I, Pencil (1958)
econlib.org
econlib.org
"There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found." This is one of the beautiful miracles of our kind, a fact that remains unknown to most of us. Including many who figure themselves at the commanding heights.
Every attempt to make this fictional mastermind more powerful makes our fate worse.
Lawmakers are sort of masterminds, especially when defining the founding principles of the law. They don't have pencil production, and usually any particular production, in mind.
The beauty is that a general principle allows almost any business to flourish; the lawmakers need not know what specific business it might be. This makes such laws reasonably future-proof.
I don’t think the author wanted to write a reference work on all aspects of its subject :-)
Here’s what I personally get out of its perspective: contentment and inspiration. It provides glory to the seemingly mundane tasks of everyday economic life. Comparing prices, finding customers and suppliers, solving small problems, settling disputes. This is what the invisible machine is composed of.
It also shields my mind, like a lode star that guides me away from many popular beliefs about what “needs to be done to boost GDP”.
I am not sure that a mind shield is a good thing.
The shield/lode star thing: let's not go full politics. I'm not narrow minded... Let's just leave it at that :-)
You could imagine an antithetical essay "I, police" involving a lawless village in which each person trains extensively in martial arts and marksmanship in order to protect themselves. Then each realizes it is more efficient to focus on their own vocation and hire a private security guard. Then a few neighbors realize it is more efficient to pool their money and hire just enough security to protect their block, and finally the whole village realizes it is most efficient to pool their money into just enough security, at which point they realize they have formed a government with taxes and police force. The story could end with "It is a fact most astounding that the forces of an unencumbered free market lead directly to an inevitable centralization into a collective governing whole."
Of course this story does not prove that all affairs should be handled by the government; but the pencil doesn't prove the opposite either.
Your village police story OTOH is made up.
If such a high profile and somewhat controversial essay was wrong on the details, I think we'd have heard about those errors.
The article makes the point very well - and it's something that definitely should be taught more in school.
I think it's very easy for kids to grasp 'top down' control in government, teams or organizations - it's something so intuitive it does not need explanation.
The concept of 'free markets' and their ability to facilitate amazing things is in some ways counterintuitive, and needs to be learned.
So I think the point is fair.
I don't think anyone is implying that all systems must operate in this manner.
The point is that the simple things in our society are the product of very complicated networks of activity that nobody understands. And this is pretty universal, whether you are talking about pencils or police.
Of course this complexity is not the only consideration that determines how things should be done. But it is a consideration that is usually ignored when people seek to regulate an industry.
I'm sure there are many 'origins of the police' narratives, but one I know is the Metropolitan Police of London were developed explicitly to curtail the dock workers from exercising their customary right to take small amounts of the goods they were unloading home with them. To generalize from this (a dangerous game, I know, but this seems to be the flavor of the thread), institutions are constructed to protect the interests of one class from another
Games are full of Man-with-a-hammer examples, like "bluff all the things" (eg. poker), "sacrifice all the things" (chess) or "never run to win the race" (backgammon). This inevitably leads to failure, but economy being what it is, the failure is too vague, too diffuse and too erratic to acknowledge them in the case of "free market all the things".
It just assumes that trickle down economics works, and repeats this "lesson" ad nauseam chapter after chapter.
However, it is very clear historically that trickle down economics does not work, and that completely unregulated markets lead to human rights abuse.
Picketty is much more enlightening.
Economics In One Lesson is an exercise in logic, showing that many popular economic policies are flawed or will necessarily have non-obvious side effects.
EIOL is also deliberately written to be an easy read.
It's hard to compare the two.
(In the unlikely case anyone cares, my personal take on Piketty: wealth inequality doesn't matter unless you think jealousy is a matter of public policy. Wealth inequality is an inevitable consequence of progress. What matters is whether the wealthy can loose their wealth due to their own mistakes, and whether wealth inequality implies legal inequality. Private profits and public risks, bailouts, legislation a la tete du client, bribes, lobbying, monopolies, special tax agreements, propping up markets, complicated laws, ... that's how the 99% get screwed. Taxes allow the government to function. They cannot "counterbalance" the legal privileges of the 1%.)
