The Invisible Hand - 60 Second Adventures in Economics (1/6)

Economist, Adam Smith, used the term The Invisible Hand to describe the self-regulating nature of the marketplace - a core concept for so-called free-marketeers.
(Part 1 of 6)
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[@Malachite7]

60 seconds I can handle.BUT THIS!?IT HAS AN EXTRA 21 SECONDS!!!!!!! D:

[@msveronaeagle9300]

huh

[@thecutlemon8101]

Dang u posted that 10 years ago? How’s life now

[@karenmarshall4775]

I will gladly have David Mitchell explain any concept, economic or otherwise, to me in 60 seconds.Thank you for adding levity to brevity!

[@williamchandler2414]

Thank you David Mitchell!

[@mckenzie-jamesfuata4207]

this made the most sense out of the twenty videos I watched on the invisible hand!

[@SarcasticSean]

60 second? I need 60 minute of economics because it is awesome

[@Zack-ln6zx]

my professor made me watch it help me

[@oceanicboat6964]

bro you good its been a year?

[@Zack-ln6zx]

@@oceanicboat6964 actually im pretty good! this is my last year studying finance and accounting and I still have doubts over the invisible hand

[@112233JORDAN]

He's already helping you

[@msveronaeagle9300]

I have to watch this for school. im 12

[@thetruemeak779]

Same

[@cogogaRJ]

Very well animated and very instructive! Good Job people!

[@frodrichbismork1501]

Correction: The invisible hand is always misquoted and does not appear in this context in "The Wealth of Nations". It is an interpretation by economists who came after Smith. In 1776 Adam Smith published "The Wealth of Nations". In this book the invisible hand is only mentioned in the context that private persons preferred the home trade to the foreign trade - And this is ultimately good for a nation. In 1759 he published "The Theory of Moral Sentiments" in which the invisible hand guides participants in a fully unregulated economy to do good for society. Quote: "The rich...are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society".

[@Wazzzuup33]

I think it appears in The Wealth of Nations three times, each time with different meaning but once with the meaning we know today. However, Smith is definitely not the father of the concept of the invisible hand e. g. Bernad Madeville and "The Fable of the Bees" from 1714 where the principle of the invisible hand is pretty much described.

[@abcd-mm2dq]

and we all saw how the invisible hand guided people from all over the world to act in accord with their home bias and invest in everyone's home market, china. so much for the invisible hand.

[@madelinegreen8932]

Love that David Mitchell is the narrator! The Adam Smith quote about the invisible hand is, however, a misnomer. He was actually critiquing capital mobility in the Wealth of Nations, not praising it.

[@sullyflynn8746]

It says tell us what you think - I think that was absolutely epic. So helpful. Thankyou!!!!

[@andydunlap]

This is quite a fun way to represent the effects of the invisible hand! :)

[@inserthere6387]

genius!!! and fill in the invisble hand that sets things back to normal!

[@InfiniteRadiiEdge]

The example you gave was from a regulated economy. Competition can still happen in regulated economies. The example I gave of the Gilded Age was incorrect since the government did help 'natural monopolies' like steel mills and grid power rise.

[@CastellanKat]

David Mitchell?

[@elbongo4454]

this was my first thought!!

[@TheMCGamer2012]

Burn all money melt all coins. Make market squares in the center of towns to trade eggs for wheat for sugar for flour for fruit. Life would be simplistic, relations with other people would be better. Those who don't own a stand or specialize in a good can trade amongst themselves in a designated area. Each stand or in the trading area, there are scales to weigh the item, etc. People set their own prices and there is no competition because one person who sells, let's say... Apples... Does not want people to pay him in just blankets, rather the stuff he needs to support his family-WHICH is set by the customer at his stand and the owner. Negotiations would influence the competition instead because the particular person may need milk for their child, etc. desperately and that way they can negotiate the fair price to maintain an average...

[@thrashmanpoint]

It's a beautiful dream. Perhapse after the apocalypse?

