Wikipedia, believe it or not, has an entry titled, "Invisible Hand," which begins as follows:
In economics, the invisible hand, also known as invisible hand of the market, is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith in The Theory of Moral Sentiments, and used a total of three times in his writings. For Smith, the invisible hand was created by the conjunction of the forces of self-interest, competition, and supply and demand, which he noted as being capable of allocating resources in society. This is the founding justification for the laissez-faire economic philosophy.
The article contains a wealth of information about the meaning and background of Smith's metaphor. Smith was a Christian defender of laissez-faire, and his metaphor suggests an obvious tie to religion, i.e., "the hand of God," without being too direct about it. On a more abstract level, however, the metaphor also suggests a kind of fundamental "force" or causal mechanism at work throughout a free market, like natural law rather than mystical consciousness. Objectivists surely would prefer to avoid even the hint of a "hand of God," particularly given Smith's well known Christian premises. (Leonard Peikoff discusses Smith's Christianity and altruism in The Ominous Parallels, Chapter 4.)
answered Feb 01 '11 at 01:48
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