Spontaneous Order

Why the "best and brightest" cannot plan the economy

You are our Ruler. An entrepreneur tells you he wants to create something he calls a "skating rink." Young and old will strap blades to their feet and speed through an oval arena, weaving patterns as moods strike them.

You'd probably say, "We need regulation—skating stoplights, speed limits, turn signals—and a rink director to police the skaters. You can't expect skaters to navigate the rink on their own."

And yet they do. They spontaneously create their own order.

At last month's State of the Union, President Obama said America needs more passenger trains. How does he know? For years, politicians promised that more of us will want to commute by train, but it doesn't happen. People like their cars. Some subsidized trains cost so much per commuter that it would be cheaper to buy them taxi rides.

The grand schemes of the politicians fail and fail again.

By contrast, the private sector, despite harassment from government, gives us better stuff for less money—without central planning. It's called a spontaneous order.

Lawrence Reed, of the Foundation for Economic Education, explains it this way:

"Spontaneous order is what happens when you leave people alone—when entrepreneurs ... see the desires of people ... and then provide for them.

"They respond to market signals, to prices. Prices tell them what's needed and how urgently and where. And it's infinitely better and more productive than relying on a handful of elites in some distant bureaucracy."

This idea is not intuitive. Good things will happen if we leave people alone? Some of us are stupid—Obama and his advisers are smart. It's intuitive to think they should make decisions for the wider group.

"No," Reed responded. "In a market society, the bits of information that are needed to make things work—to result in the production of things that people want—are interspersed throughout the economy. What brings them together are forces of supply and demand, of changing prices."

Prices are information.

The personal-computer revolution is a great example of spontaneous order.

"No politician, no bureaucrat, no central planner, no academic sat behind a desk before that happened, before Silicon Valley emerged and planned it," Reed added. "It happened because of private entrepreneurs responding to market opportunities. And one of the great virtues of that is if they don't get it right, they lose their shirts. The market sends a signal to do something else. When politicians get it wrong, you and I pay the price.

"We have this engrained habit of thinking that if somebody plans it, if somebody lays down the law and writes the rules, order will follow," he continued. "And the absence of those things will somehow lead to chaos. But what you often get when you try to enforce mandates and restrictions from a distant bureaucracy is planned chaos, as the great economist Ludwig on Mises once said. We have to rely more upon what emerges spontaneously because it represents individuals' personal tastes and choices, not those of distant politicians."

Another way to understand spontaneous order is to think about the simple pencil. Leonard Read, who established the Foundation for Economic Education, wrote an essay titled, "I, Pencil," which began, "(N)o single person on the face of this earth knows how to make (a pencil)."

That sounds absurd—but think about it. No one person can make a pencil. Vast numbers of people participate in making the materials that become a pencil: the wood, the brass, the graphite, the rubber for the eraser, the paint, and so on. Then go back another step, to the people who make the saws and machinery that are used to make the materials that go into a pencil. And before that, people mine iron to make the steel that makes the machines that make the materials that go into a pencil. It's all without central direction, without these people even knowing they are all working ultimately to make pencils. Thousands of people mining, melting, cutting, assembling, packing, selling, shipping—and yet you can buy pencils for a few pennies each.

That's spontaneous order, and it's replicated with every product we buy, no matter how complex.

The mind boggles.

John Stossel is host of Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at www.johnstossel.com.

COPYRIGHT 2011 BY JFS PRODUCTIONS, INC.
DISTRIBUTED BY CREATORS.COM

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  • Les Moore||

    Thousands of people mining, melting, cutting, assembling, packing, selling, shipping—and yet you can buy pencils for a few pennies each.

    Obviously we need a Pencil Czar.

  • anarch||

    You can lead a horse to water, but a pencil must be led.

  • TheCheeseStandsAlone||

    Pure bullshit...

    Spontaneous order will provide
    "better stuff for less money—without central planning"....???

    The crash of financial markets in September 2008 reflects nothing that comes close to "spontaneous order"....

  • ||

    are you quoting I, Pencil?

  • Khan Noonian Singh||

    We offered the world ORDER!

  • ||

    Khaaan! Khaaan!

  • Sovereign Immunity||

    I'm laughing at your superior intellect.

  • ||

    I give you...sixty seconds.

  • ||

    It has been said that social occasions are only warfare concealed. Some would prefer it to be more honest, more. . .open.

  • Sovereign Immunity||

    You task me.

  • ||

    They think me mad--Starbuck does; but I'm demoniac, I am madness maddened! That wild madness that's only calm to comprehend itself!

  • ||

    This grows tiresome. You must now ask to stay.

  • ||

    I should warn you, such men dare take what they want.

  • Imp of the Perverse||

    NERDS!!!

  • ||

    Well, I was quoting Moby-Dick. That one time, anyway.

  • Nilz Baris||

    Kirk, this station is swarming with Klingons.

  • Dello||

    That's when they called the Enterprise a garbage scow...

  • The Truth||

    Uh, the #2 economy in the world, and the one that will inevitably be #1 in 2019, centrally commands many parts of its economy.

  • Les Moore||

    But can they make a decent #2 pencil?

  • The Truth||

    They most certainly made the keyboard you're typing on, and the clothes you're wearing.

  • Les Moore||

    Keyboard -- Malaysia. Clothes -- El Salvador. Guess again.

  • Peepin' Tom||

    keyboard to sticky to see make; Les naked ;-)

  • robc||

    Keyboard - china
    shirt - india

  • Predicador||

    Keyboard – China
    Shirt – Korea (South :)

  • Doktor Kapitalism||

    Keyboard--China
    Shirt--El Salvador

    Won't finance those statists next time.

  • emperor wears no clothes||

    keyboard: china
    shirt: n/a. I'm expecting COPS at my door any minute.