The one thing they have in common is both being pretty polemical in tone.
Just like “I Pencil” delivers the crucial, uplifting insight that complex economic cooperation spontaneously emerges everywhere. This order will exist prior to and regardless of any political system.
Keeping these broad insights front and center at all times, does not imply that you have to reject every proposed intervention a priori. But if you know that every intervention will have side effects and can backfire because of the sheer complexity of the order, even when meaning well, you will naturally be much more careful and skeptical.
Which in my opinion is really a very, very, very good thing. Especially in this day and age, where the spontaneous order is more complex than ever and where government is once again very big, technocratic and e.g. willing to "clamp" macro economic variables.
I also quite simply disagree that EIOL is “beneath simplistic”. If the kids are interested in economics, they should obviously read much more than just these texts.
From wikipedia on Trickle-down economics:
> A 2015 report by the International Monetary Fund argues that there is no trickle-down effect as the rich get richer:
>> [I]f the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth.[19]
> Now, in the absence of faith in free people—in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity—the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental "master-minding."
It's possible to understand that non-directed systems can produce impressive results and still believe that a directed system might be the right choice for certain situations. Plenty of biologists were Marxists for example (JD Bernal, Steven Jay Gould was very left wing). Surely, they would have understood that complex organisms don't arise from central planning, but from an undirected, emergent process. Yet they also believed that government should play a major role in human society.
Doing a cursory search for the above, I did find this quote that seemed to capture her sentiments against central planning, to which I think a lot of people use the I, Pencil fable to show the folly that some centralized individuals would have knowledge at all times and all places about what goods and services should be in demand and what they should be priced at and that there's an arrogance to even attempt so much.
"The lesson of the economic history of Europe in the 70's and 80's is that central planning and detailed control do not work and that personal endeavour and initiative do. That a State-controlled economy is a recipe for low growth and that free enterprise within a framework of law brings better results…. And that means action to free markets, action to widen choice, action to reduce government intervention. Our aim should not be more and more detailed regulation from the centre: it should be to deregulate and to remove the constraints on trade.”
There are couple of funny true story about the Soviet Union. In one a Soviet Economics Professor went to the US in the early 90s. He lived with a US professor, he had the plan to bake some sort of local bread and they went to the shop to buy flower (and other things), but it was a particular kind of flower.
Somehow the show this note have this on the shelves so the US prof went to a clerk and ask him if they had some of that flower in the back. The clerk went off, and came back with the flower.
Seeing this the Soviet prof remarked that he was very impressed how highly economics professors were valued in the US.
To use the author's example of the post office, there may be reasons why one might want the post office to be a public entity beyond "only government could build such a complex system". For instance, it might be reasonable to wonder whether a postal system that evolved organically would cover everyone in a society, or would rural people or others who are expensive to reach be left out. Mail delivery probably qualifies as something we want everyone to have access to in order for a lot of our systems to function.
That sounds so absurdly fictional that it can only have been a joke or bad propaganda. It fails the smell test not only for Thatcher to be strolling around London with a soviet official but for the soviet official to be oblivious to Thatcherism famous for its deregulation, union-busting and privatisation.
And remember Thatcher's 'deregulation' was all within the context of what was already a fairly capitalist system to begin with.
When the Berlin wall fell, a lot of E. Germans crossed in to W. Germany - and when they entered the grocery stores, and saw all the amazing produce - fruit out of season, so many varieties of packaged goods - they were in shock and tears. They had been lied to their whole lives, told that they had 'the best' products and services and quite literally believed that their system was absolutely superior. This is the plebes mind you, I'm sure a lot of younger types had some idea of what they were missing out on.
