Invisible Hand

Invisible Hand: The term “Invisible Hand” was coined by economist Adam Smith in the 18th century. It refers to the self-regulating nature of the marketplace, where individuals pursuing their own self-interest unintentionally contribute to the overall economic well-bEINg of society. This concept suggests that when individuals seek personal gain, they inadvertently promote societal benefits through their economic activities.

Examples:

• When a baker produces bread for profit, they not only fulfill their own financial needs but also provide a necessary good for the community.
• Investors in a Stock market buy Shares of companies they believe will be profitable, which can lead to increased Capital for those companies to expand and create jobs.

Cases:

• The rise of tech startups in Silicon Valley illustrates the Invisible Hand, as Entrepreneurs pursue personal wealth and, in doing so, drive innovation and economic growth.
• The housing market can reflect the Invisible Hand when buyers and sellers interact