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What is an Invisible Hand?
There are many things that are actually ignored by economists. They are not interested in each and everything that happens, but they are rather interested in those cases when there are unintended consequences.
There are many complex things that are happening in the system we live in. We are not able to understand all these things in a good way. The choices that we make have consequences that are either intended or unintended too. The whole concept of economics starts with the choices that are made by the consumers. Though these are
The whole concept of economics starts with the choices that are made by the consumers. Though these are self-interested choices that we make, there are actions that result from them that affect society as a whole. It is important to know if these choices that we make lead to harmonious consequences or chaotic ones.
The economists views
The whole idea of choices makes economists say certain things. This would be because all the good choices may not actually lead to good consequences. Similarly, all the good consequences may not be a result of the good choices made. These are not interdependent in most cases. But this is totally opposite to what the world sees things as. There are many of us who believe that doing bad things would lead us to something bad. Even the bankers and the huge companies believe that the bad things that they are facing must have originated from something bad.
These are not interdependent in most cases. But this is totally opposite to what the world sees things as. There are many of us who believe that doing bad things would lead us to something bad. Even the bankers and the huge companies believe that the bad things that they are facing must have originated from something bad.
This was the term that was used by the famous economist Smith in his book ‘Wealth of Nations’. According to him, there is an invisible hand that is making you do things that may lead to bad consequences. There are certain things that this invisible hand leads you into.
Every person tries to find ways to earn as much money as he can, and in this process, he tries to find out the best possible solutions for himself. They are to his advantage, but not for society. This implies that his action to make the most would lead him to do something in turn to the society that is not so good. This is the action performed by the invisible hand.
Though this idea is true, there are not many economists of today who accept his theories. This is due to the fact that they are all against the ideas of Smith. The reason behind it is that he was unaware of the basic concepts of economics that exist today, which include the concept of demand and supply too.