Where is the invisible hand of the plywood market?

August 14, 2020. – In 1776, the Scottish economist Adam Smith introduced the concept of an “invisible hand” in his book ‘The Wealth of Nations’. A short and liberal interpretation is that in a free market, supply and demand balance each other out. I am not much of an economist, but lately I’ve been thinking about how well the invisible hand works in the 2020s wood business.

While the prospect of a lucrative business is certainly among the reasons to invest in plywood mills, it sometimes feels as if there are also other reasons at play; reasons that don’t seem to adhere to the invisible hand of demand and supply. Excess resources of money, wood, or skilled people come to mind.

Well, I guess it is impossible to synchronise the investment decisions of individual companies. Let’s just trust that the invisible hand still works and that it will deliver market balance in the long run.