having their commercial interactions informed and guided by the feedback mechanism of the price system.
Jul 19, 2024 · The invisible hand is a foundational concept for rational choice theory, which states that people will make decisions based on their own personal self-interest and benefits.
May 20, 2018 · The invisible hand is a concept that – even without any observable intervention – free markets will determine an equilibrium in the supply and demand for goods. The invisible hand means that by following their self-interest – consumers and firms can create an efficient allocation of resources for the whole of society.
Feb 28, 2018 · The "invisible hand" of the market, a phrase invented by Adam Smith, is a common argument against government regulation. But does it work?
Jan 9, 2021 · What is the invisible hand? This expert article provides the best definition, real-world examples, and history of Adam Smith's invisible hand theory.
This chapter examines the “invisible hand” theory proposed by Adam Smith. It explains how Smith uses the phrase as a description of unintended social benefits resulting from individual actions, and the way that markets promote cooperation.
May 2, 2023 · Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it. The concept of unintended consequences is one of the building blocks of economics. Adam Smith’s “invisible hand,” the most famous metaphor in s...
