Page 25 - Policy Economic Report - November 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

• Exploitative practices can cause harm in an invisible hand economy. For example, effective
advertising can lead to consumers buying more than they need. That might serve consumers'
short-term self-interest, but it could lead to poor financial choices that ultimately lead to long-
term economic instability. Consumers might buy products that harm the environment, not
realizing that it threatens their long-term best interests., e.g., buying certain products has led to
extensive climate change, the problem could be too far gone for the market to course-correct.

Relevance of Invisible hand in times of crisis

While Adam Smith's invisible hand theory is still relevant today, it has also come under scrutiny during
events like the financial crisis of 2008, the Covid-19 pandemic, and crypto boom.

The Covid-19 pandemic has led to a dramatic change in the structure of the economy, given the lockdowns
that have been imposed on economies. One can therefore see how firms have identified immense
profitable opportunities and adjusted their businesses to seek this out, in terms of rising prices of hand
sanitizers, face masks, medicines; rising usage of videoconferencing services etc.

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