What Is the Invisible Hand in Economics

There are few concepts in the history of economics that have been misunderstood, and misused, more often than the invisible hand. For this, we can mostly thank the person who coined this phrase: the 18th-century Scottish economist Adam Smith, in his influential books The Theory of Moral Sentiments and (much more importantly) The Wealth of Nations. In The Theory of Moral Sentiments, published in 1759, Smith describes how wealthy individuals are led by an  invisible hand  to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society. What led Smith to this remarkable conclusion was his recognition that wealthy people dont live in a vacuum: they need to pay (and thus feed) the individuals who grow their food, manufacture their household items, and toil as their servants. Simply put, they cant keep all the money for themselves! By the time he wrote The Wealth of Nations, published in 1776, Smith had vastly generalized his conception of the invisible hand: a wealthy individual, by directing...industry in such a manner as its produce may be of the greatest value, 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. To pare down the ornate 18th-century language, what Smith is saying is that people who pursue their own selfish ends in the market (charging top prices for their goods, for example, or paying as little as possible to their workers)  actually and unknowingly contribute to a larger economic pattern in which everybody benefits, poor as well as rich. You can probably see where were going with this. Taken naively, at face value, the invisible hand is an all-purpose argument against the regulation of free markets. Is a factory owner underpaying his employees, making them work long hours, and compelling them to live in substandard housing? The invisible hand will eventually redress this injustice, as the market corrects itself and the employer has no choice but to provide better wages and benefits, or go out of business. And not only will the invisible hand come to the rescue, but it will do so much more rationally, fairly and efficiently than any top-down regulations imposed by government (say, a law mandating time-and-a-half pay for overtime work). Does the Invisible Hand Really Work? At the time Adam Smith wrote The Wealth of Nations, England was on the brink of the greatest economic expansion in the history of the world, the industrial revolution that blanketed the country with factories and mills (and resulted in both widespread wealth and widespread poverty). Its extremely difficult to understand a historical phenomenon when youre living smack in the middle of it, and in fact, historians and economists still argue today about the proximate causes (and long-term effects) of the Industrial Revolution. In retrospect, though, we can identify some gaping holes in Smiths invisible hand argument. Its unlikely that the Industrial Revolution was fueled solely by individual self-interest and lack of government intervention; other key factors (at least in England) were an accelerated pace of scientific innovation and an explosion in population, which provided more human grist for those hulking, technologically advanced mills and factories. Its also unclear how well-equipped the invisible hand was  to deal with then-nascent phenomena like high finance (bonds, mortgages, currency manipulation, etc.) and sophisticated marketing and advertising techniques, which are designed to appeal to the irrational side of human nature (whereas the invisible hand presumably operates in strictly rational territory). There is also the indisputable fact that no two nations are alike, and in the 18th and 19th centuries England had some natural advantages not enjoyed by other countries, which also contributed to its economic success. An island nation with a powerful navy, fueled by a Protestant work ethic, with a constitutional monarchy gradually yielding ground to a parliamentary democracy, England existed in a unique set of circumstances, none of which are easily accounted for by invisible hand economics. Taken uncharitably, then, Smiths invisible hand often seems more like a rationalization for the successes (and failures) of capitalism than a genuine explanation. The Invisible Hand in the Modern Era Today, there is only one country in the world that has taken the concept of the invisible hand and run with it, and thats the United States. As Mitt Romney said during his 2012 campaign, the invisible hand of the market always moves faster and better than the heavy hand of government, and that is one of the basic tenets of the Republican party. For the most extreme conservatives (and some libertarians), any form of regulation is unnatural, since any inequalities in the market can be counted on to sort themselves out, sooner or later. (England, meanwhile, even though it has separated from the European Union, still maintains fairly high levels of regulation.) But does the invisible hand really work in a modern economy? For a telling example, you need look no further than the health-care system. There are many healthy young people in the U.S. who, acting out of sheer self-interest, choose not to purchase health insurance—thus saving themselves hundreds, and possibly thousands, of dollars per month. This results in a higher standard of living for them, but also higher premiums for comparably healthy people who choose to protect themselves with health insurance, and extremely high (and often unaffordable) premiums for elderly and unwell people for whom insurance is literally a matter of life and death. Will the invisible hand of the market work this all out? Almost certainly—but it will doubtless take decades to do so, and many thousands of people will suffer and die in the interim, just as many thousands would suffer and die if there was no regulatory oversight of our food supply or if laws prohibiting certain types of pollution were repealed. The fact is that our global economy is too complicated, and there are too many people in the world, for the invisible hand to do its magic except on the longest time scales. A concept that may (or may not) have applied to 18th-century England simply has no applicability, at least in its purest form, to the world we live in today.

