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Making complex things complex

Attempts have been made to help people understand the economy.

The problem with writing ANYTHING about the economy (ironically, perhaps, considering what I am doing right now... LOL!!) is that it is an inherently complex thing that defies simple explanations.

Most metaphors will break down upon further exploration, so things should be taken for what they're worth. Most attempts to explain the economy are valiant efforts, but should not be understood as all-inclusive or completely expository. They should ALL be taken as a springboard into further study.

Enter this article from NPR this morning:

http://www.npr.org/blogs/money/2010/12/17/132115320/after-the-crisis-an-economist-reconsiders-cappuccino

Milton Friedman is a world-renowned economist and a big proponent of the free market. His explanation of the yellow pencil as being a good example of market forces at work is a textbook capitalist summation of the way the world should work. While not costing much, each pencil represents a special accumulation of effort - from the tree cut for the wood, to the graphite extracted for the writing substance, to the paint and all of its ingredients - it is actually a quite complex little instrument.

The idea goes on to explain that while I pay a nickel for the pencil (or whatever), a portion of that nickel goes to everyone who had a hand in making this pencil for me, from the tree-harvester to the marketing guy to the packaging/shipping guru... Everyone gets a cut.

The article brings out the idea of a cappuccino, which I admittedly do not know much about, but which is compared to the pencil in it's complexity of manufacture. It says that no one person could accumulate the resources necessary to make a cappuccino - you'd have to be a dairy farmer, a coffee-bean grower, a metallurgist, a chef, and a barista, etc, all wrapped in one. No one person could do it. Thus, the cappuccino becomes a symbol, not only of the capitalist free-market society, but of the globalization of the market we live in.

But the article points out (correctly) that the situation is complicated by other factors, not all of which are positive. What is the effect on the environment of my pencil/cappuccino? How are all of the required materials accumulated in one place at one time? Who decides how much each person gets for helping to make the finished product?

This last question is what communist theory is based on - that the modes of production should be controlled by those who are actually doing the production. The criticism of capitalism (which has never adequately been addressed in my mind, at least) is that the prices of items are artificially inflated to provide profit for people who do not participate actively in the production of the product. Capitalist dogma teaches us that those at the helm or those in command bear greater responsibility and take greater risks than those in the trenches. But why is this the case? Why is the responsibility and the risk not equally shared? If those who are doing the production also shared in the risk (which, in fact they do - just ask anyone who's been laid off from a factory floor what risk is, while the CEOs typically can weather such storms) and in the profit (I know this is done in some places, to great effect!) wouldn't they be more invested in the process? Wouldn't they have a more keen desire to improve efficiency and quality?

I don't agree with much (most) of what Marx, Engels, Lenin, Mao, etc. had to say about societal changes required to instigate a communist ideal. In fact, if they were actually to implement the things that they suggested, our civilization would cease to exist. We would become the Borg. And no one wants that... :-)

I have not addressed other aspects of the economy, including the subsidized use of cheap fossil fuels to transport everything, the effect of uber-cheap junk on our disposable society (we cannot slake our lust for THE NEW!), the commercialization of everything from shoes to news reports to sacred holidays, or (perhaps most damning of all) the reward that capitalism provides for the greedy and the lucky over the hard-working and innovative. I have also said nothing of the way that capitalism makes everything a commodity, from the products that are generated to the time it takes to make them to the very lives of people who work in the factories - everything is associated with a dollar value....

Thus, a pencil is not just a pencil.

And it may be mightier than a sword.

Pencil makers of the world, UNITE!

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