Invisible hand
In The Wealth of Nations, Adam Smith notes an important principle of capitalism - that an individual acting for his own good is also acting for the good of his community. He attributed this principle to a force called the Invisible Hand.
- Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it...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. Nor is it always the worse for society that it was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.
The underlying premise is that if people wish to advance their material wealth in the marketplace they must produce things that will advance the interests of others, and hence society's interests.
A contemporary example of this is the far-reaching social benefits realized via the proliferation of computers and software; goods which have been produced almost entirely by people trying to maximize their own economic gain. Presumably those producers didn't manufacture the computers, develop the software and price them affordably out of a love for humanity or an altruistic desire to promote society's collective fortune. Any social benefits that have accrued therefore, according to Smith's doctrine, are simply a by-product of their striving for selfish reward.
A very religious man, Adam Smith also likened the invisible hand to the hand of God.
By extension of Smith's concept, the term can also be used to refer to any unplanned, unintended consequences which arise from actions not orchestrated by a central command and which have an observable, patterned effect on the community.
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