The Concept of the Invisible Hand of Adam Smith from the Perspective of Buddhist Ethics

Abstract

Adam Smith’s concept of the “invisible hand” is often regarded as a mechanism by which the free market efficiently allocates resources, guided by individual pursuit of profit. While this self-interest can incidentally yield benefits for society and the economy at large, the concept has drawn ethical scrutiny. This article critically examines the moral legitimacy of such a market-driven economy through the lens of Buddhist ethics, which emphasizes the renunciation of greed, altruistic action, and the cultivation of a just and virtuous society. From this perspective, economic activity is not an end in itself but a means toward the higher purpose of human flourishing. In the analysis, it showed that Buddhist ethics can support the invisible hand’s capacity for efficient resource distribution—provided it is constrained by moral principles and social responsibility. Buddhist thought further cautions against markets dominated by unchecked desire, advocating instead for a balanced, ethically grounded economic system that benefits all. The study introduces the notion of the “visible hand of ethics,” a conceptual framework proposing that Buddhist moral principles actively guide economic practices toward both material and spiritual well-being.