[@turbo_co27]

This helped me pass World History. Thank you.

[@donnamologgo945]

is not right. the video twisted the definition in a wrong way

[@turbo_co27]

Donna Mologgo Meh. It is the same as we were taught.

[@ossibor]

Storethis What?

[@turbo_co27]

ossibor I did not fail World History because of this video.

[@olivergriffiths4445]

Awesome video, thanks very much!

[@joustinful]

now that was educational. if only all things in school were like this

[@DubxbuD]

That's why it's important to make every household energy independent to begin with in order to offset the disequilibrium of a large market. People voluntarily create goods and organize companies on the basis of voluntary exchange. Thus three markets need to be built Red, Blue, and Green. A non-profit mandatory governmental democratic/energy barter system(Red), a voluntary for Profit time/attention exchange system (Blue) and a voluntary non-profit charity system (Green).

[@emo4126]

What the vast majority of us get from the invisible hand , most of the time , is the middle finger .

[@IsraelAuss]

You get nothing from the invisible hand because we never lived under a free market economy but a regulated one

[@debbiedube301]

very well presented all all 250 yrs of US economics is 30 sec. Bravo :)

[@Shadowcruise99]

Entertaining animation, I'm just wondering when we get to the elitist corruption part?

[@GDPWorking]

Automonmy to act according to self-interest is the invisible hand. Calvin and Hobbs was a great comic, and now I know what it means that the invisible hand grabbed his father in self-interest.

[@tarithasarii]

Love love love love love love David Mitchell! I wish he was my professor!!!

[@InfiniteRadiiEdge]

That's an example of competition in a regulated market. More employees could work there if the pay wasn't as high ( assuming there aren't labor unions, but there are ), but they don't just sell products, they sell an image with their price tag.

[@jakedesnake97]

this dumb (in a good way) & short video helped me with my microeconomics class. Thanks!

[@donnamologgo945]

but the content isnt real:D The invisible hand isnt Adam Smith in this way:P IS a mystic

[@ossibor]

Jacob Raymond and its 100 % wrong:P

[@jakedesnake97]

ossibor well it was towards the beginning of the session, so as we went deeper in the concepts, I discovered the many flaws of this vid :D

[@donnamologgo945]

***** ?

[@ToriZealot]

Please find this quote in the Wealth of Nations: "By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."

[@himanshusodha]

Thank You Sir For Beautifully Explained

[@ratneshprasad3111]

Damn it's still very good information in short time after 10 years later

[@mjt1517]

The free market is you and me. We SHOULD get all the power.

[@daregularperson]

Companies nowadays use their given market freedom to scream from every screen that YOU need their product. And since most people are busy watching screens nowadays, these regular folks aren't thoughtful enough to decide whether they need this product or that, so they end up buying whatever screams the loudest and happiest message. I like the idea of a total, free market, but what's happening now is complete saturation of senses causing mass consumer confusion. What is that the result of?

[@InfiniteRadiiEdge]

In the Gilded age, workers were exploited on a daily basis in mechanical jobs whether it be meatpacking, fertilizer, or semi-automated jobs. Meatpacking: people lost body parts daily... once they were inefficient, they were fired. Fertilizer: once they were inefficient, they went to even more dangerous/unskilled jobs coming into contact with acid. Semi-automated: Machines need to be fixed, but adults will not fit? Well just send children there.

[@Jack-li2ci]

Thank you Mark Corrigan

[@mbonnar]

Adam Smith also believed that tariffs and cross-border trade taxes were essential for protecting national economies. Free trade and market was only relevant nationally. International "free" trade and markets harmed individual national markets, which crashes everything. But most "free" market "economists" ignore or misunderstand this fact.

[@vatsalshukla7864]

easy to understand thank you

[@InfiniteRadiiEdge]

I didn't say it was a bad thing. You said free employee movement would be better off unregulated and I think so too. It's not quite possible right now because of the influence of the unions.