William Shakespeares Hamlet Relationship Between...

In the play Hamlet by William Shakespeare the relationship between passion and reason plays an important role in the fate of the young Prince Hamlet’s life. Throughout the play Hamlet finds out a numerous amount of unsettling news that pushes him towards rash decisions. The ghost of Hamlet’s recently deceased father, the King, sets the play into motion when he bestows Hamlet with the order to kill his murderer, Hamlet’s uncle (1.5.24-25). Relying only on his trusted friends, Hamlet sets out to find the truth as he encounters betrayal and deceit. Although Hamlet’s motivation to act upon emotions continues to provoke him, he uses reason to prevent himself from committing irrational actions, but that internal war ultimately drives him insane. Although Hamlet seems to think through most of his actions in the play, like any human he often falls short of reason and leans on his emotions to give him security and comfort. In the beginning of the play Hamlet makes his curiosity and disgust of his uncle quite obvious. Therefore when the ghost in the form of Hamlet’s father confronts him revealing the deceitful actions his uncle has committed, Hamlet quickly decides to get revenge (1.5.24-28). The close relationship Hamlet had with the victim led Hamlet to truly believe and want to get revenge based on his emotional involvement. Although Hamlets heart seems to provoke these actions, he later comes back to question the validity of the ghost and rethink ways of getting revenge to bestShow MoreRelatedClaudius Character Analysis858 Words   |  4 PagesWilliam Shakespeare wrote Hamlet, one of the most popular plays ever written. Claudius causes a war between passion and responsibility when he murders the father of Hamlet, the main character, and then marries Hamlets mother Gertrude. Claudius killed Hamlets father and then married Gertrude only so he could take the crown and become King. 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Relation Between Coltan and Ivory for Republic -myassignmenthelp

Question: Discuss about theRelation Between Coltan and Ivory for Democratic Republic. Answer: GUIDE TO CONGO is a documentary on the people of Democratic Republic of Congo, one of the poorest countries in the world, having been subject to abuse and neglect resulting from rebellion. Congo houses several political and economic conflict and these hover around the black rock Coltan- which is an essential element for cellphone manufacturing. Coltan has divided Congo into rival groups who are fighting to commercialize Coltan and rule over the natives. Congo has rebel groups like the Rwanda rebels, FRADC, FDLR who inflict torture on women and rape them (400,000 rape cases have been reported) (Guevara et al.). Coltan is referred to as the conflict rock because it helps the rebel groups to fund their activities. The producers of the documentary travelled through the forest to meet the Mai Mai camp-which is the most feared militia in the world, where their General was interviewed who said his aim was to drive out all foreigners with the cooperation of FDLR The documentary has a reference to Heart of Darkness written by Conrad who talks about Krutz, an Ivory dealer in Africa was also a subject of imperialism and colonialism (Chinua). The documentary and novel have a parallel plot of materialism and rebellion because the company brutally abuses the natives of Africa and Krutz is leading a rebellion against the company. Marlow, the protagonist of the novel meets Krutz who hands over papers of the company and dies saying horror horror which depicts the condition of the natives and how powerful companies or camps devastate people. In the novel, the author calls Africa a place of darkness, which has been reiterated in the documentary calling the situation of Congo darkness as the condition of these poor people go unreported. Reference Achebe, Chinua. "An Image of Africa: Racism in Conrad's Heart of Darkness."The Massachusetts Review57.1 (2016): 14-27. Guevara, Estefana Lpez, Eduardo Salcedo-Albarn, and Luis Jorge Garay Salamanca. "Coltan Trafficking Network in the Democratic Republic of Congo." (2016).

