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Quotation of the Day…

… is from page 7 of Thomas Sowell’s monumental 1980 volume, Knowledge and Decisions (original emphasis):

What then is the intellectual advantage of civilization over primitive savagery? it is not necessarily that each civilized man has more knowledge but that he requires far less.

DBx: This truth is doubly – triply, quadruply, quintuply! – true for our modern, global, commercial civilization. The amount of human knowledge and information that you take advantage of every moment of your life today in countries such as the United States, Germany, Singapore, and Australia is indescribably vast compared to the amount of knowledge and information that you possess. Your knowledge and information is like a miniature mite beside the Jupiter-sized amount of knowledge and information that you daily use.

Consider your clothing, your breakfast, your bathroom, your smartphone, your automobile, your pencil – each of these modern goods is brought to you by the undesigned cooperation of literally millions of individuals from around the globe. Each of these individuals possesses unique bits of knowledge and information that are, through his or her actions in the economy, used to produce his or her tiny contribution to global economic output. Each individual’s contribution is coordinated with the contributions of each of the countless other producers by the market.

The key player in the market is the price system and its ever-adjusting pattern of relative prices, expressed in money. This pattern reflects and conveys far better than any other possible institution the relative scarcities of different resources, as well as the relative intensities of different desires of consumers.

That the market isn’t ‘perfect’ is a trivial insight. Of course it isn’t; only an immature mind supposes that perfection is possible or that perfection is an appropriate standard against which to judge reality. But that the market actually works, and works pretty darn welland (most importantly) works far better than any realistic alternatives – cannot be doubted by any mature mind that surveys history and existing realities.

The overall result is the modern cornucopia of goods and services that is so abundant and robust that we take it for granted. Its abundance is so vast and its regularity so excellent that Marxists and many other economically uninformed people suppose that this process of production is somehow automatic, a gift of nature or a product of history, something that ‘grows’ according to simple ‘laws’ that French economists obsessed with income and wealth ‘distributions’ write down as if they’ve discovered the economic equivalent of the laws of thermodynamics.

Yet there is nothing automatic about the modern economy, if by ‘automatic’ is meant ‘independent of institutions and of human ideas and individual efforts.’ If the price and profit-and-loss system that performs this massive feat of globe-spanning coordination of the efforts of billions of individuals worked less smoothly than it does we would perhaps take more notice of it and behold it with wonder and appreciation for its magnificent fruits. But instead this system works so very smoothly and so silently that it goes unnoticed. Its occasional ‘failures’ and hiccups are then interpreted as obscene violations of, or breakdowns in, some imaginary laws of nature – violations that people posing as priests of secular salvation promise to prevent.

A great irony is that the interventions of these officious and arrogant priests – a more common name for these priests is “politicians” – almost always make matters worse. How could these interventions not do so? The amount of knowledge and information that any of these priests can possibly have of the details of the complex system into which he or she intervenes is, again, as a miniature mite beside Jupiter. Yet the belief in the possibility of the miracles that would be necessary for such interventions to work as promised is unshakable, and it is a mystical belief clung to with special, often fanatical, fervor by intellectuals.