To what degree is the ‘invisible hand’ working today as Smith envisioned; are today’s business activities...

To what degree is the ‘invisible hand’ working today as Smith envisioned; are today’s business activities producing the overall Invisible Hand benefits for society that he predicted? Is it creating general prosperity? To the degree it is not working, why? (1-2 paragraphs)

Expert Solution

The "Invisible Hand Theory" was propounded by Adam Smith in his book "The Wealth of Nations", it is the unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically.

I believe that the theory is relevant in today’s modern world, not all the businesses in the world are deregulated but a significant part of it is left free and today's business activities are producing those benefits as Smith envisioned for the society.

It is on the way of creating general prosperity as more and more businesses are left free and economies are coming together and are globalised, the general buyers in the market are having more options to choose from.

The best businesses amongst all will survive. The philosophy of free market and wealth accumulation is true today as most of the economies are opting for a liberal approach.

It is true that any thought or philosophy may not work in the same way it was stated and thus applies to the theory of invisible hand as well, the world is liberalised and globalised but there are business activities which are regulated by governments and it is not allowing the theory of invisible hand to work completely.

The private markets are not left absolute even in Capitalistic economies, there are markets where private players fail and it is supplemented and regulated by the government thus it is true that that the theory of invisible hand is working as Smith stated in his book not in absolute sense.

keosha answered 8 months ago

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