EDWARD'S LECTURE NOTES:
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C O U R S E 
Configuring the World
Richard Thomas Griffiths, Universiteit Leiden
https://www.coursera.org/course/configuringworld
C O U R S E   L E C T U R E 
Adam Smith and the Invisible Hand
Notes taken on September 1, 2014 by Edward Tanguay
Adam Smith (1723-1790)
studied in Glasgow and Oxford
1746 returned to Scotland
taught at Edinborough and Glasgow
concept of the Invisible Hand
forces that allow a system that is fueled by personal satisfaction and the pursuit of profit to produce results that are beneficial for a society as a whole
the competition between buyers and sellers, each motivated by the maximization of their own satisfaction that serves to stimulate innovation and drive down costs
a self regulating system
didn't require governments to direct it to socially beneficial ends
Adam Smith only mentioned the term "Invisible Hand" in his writings three times
never linked it to the free market as directly as suggested above
he used the term in the case to sell at home or abroad in an attack on mercantilism (governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers)
others developed the concept Invisible Hand for him
the market will decide the amount that is produced and the price it is sold at
competition among producers will stimulate efficiency
maximize profits
prompt lower prices
invite investment
free marketeers and globalists adhered to this concept
however, there are conditions which need to exist for the Invisible Hand to work
perfect knowledge between consumers and producers
no entry barriers to markets
no transport or other transaction costs
but none of these conditions exist in practice
this concept is blind to size and power
different players in the market
different capacities to withstand change
different dependencies on the market