History

The article draws attention to the fact that in capitalist societys individualism is prevalent.  Smith points out that each person strives to attain the best possible employment for the best recompense and that in doing so protect their own domestic industries, however this public protection is not for the good of society but for each individuals ends.  Smith introduces the invisible hand in this article, the invisible hand of market forces, which is an invisible hand that is created by the combination of the forces of self interest, competition in the market place and supply and demand.

When Smith wrote the Wealth of Nations he was living in a time where the world was becoming more and more globalized and markets were beginning to open up to trade especially as the era was a time of discovery and Empires where foreign trade was having an impact on domestic goods.  However his Invisible Hand theory is also applicable and valid in todays economic and liberal global economy.

What Smiths article was explaining was that if consumers are able to choose freely what they buy and producers are able to choose what to sell and how to produce goods then the market will settle on distribution therefore becoming beneficial to all members of a community as market prices are driven by the invisible hand.