In September of 2007 I was working on a blog about the kinds of problems that companies inevitably encounter when their underlying technologies, competitors or business models change. I wanted to make the point that any company, no matter how powerful its position, will likely get in trouble when the environment in which it once flourished changes significantly. While searching for the right words to convey the notion that the marketplace is much more powerful than any one company or industry, I came across and ended up using the concept of the invisible hand.
And that is when I first started learning about Adam Smith, the 18th century Scottish philosopher and economist, who is generally considered the father of free-market, free-trade capitalism. Smith coined the metaphor of the invisible hand in The Wealth of Nations and other writings. He used it to indicate that, “in a free market, an individual pursuing his own self-interests tends to also promote the good of his community as a whole,” and that "the free market, while appearing chaotic and unrestrained, is actually guided to produce the right results by this so-called invisible hand."
The more I read about Adam Smith, the more impressed I became with his life and his work. For years, many thought that Smith had been advocating a right wing ideological approach to open markets, reflecting a kind of survival of the fittest competition in which anything goes. As I discovered, nothing could be further from the truth.