The invisible hand and economic progress

Abstract

In the context of 20th century economics, the invisible hand might be viewed as leading an economy toward an efficient equilibrium allocation of resources. In contrast, Adam Smith's idea was that the invisible hand led people to act entrepreneurially, to explore ways to allocate their resources to increase productivity. Current 21st century economic policy depicts economic progress as income growth, whereas the more fundamental characteristic of economic progress is that it generates new types of goods and services and discovers ways of producing more efficiently. After examining these concepts, this paper discusses policies that can lead to increased economic progress.

Citation

Holcombe, R.G. (2001), "The invisible hand and economic progress", Libecap, G.D. (Ed.) Entrepreneurial inputs and outcomes: New studies of entrepreneurship in the United States (Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 281-326. https://doi.org/10.1016/S1048-4736(01)13010-9