Your Teacher Said What?! (13 page)

Then a different machine puts acetate tips—which I've just learned are called aglets—on them.
¹⁸
It dips the braided strings in a solvent called acetone (yet another petrochemical made from polypropylene), heats the acetate, and wraps it around the braids at intervals that are the length of Scott's shoelaces. What comes out the other end is a long piece of shoelace with a transparent acetate band every few feet, and when the bands are cut in half, so are the braids. Presto: shoelaces.

One more machine later—the pairing machine—the shoelaces are wound into pairs, sent to the blister-packing machine, heat-sealed in plastic (more petrochemicals), put in boxes (more cardboard), and sent to a loading dock, where trucks pick them up.

“Got it now?”

“Nope.”

“What don't you understand?”

“How can everyone tell everyone else what to do at the same time?”

 

I sometimes think that Scott's question underlines the biggest difference between Progressives and free-market conservatives. The idea is pretty counterintuitive, after all: How
can
such a system function at all, much less provide the abundance that permits, for example, a pair of shoelaces to be available wherever and whenever anyone needs them?

The key is information: Information is what allows a cotton farmer or oil refiner or lumber mill to decide how much they should be selling to the dozens of manufacturers who eventually use their raw materials to make a pair of shoelaces. Scott's notion—that the president or the “richest man in the world” can provide that information—is, essentially, the argument for socialism: Government bureaucrats can do the job best.

Now, I know that Progressives aren't all, or maybe even mostly, socialists, but that's a little like saying that they only have a chronic head cold instead of tuberculosis. When it comes to the economy, Progressives have a reflexive distrust of the market, and for the same reason that Scott does: They believe that it's just as sensible to trust an economic system designed and operated by no one as it is to be a passenger in a car without a driver. Progressives, who are reliably hostile to the idea of intelligent design in human evolution, are positively ecstatic about it in economic planning.

Of course, intelligent design in biology at least argues that the designer is divine and resides in heaven; in Progressive economics, it just assumes that the designer has a PhD and lives in Washington, DC.

The counterargument—that economies not only don't
need
a designer but do better
without
one—is that prices and information are, essentially, two ways of talking about the same thing. This is because cotton or oil or wood can only be compared in terms of the money someone is willing to pay for them. When farmers decide how much cotton to ship to the mill that will, eventually, turn it into the yarn in Scott's shoelaces (or, for that matter, how much cotton to plant, as opposed to some other crop), they get the information they need from the price that the cotton can command.

More than sixty years ago, the political philosopher Friedrich Hayek
¹⁹
showed that prices, therefore, were a kind of index to all the local and personal knowledge about what people want. He called this self-organizing system catallaxy: “the order brought about by the mutual adjustment of many individual economies in a market.”

Well, he wasn't always a very good phrasemaker, but the idea is more important than the word.

 

“Think of this another way, Scott. When you want to buy a new video game—”

“Spider-Man?”

“Okay. Spider-Man. When you go to the store, and you want to buy one, but they don't have a copy for sale, what happens?”

“They get more copies?”

“Right. From where?”

“Activision!”

“And what does Activision do?”

“They make more?”

“They do indeed. Your wanting the game is how they know how many to make, but they only know if you offer to pay for it.”

“Okay.”

“But now imagine that even more people want another game from Activision, like Call of Duty. Now they can only make so many copies, so they have to use all this information to decide whether to make more copies of Spider-Man or Call of Duty—and maybe they don't make enough copies of Spider-Man.”

“Not fair!”

 

Sigh. Well, that's why the Progressive agenda still has so many supporters, despite a century's worth of experience with central planning (North Korea, anyone?). To anyone who wants what he wants when he wants it—and at the price he wants—the market can seem a little, well, unfair.

But
everything
seems unfair to someone. To me, a fair exchange is one where the thing I sell is worth more than the thing I buy—and vice versa. The more things everyone has to freely buy and sell, the fairer the system is.

A free market produces just about everything more efficiently than any other system, but it might be that the most important thing it produces is information: It turns out that millions (or billions) of people choosing where to spend their money creates a gigantic pool of information that millions (or billions) of people can use to choose where to invest their labor and resources. The way to produce the kind of abundance that makes $3 shoelaces and $50 video games available is actually pretty simple, though hard to understand: Just get out of the way and let the information flow both ways, in the form of price signals. That's how the self-organizing magic works.

This is what Adam Smith had in mind more than two centuries ago when he described the “invisible hand”—you know, the one that produces infinitely more than any visible one. Here's how Smith put it: Every individual is led by “an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. . . . It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest”

Or as Leonard Read ended
I, Pencil
:

You bet. No matter how much evidence you muster to show that leaving “all creative energies uninhibited” is why the modern world is so much more prosperous, healthier—just plain
better—
than at any other time in history, you'll still find a lot of people inventing new and exciting ways of inhibiting them. You can't buy Scott's shoelaces for a couple of bucks because of central planning or taxation or regulation. They exist, like every other thing we buy, because millions of people—farmers, engineers, truckers, miners, and everyone else—are free to communicate their wants and needs to one another and to respond to them in the most efficient and inventive ways they can devise.

