What does the "invisible hand" metaphor describe?

The "invisible hand" metaphor, coined by economist Adam Smith, describes how individuals pursuing their own self-interest in a free market can inadvertently contribute to the overall economic well-being of society. When people make decisions based on their personal benefits, such as choosing to produce goods that are in demand, they often end up satisfying the needs and wants of others as well. This interaction through voluntary exchanges and competition leads to efficient resource allocation, innovation, and economic growth, ultimately resulting in prosperity for the wider community.

In contrast, options that suggest government control or the necessity for regulations imply an interventionist approach, which does not align with the idea of the invisible hand. The metaphor emphasizes the positive outcomes of self-interested actions without the need for central planning. Additionally, while trades and exchanges are part of the marketplace, they do not capture the broader concept of how individual motivations collectively enhance societal welfare as effectively as the idea of self-interest does.