  • Doktor Kapitalism||

    Today:

    Keyboard--see above
    Shirt--India

  • Night Elf Mohawk||

    Who says I'm wearing clothes?

  • peepin' Tom||

    keyboard even stickier than LMs; wearing woman's clothes. Hot!

  • Mensan||

    Keyboard - Canada (Canada? Really? I didn't expect that)
    Shirt - Honduras

  • Devil Inchoate||

    Nice how you got everyone to take off their shirts.

  • Doktor Kapitalism||

    I just turned mine around while in it. Sorry...but on second thought not.

  • Rather||

    I was wondering about the color of their underwear ;-)

  • Dello||

    Keyboard--Viet Nam

    Shirt--Canada

  • Baltasar Gracian||

    Perhaps if the United States didn't shackle its private sector, those items wouldn't have to be made elsewhere.

  • Montani Semper Liberi||

    I would say yes. They seem to be experts at making lead filled products.

  • Charles 3E||

    nice

  • Mensan||

    Partial fail: pencils are filled with graphite.

  • Doktor Kapitalism||

    Just going to point this out for the spectators: lead is found in products other than pencils.

  • Zeb||

    No. Their pencils suck. I have noted a marked decline in the quality of wooden pencils over the past 10 years or so. Take that, command economy!

  • T||

    Japanes mechanical pencils still rock. Pentel P205 4eva!

  • Ska||

    I prefer the .9 lead for the P209.

    Yes, mechanical pencil dorks!

  • CrackertyAssCracker||

    P207 right on my desk.

    But all three of them mother fuckers kinda make me happy way out of proportion to their actual utility.

  • CrackertyAssCracker||

    You ever work at a place that gets the cheap ass mechanical pencils, then you finally get your hand on the real deal again? It's frikkin heaven on earth.

  • Doktor Kapitalism||

    Recall, Japan is free market.

  • ||

    First, nothing is inevitable. Second, the fact that they centrally command parts of the economy doesn't prove it's a good idea.

  • The Truth||

    It has given a better economy performance than our "Free market" economy for the last 20 years.

  • TheOtherSomeGuy||

    No it hasn't.

    Slave labor has, but not the central planning.

    Chinese workers toil long hours in shops that would never meet OSHA checks for the payment of like two bowls of rice per day. If American workers competed with them for jobs by working longer for much, much less, all of those Chinese-made products would have "Made in America" stamped on them.

    It's the same scenario seen with the illegal immigration setup we have here in the US.

  • The Truth||

    You're living in the past. They're leaving sweatshop labor behind and moving into high-value products.

    It's not just low cost of labor. Africa would be even cheaper, but we don't have our laptops made there--why?

  • The Truth||

    Because yellow people are smarter than black people, that's why!

  • waffles||

    the truth is racist

  • Hey, Truther||

    Are you also an anti-vaxxer?

  • botoxporcupine||

    China's economy is rapidly growing because a.) it is experiencing an industrial revolution with many times the number of individuals than other countries (the same can be said for India) and b.) it manipulates the value of its currency, instead of letting it float with the market.

    Free markets = prosperity. Check out any data on the increase in worldwide wealth since the dawn of liberalism.

  • Doktor Kapitalism||

    Seeing as liberalism (classic definition) came along with the industrial revolution, and didn't exist in Nazi Germany, Soviet Russia, and most third world countries, I'd call that a good correlation.

  • Anonymous Coward||

    It's not just low cost of labor. Africa would be even cheaper, but we don't have our laptops made there--why?

    It's more efficient to deal with one central slaver than several dozen tribal slavers who may or may not be at war with one or more of the others based on who stole whose sacred goat 300 years ago.

  • ||

    This.

  • ||

    They're leaving sweatshop labor behind and moving into high-value products.

    Uh huh. Such as what? Was the iPhone 4 designed in China? Why no, it was designed in Silicon Valley. (Sure, it might be made in China, but the guy who puts Tab A in Slot B on an assembly line is a lot less "high value" labor than the guy who designed it all on a CAD workstation.)

    Well let's see then. Did the latest breakthrough in stem-cell research, or cancer meds, happen in China? Er, no, looks like that takes place here, too.

    Light jets? Nope. Nanotech? Negative! Machine vision algorithms, genetically-engineered crops and bacteria, DNA sequencing machines, Amazon.com, Google, SpaceX, Intel? Neener neener.

    But, hey, the Chinese will probably really give us a run for the money in, say, locomotives, cement, steel, cars, memory chips, PHP scripting, and oh I dunno, maybe buggy whips.

  • Hey, Truther||

    The Chinese are world leaders in mass death and forced labor.

  • Chad||

    But where were the Iphone's parts designed? All over the place, but mostly SE Asia. The processor is a Samsung device, I believe.

    Btw, China has caught up to the US in some scientific fields, especially those concerned with materials science. Most of the rest are just a matter of time, as we outsource our R&D to where the manufacturing is, while they grow their own.

  • Doktor Kapitalism||

    SE Asia = South Korea and Japan = mostly free economies.

  • sarcasmic||

    We have a "free market" economy?

    Last I checked the barriers to doing business were legion, and the reason we've got such a high unemployment rate is because our markets are quite "un-free".

  • Doktor Kapitalism||

    We're better than a lot of other places. See Africa, Latin America, Asia, and a good chunk of Europe. The Middle East is included in Africa and Asia.

  • IceTrey||

    They also manipulate their currency to make their products artificially cheap.

  • Gus||

    EVERY THREAD IS NOT ABOUT CHINA. SHUT THE FUCK UP.

  • Doktor Kapitalism||

    We don't care. We have free speech, unlike the Chinese.

  • ||

    China's economy didn't improve until they liberalized their economy.