That's the real magic of free markets.

December 2009 is best remembered in the Kernen household for Blake's tenth birthday and the opening of James Cameron's megahit movie
Avatar
. Both events got us thinking about what you can learn about the free market by watching TV and movies. It isn't what you think.

 

People who work in and write about the movie and TV business tend to refer to it as the Industry—capital “I,” if you please—which is pretty irritating, but not wrong. Filmed and televised entertainment generates more than $30 billion annually in the United States alone and is one of America's most profitable exports. Even those of us on the far outskirts of the world of
Dancing with the Stars
and
CSI
benefit from the enormous infrastructure—from the fiber-optic cable that transmits signals to the thousands of skilled craftspeople who capture images and sound on film or tape—created to compete for the attention of the country's 115 million households, both at home and in movie theaters.

Which is why the general attitude of the producers of filmed and televised entertainment toward business seems, to me anyway, mystifying. TV and movies don't just bite the hand that feeds them; they chew it into something that resembles hamburger.

This would be just a curiosity if it weren't for one thing: People believe what they watch. A recent study suggested that more than three-quarters of Americans get their primary information on business from television—and CNBC aside, TV isn't very happy with the way business is practiced. A survey of more than one hundred primetime programs over the course of two seasons revealed, for example, that businesspeople commit four times as many crimes as gang members and five times as many as terrorists. Businesspeople committed as many murders and kidnappings as drug dealers, child molesters, and serial killers
combined
. I've met my share of ruthless businesspeople, but when I walk down a dark alley at night, I'd actually feel
less
nervous if I knew the sound of the footsteps behind me was being made by wingtips.

And I'd feel even better if I knew that Blake and Scott were immune to, or at least skeptical of, the way their favorite TV shows and movies treat the world of business. In order to know this, of course, I needed to find out what those favorite shows actually were, and for once, I didn't need to ask. I just had to check out the shows that had been saved onto our DVR.

 

“ ‘ iTake on Dingo'?”

“It's an episode from
iCarly
.”

 

For the benefit of readers in families without young girls—and I hope you'll understand why I say you're only living half a life—I should explain that
iCarly
is a cable sitcom in which the show's main character, a teenager named Carly Shay, produces and stars in her own Web show while refereeing disputes among her friends and coping with teachers, and her guardian, a twentysomething older brother. It is one of the most successful franchises on the Nickelodeon network, generating revenue not only from advertising but also from spin-offs, including books, videogames, iPhone apps, Web sites, music downloads, and DVDs.

In the “Dingo” episode that Blake had saved, Carly and her buddies learn that quite a few of the signature features of
iCarly.com
were turning up on a cable show called
Totally Ten
and head off to Hollywood to confront the show's writers about the theft. For viewers who miss the joke that the cable company carrying
Totally Ten
is called “The Dingo Channel,” the show has a side plot involving the frozen head of Charles Dingo, the founder of Dingo Studios. When the kids finally talk their way into the
Totally Ten
writers' room—which contains a whiteboard headed “Things We Can Steal from iCarly”—they have the following exchange:

“You can't just take our ideas, change them a little bit, and then pretend they're yours.”

“You said we could.”

“No, we didn't. We'll sue you.”

“This is the Dingo Channel. We have the money, the lawyers, and therefore the power to do anything we want.”

Okay. It's just a sitcom. The private joke of one multibillion-dollar media conglomerate—Viacom, owner of Nickelodeon—tweaking another aside, is there anything especially bothersome about a teen sitcom showing Disney—oops, I mean Dingo—as a bully?

By itself, probably not. But in the world of television, it isn't by itself. It is one of the most reliable features of filmed entertainment that big business equals bad business—an unexamined but toxic assumption that is even more common in Hollywood than in the most Progressive public-policy think tank. In fact, on those rare occasions when TV and movies portray the world of commerce in a (relatively) positive manner, you can count on the subject being small business, which is
always
more virtuous than big business.

Consider, for example, the Disney-theme-park-turned-billion-dollar-movie-franchise known as
Pirates of the Caribbean.
Once upon a time, the villains in pirate movies were always either other pirates or naval vessels in the service of a corrupt governor. And indeed, those were the villains in the first (and best) of the
Pirates
movies. By the second, however, a bigger budget allowed for the addition of not only a vengeance-seeking former Royal Navy commodore and a ship full of fish men in the service of Davy Jones, but also a sea monster roughly the size of a supertanker. Given all that, who do you think was the movie's
real
villain?