The term "invisible hand" was introduced by the economist Adam Smith in his book "The Wealth of Nations." It describes the self-regulating nature of a free market, where individuals pursuing their own interests inadvertently contribute to the overall economic well-being of society. When people seek to maximize their own profits, they often create goods and services that others need, leading to increased efficiency and innovation. In a market economy, the invisible hand suggests that competition among businesses helps to allocate resources effectively. As companies strive to attract customers, they improve quality and lower prices, benefiting consumers. This process occurs without any central planning, demonstrating how individual actions can lead to collective benefits.