Investor Glossary-invisible handInvestor Glossary-invisible handInvestor Glossary-invisible handInvestor Glossary-invisible handInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Invisible Hand

The HTML to link to this page
 

Adam Smith coined the phrase invisible hand in his 1776 magnum opus, The Wealth of Nations. Usually stated more fully as the invisible hand of self-interest, the phrase was a way to describe an important idea. Smith argued that in the capitalist system an invisible hand, self-interest, leads market participants to produce the goods and services that tend to serve the public interest. Smith was very religious and to him the invisible hand mechanism was essentially a metaphor for divine intervention. Today the invisible hand process is regarded as an explanation of the positive outcome of decentralized activity in a free market economy. Since self-interest always exists, the impact of the invisible hand remains a topic of active economic research.



Rate this invisible hand definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: labor relations, balance sheet, VIX, implied volatility, current ratio, reverse mortgage, risk management, minority interest, option premium, inflation, EBITDA, average price per share, ex-dividend date, annual return, 144a, wholly-owned subsidiary, irrevocable trust, Key Rate Duration, APR, stock split, debt service coverage, deferred tax, 1031 exchange, LIBOR, real GDP, Zero Cost Collar, liquidity ratio, 1035 exchange, FTSE, phantom income, covered put, in escrow, stock market close, per diem, margin rate, open position, quality assurance, dividends payable, deferred revenue, required rate of return, FICO score, retained earnings, diluted share, 401a, class C shares, ex-dividend, command economy, limit order, cancelled check


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use