invisible hand

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Related to The Invisible Hand: Adam Smith

Invisible Hand

A metaphor for the free market. Adam Smith coined the phrase, which refers to the idea that in the pursuit of maximizing one's self-interest, one tends to maximize the interests of society as a whole, as if an invisible hand were guiding both. For example, a man may open a mechanic shop to make money for himself, but in the process he may hire otherwise unemployed mechanics and service otherwise broken cars, which then facilitates business for the rest of the community. Proponents of deregulation have used the metaphor to illustrate their points, though others, notably Noam Chomsky, have argued that Smith did not intend to phrase to imply a lack of government intervention.

invisible hand

a term devised by Adam SMITH to denote the way in which the market mechanism (PRICE SYSTEM) is capable of coordinating the independent decisions of buyers and sellers without anyone being consciously involved in the process. Smith held that as the ‘invisible hand’ maximizes individual welfare and economic efficiency it is the automatic equilibrating mechanism of the competitive market. See PRIVATE-ENTERPRISE ECONOMY.
References in periodicals archive ?
In the case of human welfare, the invisible hand explanation in the market case is an attempt to show how something that nearly everyone should care about comes to pass: how individuals acting for their own ends can, under the right conditions, increase the welfare of others by engaging in mutually advantageous specialization and trade.
They cannot be dealt with sans regulation, which is impossible globally and, if imposed regionally, will distort markets and the working of the invisible hand.
But while we're twisting in limbo, waiting to see what the Invisible Hand does next, it might be worth asking just how much the laws of the marketplace have shaped Anglophone writing over the past four decades.
This short, pithy book purports to offer us the definitive interpretation of the Adam Smith problem and to have solved finally the mystery of the invisible hand.
Linking the invisible hand idea to the first fundamental theorem Basu coins the term 'invisible hand theorem'.
But things haven't turned out all right, and the invisible hand has let go of some crucial ideals--such as "the common good.
Revealing the manner in which debate participants tend to manipulate language and perception to favor their side, Invoking the Invisible Hand is strongly recommended not only to college libraries, but also anyone involved in the Social Security debate, the better to fully understand all sides of the issue, and the fine details that advocates on each side tend to leave out.
The author demonstrates that pirate life was an excellent example of the invisible hand (hook) in action.
When they plundered another ship, pirates were known to parcel out their take evenly, unwittingly acting in accordance with what Adam Smith would later define as the invisible hand.
AIG is tipping many people away from a trust in the invisible hand of the market - and the danger is that we will overreact.
To paraphrase Adam Smith, do not undermine the power of the invisible hand.