Russ Roberts wrote and produced this 6-1/2 minute video. Once again, his creativity, risk-taking, and use of media are a triumph.
I believe that the challenge that economists face in promoting pro-market views is overcoming small-community intuition. If your mental model of society is that it is a family or a small community, then your intuition will not supply any benefits for markets. I think that in order to appreciate markets, you have to understand three things.
1. If a society were limited to a small, self-contained unit, such as a family or a village, it would necessarily have a primitive economy.
2. The coordination problems in a large-scale society cannot be solved the way that coordination problems can be solved in small-scale society. In small-scale society, direct observation of other people and intuition will get you a long way. That is not true in large-scale society.
3. Prices, competition, and creative destruction are an elegant solution to the economic coordination problem in large-scale society.
The poem emphasizes point (3). That is in some ways the most difficult point to explain. But I think you need to walk people through all three points, and even then they may still not be convinced.
I believe that the challenge that economists face in promoting pro-market views is overcoming small-community intuition.
I tend to agree with thought except the small-community intuition also increases solid family belief as well. (See Utah, Ross Douthat.) Frankly, does anybody really believe Republicans are Pro-Family right now? Look at Japan right now which literally is decreasing populations which will hinder any promotion of pro-market views.
A big problem for classical liberalism and libertarianism is that it takes a fairly high IQ to really understand the arguments in their favor. “Live and let live” is simple enough, but lots of people have a negative reaction to that statement: “I don’t care how you want to live,” “everyone should have to live like me,” “that’s an invitation to chaos,” etc.
Arguments for solving coordination problems via the price mechanism, and restraining government power by rule of law, separation of powers, constitutional republicanism, etc. are mostly correct IMO, but just too subtle and indirect for a lot of people to grasp. And they certainly go against all the “small community” intuitions with which evolution has endowed all of us to varying degrees. But also query what percentage of the populace determines their political beliefs by reference to logical arguments–I’d guess a very small percentage does that.
I continue to give this thought, in part because I deal with populations of many trillions (of bacteria) and their coordination/competition efforts.
Perhaps small community intuitions are actually very good and necessary; perhaps a kind of economics is the best way to organize tens of millions of people; a sensible guess is that somewhere in between, bureaucracy with central planning works best (hundreds to thousands) and markets are messy. Limits on the number of effective direct reports and depth of chains probably puts the upper bound on bureaucracy and overhead plus individuality place lower limits. Meanwhile, many people believe that limits to personal knowledge (~120) put an upper limit on effective small communities. In very large communities, probably markets become the only viable option, despite all sorts of challenges.
The questions of interpenetration, interfaces, and cross-cutting communities are the tests to this model and its applications…