The Invisible Hand

The Invisible Hand is a concept introduced by economist Adam Smith, representing the self-regulating nature of a free market. It describes how individuals pursuing their own interests can lead to positive outcomes for society as a whole. For example, when a baker bakes bread to earn a living, they provide food for the community. This interaction aligns personal motivation with social benefit, promoting efficient resource allocation without the need for central planning. Essentially, the Invisible Hand suggests that individual actions, driven by self-interest, can inadvertently contribute to the common good in an economy.