Archive for March 26th, 2011

Studying economics takes years and does not even guarantee a proper understanding of how the economy actually works. Thus it is both sobering and intriguing to watch Milton explaining the importance of free markets and free trade in just two minutes.

When you go down the store and buy this pencil, you are in effect trading a few minutes of your time for a few seconds of the time of all those thousands of people.

It was the magic of the price system, the impersonal operation of prices that brought them together and got them to cooperate to make this pencil, so that you could have it for a trifling sum.

To be honest, it was not Milton to come up with this pencil story. It was American economist Leonard E. Read who wrote I, Pencil in 1958.

Not a single person on the face of this earth knows how to make me.

Yet, there is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work.

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