IDEAS home Printed from https://ideas.repec.org/a/kap/revaec/v19y2006i2p189-201.html
   My bibliography  Save this article

Does the invisible hand hold or lead? Market adjustment in an entrepreneurial economy

Author

Listed:
  • Randall Holcombe

Abstract

Adam Smith's “invisible hand” is one of the best-known phrases in economics, but its meaning is somewhat ambiguous. The invisible hand might be viewed as holding the economy close to equilibrium, yet Smith actually says that individuals are led by an invisible hand. Entrepreneurial forces lead an economy along a path that generates economic progress, and that path is determined by the disruptive forces of entrepreneurship. Rather than viewing an economy as tending toward an equilibrium, it is more accurate to view an economy as characterized by continuing progress, led by the invisible hand of entrepreneurial activity. Copyright Springer Science + Business Media, Inc. 2006

Suggested Citation

  • Randall Holcombe, 2006. "Does the invisible hand hold or lead? Market adjustment in an entrepreneurial economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 19(2), pages 189-201, June.
    • Handle: RePEc:kap:revaec:v:19:y:2006:i:2:p:189-201
    DOI: 10.1007/s11138-006-7347-2
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11138-006-7347-2
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11138-006-7347-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Meir Kohn, 2004. "Value and Exchange," Cato Journal, Cato Journal, Cato Institute, vol. 24(3), pages 303-339, Fall.
    2. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    3. Holcombe, Randall G, 1999. "Equilibrium versus the Invisible Hand," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 12(2), pages 227-243, November.
    4. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    5. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gabriel A. Giménez Roche & Didier Calcei, 2021. "The role of demand routines in entrepreneurial judgment," Small Business Economics, Springer, vol. 56(1), pages 209-235, January.
    2. Randall G. Holcombe, 2011. "Cultivating Creativity: Market Creation of Agglomeration Economies," Chapters, in: David Emanuel Andersson & Åke E. Andersson & Charlotta Mellander (ed.), Handbook of Creative Cities, chapter 19, Edward Elgar Publishing.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Federico Frattini, 2011. "Mature Systems in Global Markets: The Need for an Institutional Division of Labour," Working Papers 201109, University of Ferrara, Department of Economics.
    2. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    3. Erik Reinert, 2007. "Towards an Austro–German theory of uneven economic development? A plea for theorising by inclusion," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 20(2), pages 155-170, September.
    4. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
    5. Evgeny A. Kuzmin & Sergei M. Semyonovykh, 2015. "Rethinking of Coase Theorem: Externalities and Uncertainty," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 875-883.
    6. Fagerberg, Jan & Landström, Hans & Martin, Ben R., 2012. "Exploring the emerging knowledge base of ‘the knowledge society’," Research Policy, Elsevier, vol. 41(7), pages 1121-1131.
    7. Tsoulfidis, Lefteris & Alexiou, Constantinos & Parthenidis, Thanasis, 2015. "Revisiting profit persistence and the stock market in Japan," Structural Change and Economic Dynamics, Elsevier, vol. 33(C), pages 10-24.
    8. Valentinov, Vladislav, 2015. "From equilibrium to autopoiesis: A Luhmannian reading of Veblenian evolutionary economics," Economic Systems, Elsevier, vol. 39(1), pages 143-155.
    9. John Foster, 2021. "The US consumption function: a new perspective," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 773-798, July.
    10. Figueiredo, Octávio & Guimarães, Paulo & Woodward, Douglas, 2010. "Vertical disintegration in Marshallian industrial districts," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 73-78, January.
    11. V. Carlei & E. Colantonio & D. Furia & N. Mattoscio, 2011. "Economic patterns of sustainable development: an analysis of absolute ecological footprint through self-organizing map," Quality & Quantity: International Journal of Methodology, Springer, vol. 45(1), pages 157-171, January.
    12. Alessandra Colombelli & Francesco Quatraro, 2012. "The European Firm," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 17, Edward Elgar Publishing.
    13. Rasiah, Rajah & Shahrivar, Rafat Beigpoor & Yap, Xiao-Shan, 2016. "Institutional support, innovation capabilities and exports: Evidence from the semiconductor industry in Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 109(C), pages 69-75.
    14. Mirjam Praag & André Stel, 2013. "The more business owners, the merrier? The role of tertiary education," Small Business Economics, Springer, vol. 41(2), pages 335-357, August.
    15. Amitabh Chandra & Douglas O. Staiger, 2007. "Productivity Spillovers in Health Care: Evidence from the Treatment of Heart Attacks," Journal of Political Economy, University of Chicago Press, vol. 115(1), pages 103-140.
    16. White, Halbert & Xu, Haiqing & Chalak, Karim, 2014. "Causal discourse in a game of incomplete information," Journal of Econometrics, Elsevier, vol. 182(1), pages 45-58.
    17. Julie Hermans & Annick Castiaux & Marcus Dejardin & Stéphane Lucas, 2012. "Configuration in the flesh: challenges in publicly promoted clusters," The Journal of Technology Transfer, Springer, vol. 37(5), pages 609-630, October.
    18. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    19. Thomas Ejdemo & Daniel Örtqvist, 2021. "Exploring a leading and lagging regions dichotomy: does entrepreneurship and diversity explain it?," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-26, December.
    20. Wang, Feng & Wu, Min & Wang, Jingcao, 2023. "Can increasing economic complexity improve China's green development efficiency?," Energy Economics, Elsevier, vol. 117(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:19:y:2006:i:2:p:189-201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.