My friend grew up in Poland - they had 3 flavours of ice cream 'vanilla' 'chocolate' and 'pink'. And none of the other soviet states had more than either choco or vanilla - so they thought there were 'rich' compared to the other states. But they didn't fathom that other flavours even existed ...
"In the 1980s, the last premier of the Soviet Union, Mikhail Gorbachev, traveled to Great Britain and met British Prime Minister Margaret Thatcher. According to a popular story, when Gorbachev was touring with Thatcher, he was surprised to see how well off the British seemed to be. He asked Thatcher who made sure that the British people got fed. "No one," she told him. "The price system does that." The British people got fed far better than the subjects of the Soviet Union, who languished under a planner economy." pg 220 Invidivisble: James Robinson, Jay Richards
How an incredibly complex, high-tech economy can operate without any central direction is baffling to many. The last President of the Soviet Union, Mikhail Gorbachev, is said to have asked British Prime Minister Margaret Thatcher: "How do you see to it that people get food?" The answer was that she didn't. Prices did that. Moreover, the British people were better fed than people in the Soviet Union, even though the British have not produced enough food to feed themselves in more than a century. Prices bring them food from other countries.
https://books.google.com/books?id=oVaNBQAAQBAJ&lpg=PT21&ots=...
(See Coase on the Theory of the Firm)
And not only was each step along the way to the pencil a result of direct and carefully planned action, the side effect of pencils from rail cars is only made possible at all because pencils are economically viable. Otherwise they may not (still) exist.
There is a certain harsh reality to this free market—it does not favour quality or popularity or even efficiency.. The blade falls on just how much rent can be extracted at each step without nudging itself into oblivion. What is the practical difference (for a pawn like myself) between a system or a person giving directorial control over the allocation of resources?
That disposable spoon comes from a local shop which buys it from a distributor in a factory 100 miles away who buys plastic raw material from a seller 1000 miles way who brings the crude from middle east (10K miles) to make that plastic. Someone has built Oil rig deep into ocean spending billions of dollars to extract that crude oil.
More importantly people of all castes religions races are working to achieve this none of whom have any special love for each other yet everyone benefits.
Well, "everyone benefits" is the Disney version.
Oil producing countries and their citizens are usually royally fucked over, either from foreign powers invading/meddling to take control of the oil supply, or by their friendly lackeys (royal families etc) in power.
Ways of living (farmland, hunting spaces etc) are destroyed along the way, for pollution, extraction of resources etc.
Workers leave their villages (which are often ravaged from modernization, their previous jobs, commodities, commerce etc drying up) and are forced to seek work in large industrial towns in Dickensian conditions.
And all for "disposable spoons", which will merely save "10 seconds washing a steel spoon", end up in huge piles of other plastic garbage in dumps, oceans, etc.
Even those "10 seconds washing a steel spoon" saved, and most of the other savings due to such products, will end up being eaten up completely by the modern life and modern pace that makes those products possible in the first place -- the average working person in the US having less free time than comparable professionals (even CEOs) in the 50s or 60s.
Mostly fucked up by politicians. Nothing to do with the fact that people on Oil rigs and me both willing to co-operate.
> Ways of living (farmland, hunting spaces etc) are destroyed along the way, for pollution, extraction of resources etc.
Don't see the problem with that.
> Workers leave their villages
They leave for better life. I left my village for better life. Village life sucks.
> And all for "disposable spoons", which will merely save "10 seconds washing a steel spoon", end up in huge piles of other plastic garbage in dumps, oceans, etc.
Dont know if it worse that wasting water on washing steel spoons but surely technology helps us manage that problem well too.
> the average working person in the US having less free time than comparable professionals (even CEOs) in the 50s or 60s.
The average working person in USA is having much better life that CEO in 1950s.
I don't think it's that clear cut, the "bad politicians" vs the "peaceful people". Peoples (citizens of a country) will pursue their interests, even if that means stealing/taking advantage of others as a nation.
