Video: I, The Pencil: The Movie

Fantastic remake of Leonard Read's "I, the Pencil" produced by the Competitive Enterprise Institute 

[hat tip Prof Steve Horwitz at the Coordination Problem.org]

Video: Christien Meindertsma on the Economic Value of Pigs

Here is a fascinating talk by Ms. Christien Meindertsma on TED, about the economic value of Pigs. I mean the animal (oink oink) variety and not the debt plagued acronym of peripheral European countries.

Ms.Meindertsma's talk somewhat resembles Leonard Read's I, Pencil except that she focuses on the pig as a product than as part of the market process [pointer to Mike Du]



Some passages:

The market process of pigs (bold emphasis mine-from TED)

And what I was curious about -- because historically, the whole pig would be used up until the last bit so nothing would be wasted ... and I was curious to find out if this was actually still the case. And I spent about three years researching. And I followed this one pig with number "05049" all the way up until the end and to what products it's made of. And in these years, I met all kinds people, like, for instance, farmers and butchers, which seems logical. But I also met aluminum mold makers, ammunition producers and all kinds of people. And what was striking to me is that the farmers actually had no clue what was made of their pigs, but the consumers -- as in us -- had also no idea of the pigs being in all these products.

The pig's economic value: (bold emphasis mine)

In total, I found 185 products. And what they showed me is that, well, firstly, it's at least to say odd that we don't treat these pigs as absolute kings and queens. And the second, is that we actually don't have a clue of what all these products that surround us are made of.

And you might think I'm very fond of pigs, but actually -- well, I am a little bit -- but I'm more fond of raw materials in general. And I think that, in order to take better care of what's behind our products -- so, the livestock, the crops, the plants, the non-renewable materials, but also the people that produce these products -- the first step would actually be to know that they are there.

We can't surely know everything. But we can understand the market process. And that's why markets are indispensable.

As Leonard Read writes,(emphasis added)

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. This is the mystery to which I earlier referred.

The False Khodorkovsky Truth On Globalization

The Street’s Eric Rosenbaum pins the blame of the 2^nd guilty verdict on Russian Tycoon Mikhail Khodorkovsky, which allegedly had been manipulated, to globalization.

He writes, (bold emphasis mine)

In any event, if we have long ago left behind the Cold War and entered the age of globalization, it's pretty clear that globalization means turning a deaf ear to serious human rights and legal rights issues for trade partners like the US, Russia and China, or at least often being hard of hearing.

When a tycoon rots in prison because he was getting too powerful, and too democratic, or when a Nobel Prize winning political dissident is serving a long sentence and his family barred from going to Sweden to accept the Nobel on his behalf -- and yet the major US move in relation to China is to win a dispute at the World Trade Organization over the unfair support of China for its automobile tire manufacturers -- that's the lips speaking truth to the way the powerful act in the age of globalization, as opposed to the lip service that once again overflows with blabber as Khodorkovsky quietly read his book in the metal cage of the Russian court room.

We'll say thank you very much for that cheap plastic mobile for our baby's crib, China, and, thank you very much for the oil that's not coming from those unstable Arabs, Russia, and forget about Khodorkovsky until his next trial, and let Chinese democracy die a silent death. And of course, when it comes down to it, we'll hem and haw and we'll say it's not our place to interfere in the internal affairs of other countries -- except of course, when it's the internal affair of manufacturing car tires.

It’s certainly misleading to impute the seemingly untoward developments in Russia’s domestic political front to globalization since the current body politic of Russia has evolved around the dynamics of the previous polity (Lenin-Stalinism) compounded by the ongoing changes in the economic and international dimensions.

As Stratfor’s George Friedman notes, (bold highlights mine)

Glasnost, or openness, had as its price reducing the threat to the West. But the greater part of the puzzle was perestroika, or the restructuring of the Soviet economy. This was where the greatest risk came, since the entire social and political structure of the Soviet Union was built around a command economy. But that economy was no longer functioning, and without perestroika, all of the investment and technology transfer would be meaningless.

In other words, Russia’s politics have gravitated around the impulses of ‘command mentality’, which she has yet to slough off.

So with or without globalization, the so-called issues of ‘human rights and legal rights’ would still be in place, because of the embedded political structure that operates in Russia.

And perhaps it could even be under worse conditions if a political regime under isolationism had prevailed, since international pressures towards domestic policies would have been muted.

Myanmar and North Korea should be good examples of such isolationist paradigm. Incidentally according to Human Rights Risks Atlas 2011, among the highest “human rights” risk nations, Myanmar and North Korea ranks 5^th and 9^th respectively whereas Russia is ranked 14th.

The top 4 is DR Congo, Somalia, Pakistan and Sudan—obviously countries that have been least exposed to globalization.

As an aside, China is ranked 10th mostly due to recent geopolitical developments. According to African online,

China fell two places from last year’s ranking into tenth place. It is notable that these rankings were released on the day when China would not allow its’ citizens to see the Nobel Peace Prize Ceremony because Chinese political prisoner Liu was being honored. China is ranked worst or joint bottom of the league in several key classes.

These include violation categories such as freedom of speech, the press and religion, minority rights, judicial independence, and arbitrary arrest and detention.

Overall, to link globalization with human rights violations seem not only unfounded, but importantly, a strawman meant to score political talking points.

And here is the morality aspect.

If I decide not to patronize my neighbor’s store, who is reputed to be a wife beater, out of my perception of ethics, what then is my right to impose my sense of morality to the others who don’t share my views? Doing so would be playing into the hands of the same command mentality (human rights abuse) game which the author so abhors. And this would be tantamount to the proverbial ‘pot calling the kettle black.’

Lastly, it would be uncalled for to imply that globalization or growing free trade as politically inhumane. That’s because it would be in almost everyone’s self interest to see the others in good stead in order to promote his own.

Adam Smith wrote in his magnum opus, the Wealth of Nations, the dynamics of unintended social cooperation from the pursuit of one’s own interest.

He calls this the invisible hands, (bold emphasis mine)

As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestick 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 publick interest, nor knows how much he is promoting it. By preferring the support of domestick 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. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the publick good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

And as we have earlier pointed out, the string of years of world peace have coincided with the growth in free trade. We seem to see the similar parallels in the growth of economic freedom and free trade along with reduction of human rights violation risks (China would be the exception rather than the rule).

Bottom line: In general, where people trade, social cooperation expands, where politics rule, social cooperation deteriorates.