Libhater
08-06-2014, 03:54 PM
Leonard Read, the founder of the Foundation of Economic Education in Irvington, New York, discussed the many materials necessary to produce a pencil: wood, metal, zinc, rubber, paint, and dozens of other things. But that is just the beginning, for there is an entire industry to produce each of those materials--a lumber industry to get the wood, a mining industry to get the zinc, and so on. Moreover, engineering and tool-making businesses are required to supply al of those industries. Finally, neither the pencils themselves nor the various elements needed to manufacture pencils could be transported without the oil and shipping industires.
All told, making the most simple of objects, a pencil, involves thousands of people who possess very detailed knowledge and information about their day-to-day jobs, whether they are in the lumber industry, the rubber industry, or elsewhere. And these people come from all over the world. No central planner or "pencil czar"--even with access to the most powerful computer imaginable--could possibly possess and utilize all the detailed and constantly changing information that goes into making pencils. And yet we still have our pencils. How? Because of private property and the free-market capitalism it enables. Under a free-market system, all of these thousands of people, very few of whom actually know one another, have an economic incentive to cooperate with one another under a division of labor and produce pencils.
The delusion that a single person or group of government planners could possibly possess such information and manage an entire economy is what Nobel laureate economist Friedrich Hayek called the "pretense of knowledge" or the fatal conceit." Central planning inevitably leads to economic chaos.
How Capitalism Saved America, by Thomas J. Dilorenzo
I give you my extreme partisan permission to use the above example of making a simple pencil under true capitalism and to compare it to the central planning (socialism) of a more complex product or service, i.e. our healthcare system under obama to see if you can imagine how this central planning by our government could possibly work.
All told, making the most simple of objects, a pencil, involves thousands of people who possess very detailed knowledge and information about their day-to-day jobs, whether they are in the lumber industry, the rubber industry, or elsewhere. And these people come from all over the world. No central planner or "pencil czar"--even with access to the most powerful computer imaginable--could possibly possess and utilize all the detailed and constantly changing information that goes into making pencils. And yet we still have our pencils. How? Because of private property and the free-market capitalism it enables. Under a free-market system, all of these thousands of people, very few of whom actually know one another, have an economic incentive to cooperate with one another under a division of labor and produce pencils.
The delusion that a single person or group of government planners could possibly possess such information and manage an entire economy is what Nobel laureate economist Friedrich Hayek called the "pretense of knowledge" or the fatal conceit." Central planning inevitably leads to economic chaos.
How Capitalism Saved America, by Thomas J. Dilorenzo
I give you my extreme partisan permission to use the above example of making a simple pencil under true capitalism and to compare it to the central planning (socialism) of a more complex product or service, i.e. our healthcare system under obama to see if you can imagine how this central planning by our government could possibly work.