Office administration SBA Essay Essay Example

Office administration SBA Essay Essay Statement of TopicTo find the responsibilities and duties of the Administrative Assistant at The Cable Department. AimThe aims of this undertaking are:To look into the responsibilities and duties of the administrative helper To find the importance of the Administrative Assistant to the organisation. Functions of the Cable DepartmentAt The Cable Department. the maps of an Administrative Assistant areto brand and natural assignments on behalf of an executive and to recognize the client or possible concern individual in the most polite manner. We will write a custom essay sample on Office administration SBA Essay specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Office administration SBA Essay specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Office administration SBA Essay specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Abbott Village.West Farm.St Kitts. 17 October. 2012 Ms Judith HewletThe Administrative Assistant.The Cable Department.Church Street.Basseterre. Dear Ms Hewlet.I am a 5th signifier pupil of the Verchilds High school. In an attempt to finish my School Based Assessment. I am composing this missive seeking permission to carry on an interview with you and besides to make some observations of the Administrative Assistant. I would wish to happen out the responsibilities of the secretary and how his or her work benefits the concern. I hope that you would allow me permission to hold this interview. I would be highly thankful as this would do it easier for me to finish my Office Administration School Based Assessment Project. Thankss in progress for your cooperation. Yours unfeignedly. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Tashaun Greene MethodologyThe instrument that the research worker used to garner the informationwas an interview. The research worker interviewed the Administrative Assistant on the 21st of October. 2013 and recorded responses during the treatment. This instrument is used by inquiring an Ms. Hewlet in that particular concern topographic point inquiries whether face to face or over the telephonewhich is relevant to the concern to garner information. This instrument was chosen over others because more inquiries can be asked and the research worker may acquire a better apprehension of the information. In add-on. the interviewer can reply inquiries that were non clearly understood by the respondent. this manner is much more effectual and faster in footings of acquiring the information. Five of import inquiries1. What equipment do you utilize to finish your work?2. What are the responsibilities in the concern?3. What are the paperss used in the concern?4. What are the statute laws that govern the concern?5. Are at that place any wellness and safety regulations? Agenda of Activity DateActivityRemarks13/9/12The guidelines for the SBA was handed to the research worker from the instructor The instructor explained everything that should or should non be done in the SBA14/9/12The research worker started research on the first six undertakings of the undertaking A past pupil corrected the undertaking and set a few alterations19/9/12I spoke with the secretary to seek her permission about the interview The secretary was pleased to reply and said yes23/9/12The SBA was sent back to the research worker in an electronic mailThe instructor corrected the undertaking14/12/12The research worker was on occupation fond regard to acquire farther information about the undertaking It was a success and all the information required was cod 21/12/12The interview was conductedIt was successful8/1/13The instructor gathered with pupils to inquire about the occupation experience The pupils responded good. it benefited most of them 21/1/13The SBA was sent to the instructorTeacher made some accommodations to the SBA22/2/13The SBA was sent back to the research worker to be correctedThe research worker sent back the rectification to the instructor Rules and Regulations Legislation One statute law that governs the work topographic point that the research worker had to be cognizant of is confidentiality. this merely means that whatever information is in the concern topographic point it should remain at that place and shouldn’t be discuss among your equals. relations or friends etc. The information should remain private. However. the research worker became cognizant of this statute law by the members on staff. Health AND SAFETY One wellness and safety pattern while transporting out this research undertaking based on the workplace is the mark which reads â€Å"wet floor† . This mark prevents people from acquiring hurt by allowing them know that danger can be in front of them. STAFF RULE One staff regulation which the research worker had to follow with while transporting out the undertaking is that there should be no usage of cell phones while working. This is so because it may be a distraction or it may develop struggle between the clients and the staff member. Report The aims of the undertaking are to look into the responsibilities and duties of the secretary and to find the importance of the Administrative Assistant are to keep good working conditions and to utilize the basic package applications. Business Form DateName OF DOCUMENTPURPOSE OF DOCUMENT19/12/12Internet User AgreementThe intent of this papers is to guarantee that the clients agree to acquire the cyberspace service and they will make whatever is required to acquire the service. 21/12/12The Cable FormThe intent of this signifier is for the clients to make full out to clear up whether they want to reconnect. gulf. ascent or downgrade their service. Cancelation FormThe intent of this signifier to call off the full overseas telegram service. OFFICE EQUIPMENT DateEquipmentPurpose OF EQUIPMENTSUITABILITY FOR TASKS27/12/12Photograph Copying MachineThe intent of this equipment is to copy the customer’s ID and any other papers that is at that place for cogent evidence It is suited to clear up whether the individual is who they say they are 28/12/12 Cash RegisterThe intent of this equipment is for the clients to pay their measure in which they owe or to do certain minutess It is suited because this is the chief thing that the clients come into the concern to make and it will be profiting the concern because they will be acquiring money 30/12/12 PrinterThe intent of this equipment is to maintain a difficult transcript of the of import information or information relevant to the concern It is suited to publish material so there would be a difficult transcript so they will be sent out to consumers. for illustration letters Bibliography Person listed:21 December 2012. Basseterre. Labour Secretariat Administrative Assistant Publication ListS Finisterre. L Payne A ; J Reid ( 2004 ) Longman Office Administration for CXC Appendix Five of import inquiries 1. What is the equipment used in the concern?2. What are the responsibilities of the concern?3. What are the paperss used in the concern?4. What are the paperss used for in the concern?5. What are the statute laws that govern the concern?6. Are at that place healthy and safety regulations?7. Is the concern a successful one?8. What are the benefits of the concern?9. Are at that place any staff regulations?

