Does the invisible hand hold or lead? Market adjustment in an entrepreneurial economy

Randall Holcombe

The Review of Austrian Economics, 2006, vol. 19, issue 2, 189-201

Abstract: Adam Smith's “invisible hand” is one of the best-known phrases in economics, but its meaning is somewhat ambiguous. The invisible hand might be viewed as holding the economy close to equilibrium, yet Smith actually says that individuals are led by an invisible hand. Entrepreneurial forces lead an economy along a path that generates economic progress, and that path is determined by the disruptive forces of entrepreneurship. Rather than viewing an economy as tending toward an equilibrium, it is more accurate to view an economy as characterized by continuing progress, led by the invisible hand of entrepreneurial activity. Copyright Springer Science + Business Media, Inc. 2006

Keywords: Entrepreneurship; Equilibrium; Growth; Invisible hand; Progress (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1007/s11138-006-7347-2

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