GMGT 1010 Lecture Notes - Lecture 12: Invisible Hand

• School: University of Manitoba
• Department: General Management
• Course: GMGT 1010
• Professor: Brock V.Cordes

Document Summary

People will work hard if they have incentives for doing so. As a result of these efforts, the economy would prosper. Business people don"t necessarily deliberately set out to help others. They work primarily for their own prosperity and growth. Their efforts serve as an invisible hand that helps the economy grow and prosper through the production of needed goods, services, and ideas. As people became wealthier, they would help others in the community who were less fortunate. Invisible hand: a phrase coined by adam smith to describe the process that turns self-directed gain into social and economic benefit for all. Capitalism: an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit. Business people, not government officials, decide what to produce and how much, what to charge, and how much to pay workers.