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Bonus Quotation of the Day…

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… is from page 30 of Daniel Boorstin’s 1965 volume, The Americans: The National Experience [2] (link added):

Unknown-2The purpose of the Interchangeable System [3], Eli Whitney himself explained, was “to substitute correct and effective operations of machinery for that skill of the artist which is acquired only by long practice and experience; a species of skill which is not possessed in this country to any considerable extent.”  The unheralded Know-how Revolution produced a new way, not only of making things, but of making the machines that make things.

DBx: Read again the words from Eli Whitney.  They express an economic truth that is largely ignored in today’s anxiety-laden discussions about the advance of labor-saving technology and of trade.  As George Selgin and a precious few others point out correctly, efforts to create and employ labor-saving technology are greater when and where the benefits of saving labor are greater.  And the benefits of saving labor are greater the greater is the scarcity of labor.  As Whitney’s words suggest, labor-saving technology does not simply rain down randomly; in a market economy it is driven by economic realities.  The very same reality holds true for trade.  Labor-saving innovations and trade conserve resources – including labor – that are especially scarce.

Given this economic reality, it’s strange that so many people today worry about market processes that not only reduce scarcity, but reduce those particular instances of scarcity that are most biting.

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