In this reading, a concept that I found interesting
was the “invisible hand” because it helps understand the basics of the economy.
The invisible hand can applaud us if our individual decision in the market economy
will benefit the economy as a whole. Sometimes self-interest may seem good for
a while, but in the end it will hurt us, unless we know how to use it.
The invisible hand forces us to think
about other people. Smith repeated how self-interest was a key in succeeding.
He also mentioned how it was the motivation for economic activity. Smith
describes the “invisible hand” as self-interest and competition in a market
economy. We make so many choices in our lifetime. From school choice, choosing
a major, to going to work, or dropping out of high school, but we mostly doing
things because of self-interest. We put our own personal 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 example of when Adam Smith made
the vulture sculptures. This made me think of some examples to help me better understand
this concept. For example, every morning you buy donuts and apple cider. The
decision of buying this will make the seller and production market better off.
Knowing how society can benefit from our self-interest can help us succeed.
Competition plays an important role in this
concept. Self-interest can lead to corruption and increase in prices; however,
competition keeps this in check. My customers can leave if I treat them rudely
or increase my prices because my competitors are better at something that I lack.
I want to apply this in my life as I
am choosing a major. I want to choose something that I’m going to enjoy but will
also be able to help society. Having an understanding of how and why the economy
works can go a long way in whatever field I end up in.