Question

explain what Adam Smith theory of the invisible hand was and each element of the hand . Do you agree with theory or not ? Explain

Answer 1

According to the central thesis of The Wealth of Nations, the key to social welfare lies in economic growth, which is enhanced through the division of labor and free competition. According to this thesis, the division of labor, in turn, deepens as the extension of the markets and therefore specialization expand. For his part, Adam Smith considers free competition as the most ideal means of economics, stating that the contradictions engendered by the laws of the market would be corrected by what he called the "invisible hand" of the system.

A particularity of the work is the approach that, the self-interest of each individual leads to general welfare, which is known as the mechanism of the "invisible hand" or doctrine of the invisible hand of Adam Smith. In this regard, Adam Smith said that "man almost constantly needs the help of their peers, and it is useless to think that they would only serve him out of benevolence (...) It is not the benevolence of the butcher or the baker that leads us to procure our food, but the care they give to their interests ".

I find myself in agreement with the theory, since the activities that the man does always do it to obtain a benefit and the same one repercute in the complete society, the man is not an island, acts in agreement with the society.

Answer 2

Yes,I agree 70% with Adam Smith's theory of self-regulated capitalist economy:

• In his first book "The Theory of Moral Sentiments",Smith proposed the idea of an invisible hand,the tendency of free markets to regulate themselves by means of competition,supply and demand,and self interest.