The invisible hand describes the unintended social benefits of an individual's self-interested actions, a concept that was first introduced by Adam Smith in The Theory of Moral Sentiments, written in 1759, invoking it in reference to income distribution.įurthermore, what exactly is this principle of the invisible hand in relationship to the free market? The invisible hand is a concept that – even without any observable intervention – free markets will determine an equilibrium in the supply and demand for goods. An example of invisible hand is an individual making a decision to buy coffee and a bagel to make them better off, that person decision will make the economic society as a whole better off.Īlso to know is, what is the invisible hand concept? The invisible hand is a natural force that self regulates the market economy.
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