Final answer:
Adam Smith, a prominent figure in the field of economics, coined the term 'invisible hand' to describe the self-regulating nature of a free market, where individual self-interest leads to beneficial social outcomes. He suggests minimal government interference for the market to function effectively, an idea central to free market capitalism.
Step-by-step explanation:
The originator of the idea of the invisible hand, a fundamental concept in free market capitalism, was Adam Smith. Adam Smith was a Scottish economist and philosopher, often referred to as 'The Father of Capitalism.'
In his seminal work, The Wealth of Nations, Smith introduced the notion that a free market system thrives through mutual self-interest, a mechanism he described as the 'invisible hand.'
According to Smith, when individuals seek to maximize their own gain, they inadvertently contribute to an efficient allocation of resources, which benefits society as a whole.
Smith advocated for laissez-faire economics, suggesting that government intervention in the economy should be minimal to allow the invisible hand to function effectively.
Smith's concept of the invisible hand argues that self-interested behavior in a free market can lead to positive outcomes, with consumers seeking the best deals and thereby encouraging businesses to provide goods and services that meet societal needs.
Despite the wide influence of Smith's ideas, they have also faced criticism for oversimplifying human behavior and overlooking the moral implications of unrestrained capitalism.