The Invisible Hand
Milton Friedman
• The most
influential
economist in the
last 50 years.
• Called a Chicago
economist
• He will tell you
about the pencil
The Power of the Pencil - Friedman
What can be said about the economy
from the complexity of a pencil?
How do you feed Champaign at lunch?
The answer is the Invisible Hand
• Invisible Hand guides our
world
– Why is it invisible?
Self-interest
• “It is not from the
benevolence of the
butcher or the brewer
that we expect our
dinner, but from their
regard for their own
interest.” – Wealth of
Nations
The invisible hand
• In summary, the
invisible hand
determines
– WHAT to produce?
– HOW to produce it?
– FOR WHOM to
produce?
• “The economy will
self-regulate” – my
brother