Adam Smith: The Invisible Hand

Why are some countries wealthy while other nations are poor? Prof. James Otteson, using the ideas of Adam Smith, explains how the division of labor is a necessary and crucial element of wealthy nations. Additionally, Otteson explains Smith’s idea of the invisible hand, which explains how human beings acting to satisfy their own self interest often unintentionally benefit others.

7 Comments

  1. Matt Wavle

    Since the freedom to succeed is hampered mostly by the state, a limited state is a requirement for maximized freedom.

  2. citizen1111

    I would argue that it is necessary to place equal weight to the idea that it is coercion that is the biggest impediment to liberty.  Corporate power is every bit as detrimental to liberty, as governmental power.  One need only look at laws regarding libel and agricultural products (and those large companies that pushed for them) to see that this is true.  I wish more libertarian minded people would stand up to corporate abuses of power as vehemently as they are prepared to address the abuses of power by the government.

  3. conservatief

    The worst case of this can be found in the US. It’s rather sad to see their entire political system is fraudulent and corrupt, and that the only two major parties capable of aiming a shot at the White House are basically corporately funded lobbyist gangs.

    The question though is what can be done about this corporate influence in policy making – which should be of the people, by the people and for the people instead of serving corporate interest – without touching on individual and economic liberty or merely exchanging one evil for another: humongous corporate influence for a more powerful government, which always has the tendency to try to one way or another go all the way down down the road to totalitarianism. 
  4. minaobe

    This is a good example of how every issue connects with another. This man says that everyone needs to focus on one thing that they choose, instead of focusing on many things that others choose. We could start with education reform.

  5. Autumn Reed

    Yep. The "invisible hand" is the mecca statement of all economics. The government still feels that a "visible hand" is needed. As for focusing, most people aren’t multitaskers. So, I agree that focusing one trade for the average person is best. Now, one exchange services between another to get complete. I hope that this makes sense.

  6. asexymind

    I wish he had said “invisible hands” (plural). It is the contribution of every persons’ contribution and communication of their preferences. Some of this is financial, but also moral, aesthetic, epistemological, and metaphysical. All of these factor into the economic equation, and the wealth of nations equation.

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