invisible hand


Term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources. According to Adam Smith, in a free market each participant will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better of than when simply producing for himself/herself. He further said that in a free market, no regulation of any type would be needed to ensure that the mutually beneficial exchange of goods and services took place, since this "invisible hand" would guide market participants to trade in the most mutually beneficial manner.

Use invisible hand in a sentence

Adam Smith believed that the invisible hand would guide individuals to maximize their own good, through trade and entrepreneurship, thus making society as a whole better off.

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You may want to do some research on the invisible hand and see if you can learn anything from this principle.

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There was an invisible hand guiding the practice and I knew we would be okay in the long run with our company.

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