How Individual Interests Can Promote Common Goods

Adam Smith is often considered the father of economics, and his writings have been extremely prominent. At the present time, "invisible hand" enlightenments are called upon to clarify all types of phenomena, from scientific progress to environmental degradation. In the modern context, mathematicians study "invisible hand" processes as part of Game Theory, the branch of mathematics that deals with payoffs and strategies.

Adam Smith believed that if society were established in the right way, the people that look for personal happiness would also pass on happiness to others. This means that people do not make stuff because they like you, it means that they want the money they are going to obtain for the stuff they produce or make; this is why they produce the things you need so that you can enjoy your life. When you change your money in for these goods, everyone is happier. You are under the belief that not having to prepare all those goods means more than saving your money, and they think that obtaining your money means more to them than the effort they put into producing goods.

The father of economics, Adam Smith, extended himself in the analysis of this concept by saying that a person pursues their own selfish interests can by “guided by an invisible hand,” in order to reach an end that did not form part of their intention. As economists admit about this “invisible hand” the intention interests them less than the result and they worry less about what makes people happy than how people look for the things that give them that happiness.

Analysis of Limitations:  As we all are well aware of life is full of limitations. We have for example, a limited amount of time, as well as natural resources. The second stage of the model of economic decision studies the restrictions that obligate a person to choose between the alternatives that make them happy.

Oil for example, can be used to produce pharmaceutical products that can save many lives. But it can also be used for gasoline, and this can be used not only for cars but for ambulances for example, which also saves people’s lives everyday. Pharmaceutical products and gasoline are both two examples of good uses for petroleum, so society has to find a way to decide how much petroleum can be assigned to each one of these good uses, knowing that each gallon of petroleum that is used for one cannot be used for the other.

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