Adam Smith

The concept of the invisible hand, coined in the 18th century by economist Adam Smith, is a metaphor that delves into the intricate workings of social and economic systems. It symbolizes the idea that individuals, when pursuing their own self-interest, unintentionally contribute to the greater good of society as if guided by an unseen force. This metaphor highlights the notion that through the pursuit of personal gain, individuals inadvertently drive economic prosperity and social harmony without the need for central coordination.

Adam Smith's metaphorical invisible hand suggests that by allowing individuals the freedom to pursue their own interests in a competitive market, a natural order emerges that benefits society as a whole. This concept has been a cornerstone of classical economics, emphasizing the importance of self-regulating markets and the role of individual actions in shaping broader economic outcomes.

Furthermore, the invisible hand metaphor implies that even though individuals may act out of self-interest, the collective result of their actions can lead to positive externalities that benefit society at large. It underscores the idea that a decentralized system, where individuals make decisions based on their own interests, can lead to a more efficient allocation of resources and overall societal welfare.