Invisible Hand

The goal of the economy is neither wealth nor happiness. The economy is made up of myriads of different industries and consumers. The goal of our capitalistic economy, in my opinion, only leads to people to look out for their personal best interests. For a capitalistic society to succeed, however; people must look out for themselves. I personally think the economy is more based on an individual level and will prosper on its own. Adam Smith’s theory in his literary work, “The Wealth of Nations”, talks about how self interest, competition, supply and demand and the belief that success within the economy will all come naturally. Adam Smith calls this the invisible hand theory. His theory states, “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it”. Adam Smith’s counter theorists, Keynesians, believe government intervention will ultimately lead to a more successful well being for the economy. As I stated earlier, if people look out for their own interests, which we all naturally do, the wealth and happiness of the economy will prosper to greater levels then trying to intervene with other outside factors. The new government administration is being criticized for the amount of government intervention. They are changing the fundamentals of capitalism by trying to implement government healthcare and government run banking. All in all, I believe veering from the Adam Smith approach will ultimately deteriorate the economy leading to less wealth and happiness.