Adam Adams Smith And Adam Smith's Invisible Hand Theory

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INTRODUCTION “Every individual necessarily labors to provide the annual revenue of the people as much as he can. He ... neither means to promote the community interest, nor knows how greatly he is promoting it. He means only his own profit, and he is in this, as in various other situations, led by an invisible hand to uphold an end which was no part of his aim. By pursuing his own interest he often promotes that of the public more effectively than when he really plans to promote it. (Smiths 1776: 246) by www.feedbooks.com Adams Smith theory of “Invisible hand” has been criticized and/or applauded by many Economists who came after him, based on the scope of this work, some of these Economists and their theories will be analyzed. Adam Smith and His invisible hand Theory The invisible hand theory is a theory birthed by Adams Smith who is termed the father of Economics and modern Capitalism: the type of economic system in which resources of production are owned by private entity and without government interference. Every individual works for his own benefit and personal achievement, leading to the betterment of the society as a whole without this individual intending to do so. In addition, government interventions or regulations are not required since the invisible hand guides the economic growth. “It is not from the generosity of the butcher, the brewer or the baker, that we anticipate our dinner, but from their regard to their own self interest. We address ourselves, not to

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