Both 'The invisible hand' - which, by the way, is all the time erroneously attributed to Adam Smith as a basic tenet of his ideas, while he used it only once and solely as a metaphor- and this argument rest on a faulty assumption, expressed here : This is an ideological, cultural statement and not an observation of human nature, let alone of rationality. As Kropotkin demonstrates conclusively, the predominant factor in human society is, and always has been, cooperation. Competition is secondary. Humans are not solitarily living rhinoceroses or mindless viri. The complete absence of awareness of the effects of personal decisions on the other members of society is actually a symptom of a number of pathologies.

As such, these typically reductionistic approaches to human enterprise, so prevalent in economic theories, are cathedrals built on quicksand. Humans have feedback systems in place, both manifest and latent, and have the ability to communicate information. Sure, there are examples where e.g. the exhaustion of freely available resources does occur, but, obviously, if this were the general rule, there simply would never have emerged human societies in the first place.

Metaphorically speaking, this is the equivalent of creationism applied to anthropology. A completely arbitrary tenet, specific to a culture, and not based on empiricism, is used as the central axiom of theories, that are in turn used to justify policies, above all. It's pseudoscience.