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  • Will Malpass

The Invisible Hand

Updated: Sep 6, 2020

Readers, do you know about the "invisible hand?" Sounds kind of creepy, doesn't it? But really, it's not creepy at all. Actually, I think the invisible hand is one of the best things we've got going for us!

The invisible hand made visible!

The invisible hand. We've developed this image using special techniques and advanced filters so you can actually observe how the invisible hand is gently holding the earth in its palm. Rest assured, the invisible hand is taking care of us every day, even if we don't notice, or even if we don't believe in the invisible hand.

The Scottish economist and philosopher Adam Smith (1723-1790) coined the term to describe how people who produce more than they consume are motivated by self-interest to distribute their excess production in a way that benefits society, even if they aren't intentionally trying to do so.

A sketch of Adam Smith. Notice his hands are not pictured.

A sketch of economist Adam Smith. Hmm...that's interesting...his hands are not pictured. Coincidence?

Skeptical? Not sure you believe in the invisible hand? Consider this example:

  • Pretend I have a wheat farm. Gosh, I produce so much wheat on my farm, you guys! I have way more than enough wheat for myself, my family, and all my friends and neighbors. Hmm. What am I going to do with all this extra wheat?

  • A wheat merchant has heard about my surplus wheat situation and offers to buy all my extra wheat. Why would she do that? Because she knows the family in the next village that owns the bread factory! They're always looking for more good-quality wheat, so they can make more bread than they need personally, and sell the excess to a bread merchant.

  • The bread merchant knows some dairy farmers in the next county. They keep talking to him about this innovative milk-based product they've developed. They call it "butter." They claim it goes great on warm bread. The bread merchant is intrigued, and is considering investing some of his extra capital in a butter-production facility.

New butter plant coming to the village soon!

Villager #1: "I heard an outrageous fellow is going to build a butter plant in our village. Maybe even cheese and sour cream." Villager #2: "Is he really? Why, that IS outrageous! How dairy!"

I'm sure you get the idea, savvy readers. Everybody in this scenario is benefiting by pursuing their own self-interests. Additionally, the overall society benefits because there is plenty of bread and butter to go around. See? That's the invisible hand at work in the background.

Incorrigible skeptic and invisible hand hater: "Sure, Will, overall society benefits. But I have a gluten sensitivity, and I'm lactose intolerant!"

#Interests #Humor

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