[@InfiniteRadiiEdge]

Here are thought experiments for unregulated economies: (1) a company can make its employees work overtime without repercussion (firing any undesirable employees). (2) An employee gets injured; no compensation (2.2) insurance denies based on pre-existing condition Upon investigation of the novel (1906), many regulations were created. I understand that it was meant to be propaganda for socialism which only took off in U.S. after the Great Depression (1932), a time for desperate measures.

[@SpookyJohnathan]

Also, is that David Mitchell or do people all just sound alike when they start talking about economics?

[@InfiniteRadiiEdge]

The competition is not for the product, but for employees. They sell to people who only buy 'American cars'. If they can seem more 'American' then their competitors; they can sell more.

[@LucisFerre1]

"Outsourcing" is shipping jobs overseas is a fallacy. There are no standard economists that propound protectionism since the death of mercantilism, including Keynes. Smith's point was that businessmen, by pursuing their own interests (profit), aid society, even if they have no intention to do so, because their business consists of finding out what consumers want & need & offering it to them. "I have never known much good done by those who affected to trade for the public good". ~ A. Smith

[@MRSketch09]

You know, I think everything has a time and place.. just like plants grow in the spring... I think it is time for true free markets to come about. With social media.. everyone is a watch dog. We really can pull it off and make it work if we don't go over board.

[@grahamparker538]

excellent, funny video thanks

[@cynchmaristellecapili1302]

please help me .. I have a Debate with this TOPIC .. Does Invisible Hand Exist? ... my problem is I don't know yet if I'm in a Pro side or in an Anti side ... :/ I really can't understand what invisible hand is and how it is related to economy..

[@shady4tv]

But the hands off approach stopped the greatest depression in known history in 1921 in under a year, while the reaction by the government and monetary policies in 1929 caused the great depression. This video is right the market sometimes isn't the fastests to respond to a down market but government involvement never seems to fix it. Just like things like fixed interest rates and garenteed loans caused the 2008 recession.

[@sirreality5145]

Well now I know what the invisible hand of the market is. I'm gonna make so much profit

[@capeatgitara]

I have a question, does free trade really benefit the developing countries? I really need an answer please. Thanks

[@nika9296]

yes it does

[@Felix-eo2dp]

đỉnh quá ạ!!

[@InfiniteRadiiEdge]

In a unregulated economy (the buyers try to get much as possible with little as possible & the sellers try to sell much as possible at the highest prices) the self-interested sellers of goods would exploit their workers. This is reality. It's happening right now in 3rd world countries. Cheapness of goods comes at the price of exploiting workers. [What's the problem? Everyone who wants a job has a job (whatever the conditions).]

[@adanchev]

I cannot download it using Firefox' download helper. Shows 0 bytes. What's the reason?

[@meimackleer2461]

So the invisible hand allocates resources in a market?

[@InfiniteRadiiEdge]

Companies have been spending more and more on advertising than ever before. Pharmaceutical companies spend more in advertisement than research and development . It's all market-driven: they need sick people, but people aren't always sick. So how would they get their products sold? Give doctors and hospitals promotion and over-prescribing is rampant as ever.

[@shimanezamipour2303]

Hi from Iran. please put subtitles.

[@minhnhat.porsche]

Why economy take long time to reach to equilibrium? I don't get it. Please help^^

[@diosgenes]

An invisible hand with two eyes and a second hand ready to help

[@InfiniteRadiiEdge]

I understand the profit incentive will always overshadow all else, but it does not sound acceptable to allow [preventable] abuses.

[@Nantchev]

Too simple of an explanation. Through the invisible hand standards of living increases, prices go down and products become more complex. Its competition at its finest.

[@alflorencealbo541]

No one’s gonna make a comment that David Mitchell is the narrator?

