Invisible Hand - a term used by Adam Smith once in his book "The Prosperity of Nations" with the implied that although individuals act for their own benefit, it is through interaction with each other through free market mechanisms - a mechanism that creates invisible pressures on all individuals participating in the market, leading to benefits for others that he did not foresee.
In the era of AI, invisible hands still retain their value because "individual interests" are something humans always aim for. But how will the invisible hand function when most people are looking for the most expensive commodity: Data? Currently, all activities (shopping, travel, entertainment, work) generate data.
The invisible hand approach helps Adam Smith explain the expansion of labor assignments in society. The widespread division of labor as he described, the cause of the increasing increase in wealth for society, does not come from the intention or the ability to see far away of any smart mind (any human wisdom) but comes from the natural inclination of people to exchange products with each other.
Right from the opening chapter of the book "The Prosperity of Nations", author Adam Smith criticized the people for easily mistakenly believing that wealth lies in money, gold and silver. He then continued to spend many chapters criticizing the greed for tradealism - the popular view at that time that a rich and powerful country was to hoard a lot of gold and silver and limit imports.
According to him, removing import barriers, forms of production subsidies, and removing bottlenecks for the colony will help countries import cheaper and better products and reserve resources for the production of things that countries are able to do best, so that they can exchange the non-consumed part in the country.
In the current era, why are only a few countries becoming prosperous (in modern language, it is to overcome the "middle-income trap" to become a developed country)? When AI is developed, will it lead to a widening gap between rich and poor countries when the advantage of "cheap labor" is reduced in developing countries and the advantage of technology is already in the hands of rich countries?
Many people think Smith is a person who advocates the absolute free market. But in the book, he wrote very clearly: The State has 3 important functions that the market cannot take care of itself - ensuring national security, maintaining the law, and building public works such as roads, bridges, culverts, schools.
Adam Smith was born in 1723 in Kirkcaldy, a small coastal town of Scotland. The 18th century was the period when the Enlightenment spirit - always opposing, promoting freedom, and attaching importance to reason - flourished in Europe.
Growing up in that boiling atmosphere, it is not surprising that the spirit of the times also permeates every page of Adam Smith's book "The Prosperity of Nations".
Adam Smith also always believes that economics are not separated from social morality. Because before that, he spent nearly 20 years reflecting on behavioral issues and personal interests.
He believes that humans are not only selfish individuals, but also have the ability to sympathize and share through "the carefree eyes" - that is, the ability to put themselves in the position of others to evaluate their actions.
From this platform, when writing the book "The Prosperity of Nations", Adam Smith not only made economic arguments, but also expressed sharp observations and arguments on the issues: What is fair, what is reasonable for the people, what will make people happy?