At least, throughout history, that has been the case, even in very explicit scenarios, e.g. ancient Athens, when the will of the citizens was pretty much directly put into policy, they opted to take advantage of nearby countries to build their power and economy.
What politicians/governments in powerful nations do is not just to serve their self interest, it's also in the interests of their country. In less powerful nations, politicians can be "bought" by foreign powers, so that's not always the case, but an "empire" like nation will promote the "strategic interests" of its people (way beyond mere defense). Of course that goes first through the interests of its rich people, but that also trickles to the common folk (e.g. cheap oil).
>Don't see the problem with that.
Sure, no problem with pollution and exhausting farmland etc...
>They leave for better life. I left my village for better life. Village life sucks.
Not everybody leaves for a "better live". A lot like their life just fine, thank you, but then its destroyed by external forces (in some cases, they are outright forced too, like in several "urbanization" and "industrialization" pushes, from Industrial Revolution era England to Stalin's USSR and beyond).
>The average working person in USA is having much better life that CEO in 1950s.
Citation needed. More toys != "much better life".
None at all.
> Citation needed. More toys != "much better life".
Are you kidding ? I would rather be an average working man in USA in 2016 than a rich guy in 1950s. Hands down.
Then you probably have no clear idea what either entails., except if you think that the differentiators, like access to the web and mobile phones as an "average working man in 2016" are so much better than a cozy and much simpler life in the 50s (there are social differentiators that could turn the tables, of course, e.g. if one is black etc, but you only mentioned "rich guy").
I dont have an answer - both of you got an upvote from me.
I'd also recommend http://tuttletwins.com/law/ - which is available in all of the above languages and German as well.
Great reads regardless of the size/age of the person. And definitely thought-provoking, considering the questions they yield.
He had many great economists and other people on his show, like 10 nobel price winners, both Friedman and Coase shortly before they died.
That's because it has a predetermined agenda, nothing scientific about it.
I think computer networks would have been developed without Darpa; as they are done today.
The idea is that no one alive has all the skills to make something as simple as a pencil from scratch. This is a result of our industuralized socity.
Is that the idea? Isn't the point rather that the existence of a pencil is only possible as a result of industrialization and trade. It's not as if before industrialization, there was an artisanal pencil maker who traveled the world gathering the materials needed to make a batch of pencils, and crafted them together using pencil-making secrets passed down from father to son over generations.
No person has EVER been able to make a pencil; it's something that has only ever been possible for a network of interdependent industrial concerns.
By the way, the same applies to software: If any developer can say they're "full-stack" without further specification (i.e, they're full-stack everything) with a straight face, than they should be punished by being given $200 or less of electronic components and a processor of their choice, and asked to make a webapp. No external libraries, that's cheating. Maybe give them an assembler if you start feeling sorry for them.
Edit: I guess you said no external libraries, not no manuals/specs. That makes it less fun.
However, you don't have to implement an FS or a display module (but you'll probably want to implement a serial monitor).
But yeah, if I had the time, I might consider doing this (after I finish my Z80 SBC and actually learn more electronics (the Z80 SBC is a popular enough project that I don't have to do all the circuits myself. And I can do the bare minimum)). This probably doesn't reflect well on me.
I hadn't seen NAND2Tetris before, thanks for that.
Or you could just use a newer chip, and avoid this sort of problem altogether.
They should also have to manufacture the processor themselves and 'electrical components' themselves.
Don't forget all the material that goes in to the keyboard and screen.
And how are they going to generate an electricity to power it once they have it set up?
The 'stack' in full-stack refers to a solution stack. You can read about them here: https://en.wikipedia.org/wiki/Solution_stack
The terminology full-stack is meaningful to discern between an expert at one part of the stack and someone who knows how to set up and manage all parts of the stack. For example, consider the LAMP stack:
Linux Apache MySql PHP
A Full-Stack developer is someone who knows enough Linux to set up an Apache server and MySql database, enough MySql to create a database, enough PHP to render a decent web page.
