Beyond the Invisible Hand: Reassessing Smith and Ricardo for 21st-Century Economic Challenges

DOI

10.2991/978-94-6463-888-2_27How to use a DOI?

Keywords

Adam Smith; David Ricardo; invisible hand; comparative advantage; modern economic challenges

Abstract

This paper examines the foundational economic theories of Adam Smith and David Ricardo, focusing on their enduring relevance and limitations in contemporary contexts. Smith’s concepts of the “invisible hand,” division of labor, and self-interest-driven markets established the bedrock of classical economics, emphasizing how individual pursuits inadvertently foster societal prosperity. However, his optimism about self-regulating markets is challenged by modern issues such as income inequality and corporate exploitation. Ricardo expanded Smith’s ideas through the theory of comparative advantage, demonstrating how nations benefit from specializing in industries of relative efficiency. Yet, his model’s rigid assumptions—static trade patterns and immobile resources—struggle to address today’s dynamic globalization and technological disruptions. By critically analyzing these theories, this paper highlights their contributions while advocating for adaptive frameworks that reconcile classical principles with 21st-century complexities, such as sustainability and digital economies.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Ziwei Zhang
PY  - 2025
DA  - 2025/12/03
TI  - Beyond the Invisible Hand: Reassessing Smith and Ricardo for 21st-Century Economic Challenges
BT  - Proceedings of the 2025 7th International Conference on Economic Management and Cultural Industry (ICEMCI 2025)
PB  - Atlantis Press
SP  - 270
EP  - 280
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-888-2_27
DO  - 10.2991/978-94-6463-888-2_27
ID  - Zhang2025
ER  -