The invisible hand is a metaphor for how, in a free market economy, selfish people operate through a system of mutual interdependence.
This interdependence encourages producers to produce what society needs, even if they only care about their own well-being.
– Adam Smith introduced this concept in his 1759 book Theory of Moral Sentiments and then in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations.
Every free exchange creates signals about what goods and services are valuable and how difficult it is to bring them to market.
Critics argue that the invisible hand does not always produce socially beneficial outcomes and can encourage greed, negative externalities, inequality, and other forms of harm.