On the other hand, a frontend developer knows the gritty details about how to render a beautiful and performant webpage that works on IE6, iPhones on 2G and your 4k monitor.
However, such a quick, "fuck that guy, amirite?" type insult is so common that it's become boring, especially amongst programmers, who have gotten a lot of practice insulting each other over the internet in the past however-many decades: our culture has adjusted accordingly, and the bar has been raised on effective insults. You can tell what is an ineffective insult, because the recipient will immediately turn around and mock you. You know, like I'm doing now.
Overall, I rank this insult a pitiful 3/10.
This is simply a direct counter to your argument that "every non-idiot thinks full stack means everything since the stone age"
I appreciate your apology above.
Also, "all the software stuff" still means down to assembler. So that'll be fun.
Yes, I know that's not what you meant, but why stop the fun now, just because I couldn't keep my terminology straight?
The understanding does not mean that they want to take the time investment of recreating all that work from scratch.
For instance,
I understand branch prediction, cache lines and inter-processor synchronization. But I'm no kernel developer.
I know what the assembler does, and its goals. But I haven't made one, and any I made would be sub-optimal
.. This proceeds through compilers, operating systems and up to the web stack.
I mean, writing a renderer that fully implements "HTML 5" along with ALL relevant standards - that's a massive software effort. I barely understand it, but I understand enough to get the job done.
But
No matter how much you know, there's always going to be a part of the stack that you can't develop for: you can't know everything.
that was my point.
Funnily enough, so am I. So I can't really help you with that.
This is easy if there are multiple possible interpretations. Just pick the one that makes the least sense.
That way, instead of having to address their statement you can just pick on their communication skills.
Oh well. Sorry.
I mean, if you really want to make it a challenge then don't give them a processor, give them some large sheets of acetate and some coloured tape.
(I was going to include a picture of the 6502 rubylith for that last para, but found this amazing anecdote instead: https://hardware.slashdot.org/comments.pl?sid=1939704&cid=34... )
Link to PDF version: http://freedom-school.com/money/how-an-economy-grows.pdf
Archimedes said he could move the world with a lever long enough, but when it came to proving it, he needed a pencil to make the point
You didn't build that.
It takes a village.Example from Ceylon: toxic mine tailings, leading to soil pollution, leading to either poisonings/cancers/deaths when attempting to grow food locally, or to having to import it from afar, or move away. Broken homes/families. Strains on the social safety net if there is one.
Example from Oregon: clearcuts, leading to soil instability, leading to landslides, leading to deaths and destruction of property, and also to the silting/sedimentation of streams & rivers, destroying salmon spawning habitat, leading to decline of the fishery, unemployed fishermen, broken families/alcoholism/crime/strains on society.
Technology metes out equal parts punishment and convenience; this site's audience should know that better than anyone, or they'll learn it soon.
What about the internal hierarchies of the firms involved? Who was freer, the owner of the pencil factory or the men in Sri-Lanka working for pennies to mine the graphite?
And the crass juxtpositioning of 'central planning' and the 'free market' is lazy and disingenuous. I'm no celebrant of the USSR but they weren't incapable of abstraction in their central planning,a s this seems to suggest. They werecapable of coordinating the production of pencils without Stalin knowing every process involved (just as mail functions without one man who knows each of the streets in America)
It's far from a perfect comparison, but I'm reminded of this classic Brecht poem: http://www.poemhunter.com/poem/a-worker-reads-history/
It is also a reminder that politicians who claim that they can make college and healthcare free, create jobs, increase wages, protect use from Chinese people stealing jobs, negotiate "smart trade deals" are basically people who have no clue what they are talking about.
(Similarly for college tuition, while we're at it. As for "create jobs" and "increase wages", these are relative terms, but there are certainly countries where such things have gone up at times in response to specific policy decisions (including here in the U.S.!). I'll leave the rest untouched upon for now.)
