How many times in your life have you heard a formula “the invisible hand of the market will solve everything!”? Certainly, many times. And probably, in most cases it was an ironic comment of someone who previously had pointed out the reality of some social problem – unemployment, economic crisis, poverty or criminality.
No free-market scholar would ever utter such a statement. The logic of the sentence is based on the utopian (one would say even religious) belief about seamless functioning of some kind of “paradise” society and misunderstanding of the real benefit of the market society against society of regulation and centralization.
Market cannot cure cancer, make state-of-the-art health care available in an infinite amount, it cannot ensure that every inhabitant of the Earth has the latest Lamborghini and 300 days for holidays per year. Unless mankind fails to reverse the expulsion from the Paradise, the world will be facing material deprivation, crime, and disease. No doubt about it.
Market cannot solve these problems. Nevertheless, it can improve the state of affairs faster than the actions of bureaucrats and politicians. Market cannot ensure that we will all have a lot, but it can ensure that we will have more tomorrow. It cannot provide the best existing healthcare for everyone, but it can cause that the poor people today do not die of the deadly diseases of the yesterday’s rich people. And it is able to do it more quickly and efficiently than its alternative.
There is no magic behind this invisible hand. The invisible hand is actually made of billions of very visible hands which put the products into shopping carts, receive payments, or shake other hands to complete a contract. The market is efficient because it is the only real “social” element of the arrangement of the society. Not a few thousand of more or less skilful bureaucrats and politicians with more or less good intentions, but each man is a market participant in deciding where the resources of the society will be placed to produce the most wealth.
Translation by Natália Hlaváčová