    China started from a very poor state, so their economy has grown more rapidly, since they have farther to catch up.

    The US doesn't have a much wealthier nation to sell lots of products to. We can only grow by increasing productivity and creating new products. We can't compete by making cheaper copies of soemthing that already exists, because the production costs are higher here.

  • Doktor Kapitalism||

    Exactly: they're piggybacking on our success. And unfortunately making a profit on it under the roof of Communism.

  • Death||

    Hmmm. Nothing you say?

  • Taxes||

    Hah. Nothing indeed.

  • The Lie||

    Uh, the #2 economy is losing ground fast. And uh, how do you know what will happen in 2019?

  • The Truth||

    The Economist has predicted it, using a very good model.

    You can play around with the model on their website, though. Even using overly optimistic stats for the US and pessimistic ones for China they suprpass us sometime in the 2020s.

  • The Truth||

  • Gus||

    EVERY THREAD IS NOT ABOUT CHINA. SHUT THE FUCK UP.

  • Doktor Kapitalism||

    Calm down Gus. Say something productive or be quiet.

  • Bradley||

    No, The Truth deserves it. He really does need to stop shitting up every thread with this China 2020 stuff.

  • Doktor Kapitalism||

    Which The Truth are we talking about, and we don't have to respond to him.

  • ||

    If I had kept growing at the same rate I did when I was fourteen, I'd be twenty feet tall by now!

  • WTF||

    You mean you're not? But that's unpossible - the models predicted it!

  • Sovereign Immunity||

    You mean the same models that predicted that terra firma would be a world wide Sahara by now? Or the ones that said we would be Hoth?

    You must have quite the hockey stick, Mr. Libertate! (flirt flirt)

  • ||

    Not to mention that when your income is about 1700 dollars a year, I hope it is growing fast....very, very fast

    http://www.china-embassy.org/eng/xw/t268200.htm

  • Random Dude||

    Dude, I think you're forgetting something.

    China has been ravaged by central-planning, which is why their per-capita GDP is 1/10 of the U.S.

    It is only now that they are de-centralizing that they are reaping the gains of their large capital stores.

    Also, the world moved on significantly in regards to technology since China's failed experiment with communism, so it's not surprising that they would be able to skip entire generations of old technology--thus bridging the gap much more quickly.

    A second point. Capitalism requires capital. Duh. So while America has a nominally higher rate of free-market activity, our paltry 5% savings rate is nothing compared to the 45% savings rate of the Chinese. If the United States had free-market interest rates that allowed capital and savings to skyrocket (which they need to), we would go through a period of significant difficulty followed by very strong growth from the result of our investments on that capital.

  • Random Dude||

    I'll respond to my own point.

    The capital shortage in the U.S. is also a failure of central planning through Federal Reserve policy.

    By an arrogant attempt to determine what the interest rate should be (as if there should even be a baseline monolith rate....) they persistently keep rates below market and penalize savers at the expense of consumers. This has led to a politically led, unsustainable, and enormous capital shortage; the inevitable failures of this system will visit the U.S. beginning in this year and will last for a long time to come.

    So, basically, the U.S. has centralized financial fascism too and, in many ways, ours is even more pronounced than the Chinese.

  • ||

    That's a good point. As long as the God-damned socialist Keynesians are in charge, bleating about the necessity for "stimulating" consumer demand growth with cheap -- indeed, nearly worthless -- money, only fools and survivalists will save what sensible people would save in a sensible system.

    Up the Austrians! Abas le Fed! Boo!

  • Doktor Kapitalism||

    Thanks for pointing that out. The reason the starving children are in Africa, not China, is because they're basically looking the other way when people engage in profit-seeking business. Why? Because they realize that slave labor doesn't work, and neither does following the rules laid down by one of the biggest murderers in history (Mao).

  • WTF||

    ...the one that will inevitably be #1 in 2019,
    Because everything including all economic trends will stay exactly the same for the next 8 years. Okay, you've convinced me.

  • The Truth||

    They slow Chinese growth considerably and increase US growth, and its still 2019, moron.

    Again, look at the model. Adjust it almost any plausable way you want, China passes us in the 2020s.

    Just admit it, they've made complete nonsense of your free market cult.

  • WTF||

    Because you seem to think that models actually reflect the unknowable future, you authoritarian shitwad.

  • Ragin Cajun||

    Resistance is futile! China wins the future!

  • ||

    YELLOW PERIL!!!

  • WTF||

    And it doesn't seem to register with you that America's economy has slowed as we also drop in rank on economic freedom, moron.

  • Helpful helper||

    How about per capita? They have a population more than four times as large as the US. In order to come close to the US on a per capita basis they would need an economy significantly larger than ours. Can't be compared by total GDP.

  • T||

    That argument has been brought up before, and he dismisses it because it's not truthy enough or something.

  • waffles||

    dude, not helpful.

  • Helpful helper||

    Hmm...
    1.5 billion making $10,000 each is technically bigger than 310 million making $45,000 each.

  • Gus||

    EVERY THREAD IS NOT ABOUT CHINA. SHUT THE FUCK UP.

  • Doktor Kapitalism||

    Again, calm down. If you don't like it, you can leave, you know. This isn't China before they allowed emigration.

  • 35N4P2BYY||

    This is mentioned up thread but you need to ask yourself what policies put in place lead to this growth?

    Oh that's right, it was making their market MORE free that led to economic grouwth.

    So tell me again how China proves the superiority of central planning?

  • Doktor Kapitalism||

    Very much so true. Back when they were centrally planned, the starving kids were in China, not Africa. Not to mention the kids being eaten by their parents due to Mao's faminies.

    http://reason.tv/video/show/killer-chic

  • Bill||

    China can definitely pass us in total GDP since they have 4 times as many people as we do. At that point, there per capita GDP will still be 25% of ours.

