Inflation, supply chain issues, bare shelves...who coulda predicted this? Well, just about any rational informed person, actually...
I don't consider myself prescient just pragmatic, realistic. Cynical, even. In April 2020, when all this was spooling up, I noted on social media that, paraphrased, "We better be real careful how we shut down this economic engine, because none of us has the starter battery and know-how to do it."
Sadly, I was right. It's not that we are not smart; in aggregate, as a whole economy, we're remarkably intelligent. The things we're able to do as a collective macro-economy is incredibly immense: how is it that, prior to March 2020, anything that we could ever want was available to us on the grocery store shelf or even available as soon as same-day or (at worst) two-day delivery? How was that possible? Who designed that?
"Who designed that?" Well, no one. An economy is not a "who" but a "what". And that "what" was our aggregate efforts in a (mainly) free economy. There's not a sole "who" (or even selected group of "whos") that figured this all out; it's the combined efforts of literally billions of people working together, unplanned, undirected, to provide to us what we wanted.
Economies are similar to a murmuration of European Starlings that create beautiful patterns through the ebb and flow of swirling bodies. There's not one King Starling calling out moves to the flock; instead it's one Starling making a minor move that signals to each of the birds nearby to move, which then signals to their next birds to move...and so on. Almost instantaneously. No one bird can central-plan the the flock's next move to change directions quickly or avoid a predator; instead it is a series of nearly-instant signals moving throughout the flock's aggregate flight paths that make it happen....fluidly.
Such it is with a free market economy. Billions of signals -- pricing, demand, supply -- murmuring through the "flock" tell the next "bird" what needs to be done. Those signals build and spread over time, fluidly, to level out a demand/supply chain that ensures that the suppliers provide what the consumers want, at the price they're willing to pay for it, at near-silently-agreed-upon timing.
But then COVID hit, along with its resultant Central Planning and teh shut down of major chunks of our economy, both in supply and demand. These mandates broke those fluid signals and agreements, placing the supply chain into unknown - and undesired - territory.
It's just not possible for a King Of The Economy to begin waving his wand, making demands for instant change, without putting this perfectly-balanced and -unplanned system into chaos. But that's exactly what we tried to do when we shut down our various micro-economies in 2020. We suddenly shut off the spigots of demand by telling people to stay home; instantly shut off supply by decided and declaring which industries were "essential" and which were not. We tried to, in effect, centrally plan the economy for an amount time...and we destroyed that elegant murmuring of signals. It's as if we had reached into the flock of starlings, killed off some, relocated others to another part of the world, and caged the rest, and then when it suited our fancy we tried to release them all into the wild and expected them to immediately go back to normal.
It just doesn't work that way.
I was reminded of this concept as I read a couple columns today, linked below. I'd suggest most of our world does not understand these evolved, delicate, unplanned, economic balances, so we're looking to the wrong place for answers. Ironically, we're looking for answers from the same groups that caused the chaos...we instantly destroyed these balances that were created over time, so we have to realize that it will take even more time for these to balances to realign.
I don't consider myself prescient just pragmatic, realistic. Cynical, even. In April 2020, when all this was spooling up, I noted on social media that, paraphrased, "We better be real careful how we shut down this economic engine, because none of us has the starter battery and know-how to do it."
Sadly, I was right. It's not that we are not smart; in aggregate, as a whole economy, we're remarkably intelligent. The things we're able to do as a collective macro-economy is incredibly immense: how is it that, prior to March 2020, anything that we could ever want was available to us on the grocery store shelf or even available as soon as same-day or (at worst) two-day delivery? How was that possible? Who designed that?
"Who designed that?" Well, no one. An economy is not a "who" but a "what". And that "what" was our aggregate efforts in a (mainly) free economy. There's not a sole "who" (or even selected group of "whos") that figured this all out; it's the combined efforts of literally billions of people working together, unplanned, undirected, to provide to us what we wanted.
Economies are similar to a murmuration of European Starlings that create beautiful patterns through the ebb and flow of swirling bodies. There's not one King Starling calling out moves to the flock; instead it's one Starling making a minor move that signals to each of the birds nearby to move, which then signals to their next birds to move...and so on. Almost instantaneously. No one bird can central-plan the the flock's next move to change directions quickly or avoid a predator; instead it is a series of nearly-instant signals moving throughout the flock's aggregate flight paths that make it happen....fluidly.
Such it is with a free market economy. Billions of signals -- pricing, demand, supply -- murmuring through the "flock" tell the next "bird" what needs to be done. Those signals build and spread over time, fluidly, to level out a demand/supply chain that ensures that the suppliers provide what the consumers want, at the price they're willing to pay for it, at near-silently-agreed-upon timing.
But then COVID hit, along with its resultant Central Planning and teh shut down of major chunks of our economy, both in supply and demand. These mandates broke those fluid signals and agreements, placing the supply chain into unknown - and undesired - territory.
It's just not possible for a King Of The Economy to begin waving his wand, making demands for instant change, without putting this perfectly-balanced and -unplanned system into chaos. But that's exactly what we tried to do when we shut down our various micro-economies in 2020. We suddenly shut off the spigots of demand by telling people to stay home; instantly shut off supply by decided and declaring which industries were "essential" and which were not. We tried to, in effect, centrally plan the economy for an amount time...and we destroyed that elegant murmuring of signals. It's as if we had reached into the flock of starlings, killed off some, relocated others to another part of the world, and caged the rest, and then when it suited our fancy we tried to release them all into the wild and expected them to immediately go back to normal.
It just doesn't work that way.
I was reminded of this concept as I read a couple columns today, linked below. I'd suggest most of our world does not understand these evolved, delicate, unplanned, economic balances, so we're looking to the wrong place for answers. Ironically, we're looking for answers from the same groups that caused the chaos...we instantly destroyed these balances that were created over time, so we have to realize that it will take even more time for these to balances to realign.
Given the opportunity - given the freedom - they eventually will.
But if we think we can use central planning to suddenly mandate the re-balance, an imbalance that was caused by the central planning itself, then we may never recover, certainly not to the level we were before. If we continue that mandate route then we will certainly re-balance but to a new paradigm of that central planning, within those limits, and it won't be as good as it was before.
So my suggestion is, "Don't just do something, sit there." Please.
There’s No ‘Supply-Chain Shortage,’ Or Inflation. There’s Just Central Planning - John Tammy
Of Pencils and Miracles - Jeff Jacoby
So my suggestion is, "Don't just do something, sit there." Please.
There’s No ‘Supply-Chain Shortage,’ Or Inflation. There’s Just Central Planning - John Tammy
Of Pencils and Miracles - Jeff Jacoby
"I, Pencil" -- Leonard Read
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