[pastProlog]

> Perhaps it is something like this: Each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants.

If everybody is working in this process, then where do the people who expropriate the most from this process - the idle class heirs - get their profits?

> There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work.

The invisible hand...this is Adam Smith being misquoted. Adam Smith did use the metaphor of an invisible hand - Smith said the invisible hand was something that blocked free trade, not facilitated it. L. Read is using the metaphor in the exact opposite manner in which it was proposed.

Also, much of this could be said about a pencil being made in the USSR. Did any one person in the Soviet Union know how to make an entire pencil, from tree to graphite and such? Perhaps some government bureaucrat looked at his charts and ordered it to be made, but how different is that than the corporate bureaucrat looking at his charts and ordering pencils to be made?

Also, in our era of TARP bank bailouts, quantitative easing, farm subsidies and such, this notion of say the US government not having a central role in the economy as it exists is absurd. This medium we read and type on now was created through military contracts to Fairchild Semiconductor, DARPA grants for ARPAnet research and such, over many decades.

[rvern]

> The invisible hand...this is Adam Smith being misquoted. Adam Smith did use the metaphor of an invisible hand - Smith said the invisible hand was something that blocked free trade, not facilitated it.

You're wrong about this: https://en.wikipedia.org/wiki/Invisible_hand. Adam Smith is not being misquoted.

[tpeo]

Though he's indeed wrong in saying that the "invisible hand" acts only as to hamper trade, he isn't far off. The only use of the expression "invisible hand" in The Wealth of Nations occurs amid the discussion of why investors and traders might be biased towards their home country, which is still a discussed issue [0][1] and is considered a kind of market failure.

But nowhere in the same passage does Smith's use of the expression suggest that the "invisible hand" would act merely to hamper trade, but that this simile generally describes an unintended outcome of a decentralized process. The action of the invisible hand might not be necessarily beneficial, as it isn't in this case.

[0] : https://en.wikipedia.org/wiki/Home_bias_in_trade_puzzle

[1] : https://en.wikipedia.org/wiki/Equity_home_bias_puzzle

[nickik]

> If everybody is working in this process, then where do the people who expropriate the most from this process - the idle class heirs - get their profits?

The 'idle' class is not actually 'idle', and if they are then usually their parents were not 'idle'.

> The invisible hand...this is Adam Smith being misquoted. Adam Smith did use the metaphor of an invisible hand - Smith said the invisible hand was something that blocked free trade, not facilitated it. L. Read is using the metaphor in the exact opposite manner in which it was proposed.

I don't know what you are talking about

'Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.' - Adam Smith

> Also, much of this could be said about a pencil being made in the USSR. Did any one person in the Soviet Union know how to make an entire pencil, from tree to graphite and such? Perhaps some government bureaucrat looked at his charts and ordered it to be made, but how different is that than the corporate bureaucrat looking at his charts and ordering pencils to be made?

That is true, but the point of the story is not to say that markets are the only way to make something. The point of the story is to show the complexity of a simple object, in order to illustrate how complicate the overall system is. The implication is that you need markets because of the extrem difficulty of getting at this information.

The USSR could do it, all things consider, they could not do it well. They did actually use lots of markets, property rights and intensives to achieve this, just worst version of it. Central planning as envisioned by Trosky, Lenin, Bukharin, Bauer and co is so impossible that it is impossible to enforce, people will automatically start working around the inefficacy of the system.

> Also, in our era of TARP bank bailouts, quantitative easing, farm subsidies and such, this notion of say the US government not having a central role in the economy as it exists is absurd. This medium we read and type on now was created through military contracts to Fairchild Semiconductor, DARPA grants for ARPAnet research and such, over many decades.

A central role and a central plan is not the same thing. Planning is about direction, and you can say lots about the US government but they don't point the economy in a particular direction, usually they try to stop the economy from changing.

Point out that government has invested in successful stuff is not really relevant. The US was the most successful and innovative economic power on the planet when the federal government had less then 2% of GDP. Nobody denies that lots of industry developed faster because because of government, but many other developed slower as well. Where does this leave you?

[pastProlog]

> The 'idle' class is not actually 'idle', and if they are then usually their parents were not 'idle'

Heirs who do not work and live off the profits of worker's labor are idle. Certainly their parents are idle as well. If that were not the case there wouldn't be phrases like nouveau riche and old money. You can watch billionaire heir Jamie Johnson's documentaries to see more with regards to this.

> 'Every individual... neither intends to promote...'

Precisely. You're quoting from Book IV, Chapter II of Adam Smith's Wealth of Nations. The chapter is titled "Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home". Meaning restraints on international free trade. It's opening sentence is "By restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them."

The part you quote says fully:

"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, 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."

The end being promoted by the invisible hand is as the only sentence discussing the invisible hand opens with "by preferring the support of domestic to that of foreign industry". The means to do that are described in the chapter title "of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home" through means described in the chapter's first sentence and elsewhere "by restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them".

It's not hard to see how the notion of the invisible hand has been twisted to its exact opposite meaning, as even when people point this fact out, they ignore the text and continue on with the meaning they think it has...

> The USSR could do it, all things consider, they could not do it well...Central planning as envisioned by Trosky, Lenin, Bukharin, Bauer and co is so impossible that it is impossible to enforce, people will automatically start working around the inefficacy of the system.

Actually the USSR economy functioned very well under Stalin. While the west was mired in the Great Depression, the USSR was growing by leaps and bounds. European (and even American) workers moved to Russia to get work, as did European (and American) firms. It managed to beat off a German invasion and raise the red flag in Berlin. By 1957 it was launching satellites and doing other such innovations ahead of the west. Nonetheless, in 1956 Khrushchev announced various major changes, including a decrease in capital allocation percentages, something which also happened in other Comecon countries. Those changes and other things did lead to stagnation, but they were a shift. In fact the Chinese stated so at a time, and eventually broke from the Russians due to this revisionism.

> Planning is about direction, and you can say lots about the US government but they don't point the economy in a particular direction

Of course it does. The direction was and is set out by DARPA, NSF, NIH. Who is funding the Boston Dynamics robots (answer: DARPA)? Who is providing money to SpaceX (answer: NASA)? Who is providing Boeing with revenues for the R&D necessary to build airplanes (Boeing is the second largest military contractor in the world)? Who is funding CRISPR/Cas9 research?

> The US was the most successful and innovative economic power on the planet when the federal government had less then 2% of GDP.

A number of factors are at play with this. One is that settlers arrived fairly historically recently in the US, gaining over 9 million square kilometers of land, much of it resourceful, plus the bonus of two big oceans to protect it. That in itself is quite a big windfall, a large European country like France is 5% of the size of the USA. Countries like Argentina has a similar trajectory, but 2 out of 3 Argentinians have indigenous heritage, whereas Americans killed almost all of the native population and took their land (about 1% of Americans have native heritage). Other factors are at play, but being handed over the equivalent of 20 Frances with two big oceans around it can do a lot to help one be a successful economic power.