Is the invisible hand theory relevant in the 21st century?

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Adam Smith coined the phrase "invisible hand" to describe the way that businessmen and producers, if left to themselves (rather than being forced by mercantilist legislation), would actually make decisions that would benefit the overall national economy. He would do this not out of any sense of the overall common good, according to Smith, who wrote that the typical businessman "generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it." Rather, Smith wrote, businessmen were "led by an invisible hand to promote an end which was no part of his intention." In short, Smith was arguing that business owners were more likely to figure out how to invest their money in ways that benefited society than government policy-makers.

How is this eighteenth-century observation relevant to the twenty-first-century world? In several ways. Generally speaking, the degree to which the government should manage the economy is a key difference between liberals and conservatives in countries around the world. Conservatives generally adopt the "neo-liberal" position that Smith is credited with establishing. Smith was particularly writing about protective tariffs and trade restrictions when he described the "invisible hand," and some leaders around the world, including the United States, have sought to impose tariffs on some goods in an effort to promote domestic enterprises. This is precisely what Smith was arguing against in Wealth of Nations. So the principles behind the "invisible hand" are still very much contested in modern politics.

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First things first—let us define the term "invisible hand". In a market system in which there is minimal government control, the metaphor of an invisible hand describes the way in which individuals and companies depend on one another to provide better products and better service. In providing these higher standards, these companies ultimately serve their customers better.

In many ways, the term very neatly ties in with capitalism, which is a system characterized by the interdependence of companies in a space in which their activities are not controlled by government. I would therefore argue that invisible hand theory certainly is relevant in the 21st century. In a globalized world driven by technology and digitization, businesses will continue to run themselves along capitalist principles, thereby reinforcing the relevance of invisible hand theory.

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I think that the theory of the invisible hand is very relevant in the 21st Century.

The globalized world is where goods are produced under a free market.  Nations and their economies are geared towards a freedom of economic expansion.  Adam Smith's philosophies of wealth accumulation and the free market are relevant now because more nations embrace it through liberal economic growth.  

A significant part of capitalist theory is the invisible hand.  Classical liberals, like Adam Smith, believe that the invisible hand is the mechanism through which all problems of the marketplace can be remedied.  As Milton Friedman writes, the invisible hand represents "the possibility of cooperation without coercion." Thinkers like Smith and his followers like Friedman use the invisible hand to explain why external control of the marketplace is not needed.  As a result of the invisible hand, government intervention is unnatural because the invisible hand can remedy any potential disruption.  This allows the marketplace to operate in a free manner and represents freedom of choice.  The invisible hand is an essential idea behind capitalism, free market entrepreneurship, and expansion of economic freedom.

[Adam Smith] made it clear in his writings that quite considerable structure was required in society before the invisible hand mechanism could work efficiently. For example, property rights must be strong, and there must be widespread adherence to moral norms,... (Helen Joyce, "Adam Smith and the invisible hand," plus.maths.org)

As the globalized economy embraces capitalism in the 21st Century, the invisible hand will become more relevant.  Free market advocates will turn to it as a way to counter external control in the form of government intervention.

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