Define: Invisible Hand

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Definition: Invisible Hand



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Full Definition of Invisible Hand


Adam Smith coined the phrase invisible hand in his 1776 magnum opus, The Wealth of Nations. Usually stated more fully as the invisible hand of self-interest, the phrase was a way to describe an important idea. Smith argued that in the capitalist system an invisible hand, self-interest, leads market participants to produce the goods and services that tend to serve the public interest. Smith was very religious and to him the invisible hand mechanism was essentially a metaphor for divine intervention. Today the invisible hand process is regarded as an explanation of the positive outcome of decentralized activity in a free market economy. Since self-interest always exists, the impact of the invisible hand remains a topic of active economic research.


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Definition Sources


Definitions for Invisible Hand are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February, 2020