📚 noun • entry_id 49339
invisible hand
Meanings (ES + gloss)
mano invisible
A metaphor for the principle that in a free market, an individual pursuing his own self-interest also tends to promote the good of his community as a whole.
In short, Smith understood that the invisible hand is often benign, but not always.
When Lucasians postulate that prices are ‘flexible’ they seem to mean that we can observe only Walrasian market-clearing prices. There is no nonsense here about the invisible hand…
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