Adam smith invisible hand4/7/2023 ![]() It dictates the rules not anyone else: It’s an Invisible Hand, a power which is superior and beyond us.There are 3 points that are essential to know and respect when it comes to the Invisible Hand in Economics: That solution is so simple, but yet something is missing. So, we are all led by an Invisible Hand to maximise our happiness and the general interest, which profit to everyone inside the economy according to Adam Smith. Not all people have the same beliefs, but they are all under the same influences. That’s why the name Invisible Hand is more suitable for it. Any kind of superior powers that are a way beyond us. But Adam Smith, called it simply the Invisible Hand because it could be controlled by any kind of Divinity. In some places, it is called also the Hand of God because it is the God who is responsible for the superior influences that lead us to take most of the decisions. It’s what lead us to pursue the greatest solution for us to maximise our own well-being. From the other side, the entrepreneurs are going to be forced to innovate to please the customers and be efficient to keep realising some benefices. By saving more, people will search more actively for the right object that will both maximise their happiness and reduce the expenses as much as possible. In order to do it, people will either start saving more or investing more. And that usually leads to more chances of happiness than staying in the same level for your whole life. Getting wealthier than what you actually are, helps not because only you will have more money than what you have now, but mostly because you will start improving yourself, succeeding in a challenge, achieving a new level in your life…etc. People are normally and instinctively always looking to be as happiest as possible, and one of the ways that help to achieve it is by becoming wealthiest. So, even if people are seeking their own interest and satisfaction, they will be – somehow without even figuring out that they are- helping the whole economy to improve and gets better. ![]() ![]() I have never known much good done by those who affected to trade for the public good.” By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. Nor is it always the worse for society that it was no part of his intention. He generally neither intends to promote the public interest, nor knows how much he is promoting it He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. “Every individual necessarily labours to render the annual revenue of the society as great as he can. In his book, The Wealth Of Nations, he says: People should be free to buy and exchange goods and services as freely as they want. Adam Smith came with the solution and it is so simple and easy that it is shocking! Governments should just leave the market alone. What does the Invisible Hand really means in Economics?Īs said earlier, when times are tough, no government knows how to deal with the situation at the best way. They will be guided by the hand of god, which will lead them to make the best choice to their own happiness and also brings profits to the whole society. In 1776, the Scotish economist Adam Smith released his work for what he is famous nowadays and known as the father of Economics: The Wealth Of Nations.Īccording to Adam Smith, in these kinds of situations governments should simply let the people act only by themselves. ![]() Most of the times governments end up taking the wrong, or not the best, action to improve the situation. Governments are always trying to take the right decisions, that will maximise the benefits and the happiness of the people. rising unemployment and a decrease in incomes…etc, come. Sometimes governments just get overwhelmed by the pressure and the speed with wich problems, e.g. ![]() The Economy is such a tricky thing to maintain in the right roads. ![]()
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