If you like my blog, please tell others.
If you don’t like it, please tell me.
A couple of days ago I discussed how our complex society allows us to live simple lives. It takes the efforts of many people even to provide the number 2 pencil for which we pay only a few cents. Yet nobody deliberately organizes all those people to do the work. Each simply does his job in order to be paid. Most don’t even know that they are helping to make pencils.
We might compare this economic organization to a human body. Countless cells perform specialized functions, most with no central direction. Lung cells move oxygen into the blood and remove carbon dioxide waste, receiving in return the nourishment they need for their own lives. Yet those lung cells are certainly unaware that the oxygen they provide sustains the heart, the brain, the muscles and other tissues. Likewise cells in the stomach and small intestine digest food and move it into the blood, providing nourishment to every part of the body. Yet the stomach cells know nothing of how their nourishment is used, they only do their job in exchange for the oxygen and other things they need. That goes on throughout the body; different cells form organs that do their jobs without knowing how the products of their work are used. In exchange those cells receive the nourishment and waste-removal services they need to live.
Whether you believe in evolution or divine design, your body is a wonderful system. Now suppose you are approached by a gifted surgeon who offers to make a few improvements. He thinks it is not fair for the brain and heart to get first call on available oxygen and food. Surely the feet deserve as much consideration as does the brain, after all your feet help the whole body get around. Why is the body so arranged that when you get cold circulation slows to the feet and they get cold while the brain and heart stay warm and nourished? To each according to his need and the feet have needs just as does the brain.
Would you accept such modifications of your body? Probably not, who could foresee the unintended consequences of his “improvements”? It would be worse if the person offering to operate were a lawyer instead of a surgeon. Yet we have politicians worldwide insisting that they know best how to improve economic matters.
The interesting thing is that a great number of those politicians are lawyers and very few ever seriously studied economics. Somehow they seem to think that knowledge of legal matters qualifies them to tell the rest of us how to run our businesses. In fact the U.S. government has just appointed a new chairman for General Motors – and that man has no experience in the auto industry. We can hope for the best, after all that company has a major effect on our economy. However I’m afraid I can’t be very optimistic in this case.
Why should government dictate business practices? Many think that such control will lead to fairness and prosperity, but why should that be so? Such a belief requires that government officials be:
a. Able to consider all the appropriate factors and make wise decisions, and
b. Moral enough to put the needs of others above their own.
I do not believe we can trust any mere human to meet those requirements. The economy is so complex that no person can understand all its details. How does he compensate for weather that affects crops? How does he allow the risk taking necessary to developing new products without also allowing waste? How does he distribute compensation to best motivate people to do what will benefit the population? Such a person will face many more questions, all unnecessary if individuals are left free to manage their own affairs.
Nor can we trust people in power to be totally altruistic. They are quite as human as the rest of us and just as subject to temptation – nay more so because their positions of power protect them. I find it amazing how many people complain about greedy business executives and yet are willing to trust their welfare to government employees. They seem not to realize that those government employees are quite as human as are the businesspeople.
Is the free market perfect? Of course not, there are greedy executives and other problems. However the market at least allows a choice. If you don’t like the cars Ford makes you can buy a Chevy or Toyota, or even not own a car at all. Government allows no such choice. Don’t like public schools? Too bad. You can send your children to a private school but you still have to pay for the public school you do not use. It’s as if you had to pay Ford when you buy that Toyota.
Government is necessary for some functions. We need national defense as well as a local police force. We need a road system and it is not practical for private enterprise to provide it. However when government starts meddling in affairs that the people themselves can manage, we are headed for trouble. That is why a country like Soviet Russia, with tremendous natural resources, became so poor under communism. Well-intentioned people “performed surgery” on their system and the result was poverty and misery for the vast majority of the people.
Before we ask government to meddle in our economic system we should think about what might be the result. It is likely to be as bad as having that surgeon change the way our bodies work.
Showing posts with label life. Show all posts
Showing posts with label life. Show all posts
Monday, July 6, 2009
Thursday, July 2, 2009
The Simple Life of You, Part 1
If you like my blog, please tell others.
If you don’t like it, please tell me.
Some people complain about how complicated life has become today, they long for the simple life of earlier times. There is even a pretty good movie about the subject (“The Simple Life of Noah Dearborn” with Sidney Poitier). Unfortunately that simple life wasn’t so simple. Consider a typical day in my life compared to that of my great-grandparents who lived a hundred years ago on a farm in the western U.S.
