Years of listening to the podcast EconTalk has imparted in me at least one big idea: the market is a pretty amazing mechanism for coordinating human activity.
Those of us lucky enough to grow up in a market economy rarely stop to consider how remarkable it is that our local supermarket always has enough bread on the shelves. Suppose an alien landed from outer space and you had to explain that there were two possible systems for ensuring that there’d be enough bread in the supermarkets to feed a local population. One system involved a “bread czar” who’d be totally focused on making sure every store got the right amount of bread from farmers; the other system would involve a bunch of chaotic, self-organized activity between and among all the farmers and market owners in the world and somewhere it’d all work out. Logically, the bread czar carefully overseeing everything should carry the day. But alas!
Here’s Russ Roberts, from his blog post on Emergent Order:
Understanding and appreciating emergent order, and understanding when it works well and when it doesn’t and it does not always work well, is for me, the essence of economics and the deepest idea that we economists can contribute to helping normal human beings understand the world around us.
Economists call the interaction between buyers and sellers of bread a “market,” but our charts of supply and demand, while often very powerful, don’t get at the richness of how we as human beings manage to cooperate without top-down coordination and do it so peacefully.
Indeed. The post is a companion to a short video titled It’s a Wonderful Loaf, which Russ produced, which tells the story of the would-be bread czar. I had the pleasure of seeing it debut in San Francisco.
Inducing awe is something I’ve written previously about. It’s a powerful habit to cultivate. I love being in the presence of real expertise or real impressiveness and marveling at what happened behind the scenes to manifest the expertise in front of me. Free markets and capitalistic mechanisms — while hardly perfect — for me induce a different but related sense of awe and wonder.
Thanks, Russ, for sharing your passion and sense of wonder with others. It’s infectious.