[@InfiniteRadiiEdge]

The trend is that the profit incentive always seem to triumph over individual property rights. Moreover corporations are considered to have citizen rights in America (Citizens United v. Federal Election Commission) [but with lower taxes than individuals], and even this is being considered.... watch?v=mmWjYUJvSyA

[@richgrise2742]

DING!!! DING!!! DING!!! This is the first time I've seen or heard anyone mention the time lag thing. It takes a non-zero amount of time for the market to respond - when government dictates, it doesn't get done sooner, but saying "We're writing up the rules now" gives the sheeple a feeling like "Well, at least they're working on it." While with a Free Market doesn't offer instant solutions, command and control can't provide instant solutions either; merely the _illusion_ of solutions.

[@Jar12ro]

It's a free video that lasts just over a minute; what the hell were you expecting?

[@warrenbuffet8630]

When they give one group of people money and not the other it does the worst harm to society. Makes people not want to be ambitious or have drive to be successful.

[@Ixmore]

Well said Brother. Also, a free market can be more effective with some common sense and some good old fashion Muck racking.

[@Higuzounet]

Is this video subtitle ? (and can you just paste me the link if you find it)

[@donnamologgo945]

dont use this video, ist completly wrong in definition.

[@julesvialleton6844]

Superbe vidéo faite avec beaucoup d'abnégation

[@nustada]

" You just have to make the customer think you are selling the best products without selling the best products through advertisement." Not entirely true, that is only true when differences are marginal and subjective, eg cigarettes. Marketing costs money, word of mouth does not. A company the minimizes marketing in favor of R&D and material quality, may simply outclass. Have you ever heard of a company called "Ferrari", I bet you have. Yet they never spent a penny on marketing.

[@TheSpiderfly]

Is this narrated by David Mitchell?

[@rahul327]

yup :)

[@pilnystudent4]

This is not what Invisible Hand is. What Smith discover and what Invisible Hand really is that from selfish interest of one benefit whole society.

[@ossibor]

pilnystudent4 yep but 99,99 % of capitalism dont know it or dont want to know it ;)

[@catfarishsux]

I feel like I am Jez, and Mark is talking about business as always

[@youser2]

Is the narrator David Mitchell??

[@fredboxful]

lol that wasn't even a good explanation

[@LucisFerre1]

"Green" was and is not a government movement or a product of regulations. It is the product of consumer desire. 'Same with "cruelty free" testing of products, etc. You want clean water, so does your next door neighbor and everyone else. Producers pander to consumer impressions and desires.

[@ClearDuality]

You forgot the part where this is a lesson about a theory, and not support for the theory.

[@rocksgio]

Dude in the middle at 0:47 looks undeniably like Jimmy Carr

[@InfiniteRadiiEdge]

Without American wages, you just have an expensive car made in America with labor by non-Americans (those who will accept lower wages). The American standard of living seems too great to decrease the wage. I'm not quite sure if the free market wouldn't quite work unless U.S. was in isolation with the world market which has lower labor costs .The other non-alternative is to have high tariffs again...and that that seem to work.

[@phuthuy14101996]

awsome!!

[@donnamologgo945]

why? because its wrong :D

[@InfiniteRadiiEdge]

Right, if American cars didn't come with American wages, they wouldn't be favored so much. I'm against most regulation besides the FDA , roads, medical research, and banning of abusive loan rates and the like. I think people should save their own money (opposed to social security) personally and spend their own money (opposed to many taxes.) It's odd to me to argue for regulation or no regulation. It's almost as if being a moderate is not an option.

[@FibonacciGaussFerma]

where is subtitles?

[@raymond3200]

invisible hand means never ending greed of people, finally, 1% richest and most powerful people controls everything......

[@AlexeySherstnev]

В этом ролике ошибка. Продавец сыра почему-то один.

[@alexanderkilimnik8673]

Ever wonder which hand is invisible? (Right or Left)

[@hellzone100]

Are you saying someone should start regulating are AIR and are WATER ? The fundamentals. h2o, o2 You know that will not not happen in any scenario. Not without bloodshed.

[@anathemaadvocate4209]

The idea is simple, that people know more about their own preferences than third party bureaucrats lording it up in some capital thousands of miles away. Allow people to make their own economic decisions and more mutually beneficial outcomes occur. hence GDP growth, low unemployment etc. More win win situations.

