Quotation of the Day…

by Don Boudreaux on July 29, 2014

in Seen and Unseen, Trade

… is from page 187 of Matt Ridley’s 2010 volume, The Rational Optimist (link added):

Trade, says Johan Norberg, is like a machine that turns potatoes into computers, or anything into anything: who would not want to have such a machine at their disposal?

If you doubt or otherwise do not see the truth of this claim, just look around and ask yourself: “How much of what I see around me – my computer, my cell phone, my shirt, my jeans, the walls of my home or office, the chair in which I sit, the coffee in the cup (and the cup itself), the automobile parked outside in the driveway (and the driveway itself), the glass in the window out of which I gaze upon the car in the driveway – did I make myself?  How much of what I see around me could I possibly make myself, even if I had the physical strength and stamina of Superman, the smarts of Albert Einstein, and a century to complete the tasks?”

Your answer to each question is (if you are not intellectually blind)  ”None of it.”  You (or your parents, if you are still a full-time student) performed one or two highly specialized tasks – such as bookkeeping for XYZ Co., carpentry for Acme Building Contractor, Inc., or teaching economics or another specialized discipline at State U.  You then exchanged the particular fruits of your highly specialized labor for each and every one of the countless goods and services that you consume daily.  You specialize in producing one thing and you trade with hundreds of millions of other specialists who, in total, produce hundreds of millions of other, different goods and services.  And you, personally, then get to choose which particular, personalized selection of these hundreds of millions of different goods and services you transform your own output in to.

Trade turns everything into everything, largely according to each specialist’s wishes (as long as government doesn’t interfere, by using the likes of tariffs and subsidies, with the process that makes these countless and diverse wishes come true).

It’s a truly amazing process!  It’s a process that’s on-going, every moment, in market-oriented societies.  And it works, if not perfectly, so well and so smoothly and so quietly that we take it for granted, not realizing that the prosperity that each and every one of us enjoys from this process is what gives us the luxury to worry about the likes of climate change and about how much money some of us have in our bank accounts relative to how much money others of us have.

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