The invisible hand is a term coined by Adam Smith in the 1700s to describe the operation of free markets. The general idea is that individuals pursuing their own self interest ends up doing what is best for society "as if guided by an invisible hand".
As an example, when the price of a goods increase due to higher demand or lower supply, more people will start producing this goods. They do this out of self interest, tempted by the high sales price, but it also benefits society as a whole since the larger supply will make the goods available to more buyers as well as driving the price down again.
The short answer would be 'allocation': The invisible hand puts more resources into producing goods for which there is a shortage, as evidenced by high profit margins, at the expense of goods for which there is a surplus, as evidenced by low or negative profit margins. And the invisible hand keeps doing these adjusments continously without anyone planning or ordering that society should produce more of what it needs and less of what it doesn't need.
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