I get up in the morning, flip a switch and have light instantly. Grandpa would get up and light a lantern. He had to refuel that lantern regularly with coal oil. The coal oil had to be transported by train or horse-drawn wagon to the store nearest to him.
If its winter my thermostat keeps my house at the temperature I chose. I can even have it allow the house to cool while I sleep and then warm it up just before I get out of bed. Grandpa had to chop wood, then feed it into a stove and build a fire to warm his house. If he was lucky he might buy coal and not have to chop the wood.
An indoor toilet takes my body waste away and I don’t even have to think about it. Grandpa had to dig a hole and build an outhouse over it. In winter, he and Grandma had to expose their nether regions to the cold every time nature called.
I turn take a shower in warm or hot water, heated without my even thinking about. In that shower I use soap I buy from the store. Grandma would heat water on the stove for a once-a-week bath for the family. She used ashes to make that soap herself. The water was either pumped from a hand-dug well or hauled from the creek.
I might make my breakfast using food purchased with one quick trip to the store. If my wife decides to make pancakes she uses a mix and an electric griddle. Grandma had to get up early, light the stove, mix the ingredients, and cook breakfast over that wood or coal stove. Many of those ingredients came from the cow, chickens and pigs they cared for, or the crops they raised.
The rest of a typical day is similar, my great-grandparents daily lives were much more complicated than mine. They had to know how to care for animals, plant, care for and harvest crops, butcher a pig, build a fire in the stove and on and on and on. They were very self-sufficient but that self-sufficiency required a wide variety of skills. My daily life, on the other hand, does not require nearly that diversity of skills. The gas company sees to it that I have gas to heat my house. The electric company provides the electricity to turn on my lights, wash my clothes, and power my computer. Other businesses provide for my other needs and desires.
In effect I have delegated most tasks to professionals, including the butcher, the electrician, the baker etc. That frees my time so I can do my own specialized work. The fact that I live in a complicated society allows me to live a simple life. Grandpa’s life was complicated because he lived in a simple society. I may add complexity to my life by the job I do or the activities I participate in, but that is my choice. The necessary tasks of daily living are much simpler for me than they were for my great-grandparents.
As an example of how I benefit from our complicated society, consider the number 2 pencil with which I so unthinkingly write notes to myself (I seldom write them to others because my handwriting looks like an explosion in an ink factory). A simple item, easily made, right? Nope. The production of that pencil is a complicated process, involving the work of people in many parts of the world. I’ll not attempt to describe it here, but I do suggest that you read “I Pencil” by Leonard E. Read. You should be able to find it easily on the Internet (another complexity of our society which can simplify our search for information). That little story is a bit dated but still describes the complexity of making pencils. Of course more advanced products require even more complexity in their manufacture. It would be mind-boggling to list all the people who have contributed to the computer on which I’m writing this.
And just who provides overall organization for all the people who make my pencil? Who decides that the logger should provide cedar, the miner provide copper and zinc for the ferrule, that the man in Ceylon (Sri Lanka) should dig out the graphite, all to produce a pencil? Nobody. Each does a job to earn his living and most don’t even know the ultimate use of what they produce. The logger doesn’t care if that tree he just cut is going to shingle a house, make pencils, or some other use. His motivation is the paycheck he gets, not my ability to write a note to myself. It is the same with the man digging the graphite. He may not even know how to write, but does know that he will get paid for his work.
As Adam Smith said, “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. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
Our society and economy has developed over time to provide for our wants. If people in a certain town want more bread, that provides incentive for the existing bakery to increase production or for a new baker to set up shop. If the only bakery in town overcharges, a competitor is likely to see the opportunity and set up shop to sell at a lower price. In the technology area, if a company can produce a new product at a price people are willing to pay, that product will help the company make a profit, to the benefit of both customers and the company.
Books can and have been written on this subject, but here let us simply remark that our society has evolved in such a way as to provide most of what we need at a price we are willing to pay. Nobody directed that evolution, it just happened as different people found that they could profit by satisfying the desires of others.
Our question today is what we do with this complex, self-organizing machine we call the economy. I’ll get to that soon, but probably not tomorrow since I want to use my next blog to celebrate Independence Day.
If you don’t like it, please tell me.
