LOONY TUNES no. 159
From China (9 August) on Ali Express HERE
“The dark space aluminum buckle / invisible hand clasping / drawer handle 96 pitch concealed handle cabinet handle”
MLR (Monthly Labor Review) (August) Review of book by Richard L. Freeman HERE
“May the invisible hand be with you: Can the U.S. market-driven labor system do better without reducing productivity and growth?”
…”Institutionally driven wage systems tie productivity growth and wages together more tightly than does a market-driven labor system, so it is at this point that the reader starts wondering whether the most market-driven labor system fell short of the invisible-hand model in ways that institutions might correct.”
Thomas Gelsthorpe posts (10 August) on Cape Cod Times HERE
“Three essays that help gain perspective"
"I, Pencil" is an allegory written in 1958 by Leonard E. Reed to illustrate division of labor, relative advantage, and Adam Smith's "invisible hand" -- principles taught in Econ 101, but written in the lighthearted tone of a children's story. Josh Harness' summary states at a minimum one person making a pencil would need to master nine demanding specialties: "Growing cedar trees, harvesting trees, milling lumber, manufacturing a tint for the milled lumber, mining and refining graphite, manufacturing glue, manufacturing lacquer, mining and refining zinc and copper into metal sheets for the collar, and growing and refining castor beans for the eraser."
That’s the problem: ‘Adam Smith's "invisible hand” is taught in ECON 101 and the lecturer’s error gives it undeserved authority. While ‘I, Pencil’ is a brilliant perspective on the complexity of markets, Adam Smith’s “invisible Hand” is total myth that corrupts the ‘I, Pencil’ message.