The term " The Invisible Hand " was introduced by Scottish philosopher Adam Smith (1723-1790). Smith was considered the first true economists and developed many economic tools to help him understand Economics . He was most important insight was his recognition that the market determined prices and it was not as chaotic as some had thought. Smith recognized that the "invisible hand" of the market allocated resources to where they would be most valuable to the economy. This "invisible hand" determines supply-and-demand and therefore sets prices. Consumers demand products which are made of natural resources. the amount of money consumers are willing to pay for a product can be thought of as consumer votes which direct the market where the resources to make products should be most efficiently allocated.