Sometimes Americans do move to other countries! Sometimes they don't. More factors generally go into a person's decisions to move or not move than any one policy choice, and people have attachments to where they grew up, and so on. It's no small matter.
Sure I can offer you an rotten apple for free as the ONLY choice and claim you are getting a free apple. But that is not any better than USA where government mandates the floor on quality of apple and gives freedom to set the price (which will be high because of quality floor).
Both scenarios are very different. When cost of things is distributed over large population it might not be visible to a naive mind but it is indeed the cost one ends up paying.
For example wait times for an ordinary surgery in Canada are simply mindblowing: http://www.ctvnews.ca/health/healthcare-wait-times-hit-20-we...
You wont hear an old lady complaining about wait time but you will hear a man praising that he did not pay anything for a bypass surgery.
Also, immigrating to another country has many legal, economic, social, and mental challenges. This makes moving to another country less appealing to humans!
If everybody is working in this process, then where do the people who expropriate the most from this process - the idle class heirs - get their profits?
> There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work.
The invisible hand...this is Adam Smith being misquoted. Adam Smith did use the metaphor of an invisible hand - Smith said the invisible hand was something that blocked free trade, not facilitated it. L. Read is using the metaphor in the exact opposite manner in which it was proposed.
Also, much of this could be said about a pencil being made in the USSR. Did any one person in the Soviet Union know how to make an entire pencil, from tree to graphite and such? Perhaps some government bureaucrat looked at his charts and ordered it to be made, but how different is that than the corporate bureaucrat looking at his charts and ordering pencils to be made?
Also, in our era of TARP bank bailouts, quantitative easing, farm subsidies and such, this notion of say the US government not having a central role in the economy as it exists is absurd. This medium we read and type on now was created through military contracts to Fairchild Semiconductor, DARPA grants for ARPAnet research and such, over many decades.
The 'idle' class is not actually 'idle', and if they are then usually their parents were not 'idle'.
> The invisible hand...this is Adam Smith being misquoted. Adam Smith did use the metaphor of an invisible hand - Smith said the invisible hand was something that blocked free trade, not facilitated it. L. Read is using the metaphor in the exact opposite manner in which it was proposed.
I don't know what you are talking about
'Every individual... 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, and 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.' - Adam Smith
> Also, much of this could be said about a pencil being made in the USSR. Did any one person in the Soviet Union know how to make an entire pencil, from tree to graphite and such? Perhaps some government bureaucrat looked at his charts and ordered it to be made, but how different is that than the corporate bureaucrat looking at his charts and ordering pencils to be made?
That is true, but the point of the story is not to say that markets are the only way to make something. The point of the story is to show the complexity of a simple object, in order to illustrate how complicate the overall system is. The implication is that you need markets because of the extrem difficulty of getting at this information.
The USSR could do it, all things consider, they could not do it well. They did actually use lots of markets, property rights and intensives to achieve this, just worst version of it. Central planning as envisioned by Trosky, Lenin, Bukharin, Bauer and co is so impossible that it is impossible to enforce, people will automatically start working around the inefficacy of the system.
> Also, in our era of TARP bank bailouts, quantitative easing, farm subsidies and such, this notion of say the US government not having a central role in the economy as it exists is absurd. This medium we read and type on now was created through military contracts to Fairchild Semiconductor, DARPA grants for ARPAnet research and such, over many decades.
A central role and a central plan is not the same thing. Planning is about direction, and you can say lots about the US government but they don't point the economy in a particular direction, usually they try to stop the economy from changing.
Point out that government has invested in successful stuff is not really relevant. The US was the most successful and innovative economic power on the planet when the federal government had less then 2% of GDP. Nobody denies that lots of industry developed faster because because of government, but many other developed slower as well. Where does this leave you?
