The invisible hand of the market can solve many economic problems from "summary" of Basic Economics by Thomas Sowell
The invisible hand of the market is a concept that has been used for centuries to explain how individual self-interest can lead to positive outcomes for society as a whole. This concept was famously articulated by the economist Adam Smith in his book "The Wealth of Nations" in 1776. Smith argued that when individuals pursue their own self-interest in a competitive market, they unintentionally promote the general welfare of society. This idea is based on the premise that in a free market, individuals are guided by their own self-interest to seek out opportunities to maximize their own well-being. As a result, they are motivated to work hard, innovate, and produce goods and services that are in demand. In doing so, they are also providing value to others in society by creating goods and services that satisfy the needs and wants of consumers. The invisible hand of the market works through the price mechanism, which is the process by which prices are determined by the interaction of supply and demand. Prices serve as signals that convey information about the scarcity of resources and the preferences of consumers. Whe...
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