The chapter discusses how Smith explores the metaphor of the “invisible handInvisible hand” as a rhetorical device used to illustrate economic principles. Smith’s writing style emphasises clarity and precision, with frequent references to previous points and careful consideration of potential objections. The metaphor of the “invisible handInvisible hand” is introduced as a personification of the guiding force in economic affairs, often interpreted as the market mechanisms that regulate supplySupplies and demandDemands. Smith’s use of this metaphor is analysed in the context of his broader philosophical and economic theories, including its origins in his earlier works as divine providence and in reference to the role of politiciansPoliticians in later works. In this context Smith analyses the mechanisms of supplySupplies and demandDemands in the market, illustrating how they determine prices and equilibriumEquilibrium. He discusses the concept of the “invisible handInvisible hand” guiding individual decisions to promote the common good and maintain some kind of balance between market and natural pricesNatural prices. Smith discusses at length how prices are determined and highlights the conditions that dictate how competition works and how profitProfits is made. It is one central idea of “The Wealth of Nations” that the interplay of supplySupplies and demandDemands functions without it being actively pursued by individual participants of market exchangesExchanges, whose true motives might not even be entirely clear to themselves. The promotion of the common good is often achieved by the invisible handInvisible hand without the individuals concerned actively pursuing it. Smith emphasises the importance of competition in achieving optimal supplySupplies and highlights obstacles such as monopoliesMonopolies and state intervention that disrupt market equilibriumEquilibrium. He also explores various social groups and their roles in the distribution of wealth, examining the factors influencing their respective decisions and the ensuing results on the prosperity and well-being of individuals, local communities and nations. It is particularly interesting to see how Smith differentiates between these different orders of society—workers, landowners and merchantsMerchants or entrepreneursEntrepreneurs—and how he interprets their respective motives for economic interaction and their connection with the general interest of society.

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The Invisible Hand

  • Thomas Rommel,
  • Helen Winter

摘要

The chapter discusses how Smith explores the metaphor of the “invisible handInvisible hand” as a rhetorical device used to illustrate economic principles. Smith’s writing style emphasises clarity and precision, with frequent references to previous points and careful consideration of potential objections. The metaphor of the “invisible handInvisible hand” is introduced as a personification of the guiding force in economic affairs, often interpreted as the market mechanisms that regulate supplySupplies and demandDemands. Smith’s use of this metaphor is analysed in the context of his broader philosophical and economic theories, including its origins in his earlier works as divine providence and in reference to the role of politiciansPoliticians in later works. In this context Smith analyses the mechanisms of supplySupplies and demandDemands in the market, illustrating how they determine prices and equilibriumEquilibrium. He discusses the concept of the “invisible handInvisible hand” guiding individual decisions to promote the common good and maintain some kind of balance between market and natural pricesNatural prices. Smith discusses at length how prices are determined and highlights the conditions that dictate how competition works and how profitProfits is made. It is one central idea of “The Wealth of Nations” that the interplay of supplySupplies and demandDemands functions without it being actively pursued by individual participants of market exchangesExchanges, whose true motives might not even be entirely clear to themselves. The promotion of the common good is often achieved by the invisible handInvisible hand without the individuals concerned actively pursuing it. Smith emphasises the importance of competition in achieving optimal supplySupplies and highlights obstacles such as monopoliesMonopolies and state intervention that disrupt market equilibriumEquilibrium. He also explores various social groups and their roles in the distribution of wealth, examining the factors influencing their respective decisions and the ensuing results on the prosperity and well-being of individuals, local communities and nations. It is particularly interesting to see how Smith differentiates between these different orders of society—workers, landowners and merchantsMerchants or entrepreneursEntrepreneurs—and how he interprets their respective motives for economic interaction and their connection with the general interest of society.