Heirs who do not work and live off the profits of worker's labor are idle. Certainly their parents are idle as well. If that were not the case there wouldn't be phrases like nouveau riche and old money. You can watch billionaire heir Jamie Johnson's documentaries to see more with regards to this.
> 'Every individual... neither intends to promote...'
Precisely. You're quoting from Book IV, Chapter II of Adam Smith's Wealth of Nations. The chapter is titled "Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home". Meaning restraints on international free trade. It's opening sentence is "By restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them."
The part you quote says fully:
"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, 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, and 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. Nor is it always the worse for the society that it was no part of it."
The end being promoted by the invisible hand is as the only sentence discussing the invisible hand opens with "by preferring the support of domestic to that of foreign industry". The means to do that are described in the chapter title "of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home" through means described in the chapter's first sentence and elsewhere "by restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them".
It's not hard to see how the notion of the invisible hand has been twisted to its exact opposite meaning, as even when people point this fact out, they ignore the text and continue on with the meaning they think it has...
> The USSR could do it, all things consider, they could not do it well...Central planning as envisioned by Trosky, Lenin, Bukharin, Bauer and co is so impossible that it is impossible to enforce, people will automatically start working around the inefficacy of the system.
Actually the USSR economy functioned very well under Stalin. While the west was mired in the Great Depression, the USSR was growing by leaps and bounds. European (and even American) workers moved to Russia to get work, as did European (and American) firms. It managed to beat off a German invasion and raise the red flag in Berlin. By 1957 it was launching satellites and doing other such innovations ahead of the west. Nonetheless, in 1956 Khrushchev announced various major changes, including a decrease in capital allocation percentages, something which also happened in other Comecon countries. Those changes and other things did lead to stagnation, but they were a shift. In fact the Chinese stated so at a time, and eventually broke from the Russians due to this revisionism.
> Planning is about direction, and you can say lots about the US government but they don't point the economy in a particular direction
Of course it does. The direction was and is set out by DARPA, NSF, NIH. Who is funding the Boston Dynamics robots (answer: DARPA)? Who is providing money to SpaceX (answer: NASA)? Who is providing Boeing with revenues for the R&D necessary to build airplanes (Boeing is the second largest military contractor in the world)? Who is funding CRISPR/Cas9 research?
> The US was the most successful and innovative economic power on the planet when the federal government had less then 2% of GDP.
A number of factors are at play with this. One is that settlers arrived fairly historically recently in the US, gaining over 9 million square kilometers of land, much of it resourceful, plus the bonus of two big oceans to protect it. That in itself is quite a big windfall, a large European country like France is 5% of the size of the USA. Countries like Argentina has a similar trajectory, but 2 out of 3 Argentinians have indigenous heritage, whereas Americans killed almost all of the native population and took their land (about 1% of Americans have native heritage). Other factors are at play, but being handed over the equivalent of 20 Frances with two big oceans around it can do a lot to help one be a successful economic power.
You're wrong about this: https://en.wikipedia.org/wiki/Invisible_hand. Adam Smith is not being misquoted.
But nowhere in the same passage does Smith's use of the expression suggest that the "invisible hand" would act merely to hamper trade, but that this simile generally describes an unintended outcome of a decentralized process. The action of the invisible hand might not be necessarily beneficial, as it isn't in this case.
[0] : https://en.wikipedia.org/wiki/Home_bias_in_trade_puzzle
I say this because when the article is hyping up the "timelessness" of this essay, I know that there is political motivation behind it, rather than some kind of (more nearly) objective opinion on it.
Apparently I'm the smartest man alive /s
This is more in response to the article than the contents of the actual paper, which I won't be reading.
By the way, your non-pencil doesn't erase. Also, are you going to mine that lead yourself?
We detached this subthread from https://news.ycombinator.com/item?id=13017901 and marked it off-topic.
Shit. Turns out humans, as a species, cannot make a pencil from scratch.