A question from Yahoo! Answers:
What are real world examples of “the invisible hand”?
Adam Smith’s Invisible Hand therory. What real world examples of his therory are in the world today?
Well, take a look at American farming. In the 19th century, people from all over the world rushed to the American Midwest, lured by the promise of free land. So there were plenty of individuals who endeavored to employ their capital so that its produce may be of the greatest value.
Hundred years later, the vast majority of those farmers’ descendants live in cities and have nothing to do with farming; food prices have been continuously falling relative to incomes. Three percent of the U.S. population engaged in farming are capable of feeding the entire country and export food while they are at it, but their standard of living is generally below that of the city dwellers. So by working hard, innovating, and maximizing their output, American farmers have actually promoted affordable food for city dwellers and lower living standards for themselves compared to city dwellers, an end that was no part of their intention…