Who's responsible for getting the appropriate number of chickens into NY food outlets?

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The paradox is that chaos creates order, while control can result in chaos. In an effort to control outcomes, free exchange is curtailed and the essential ordering signals of price and profit are lost—leading to misallocation of resources and outcomes that nobody likes.

John O’Leary and William D. Eggers 'Health Care, Chaos, and the Challenge of Chickens in Manhattan' E21.

World book day

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world-book-day

It's World Book Day, and I've been thinking about the books that I would recommend folk to read. Friedman's Free to Choose might be a good place to start, or maybe even Capitalism and Freedom. I don't know that there is much Hayek that is easily accessible to most people, but I suppose The Road to Serfdom, skipping the first few chapters, might suffice. Henry Hazlitt's Economics in One Lesson does what it says on the cover, and I have a soft spot for a forgotten short classic, Ernest Benn's Why Freedom Works. Frederick Bastiat's The Law has something going for it, as does Alexis de Tocqueville's Democracy in America. For light reading one might choose Ayn Rand's political novel The Fountainhead, rather more convincing than her Atlas Shrugged, though with the same cardboard characters and stilted, long speeches. In fact, if you want to get to the core of Ayn Rand, you can't do better than her short, pungent Playboy interview.

Equally, though, there are some books I would not recommend. Adam Smith's Wealth of Nations, for example, is a really tedious read today (a tenth of it, eighty pages or so, is a 'dirgression' on the price of silver, and there are equally rambling asides on nearly every subject under the sun. As the author of Adam Smith – A Primer, you don't need to ask what I would recommend instead.

And there are quite a number of books that should, simply, be burned. Before you accuse me of philistinism or even nazism, let me interject that even the great David Hume, one of the most enlightened and cultured people on the planet, came to the same conclusion. There would be many books that the world would be better without. After explaining the power of fact and reason to banish misconception and superstition, he wrote:

When we run over libraries, persuaded of these principles, what havoc must we make? If we take in our hand any volume; of divinity or school metaphysics, for instance; let us ask, Does it contain any abstract reasoning concerning quantity or number? No. Does it contain any experimental reasoning concerning matter of fact and existence? No. Commit it then to the flames: for it can contain nothing but sophistry and illusion.

What do they spend your money on?

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what-do-they-spend-your-money-on

Money Saving Expert has some good questions and answers here.

Ludwig von Mises – A Primer

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The Institute of Economic Affairs has just published my Ludwig von Mises – A Primer. Mises (1881-1973) was one of the most innovative social thinkers of the last century, and undisputed head of the Austrian School of Economics.

The key Austrian School idea is that you can understand economics only by tracing it back to the motives and actions of individuals. Textbook concepts like ‘aggregate demand’ or ‘the price level’ are mere statistics – there is no mechanical link between any of them. What drives economics is the values and choices of individuals. And that, explained Mises, is a science of its own.

From these ‘subjectivist’ insights, Mises also gave us fresh ideas on the nature and behaviour of that all-important economic phenomenon, money. It is no lifeless medium of exchange, he explained. It is something people value for its usefulness in making exchanges. The more they demand, the higher its price – what we call its purchasing power.

Governments interfere with this at their peril. Booms and busts arise precisely because banks and governments create too much money and credit, he explained. Cheap credit and plentiful cash encourages entrepreneurs to make investments that prove over-optimistic when the stimulus fades. Then there is a painful downturn as these malinvestments are written off, factories closed, plant scrapped, and workers fired.

Mises also exposed the socialist calculation problem. Under socialism, the means of production are collectively owned, so are never bought and sold, and never acquire prices. So we cannot know which of the millions of possible production processes is the cheapest, and resources are inevitably wasted. The market economy, by contrast, places producers under daily pressure to deliver the highest-valued outputs for the cheapest feasible mix of inputs.

Mises influenced an entire generation of free-market economists and liberal social thinkers. I hope my Primer will make his ideas accessible, in simple language, to many more people.

Find out more here.

Are we free?

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If the roads, the railways, the banks, the insurance offices, the great joint-stock companies, the universities, and the public charities, were all of them branches of the government; if, in addition, the municipal corporations and local boards, with all that now devolves on them, became departments of the central administration; if the employes of all these different enterprises were appointed and paid by the government, and looked to the government for every rise of life; not all the freedom of the press and popular constitution of the legislature would make this or any other country free otherwise than in name.

John Stuart Mill, "Objections to Government Interference," On Liberty

The real election debate

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Worstall at the weekend

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Saturday: On corporate capture

Sunday: And now it's the World Bank on financial transactions taxes

To vote or not to vote...

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One reason to consider chucking out the current incumbents.

H/T John Steepek, MoneyWeek blog.

Isn't it ironic?

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New virus

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Reports in that a new virus has been discovered that could be the most dangerous ever to hit Britain. Innocent users are being duped into marking a simple X in a box on a piece of paper, but this will result in catastrophic consequences. So if you receive anything marked 'Manifesto', bin it immediately...