[@bighands69]

***** You have missed the point completely. Consumers know what is best for them not you or some leader of the people.

[@bighands69]

***** Market failure. There is no such thing as market failure only people failure. If a person dicides to buy a house at 1 million and 4 years later it is only worth 100k then that is there fault and no point blaming the market. The market is perfect and it is tough luck if you think you can beat it.

[@bighands69]

***** The markets do not care about laws or regulations. There was famines in the USSR which was one of the most controlled systems in the world. It did not matter what regulations were in place. "If you think I am talking crap then look no further than China where children now have asthma, which historically did not affect Chinese" People died in the Communist state of China from starvation. There was over 100 million people murdered in China by the communists. That is not a very good example for you to use.

[@bighands69]

***** "Sorry. You probably do not care about excess human supply (over population) because after all the market will correct the glut via the price mechanism" You are correct that I do not care. But when I see a poor person struggling or a child with nothing of course I care. I grew up in UK social housing and the government programs did not work even though they pumped money into the places. The market is not some system you can control it is a phenomenon of human interactions. How is it possible for some government to know what people want. It is clear that the governments did not see the 2008 crash coming so how could they know what the "Market" wants.

[@bighands69]

***** So explain how the laws that you talk did not stopped recessions and great depression. Governments cannot see these things coming so why should they be allowed to create their mechanisms of control t(hat simply do not control anything). It clear that you do not understand the basic point do not avoid this point and address it. Why does government intervention and laws not stop recessions if you claim they are in full control of economics/markets via laws.

[@luisantonioruiztrejo1998]

Esa es la oferta y la demanda

[@LINALOZA]

How did I go from "dumb ways to die" to economics?

[@thahirabdulmuthalib]

Part 2

[@chris2kostya]

The problem is you need a visible hand to make it an invisible hand

[@ttaylorfaithh]

thank u

[@lacrahuntington]

Finally An Intelligent comment.

[@InfiniteRadiiEdge]

Workers in 3rd world countries are currently facing similar conditions.

[@jasonmcnab1]

You thought that last quip was fair, but it is actually bias.

[@jasonaaronscalmato6916]

I'm still in My own Spacehouse Home WITH state identity damages!

[@omegafury88]

So what happens when we blissfully deplete all our natural resources? What happens when I'm trying to have a comfortable dinner with my girlfriend and our table is approached from beginning to end with people trying to sell us things that we don't want? What happens to quality of production? How about a balanced approach. The government doesn't get all the power and nor does the freemarket.

[@AustralianAngel27]

:) nice video

[@CarringtonJoy]

Well if your going to be like that, you don't start a sentence with "and". Also I am young but I'm know I'm not stupid, you don't know me so it's stupid to make assumptions on someone you don't know. One more thing I'm trying to further my education so even though I didn't understand I at least know something, that could possibly help me in the long run.

[@catfarishsux]

IT'S MARK!!

[@EnviedShadow]

Exactly...

[@Dominic_Galletta]

let me guess your teacher is making you watch this

[@luvjde]

pls help

[@MrGman543]

oh how i love your clean water analogy... its just so... stupid. sorry for being rude. first i off i don't understand what "driving clean water" is. i guess you are talking about drinking water. you are correct, businesses want to be as profitable as possible even if that means lower quality. unfortunately for them, if they do make low quality water people wont buy from them. do you really think aquafina would risk there reputation by making unhealthy water?

[@JapanForSale]

Or it's the people who take home an order of 4 cheeseburgers, a 16 inch pizza, and an order of cheesy sticks for their family's dinner. Or it's the moms nowadays who equate home cooked meal with microwaving frozen chicken butt nuggets and Kraft Mac'n'Cheese. In fact, in my line of work, I see customers who pick the burger grill over everything else on a daily basis. And I work in a fking hospital, and these are doctors and nurses. You'd think that'd know better. People make stupid decisions.

[@StephanCox]

Mmm. That's good Kool Aid...