invisible hand


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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 ?
The grant and renewal of Congressional franchises is highly exposed to arbitrariness, discretion and the invisible hand of corruption.
But individual action is also not enough, and the invisible hand of the market will not save us.
This reminds me of the "Invisible Hand," a term coined by economist Adam Smith in his book "The Wealth of Nations" to describe the unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically.
An enterprise culture results that, through Adam Smith's "invisible hand", benefits society as a whole.
But invisible forces have now teamed up with Adam Smith's Invisible Hand as well.
Adam Smith's 'invisible hand' has turned out to be the blind umpire of a fierce and savage struggle in which the casualties in dead and wounded far outnumber recorded survivals.
The JRL took an account of the report submitted by the nominated committee and the public revelations that the invisible hand of Indian agencies in the gruesome killing could not be ruled out.
More candidates have switched parties than ever before and there is a lot of mention of an 'invisible hand' calling all the shots.
"There are a lot of people who would simply like to let the future happen to us, saying there is some great invisible hand somewhere guiding the destiny of mankind ...
'Standard theory, dating back to Adam Smith, had argued that in perfect markets, the pursuit of self-interest by firms and households would lead, as if by an invisible hand, to the well-being of society,' Stiglitz said.
Instead, "[t]hey took care of themselves." Rentz presented a picture of an American society where one can step away from the rigors of the invisible hand and refuse to have one's own outstretched.
Globalization was going to bring prosperity in its wake, and how could one oppose the promise of the greatest good for the greatest number that the transnational corporations, guided by the invisible hand of the market, were going to shower on the world?