The invisible hand is Schumpeter's theory that firms gain an advantage over one another chiefly by innovating.

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The theory of the invisible hand was first proposed by Adam Smith, and it refers to the concept that the market economy, through the interaction of supply and demand, will allocate resources in the most efficient manner without the need for central planning. Schumpeter's theory of innovation as a means for firms to gain a competitive advantage is known as the theory of creative destruction.

The Invisible Hand Is Schumpeter's Theory That Firms Gain an Advantage