Pheonix Essays - Decepticons, Autobots, Micromasters, Red Alert

Pheonix Essays - Decepticons, Autobots, Micromasters, Red Alert Pheonix Transformers : The Phoenix War story by M Sipher Part One Deception, Subterfuge, Treachery and Other Methods of Getting Your Way or (Since You Joined) The Corporation ********** We have red alert! We have red alert! Klaxons wailed throughout Mining Station 48. The planetoid was a valuable source of numerous metals used in Cybertronian armor plating... metals mined by what was politely referred to as Non-Wage-Earning Labor. Otherwise known as slaves. The stocky, humanoid mine workers came from the planet Juliwa, and were perfectly suited for backbreaking labor in the planetoid's thin atmosphere... valuable

Aristotelian theory of virtueand the rule of the golden mean Essay

Aristotelian theory of virtueand the rule of the golden mean - Essay Example This essay discusses that these are the reasons why Categorical Imperative requires choosing the option to help the roommate, notwithstanding that it may influence the results of the crucially important life-changing test. Mill’s Utilitarianism is based on the claim that people should act in accordance with what will make them happier and bring as much utility as possible. However, moral actions in this context are those that would also make other people happier and reduce the overall amount of unhappiness. Thus the moral doctrine, in general, proclaims looking for a compromise that would satisfy both a person and the other person who needs help. In the given situation, it is important to find a solution that would allow me to sleep enough and not to fail the test and help the friend to get home safe. Driving the friend home myself can affect my test score, which would not bring me any utility; although living my friend alone in such situation would not only be bad for him but also would make me think of what an immoral person I am, which turns out to be bad for me as well. Thus the best compromise in this situation is probably to call a taxi and pay the driver to bring my friend home. While the taxi would be delivering the roommate, I would be able to keep sleeping, so I wouldn’t fail the exam of my life. Therefore this compromising decision would both help my friend and allow me to get some sleep which is required to succeed on the exam, which is of crucial importance and can’t be failed whatsoever.

Dippin Dots Managing Strategy Case Study Example | Topics and Well Written Essays - 1250 words

Dippin Dots Managing Strategy - Case Study Example The people prefer to have low-fat products that have the taste and the texture of the full fat ice cream. The primary target audience for any player in the ice cream industry is children and youths of a county. The scenario is similar in the US. Technological development has a significant bearing on any product. The technology used for the manufacturing of the ice cream was cryogenic that was used in the process of freezing which is quite unique within the ice cream industry. Low temperature is required to store the product in order to uphold the consistency and integrity of the product. The climatic condition of a country can have a bearing on the sale of the ice cream. In the US winter there is severe cold throughout the country, thus this can have a bearing on the ice cream sale. The United States Department of Agriculture along with the Kentucky Milk Advisory Panel has been entrusted to inspect the Dippin’ Dots plant in Paducah, Kentucky in order to ensure that the company is maintaining a high-quality standard. The threat of entry has been very high for the companies that operate in this market. Many new competitors have entered the market producing a similar kind of products. Due to less involvement of government, the threat of entry has been high. There have been several competitors of the Dippin’ Dots in the out-of-home ice cream market. The chief competitors are Ben & Jerry’s, Haagen-Dazs, Carvel, Baskin-Robbins and Dairy Queen; and the new entrants like Cold Stone Creamery, Magie Moo’s and Marble Slab Creamery (Prata, 2006). The overall suppliers in the ice cream industry encompass limited power if there are large numbers of competitors. Bargaining power of suppliers in the case of the industry in which Dippin’ Dots operate is low, as there is a large number of suppliers who can provide almost similar kind of products to the  buyers.