In this reading, a concept that I reallyfound interesting was the “invisible hand.” The concept of the invisible hand isa great way of understanding the basics of economics. It is a natural forcethat regulates the market economy. The “invisible hand” can applaud us if our individualdecision in the market economy will benefit the economy as a whole. Sometimes self-interestmay seem good for a while, but in the end it will hurt us, unless we know howto use it. The invisible hand forces us to thinkabout other people. Smith mentioned two ways of ginning the help of otherpeople. First, was to appeal to the goodwill of others and to appeal to other’sself-interest.
Adam Smith talked a lot about how self-interest was themotivator for economic activity. Smith describes the “invisible hand” as self-interestand competition in a market economy. We make so many choices in our lifetime.
Fromschool choice, choosing a major, to going to work, or dropping out of highschool, but we mostly doing things because of self-interest. We put our ownpersonal gain first. Most of the stuff we see around us is because of self-interest.As long as we know how to use it, it can benefit us. Buchholz used the exampleof when Adam Smith made the vulture sculptures. This made me think of some examplesto help me better understand this concept.
For example, every morning you buy donutsand apple cider. The decision of buying this will make the seller and productionmarket better off. This will benefit everyone because the firms and marketsthat produce are better off. Knowing how society can benefit from our self-interestcan help us succeed. Competition plays an important role in thisconcept. Self-interest can lead to corruption and increase in prices; however,competition keeps this in check. My customers can leave if I treat them rudelyor increase my prices because my competitors are better at something that I lack.
I want to apply this in my life as Iam choosing a major. I want to choose something that I’m going to enjoy but willalso be able to help society. Having an understanding of how and why the economyworks can go a long way in whatever field I end up in.