Invisible hand

Adam Smith coined the term "invisible hand."

Adam Smith introduced the concept of the invisible hand to illustrate how self-interest can lead to public benefits. He used it in his works to show that individuals pursuing their own gain can unintentionally contribute to the economic well-being of society.

Example

In "The Wealth of Nations," Smith argued that free markets encourage international trade without government intervention, benefiting all parties involved.

Understanding the invisible hand helps explain the self-regulating nature of free markets and their ability to produce optimal economic outcomes.

Related concepts

Adam Smith

Adam Smith coined the phrase "It is not from the benevolence of the butcher that we expect our dinner."

Division of labour

Adam Smith argued that specialization and division of labor increase productivity and economic growth

Nassim Nicholas Taleb

Nassim Taleb coined the term "antifragility."

Benjamin Graham's Mr. Market allegory teaches about market irrationality

Benjamin Graham's Mr. Market allegory teaches that markets can be irrational, with prices fluctuating wildly independent of intrinsic value

Reflexivity (social theory)

George Soros's reflexivity theory suggests market perceptions can change fundamentals

John Maynard Keynes

Keynes coined the phrase "In the long run, we are all dead."

Educational content, not financial advice.

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