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Alfred Marshall criticised Smith's definition of the economy on several points. He argued that man should be equally important as money, services are as important as goods, and that there must be an emphasis on human welfare, instead of just wealth. The "invisible hand" only works well when both production and consumption operates in free markets, with small ("atomistic") producers and consumers allowing supply and demand to fluctuate and equilibrate. In conditions of monopoly and oligopoly, the "invisible hand" fails.

Nobel Prize-winning economist Joseph E. Stiglitz says, on the topic of one of Smith's better-known ideas: "the reason that the invisible hand often seems invisible is that

Nobel Prize-winning economist Joseph E. Stiglitz says, on the topic of one of Smith's better-known ideas: "the reason that the invisible hand often seems invisible is that it is often not there."[148]