I am thankful for the Invisible Hand

Thank God there is no turkey czar… yet.

The reason your Thanksgiving turkey was waiting for you without an advance order? Because of the economic concepts of “spontaneous order,” “self-interest,” and the “invisible hand” of the free market. Turkeys appeared in your local grocery stores primarily because of the “selfishness” and “self-interest” (maybe even greed in some cases) of thousands of turkey farmers, truckers, and supermarket owners who are complete strangers to you and your family. But all of those strangers throughout the turkey supply chain co-operated on your behalf and were led by an “invisible hand” to make sure your family had a turkey on the table to celebrate Thanksgiving this year. The “invisible hand” that was responsible for your holiday turkey is just one of millions of everyday examples of the “miracle of the marketplace” where “individually selfish decisions must lead to a collectively efficient outcome,” as economist Steven E. Landsburg observed.

People individually have the ability to decide how a good or service should be distributed based on their willingness to give money for it and their willingness to accept money for it. A billion daily decisions made by hundreds of millions of people makes this possible.

Around the globe, central planners believe they can calculate aggregate demand and price elasticity of everything more effectively than everyone. They are wrong. This is called the economic calculation problem: A problem so complex it can only be solved by a invisible hand guided by billions of decisions made by hundreds of millions of people every single day.

Almost 100 years ago Ludwig von Mises argued that the market and price mechanism is the only possible solution to allocating resources to produce goods and services. Without the information provided by market prices, socialism lacks a method to rationally allocate resources. The result of socialist central planning is, always and everywhere, stupid surpluses and painful shortages. Planned economies always fail.

Yet, somewhere, deep in the dark bowels of the Leviathan, there is almost certainly an Obama Administration appointee is planning to make turkey distribution more fair and more efficient via regulation, taxation, controls, inspections and mandates. The result will be, as sure as the sun rises tomorrow, a painful turkey shortage. Sadly, he doesn’t care. He believes he is smarter than hundreds of millions of people making billions of decisions regarding their own wants and needs.

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