Adam Smith on the natural ordering Tendency of Free Markets, or what he called the “Invisible Hand” (1776)
Found in An Inquiry Into the Nature and Causes of the Wealth of Nations (Cannan ed.), vol. 1
This passage comes from Adam Smith, An Inquiry into the Nature and Causes of the the Wealth of Nations and is perhaps one of his most famous quotations (1776):
… by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
Liberty Fund is pleased to publish in paperback Glasgow Edition of the Works and Correspondence of Adam Smith, in 7 volumes, which was commissioned by the University of Glasgow and originally published by Oxford University Press in 1976 in order to commemorate the 200th anniversary of the first publication of Smith’s The Wealth of Nations (1776).
The concept of the “invisible hand” is one of Smith’s most potent concepts and is consequently one of his most famous statements. With his complete works online it is possible to do a “key word” search for this phrase across his entire corpus. It is surprising to see where else it crops up in his writings.
This phrase about the “invisible hand”, along with Adam Ferguson’s that societies were “the result of human action, but not the execution of any human design,” are two of the most important and profound insights to emerge out of the Scottish Enlightenment.