Dooley Dose of Economics: The Invisible (Bone) Hand
Dooley, a shy but fierce skeleton, has resided at Emory University for more than a century. Before his exhibition with the college, he lived a small and isolated life, making his own food, clothes, and housing. It was exhausting, and Dooley was entirely dependent on himself for any items he wanted. As he ventured to Emory, he realized that he no longer wanted to follow the system of self-sustenance and made his first purchase: a sandwich.
Seemingly small, but by buying a sandwich, he started a chain reaction of sorts. The sandwich made him feel better - though he had no stomach - and it also funneled money into the sandwich store he bought it from. The store then made money by selling the sandwich. The profit the store owner got was then used to buy produce from a grocery store. The grocery store made a profit from the sandwich store owner and was able to buy produce from a local farm. This linking of profit we can follow illustrates the intersections of the sandwich network, in which each group is reliant on another to carry out their work in the most efficient way possible. In this way, Dooley’s decision to re-enter society superseded his intent, as it fueled an entire economy.
This humerusly (bone joke) illustrates the concept of the invisible hand, first coined by economist Cantillon. Much like Dooley the skeleton, the invisible hand is a spirit - acting independently of direct producers (such as the sandwich store) but still influencing their actions. This principle operates under the idea that each decision made by an individual (dead or alive, in this case) in a market economy that intends to better themselves will help the economy. Though we could say Dooley was being lazy by refusing to make his goods from scratch as he used to, the choice to make his life easier and get a fast meal resulted in a chain of profits that helped the other groups in the circuit better themselves off. When the sandwich store increased its profits from Dooley, the new customer, it was in their best interest to reinvest that money into, for example, buying better produce, getting a fancier napkin dispenser, and overall making the sandwich-buying experience better. Regardless of where the money is utilized, it is typically redistributed into the economy, allowing the next link in the chain to make a similar decision and thus improve the experience for everyone. Though idealistic, the invisible hand explains the pattern of how the market incentivizes progress.
Economics Student and Dooley Enthusiast,