    That will not mean their people on average are richer than ours, just that the country of China will be.

    As far as it happening, who knows. And as far as it being 2019 or 2050??

  • Jeff||

    Just wait until this great centrally planned economy has to react and shift itself to changing consumer demand, large-scale style. They'll still be producing pencils when people are asking for diamonds and laser etchers.

    Unless you want to centrally plan demand through force, and no governments use force, right?

  • The Truth||

    Of course all governments use force, western ones just hypocritically pretend they don't.

  • WTF||

    Pauli Krugnuts? Is that you?

  • Helpful helper||

    So are you saying that use of force in this context is then therefore a good thing? Use of force results in better decisions and better outcomes? Keep watching China as their population starts to demand a higher standard of living and see if central planning can continue to be viable.

  • The Truth||

    Yes, yes I am. Force can often be a good thing for society at large.

  • Helpful helper||

    So you would rather engage in a transaction with a neighborhood loan shark that will physically assualt you if you don't repay than a than bank, for instance or any other example along those lines? We are all better off as traders of value than we could possibly be as weilders of force versus victims.

  • The Truth||

    Gee, what happens if you don't pay the bank, eventually, for say, your mortgage?

    The sheriff comes to your door and throws your ass out on the street. If you refuse, you can be arrested.

    EVERYTHING is backed by force in the ehdm.

  • The Truth||


    The Truth|2.10.11 @ 1:13PM|#

    Gee, what happens if you don't pay the bank, eventually, for say, your mortgage?

    The sheriff comes to your door and throws your ass out on the street. If you refuse, you can be arrested.

    EVERYTHING is backed by force in the ehdm.
    reply to this

    I may be The Truth, but apparently I know next to nothing about bondsmen!

  • Gus||

    EVERY THREAD IS NOT ABOUT CHINA. SHUT THE FUCK UP.

  • Doktor Kapitalism||

    For probably the fifth time, calm down!!!! If you need a place to relax, here's the website for you:

    http://www.thecoolhunter.net/t.....D---China/

  • Helpful helper||

    So in your mind those two things are morally equivalent? Because with the bank you do have legal recourse. The bank does have to follow the legal terms of the contract that you signed, whereas the shark can change terms at his whim and still break your kneecaps.

  • ||

    Society at large - jeeze, what is that exactly?

  • Doktor Kapitalism||

    I don't *care* how much "good" society gets for your use of force, I still won't allow it. And I will respond to you in the media you have chosen: violence.

    Ayn Rand totally trashes that idea in "Atlas Shrugged." Get over it.

  • Jen||

    And why has China's economy been making these great strides? Because it's been moving away from Central Planning and toward a market economy. Thanks for playing.

  • The Truth||

    Nope, try again. They control much more of their economy than our govt does in ours, yet they've been growing 10% a year during the recession while we've been stuck with 10% unemployment and declining wages.

    Try again.

  • Jen||

    Way to not respond at all to what I just said. Are you by any chance in high school? You argue like you're in high school. I compared China of today with China of two decades ago, and you respond by comparing China of today with the U.S. of today? Try again yourself, you mental midget.

  • The Truth||

    Mao did the necessary ground work in central planning the Chinese economy. Now they reap a bounty from the seeds he sowed.

  • WTF||

    The Truth|2.10.11 @ 1:06PM|#
    Mao did the necessary ground work in central planning the Chinese economy. Now they reap a bounty from the seeds he sowed.

    Like the 45 million of his own people he killed? You really are disgusting.

  • Brian R||

    Mao laid the groundwork by destroying the groundwork. You do remember that he presided over one of the greatest famines in history? The "Great Leap Forward" that was really a giant collapse?

    When the starting point is dirt-poor and starving, it's very easy to achieve high growth rates. And they've achieved those by... oh yeah, privatizing sections of their economy.

  • The Truth||

    Say what you want about Mao, but at least he wasn't a market fundie. A pragmatist if there ever was one.

  • Doktor Kapitalism||

    Pragmatism = mass murderer? That was easy.

  • Hey, Truther||

    Mao was really good at being a goose-stepping ultra-nationalist.

  • ||

    Are the 30 million or so murdered and starved to death the fertilizer for your analogy?

  • waffles||

    So how many Americans do we need to kill to be as great as China? This game is fun!

  • The Truth||

    You morons need to be able to tell the difference between a spoof and a real poster.

    China doesn't follow Mao anymore, not even in rhetoric. He's seen as a great general not as an economic genius. They follow Deng Xiaopeng.

  • The Truth||

    Don't listen to the equivocator who is only trying to confuse you. Central planning is the answer. Deng, Schming!

  • Hey, Truth||

    We'll know you're real when you admit to being an anti-vaxxer.

  • WTF||

    The Truth|2.10.11 @ 1:23PM|#
    You morons need to be able to tell the difference between a spoof and a real poster.

    Well, when both are equally idotic, it's kind of difficult.

  • The Truth||

    He is an equivocator now stricken from The Path of Truth! Deng, he praises? The One who did not smite the kulaks when they chose markets over collectivism? Heretic equivocator!

  • Doktor Kapitalism||

    EXACTLY!!! They're not controlling nearly as much of their economy.

  • The Truth||

    Only about 13 million or so to plant the seeds of America's own glorious Great Leap Forward. The population rduction would also alleviate some of our carbon footprint and consumerism.

  • Doktor Kapitalism||

    Okay, now I know you just hate human beings on principle.

    Let's go Galt on you, and see how you like your people's globe while the rest of us live comfortably in space.

  • Anonymous Coward||

    Mao did the necessary ground work in central planning the Chinese economy. Now they reap a bounty from the seeds he sowed.

