We have always known that heedless self-interest was bad morals; we know now that it is bad economics.
Franklin Delano Roosevelt,
Second Inaugural Address (1937)
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The previous chapter outlined Adam Smith's vision of a market economy. One virtue of the invisible hand process is its democratic nature. In a truly competitive market the forces of demand and supply will prevent any person or company (or any organized group of companies or persons) from exercising market power over others. A market ruled by the invisible hand is ruled by the interacting wills of the numerous actors on both sides, none of whom can dictate terms.
Here we note possible reasons why real-world markets may not achieve a democratic ideal. In the real world markets can work imperfectly. Therefore (say some economists) we need laws and policies. Other economists say, "Wait a minute." The debate will take us deeper into the economic conversation about the strengths and weaknesses of markets versus governments as tools for improving human welfare.