![]() Smith was profoundly religious, and saw the “invisible hand” as the mechanism by which a benevolent God administered a universe in which human happiness was maximised. ![]() In the modern context, mathematicians study “invisible hand” processes as part of Game Theory, the branch of mathematics that deals with payoffs and strategies (see Game Theory and the Cuban Missile Crisis) in Issue 13 of Plus. Nowadays, “invisible hand” explanations are invoked to explain all sorts of phenomena, from scientific progress to environmental degradation. Smith is often regarded as the father of economics, and his writings have been enormously influential. Each individual strives to become wealthy “intending only his own gain” but to this end he must exchange what he owns or produces with others who sufficiently value what he has to offer in this way, by division of labour and a free market, public interest is advanced. In this passage, taken from his 1776 book “An Inquiry into the Nature and Causes of the Wealth of Nations” Adam Smith set out the mechanism by which he felt economic society operated. I have never known much good done by those who affected to trade for the public good. ![]() By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. Nor is it always the worse for the society that it was no part of it. By preferring the support of domestic to that of foreign industry, he intends only his own security and by directing that industry in such a manner as its produce may be of the greatest value, 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. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. …every individual necessarily labours to render the annual revenue of the society as great as he can.
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