    Tell us about the backyard furnaces and all of that high-quality steel they produced.

  • The Truth||

    The hell with all of you. What is the point of having a handle if anyone can use and abuse it?

  • Ragin Cajun||

    If only the use of handles was centrally planned...

  • The Truth||

    It's just that spoofer again, you moron. He keeps trying to make me look bad because he can't handle the truth of my argument. Way to go, spoofer. Grow up. Get a life.

  • The Truth||

    No, THAT's the fucking spoofer, trying to make ME look bad, saying idiotic things.

  • The Truth||

    The truth is The Truth, you didn't have a fucking chance from the moment you started down that road. I love to troll trolls to the point I'm even more annoying than the troll, and when you claimed the title The Truth, you gave me the perfect storm to screw with you because there is no fucking way the ban hammer is coming down to save some shit claiming to be The Truth.

  • 29InNet||

    Where's Spock when you need him?

  • Carl Williams ||

    Who keeps stealing my nickna -- oh shit, is that Tyson?

    *ducks, covers, drops to ground*

    http://video.google.com/videop.....762500183#

  • ||

    Are you The Situation's poor, less intelligent cousin with the massively deviated septum?

  • Surly Chef||

    It allows for Spontaneous Order to shape a system wherein posters with poor logical reasoning who advocate authoritarianism, statism, genocide, and a host of of despicable view points are openly shunned for failing to respect the fundamental rights and liberties of all mankind.

  • ||

    ---"What is the point of having a handle if anyone can use and abuse it?"---

    Don't post anonymously, then we can check to see if it is the "truth" or the "spoof" and respond accordingly.

  • Richter||

    He's got a hologram!!!!!!

  • Gus||

    EVERY THREAD IS NOT ABOUT CHINA. SHUT THE FUCK UP.

  • The Truth||

    Just a tip. Stay away from DC social events, from cocktail parties to PTA meetings and every gathering in between, if you feel that way. They'll drive you crazy. I guarantee the first time a parent shows off his kid's Mandarin ('the language of the future' he will also tell you) speaking skills, you will go want go downtown to purchase a flamethrower and take it to the streets.

  • The Truth||

    CHINA RULZ!!!

  • ||

    Growth isn't the issue. Absolute standards of living should be. China is growing rapidly because as it opened it's markets up, it had a lot of distance to catch up, and can makem oney selling a lot of stuff to much wealthier countries (i.e. us). It's still a long way behind us. A better comparison would be to see what happens when wages start to approach US levels.

  • ||

    they've been growing 10% a year during the recession while we've been stuck with 10% unemployment and declining wages.

    Perhaps in the last year or so, yes, although the figures from China are almost certainly lies. (Communists lie about the outcomes of their Five Year Plans?! Who knew?!)

    But perhaps you want to compare over, say, the last three centuries? When the United States was scruffy aborigines and starving religious crazies eating their own leather pants over the winter, the Chinese were a large wealthy civilization. What happened? Well, after the follies of a centrally-planned imperial system, they got those of a centrally-planned Communist system. One Emperor and corrupt court followed by another. Whee!

    Having thus destroyed several centuries of progress, as well as tens of millions of Chinese peasant lives, some nonsuicidal Party apparatchik (Deng is usually credited) invented Costume Communism(TM) -- where you keep all the political monolithism and nondemocracy, but act like the Wild West of capitalistic free marketeerism as far as small-scale entrepreneurism goes. It's probably easier to start a small business in China than the US, and with far less in the way of onerous government gratuitous buggery regulation.

    So they've made leaps and bounds in the last 20 years. Kind of how when someone nearly starves to death, but then gets to eat normally again, he gains strength way faster than any mere healthy chap who visits the gym daily.

    But why you think this means the starving guy regaining his strength is going to keep going -- grow to be 11 feet tall and able to leap tall buildings with single bound, I do not know. Americans got soft after they got rich, I don't see any reason why that won't happen to the Chinese, too. They're made of the same DNA, you know.

    Couple that with their demographic time bombs -- a monstrous excess of unmarriageable young males, and a coming hideously low ratio of workers to retirees -- and I suspect the Chinese will take over in just about the same way as the Japanese took over in the 1990s.

    Er...you did get the memo, right? In the 1980s, when the Japanese were buying Viacom and portions of Rockefeller Square? Japan, Inc., was going to bury the US before 2000? Funny how that turned out.

  • DanD||

    China is not #2 in productivity per capita. There are many more economies with a higher efficiency than China.

    China has a large economy primarily because of the size of its populace. And it's a populace that's far more pissed-off and prone to revolution than many in the American media realize. Most of these problems stem from its history of central planning leading to famine, ruin, and outright murder of its citizens.

    China has been transitioning to a freer, more enterprise-driven society for well over a decade now, and there has been concomitant prosperity. But to the extent that this threatens China's entrenched political elite, tension in the urban centers has also been building. China's future largely depends on whether this tension boils over, or whether those in power peacefully "disappear."

  • Correct DanD||

    "far more pissed-off and prone to revolution" They have not forgotten what Mao and his successors did.

  • Charles 3E||

    you cats are getting trolled. also not everything has to be about China, which will not be more than an influential regional power in our lifetimes.

  • Fidel Castro ||

    Cuba will soon outstrip the Yanquis in all that matters.

  • Fidel Castro ||

    The doctors here in Madrid are fabulous.

  • ||

    Uh, let's divide GDP by number of people, and then we can talk.
    1.3 billion people are bound to make more in aggregate than 300 million, that doesn't make them rich. Unfortunately, it does mean more power for a few corrupt men.

    Why do people think size of economy alone means anything about prosperity?

  • ||

    Uh, let's divide GDP by number of people, and then we can talk.
    1.3 billion people are bound to make more in aggregate than 300 million, that doesn't make them rich. Unfortunately, it does mean more power for a few corrupt men.

