Examples and Arguments
Since Smith's time, the principle of the invisible hand has been further incorporated into economic theory. Léon Walras developed a four-equation general equilibrium model that concludes that individual self-interest operating in a competitive market place produces the unique conditions under which a society's total utility is maximized. Vilfredo Pareto used an edgeworth box contact line to illustrate a similar social optimality.
Ludwig von Mises, in Human Action (see note 3 at the bottom), claims that Smith believed that the invisible hand was that of God. He did not mean this as a criticism, since he held that secular reasoning leads to similar conclusions.
The invisible hand is traditionally understood as a concept in economics, but Robert Nozick argues in Anarchy, State and Utopia that substantively the same concept exists in a number of other areas of academic discourse under different names, notably Darwinian natural selection. In turn, Daniel Dennett argues in Darwin's Dangerous Idea that this represents a "universal acid" that may be applied to a number of seemingly disparate areas of philosophical inquiry (consciousness and free will in particular). See also Social Darwinism.
Read more about this topic: Invisible Hand
Famous quotes containing the words examples and/or arguments:
“In the examples that I here bring in of what I have [read], heard, done or said, I have refrained from daring to alter even the smallest and most indifferent circumstances. My conscience falsifies not an iota; for my knowledge I cannot answer.”
—Michel de Montaigne (1533–1592)
“It has often been argued that absolute scepticism is self-contradictory; but this is a mistake: and even if it were not so, it would be no argument against the absolute sceptic, inasmuch as he does not admit that no contradictory propositions are true. Indeed, it would be impossible to move such a man, for his scepticism consists in considering every argument and never deciding upon its validity; he would, therefore, act in this way in reference to the arguments brought against him.”
—Charles Sanders Peirce (1839–1914)