Free To Choose Network | The Real Adam Smith
The Real Adam Smith
Key Concepts
Invisible Hand
This concept means that people (and systems) often work together in great harmony even when there’s no one apparently guiding them. For example, your local grocery stores stock foods that come from all over the world. No one tells them what they must carry. The behavior of their customers is what guides their decisions. Each person works in his/her own best interest—the store keeper wants what’s best for him and his business so he can support his family. (See “Self-Interest” as well.) It turns out that what’s best for him is to meet his customers’ desires. By stocking what they want, he sells products, which brings money into his store, which allows him to pay his own bills. No one tells each person in the system what to do—it all happens as if “guided by an invisible hand.”
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