    Why do people think size of economy alone means anything about prosperity?

  • oh brother||

    holy shit people are still arguing in favor of communism?

    yeah china centrally plans the parts of the economy that suck. Zero poverty woohoo. of course the poverty level there is defined as $1/day income.

  • Brian||

    China ranked 93rd in GDP per capita in 2010 according to the IMF, while the USA ranked 6th. Anyone can make a lot of cheap, basic stuff with hundreds of millions of people working for peanuts. The real measure of a successful economy is how efficient and productive it is. China produces a level of output per person that is lower than those of 92 other countries. So this "#2 economy in the world" business is meaningless, especially as some sort of defense of central planning: China only started to gain ground in economic growth when it began to liberalize (and de-centralize) sectors of the economy!

  • Ragin Cajun||

    Dammit, that's what we need! Think about how better off we will be!

  • Ragin Cajun||

    (If only we were as smart as those Chinese!)

  • Sovereign Immunity||

    Gee, all that to-do just for pencils? Imagine all work that goes into pens...

  • Willy Makit||

    ... or porn.

  • WTF||

    Can the ChiComs make better porn? I thought not. USA! USA! USA!

  • SIV||

    OT: I just heard on the radio that With Senator John Kyl (R-AZ) retiring the frontrunner to replace him is Sheriff Joe Arpaio.

  • ||

    Be careful with those chinese (YELLOW PERIL) pencils.
    http://www.youtube.com/watch?v.....re=channel

  • TheOtherSomeGuy||

    Spontaneous Order is revealed by the very existence of government.

    Men came along before government, and without government's help, they organized and created the very society which gave birth to central planners.

    That egg certainly came before the chicken.

  • sarcasmic||

    Heretic!

    Nothing ever existed without government!

    Government gave birth to society, not the other way around!

    No significant invention in the history of mankind came about without a federally funded research grant!

    All of your rights come from government as well!

    Without government there would be nothing!

    Government is god!

  • Doktor Kapitalism||

    Wheel, fire, gunpowder, et cetera ad infinatum.

  • Name Nomad||

    He stole that pencil example directly from Milton Friedman, dammit. The weird thing is that I was just thinking about Free To Choose this morning.

  • creech||

    Not Leonard Read's "I, Pencil?"

  • Name Nomad||

    Friedman stole (borrowed) it off Read. You, sir, are correct.

  • ||

    hmm, I would love to take a train to work.

    More seriously, just because it's not a good idea to try to control a whole economy doesn't mean that it's never a good idea to provide any guidance.

  • ||

    Can you explain what you mean by "guidance" ? I suspect you mean direct or control parts of the economy. If THATS what you mean, then no, that's never a good idea.

  • Spain||

    If only The Truth was around a few centuries back, we would have never declined. Damn you to Hell, Adam Smith!

  • Japan||

    Ditto. If The Truth had been around just two decades ago, mercantilism surely would not have proven to be self defeating for us. Damn you to Hell, F. A. Hayek. Long live Krugman! Long live Krugman!

  • Japan||

    Gee, maybe if we hadn't foolishly signed the Plaza Accords?

  • The Truth||

    Let's keep fucking our consumers. That's the ticket to prosperity! Doesn't matter that their standard of living is less than that of east Asian nations with half our GDP. What's important is we got to keep those GDP numbers up! Up! Up!

  • teh gays||

    whose fucking who here?

  • The Truth||

    *slurp* I'll reply as soon as I pull my tongue out of Hu Jintao's ass.

  • USA in 1900||

    You know, we were pretty fucking mercantilist.

  • The Truth||

    A lie long disproved! Clayite policies were a disaster that a robust free market quickly turned around and corrected.

  • The Truth||

    A spoofer above inadvertantly made a good point--Americans want to be consumers, the Chinese want to be producers.

  • The Truth||

    You're the spoofer, I am The Truth!

  • The Truth||

    In fact, everyone, let us all be The Truth! Are we not ends or are we mere means? We are The Truth!

  • The Truth||

    We are but interchangeable cogs in a grand centrally-planned machine! Long live the State!

  • The Truth||

    I am The Truth! You are The Truth! We are all The Truth together!

    And on every other Tuesday at the local Applebe's, I do double duty as The Walrus!

  • ||

    I grok that.

  • ||

    I am The Truth.

  • The Truth||

    We are but the arms through which the mind of the state is made manifest. We know the future because we control the past. We are the one reality, the truth!

  • George V||

    Time to get a life young (wo)man.

  • ||

    Resistance is futile

  • Pravda||

    Always be skeptical of anyone advertising their message as "the truth."

    Believe me...I should know.

  • The Truth||

    I have been locked in a fierce ideological battle to claim The Truth as my own. My opponent has not posted for a while now. I am the winner. I have defeated The Truth. For now I am the Truth.

  • The Way||

    Watch out, mofo. Things are creeping up on you faster than your rear view mirror will acknowledge.

    Oh, it's on!

  • The Light||

    Knock it off, you guys.

  • Gus||

    EVERY THREAD IS NOT ABOUT CHINA. SHUT THE FUCK UP.

  • Doktor Kapitalism||

    Contribute. Or are you ashamed that a ten-year-old in China makes more money than you because you majored in Applied Choreography?

  • ||

    Americans have a lot of money.
    Chinese people will work for pennies because they are poor.

    Hence Americans can buy a lot of cheap stuff made by chinese people.

    Hence Americans are gonna be consumers and CHinese are going to be producers by the sheer fact that one population is much wealthier than the other.

  • Bangaladesi peasant||

    Just you wait!

  • ||

    Spontaneous order vs. Planned Perfection.

