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 arguments and/or examples:
“Argument is conclusive ... but ... it does not remove doubt, so that the mind may rest in the sure knowledge of the truth, unless it finds it by the method of experiment.... For if any man who never saw fire proved by satisfactory arguments that fire burns ... his hearers mind would never be satisfied, nor would he avoid the fire until he put his hand in it ... that he might learn by experiment what argument taught.”
—Roger Bacon (c. 12141294)
“It is hardly to be believed how spiritual reflections when mixed with a little physics can hold peoples attention and give them a livelier idea of God than do the often ill-applied examples of his wrath.”
—G.C. (Georg Christoph)