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Understanding Adam Smith's Invisible Hand

The theory of the invisible hand, developed by Adam Smith, holds that when individuals pursue their own economic interests, they are being guided by an invisible force that promotes the greatest welfare of society. Smith argued that free market competition, through the forces of supply and demand, can achieve economic balance without government intervention.

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5 views1 page

Understanding Adam Smith's Invisible Hand

The theory of the invisible hand, developed by Adam Smith, holds that when individuals pursue their own economic interests, they are being guided by an invisible force that promotes the greatest welfare of society. Smith argued that free market competition, through the forces of supply and demand, can achieve economic balance without government intervention.

Translated by

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© All Rights Reserved
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Invisible Hand ADAM SMITH

The theory of the invisible hand is a metaphor that denotes


to the market economy as a tool with
ability to achieve thesocial welfaremaximum
as long as one's own interest is sought. This theory was
prepared by the economistAdam Smith.

He pointed out that the role of the market is fundamental and


that the less control existed in the economies,
it will be easier for them to reach their maximum
well-being. according to Adam Smith, the actions of the
supply and demand are sufficient to achieve the
economic balance.

The metaphor of the invisible hand implies


It maintains that the free
also that is stimulated or slowed down to the
competition is the best individuals to produce or not, following the
way of functioning of the price level that exists in the
economy market.

He gained greater notoriety

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