The Myth of the Invisible Hand: A Discussion on Incomprehensible and Misused Concept of Economics

İngilizce (OpenAlex)

The invisible hand is one of the most familiar and misunderstood concepts popularised by Adam Smith. Smith is the pioneer of the recognisance of economics as a social science. Thanks to the invisible hand mechanism, Smith argues that all economic activities in markets have no shortage of state intervention thanks to perfect competition. Markets consistently and spontaneously come to equilibrium at the full employment level via that. However, this mechanism is a myth, learned worldwide for years. Since the historical process, the state has always been at the stage in the constitution of a market order in economies. However, the underlined roles of the state have evolved correspondingly with the evolution of economic theories. In this context, the economic theories that have specified the general framework of economics are discussed in this paper. Eventually, it is concluded that the state always remains at the forefront of economies as a mechanism that backs up the formation of the market economy. Further, the process of COVID-19, which is expected to licking a new shape to economic theories, has also been investigated very briefly in this connection.