Law of Value - Smith's Hidden Hand

Smith's Hidden Hand

Neo-classical economics holds that, left to themselves, markets will balance supply and demand relatively quickly. If equilibrium does not exist, it will exist in the future, provided obstacles to market functioning are cleared away. But this idea goes right back to the classical political economy of Adam Smith (and even earlier theorists).

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    The chess-board is the world; the pieces are the phenomena of the universe; the rules of the game are what we call the laws of Nature. The player on the other side is hidden from us. We know that his play is always fair, just, and patient. But also we know, to our cost, that he never overlooks a mistake, or makes the smallest allowance for ignorance.
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    Another gentleman ... desired to know if I was engaged, or would honour him with my hand [to dance]. So he was pleased to say, though I am sure I know not what honour he could receive from me; but these sort of expressions, I find, are used as words of course, without any distinction of persons, or study of propriety.
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