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There are two fundamental theorems of welfare economics.The first states that in economic equilibrium, a set of complete markets, with complete information, and in perfect competition, will be Pareto optimal (in the sense that no further exchange would make one person better off without making another worse off).
The invisible hand is a metaphor inspired by the Scottish economist and moral philosopher Adam Smith that describes the incentives which free markets sometimes create for self-interested people to accidentally act in the public interest, even when this is not something they intended. Smith originally mentioned the term in two specific, but ...
The idea was also discussed by Adam Smith, the Scottish Enlightenment, and consequentialism (judging by results). [3]The invisible hand theorem is an example of the unintended consequences of agents acting in their self-interest.
Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand. [4] Rationality can be used as an assumption for the behaviour of individuals in a wide range of contexts outside of economics. It is also used in political science, [5] sociology, [6] and philosophy. [7]
The philosopher and economist Adam Smith opposes this (although he defends a moderated version of this line of thought in his theory of the invisible hand), since Mandeville fails, in his opinion, to distinguish between vice and virtue. [2]
The theorem tells us that no taxation is Pareto-efficient and that taxation with redistribution is Pareto-inefficient. Because of this, most of the literature is focused on finding solutions where given there is a tax structure, how can the tax structure prescribe a situation where no person could be made better off by a change in available taxes.
Perimenopause, on the other hand, is less widely understood, partly because of a lack of education and awareness around this transitional time and partly because its bounds are broader and squishier.
The Vanishing Hand theory is a concept first conceived of by economist Richard Normand Langlois. [1] The term is an intentional play on both Adam Smith 's invisible hand and Alfred Chandler 's Visible Hand .