"Invisible hand" in the economy

The Invisible Hand

If you’ve ever been in an economic themed conversation you will must probably have heard about the invisible hand. Have you ever get benefited by someone intent on gaining something or, gained something from someone’s greed? Well that my friend its what Adam Smith decide to illustrate when he conned the term “Invisible Hand”, which meaning is defined by different examples in everyday life. A term basically simple to explain a complex process, that expands along a nation’s economy.

In the economist world it’s very normal to hear about these “Invisible Hand” this is because it’s one of the fundamental pillars of economy in any given society. Adam Smith, who was also known like the father of economy, discovered what can be considered the base of an economy. What this mysterious hand consist of is that every individual that labors necessarily renders the annual revenue of the society to his extent. In Layman’s terms everyone who works a job is helping other workers or consumers, which ultimately contributes to the economy in general. Basically everyone no matter how meaningless their job can be is contributing towards the global economy. This is the trait, that is characterized as invisible of this term because even though that in a close perspective jobs might seem meaningless but in a larger picture they all contribute to society. For example, imagine a man wants to go to work in a bicycle so he buys one, your are both able to go to your job and the clerk of the bicycle store will get a paycheck for his work from his boss. The boss will receive his payment in form of capital investment, which will later be used to buy the bikes from the local distributor. This distributor buys his bikes from a factory, and so goes the chain influencing not only locality but even international business.

The invisible hand can be found in many aspects of life like for example the environment. By making a involuntary mistake like for example using one species to control a problem in one environment by that change of places you can extinct another especie that has noting to do with your local problem. Like these you can find uncountable examples. In economy the “Invisible Hand” is a pillar. Without it the economy will collapse, it can be compared to removing the support of a house’s roof. The economy exist because of the exchange of money and this exchange can’t occur without businesses being interconnected with one another.

In conclusion the invisible hand is the term that explains how everyone contributes involuntarily to a system called economy. Maybe this is why Smith sees this invisible hand as the mechanism by which God administered the universe in which human happiness was maximized. Administrated or not everyone gains something because of this “Invisible Hand”.

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