    Looks like the socialists and the creationists finally agree on something.

  • ||

    What a surprise; Yellow Peril Troll has been jacking off all over another thread.

    It's just inconceivable that individuals could co-ordinate complex activities without government guidance.

  • ||

    Because you seem to think that models actually reflect the unknowable future, you authoritarian shitwad.

    Nice.

  • ||

    just because it's not a good idea to try to control a whole economy doesn't mean that it's never a good idea to provide any guidance.

    And from here, it's just a hop, skip, and jump to a twenty thousand page tax code.

  • T||

    I'm fine with the guidance of "mind your own business and keep your hands to yourself". That seems to work pretty well.

  • Ragin Cajun||

    Unless you are on a date.

  • ||

    P.J.....always worth listening to.

  • ||

    So, was I the only one who was pretty sure he could make a functioning pencil?

  • RyanXXX||

    ^This "the truth" guy must be Donald Trump.

    He came on Piers Morgan's show last night and spewed endless idiocy, talking about how he loved free trade but that the first thing he'd do is put a 25% tax on Chinese products (apparently he thinks the Prez can just come up with arbitrary new taxes and sign them into law).

    He then went on about how China was "cheating" in the marketplace, and how they were blood enemies of America, blah blah blah. And how he'd put his Wall Street friends in charge of diplomacy with upcoming countries.

    I can just see him sitting down with Hu Jintao and saying "you're fired," and truly expecting something to change.

  • Realist||

    In the first place, the best and the brightest have never been in the government.

  • George V||

    Hence, the use of quotation marks.

  • Charles Ivie||

    True. A genuinely intelligent person would never aspire to political office, government provides jobs for the fool and the would be despot.

  • ||

    You can't handle The Truth!

  • DK||

    Obama KNOWS. You know, like GOD knows.

  • DK||

    What the fuck? Now my handle's being stolen.

  • ||

    just because it's not a good idea to try to control a whole economy doesn't mean that it's never a good idea to provide any guidance.

    People who claim a monopoly on the initiation of force can rarely restrain themselves from crossing the line from "guidance" to "control".

  • Derp||

    Aren't roads completely subsidized by government? Gasoline, heavily subsidized? The infrastructure of the automobile industry?

    I feel our current infrastructure is so completely fucked we don't have much choice as a player in the market. Cars are incredibly expensive--it's a capital cost, relatively speaking.

    It would be awesome to see how a truly free economy would handle transportation, given our current technologies.

  • RanDomino||

    Yes; if drivers had to shoulder the entire price of their cars, gas, and roads, they'd be screaming for trains. Yet, unsurprisingly, Stossel chooses to ignore this, because he is not a real theorist, but a corporate whore.

  • Hurr Durr||

    ROADZ!!!

  • ||

    You're unaware, perhaps, that roads are built with taxes on gasoline? Or that state gasoline taxes go straight into the general treasury, meaning the real cost of gasoline is less than what drivers pay at the pump?

  • Derp||

    I was unaware of this, thanks for explaining. I don't know much of the subject, those questions just came to mind. I need to sit down one night and research it more.

    In regards to your second comment: isn't gasoline subsidized at a federal level before reaching pumps in the state? How can it be gasoline is so cheap for us, as opposed to other industrialized countries?

    Again, I apologize--ignorant on the subject.

  • emperor wears no clothes||

    "How can it be gasoline is so cheap for us, as opposed to other industrialized countries?"

    Well, speaking for Canada, it's because at least two - and sometimes three - levels of government tax the sh!t out of it.

  • Derp||

    Also, Carl, do you feel that cars are the most efficient way to handle general transportation?

    I mean this question in more of a hypothetical sense; presuming you were not bound by our pre-existing transportation infrastructure.

  • Doktor Kapitalism||

    Trains are more efficient when it comes to fuel economy. Cars allow more freedom. Bikes are cheaper than either, but don't work so well in the rain.

    Just don't bring back horses.

  • The Truth||

    EVERY THREAD IS ABOUT CHINA, SO GUS, STFU

  • Doktor Kapitalism||

    I don't like you, either (whichever The Truth you may be).

  • ||

    A friend of mine once said: "Any newspaper whose name literally translates as 'The Truth', which was used as a propaganda organ, is destined to become a tabloid."

  • Fist of Etiquette||

    Boitano on Stossel? Now I've seen everything.

  • Fist of Etiquette||

    Reagan on Stossel? Gimme a break!

  • Fist of Etiquette||

    So is Stossel complaining that they're creating high speed rail or that they're not doing it fast enough?

  • Fist of Etiquette||

    The government doles out spontaneity in as judicious amounts as its boilerplate regulations allow.

  • Fist of Etiquette||

    Next Larry is going to claim that the Volt will have no market.

  • Fist of Etiquette||

    Exploding TVs in the USSR in the 80s? Maybe they were watching The A-Team.

  • Fist of Etiquette||

    Gorbachev just got totally pwned over some wall Reagan considered an eyesore apparently.

  • Fist of Etiquette||

    Quotewise, Reagan was the Churchill of the West.

  • Fist of Etiquette||

    Reagan's budget deficit was so great because it cost a huge amount to invent AIDS.

  • Fist of Etiquette||

    Eating spinach = increasing taxes.

  • Fist of Etiquette||

    Huh, a commercial aimed at kids. During Stossel. On Fox Business Channel.

    Ad dollars well spent.

  • Fist of Etiquette||

    Exactly what happened to Rosa Parks. Except it's a school bus, that she isn't on.

  • Fist of Etiquette||

    Hyperbole aside, I like Kevin.

  • Fist of Etiquette||

    Although, he's a fool to think congressional Democrats are going to join him on school choice.

  • Fist of Etiquette||

    Daniels!

