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Economics vocabulary · Core Concepts

Invisible hand

Meaning in economics, with examples

nounAdvanced term

In economics, invisible hand means: Adam Smith's image for the way markets can turn people's self-interest into results that benefit society, without anyone planning it.

In Turkish: görünmez el

How it is used

Usually the invisible hand of the market. It comes from Adam Smith's The Wealth of Nations (1776), where the phrase appears only once. It is often quoted in debates on free markets, sometimes in a simplified way; market failures show where the invisible hand does not work well.

Example sentences

  1. Smith argued that the invisible hand guides self-interest towards the common good.

  2. Pollution is a case where the invisible hand fails without regulation.

Common collocations

  • the invisible hand of the market
  • Adam Smith's invisible hand
  • trust the invisible hand
  • market economyAn economic system in which prices, production and wages are mainly decided by supply and demand in free markets, not by government plans.
  • marketAny arrangement, physical or online, where buyers and sellers meet to exchange goods, services or assets, and where prices are formed.
  • market failureA situation in which a free market, left alone, does not produce an efficient outcome for society, so too much or too little of something is produced.
  • competitionRivalry between firms that sell similar products and try to win the same customers, which tends to push prices down and quality up.
  • incentiveSomething such as a reward, a price or a penalty that encourages people or firms to act in a particular way.

More terms: Core Concepts

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