Invisible Hand in Wealth of Nations
In The Wealth of Nations, Adam Smith introduced the 'invisible hand' as one of economics' most enduring metaphors. He explained that a businessman who 'intends only his own gain,' is 'led by an invisible hand to promote an end which was no part of his intention.' This logic, where the pursuit of self-interest promotes societal good, serves as the basis for the economic model of a perfectly competitive market. Smith argued that by pursuing their own interests, individuals often promote the good of society more effectively than when they consciously try to do so. He reinforced the primacy of self-interest in economic exchanges with the observation that 'Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.' However, it's crucial to understand this concept within the context of Smith's broader philosophy. His earlier work, The Theory of Moral Sentiments, presents a more nuanced view of human motivation that acknowledges innate principles of sympathy and concern for others, which temper pure self-interest.
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