  • Fist of Etiquette||

    Uh-oh, John just used the phrase "central planning" while discussing Obamacare. Acistray.

  • Fist of Etiquette||

    Human dignity? Daniels, you had me then you lost me.

  • Fist of Etiquette||

    Stoss just called Daniels a "nerdy Princeton technocrat".

  • Fist of Etiquette||

    A first class high speed train wreck.

  • Fist of Etiquette||

    Great. Now I'm hungry for steak.

  • Fist of Etiquette||

    Stossel laughs at Paul's "next week, entitlements" promise.

  • Fist of Etiquette||

    Banks now own a lot of houses of cards.

  • Fist of Etiquette||

    Russkies in space!

  • Fist of Etiquette||

    Crappy commie space junk.

  • Fist of Etiquette||

    You're out of order! This whole blog post is out of order!

    And I'm out.

  • Doktor Kapitalism||

    You're high again, aren't you. Please please please don't use drugs and comment of Reason. It's worse thank drunk dialing (though not drunk driving).

  • Chad||

    Why "spontaneous order" doesn't work:

    1: Externalities
    2: Imperfect information
    3: Monopolies, oligopolies, and monopsonies
    4: Agency
    5: Prisoners' dilemmas and free-riding

    etc, etc.

    Get over it. Even if you had your mythical "free market", it wouldn't work. In any case, this is irrelevant, because what really exists is a wildly imperfect market interacting with government cronies. The best we can do is optimize this system, not yammer about a libertopian dream which will never exist and wouldn't work if it did.

  • Haxus the Great||

    Libertarians want X, but the status quo is Y. Therefore X is impossible.

    QED, motherfuckers!

  • And that's why Mao was great?||

    Chadster, the blinders you are wearing are not fashionable, no matter what they told you in school.

  • Bill||

    And yet, many of your solutions introduce countless additional "externalities", and actually promote the formation of oligopolies.

    Imperfect information is an argument AGAINST planning twit.

  • Doktor Kapitalism||

    Could you statists be so kind as to give us some land to at least try? USA, for example? Maybe just Alaska? Limon provice of Costa Rica?

    We've tried just about everything else. Why don't we give free market capitalism as shot before we dismiss it?

  • Discount Mulberry bags||

    Thank you for taking the time to publish this information very useful!Mulberry handbags

  • ||

    Apparently Reed never heard of "I, AK-47," a surprisingly successful product of Soviet central planning.

    It also looks like states arise as a result of human action, but not necessarily because of human design - a feature of emergent social interaction which bodes ill for libertopian fantasies.

  • Doktor Kapitalism||

    You politics is not coherent enough even to me to respond to. Please expand.

    The Soviet Union may have succeeded in creating a good assault rifle. They did not succeed in getting bumper harvests to the people they allegedly were helping.

    Communism is just gussied up kleptocracy.

  • ||

    "The private sector, despite harassment from government, gives us better stuff for less money -- without central planning. It's called a spontaneous order."

    "They [intellectuals] prefer ideas, which give them jobs and income and which enhance their power and prestige...They look for ideas, which enhance the role of the state because the state is usually their main employer, sponsor or donator… Hence it is not surprising that the intellectuals are mostly interested in abstract, not directly implementable ideas... Hayek put it clearly: “the intellectual, by his whole disposition, is uninterested in technical details or practical difficulties.” He is interested in visions and utopias, and because “socialist thought owes its appeal largely to its visionary character” (and I would add lack of realism and utopian nature), the intellectual tends to become a socialist.…The free market system does not typically reward those who are, in their own eyes, the most meritorious. Because the intellectuals value themselves very highly, they disdain the marketplace. Markets value them differently than their own eyes and, in addition to it, markets function nicely without their supervision. As a result, the intellectuals are suspicious of free markets and prefer being publicly funded. That is another reason, why they are in favour of socialism…” President of the Czech Republic, Václav Klaus

    http://www.klaus.cz/klaus2/asp.....Yl3mgsTzI6

  • Doktor Kapitalism||

    Isn't that the same guy who said "The third way [between capitalism and socialism] is the quickest route to the third world." ?

  • Ekim||

    The free market needs free market determined price signals to work. Allowing the bank to centrally plan prices prevents the free market from working efficiently. Stop printing to regain the free market provided efficiency our country once had.

    Printing is the #1 reason that the rate of productivity improvement has been steadily declining. As currently practiced, printing is nothing more than redistribution from the majority to the financial sector. Printing directly lowers the standard of living of the majority now, and indirectly lowers the future standard of living by mis-allocating capital into unproductive activity.

  • Pencilvanian||

    1. Government is force


    2. Good ideas do not have to be forced on others


    3. Bad ideas should not be forced on others

    
4. Liberty – including the free market – is necessary for the difference between good ideas and bad ideas to be revealed

    You could pay $100,000 for an Econ education and never learn that.

    You get it here @no charge.☺

  • RayfromCT||

    Stossel almost got the whole analogy out, which explains spontaneous order (and the ever present invisible hand that was first penned in TWON.) Here is the best description of SO- which honestly should be renamed "rinkonomics/" This guy nails it. http://www.econlib.org/library.....order.html

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  • Charles Ivie||

    The notion that Spontaneous order is post rational is no more valid than saying quantum statistics is post rational because it replaced the "Clockwork Universe" view of cosmology. Spontaneous Order is best viewed as a new paradigm rather than an assault on rational thinking. It would appear that the natural laws describing the behavior of spontaneous order are similar to those describing any large aggregate collection of dynamic objects in thermo dynamics and quantum statistics. It would be interesting to consider the possibility that the mathematical formalism that can be applied to quantum physics may also apply to spontaneous order. Clearly the notion that a small sub group of individuals could alter this natural process in any positive way is doubtful.

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