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On Wall Street: Overcoming the herd instinct

By Aline van Duyn

Published: October 17 2008 17:18 | Last updated: October 17 2008 17:18

Adam Smith’s “invisible hand” has been replaced in the world financial system by a very visible government fist.

The theory by the famous 18th century economist was originally part of a discussion about domestic versus foreign trade. It has since been applied to markets more generally. It suggests that, in a free market, an individual pursuing his own self-interest will make choices which will also tend to benefit the entire community.

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