Some people complain about how complicated life has become today, they long for the simple life of earlier times. There is even a pretty good movie about the subject (“The Simple Life of Noah Dearborn” with Sidney Poitier). Unfortunately that simple life wasn’t so simple. Consider a typical day in my life compared to that of my great-grandparents who lived a hundred years ago on a farm in the western U.S.
I get up in the morning, flip a switch and have light instantly. Grandpa would get up and light a lantern. He had to refuel that lantern regularly with coal oil. The coal oil had to be transported by train or horse-drawn wagon to the store nearest to him.
If its winter my thermostat keeps my house at the temperature I chose. I can even have it allow the house to cool while I sleep and then warm it up just before I get out of bed. Grandpa had to chop wood, then feed it into a stove and build a fire to warm his house. If he was lucky he might buy coal and not have to chop the wood.
An indoor toilet takes my body waste away and I don’t even have to think about it. Grandpa had to dig a hole and build an outhouse over it. In winter, he and Grandma had to expose their nether regions to the cold every time nature called.
I turn take a shower in warm or hot water, heated without my even thinking about. In that shower I use soap I buy from the store. Grandma would heat water on the stove for a once-a-week bath for the family. She used ashes to make that soap herself. The water was either pumped from a hand-dug well or hauled from the creek.
I might make my breakfast using food purchased with one quick trip to the store. If my wife decides to make pancakes she uses a mix and an electric griddle. Grandma had to get up early, light the stove, mix the ingredients, and cook breakfast over that wood or coal stove. Many of those ingredients came from the cow, chickens and pigs they cared for, or the crops they raised.
The rest of a typical day is similar, my great-grandparents daily lives were much more complicated than mine. They had to know how to care for animals, plant, care for and harvest crops, butcher a pig, build a fire in the stove and on and on and on. They were very self-sufficient but that self-sufficiency required a wide variety of skills. My daily life, on the other hand, does not require nearly that diversity of skills. The gas company sees to it that I have gas to heat my house. The electric company provides the electricity to turn on my lights, wash my clothes, and power my computer. Other businesses provide for my other needs and desires.
In effect I have delegated most tasks to professionals, including the butcher, the electrician, the baker etc. That frees my time so I can do my own specialized work. The fact that I live in a complicated society allows me to live a simple life. Grandpa’s life was complicated because he lived in a simple society. I may add complexity to my life by the job I do or the activities I participate in, but that is my choice. The necessary tasks of daily living are much simpler for me than they were for my great-grandparents.
As an example of how I benefit from our complicated society, consider the number 2 pencil with which I so unthinkingly write notes to myself (I seldom write them to others because my handwriting looks like an explosion in an ink factory). A simple item, easily made, right? Nope. The production of that pencil is a complicated process, involving the work of people in many parts of the world. I’ll not attempt to describe it here, but I do suggest that you read “I Pencil” by Leonard E. Read. You should be able to find it easily on the Internet (another complexity of our society which can simplify our search for information). That little story is a bit dated but still describes the complexity of making pencils. Of course more advanced products require even more complexity in their manufacture. It would be mind-boggling to list all the people who have contributed to the computer on which I’m writing this.
And just who provides overall organization for all the people who make my pencil? Who decides that the logger should provide cedar, the miner provide copper and zinc for the ferrule, that the man in Ceylon (Sri Lanka) should dig out the graphite, all to produce a pencil? Nobody. Each does a job to earn his living and most don’t even know the ultimate use of what they produce. The logger doesn’t care if that tree he just cut is going to shingle a house, make pencils, or some other use. His motivation is the paycheck he gets, not my ability to write a note to myself. It is the same with the man digging the graphite. He may not even know how to write, but does know that he will get paid for his work.
As Adam Smith said, “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. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
Our society and economy has developed over time to provide for our wants. If people in a certain town want more bread, that provides incentive for the existing bakery to increase production or for a new baker to set up shop. If the only bakery in town overcharges, a competitor is likely to see the opportunity and set up shop to sell at a lower price. In the technology area, if a company can produce a new product at a price people are willing to pay, that product will help the company make a profit, to the benefit of both customers and the company.
Books can and have been written on this subject, but here let us simply remark that our society has evolved in such a way as to provide most of what we need at a price we are willing to pay. Nobody directed that evolution, it just happened as different people found that they could profit by satisfying the desires of others.
Our question today is what we do with this complex, self-organizing machine we call the economy. I’ll get to that soon, but probably not tomorrow since I want to use my next blog to celebrate Independence Day.
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