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Economic Miracle

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Economic Miracle Empty Economic Miracle

Post by LACOP Sun Feb 22, 2009 6:33 pm

Economic Miracle
Walter E. Williams
Wednesday, February 18, 2009
The idea that even the brightest person or group of bright people, much
less the U.S. Congress, can wisely manage an economy has to be the
height of arrogance and conceit. Why? It is impossible for anyone to
possess the knowledge that would be necessary for such an undertaking.
At the risk of boring you, let's go through a small example that proves
such knowledge is impossible.Economic Miracle CoulterDaily_Mag_Ad2.6.09Imagine you are trying to understand a system consisting of six
elements. That means there would be 30, or n(n-1), possible
relationships between these elements. Now suppose each element can be
characterized by being either on or off. That means the number of
possible relationships among those elements grows to the number 2
raised to the 30th power; that's well over a billion possible
relationships among those six elements.
Our economic system consists of billions of different elements
that include members of our population, businesses, schools, parcels of
land and homes. A list of possible relationships defies imagination and
even more so if we include international relationships. Miraculously,
there is a tendency for all of these relationships to operate smoothly
without congressional meddling. Let's think about it.
The average well-stocked supermarket carries over 60,000
different items. Because those items are so routinely available to us,
the fact that it is a near miracle goes unnoticed and unappreciated.
Take just one of those items -- canned tuna. Pretend that Congress
appoints you tuna czar; that's not totally out of the picture in light
of the fact that Congress has recently proposed a car czar for our auto
industry. My question to you as tuna czar is: Can you identify and tell
us how to organize all of the inputs necessary to get tuna out of the
sea and into a supermarket? The most obvious inputs are fishermen,
ships, nets, canning factories and trucks. But how do you organize the
inputs necessary to build a ship, to provide the fuel, and what about
the compass? The trucks need tires, seats and windshields. It is not a
stretch of the imagination to suggest that millions of inputs and
people cooperate with one another to get canned tuna to your
supermarket.
But what is the driving force that explains how millions of
people manage to cooperate to get 60,000 different items to your
supermarket? Most of them don't give a hoot about you and me, some of
them might hate Americans, but they serve us well and they do so
voluntarily. The bottom line motivation for the cooperation is people
are in it for themselves; they want more profits, wages, interest and
rent, or to use today's silly talk -- people are greedy.
Adam Smith, the father of economics, captured the essence of
this wonderful human cooperation when he said, "He (the businessman)
generally, indeed, neither intends to promote the public interest, nor
knows how much he is promoting it. ... He intends only his own
security; and by directing that industry in such a manner as its
produce may be of the greatest value, he intends only his own gain."
Adam Smith continues, "He is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his intention.
... By pursuing his own interest he frequently promotes that of the
society more effectually than when he really intends to promote it."
And later he adds, "It is not from the benevolence of the butcher, the
brewer, or the baker, that we expect our dinner, but from their regard
to their own interest."Economic Miracle CoulterDaily_Mag_Ad2.6.09 If you have doubts about Adam Smith's prediction, ask yourself
which areas of our lives are we the most satisfied and those with most
complaints. Would they be profit motivated arenas such supermarkets,
video or clothing stores, or be nonprofit motivated government-operated
arenas such as public schools, postal delivery or motor vehicle
registration? By the way, how many of you would be in favor of Congress
running our supermarkets?
LACOP
LACOP
Infantry
Infantry

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Registration date : 2009-02-16

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