Review the “invisible hand”

Adam Smith in 1776 famously wrote: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

Elsewhere he writes, “…every individual necessarily labours to render the annual revenue of the society as great as he can … he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention … By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

The invisible hand concept, that self-interest can promote the public good, is central to the theory of how market economies become efficient.

Now read this article: Dell Agrees to $100 M Settlement with SEC

Optionally, you may wish to also look at the statement from the SCC: SEC Charges Dell

Answer and discuss these questions:

Why is competition necessary for the invisible hand to work well?

How did Dell and Intel behave in ways that harmed the public interest?

Can you think of other examples where the pursuit of self-interest by businesses works against the public interest?