Saturday, 28 April 2012

ECONOMICS FOR REAL PEOPLE: Planning without central plans

And in other news…

… Monday evening will see the second meeting for this semester of the Auckland Uni Economics Group. Here’s their note advertising the show:

ECONOMIC HARMONIES, IV: Planning Without Central Plans

It’s said that the market can’t plan; that without a central planner no planning can get done.

But as Stalin’s Great Grain Famine demonstrated, central planning couldn’t even produce grain—a simple commodity complex neither in production nor distribution.

It’s a mystery to many people how the market feeds people—feeds them, clothes them, houses them, provides them with iPads, iPhones and the collected works of One Direction—but just because they can’t see the planning themselves doesn’t mean there’s none there.

The market has a plan. It’s called the Price System.

The Price System is the means whereby hundreds of million individual decision-makers can coordinate their plans without ever having met each other.

This is the “Visible Hand” of the market that is all but invisible to those who can see only central planning, and not the products of the millions of interactions that ‘are the products of human action but not of human design’ representing the ‘spontaneous order’ of the market.

So this Monday at the Auckland Uni Economics Group we discuss the Price System and Economic Coordination—offering:

  • a horse auction,
  • answers to many questions, including
         * price signals: what exactly do they communicate?
         * who exactly sets prices?
          * on costs of production (and how so few economists understand their import)
          * if price reflects value, then why are diamonds (which merely glitter nicely) more expensive than
             water (which is the very stuff of life!)?

All this and more, including five simple principles to  help you understand how the market almost automatically coordinates the economic activity of every person on the planet, and why the result is order rather than an “anarchy of production.”

Come along and be both entertained and educated!
Riko Stevens
UoA Economics Group 

PS: Note that due to popular demand all meetings are now being held on Monday evenings instead of Thursday evenings. We hope to see you there!

PPS: Many of you have been asking if you can bring friends along, especially friends who are not students—or not economics students. Our answer: of course!  The more the merrier.


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