23 | Price Signals and Spontaneous Order
Prices are both information and an incentive to help people to coordinate in complex ways as they individually decide what to produce or consume.
In this video, we show how the price system allows for people with dispersed knowledge and information about rose production to coordinate global economic activity.
What if there were no prices? How would you use available resources? To appreciate why market prices are essential to human well-being, consider what a fix we would be in without them.
On today's show: The bold experiment in capitalism that brought together an economist, hundreds of food bank directors from around the country, and, just to spice things up, a socialist.
When Susannah Morgan was running a food bank in Alaska, she always needed produce. Items like fresh oranges or potatoes. But her food bank didn't get much. Feeding America, a major supplier for food banks, assumed transporting fresh produce would be too expensive. Instead, among other things, Susannah's food bank got pickles. A lot of them. At the same time, Feeding America was flooding Idaho with potatoes.
I spent 6 months and $1500 to completely make a sandwich from scratch. Including growing my own vegetables, making my own salt from ocean water, milking a cow to make cheese, grinding my own flour from wheat, collecting my own honey, and killing a chicken myself.
Our latest Freakonomics Radio episode is called “How Can This Possibly Be True?”
Our latest Freakonomics Radio episode is called “How Can This Possibly Be True?” A famous economics essay features a pencil (yes, a pencil) arguing that “not a single person on the face of this earth knows how to make me.” Is the pencil just bragging? In any case, what can the pencil teach us about our global interdependence — and the proper role of government in the economy?
For more than half a century, Leonard Read’s classic story has opened eyes and changed minds by the hundreds of thousands. It humbles even the high and mighty as it reveals the wondrous achievements of individuals whose contributions are coordinated by nothing more than incentives and market prices.
For more than half a century, Leonard Read’s classic story has opened eyes and changed minds by the hundreds of thousands. It humbles even the high and mighty as it reveals the wondrous achievements of individuals whose contributions are coordinated by nothing more than incentives and market prices. This film guarantees that the insights of Read’s humble pencil will continue to work their magic for many years to come!
A blog post on the division of labor, by Mike Munger.
A simple example of hamburgers being made at home versus at a restaurant can help illuminate the explosion of prosperity since the Industrial Revolution.
In this video, Professor Boudreaux explains how the specialization of knowledge helped his two-year old son overcome a life-threatening illness.
For more than half a century, Leonard Read’s classic story has opened eyes and changed minds by the hundreds of thousands. It humbles even the high and mighty as it reveals the wondrous achievements of individuals whose contributions are coordinated by nothing more than incentives and market prices. This film guarantees that the insights of Read’s humble pencil will continue to work their magic for many years to come!
For more than half a century, Leonard Read’s classic story has opened eyes and changed minds by the hundreds of thousands. It humbles even the high and mighty as it reveals the wondrous achievements of individuals whose contributions are coordinated by nothing more than incentives and market prices.
This gif is an excellent example of the concept of division of labor.
This gif is an excellent example of the concept of division of labor. https://i.imgur.com/xerxnGk.gifv
The crew working for Ferrari and managing this pit station are an excellent example of division of labor.
In this video, we show how the price system allows for people with dispersed knowledge and information about rose production to coordinate global economic activity.
Illegal dumping is the 'new narcotics' for organized criminals in the U.K.
Illegal dumping is the 'new narcotics' for organized criminals in the U.K.
“We have to take defending ourselves into our own hands,” one farmer said as moats and trenches are dug and reinforced gates installed.
Here's what it means for competitors like Delta, United, and American--plus the lesson for your business.
This is a story about Southwest Airlines, but it's also about culture.
First, imagine what it's like to be Southwest CEO and chairman Gary Kelly.
You're coming off a challenging year. Southwest has more Boeing 737 MAX aircraftthan any other U.S. airline, and they're all sitting idle right now, off the schedule until at least April.
Five reporters stumbled on what seems like a basic question: What is money? The unsettling answer they found: Money is fiction.
What do banks do with our deposits? You think that banks are where your cash is stored and safeguard and that a dollar bill is money. Well, you’re wrong. Like, really wrong.
What is the real value of a dollar? You think that a dollar bill is money and that banks are where your cash is stored and safeguarded. Well, you’re wrong. Like, really wrong.
Functions of Money - The Economic Lowdown Podcast Series, Episode 9
Money has taken many forms through the ages: shells, wheels, beads and even cows. All forms, though, have always had three things in common. Find out what in this eight-minute episode of our Economic Lowdown Podcast Series. You will also learn how commodity money differs from representative money and how both differ from today's fiat money.
The penny is basically worthless. Actually, it's worse than worthless. It costs the U.S. government about 2 cents to produce every penny
AIDS has killed more than 36 million people worldwide. There are drugs available to treat AIDS, but the price of one pill is incredibly high in the U.S. — coming in at 25 times higher than its cost. Why is that?
In this video, we explore the costs and benefits of monopolies. We cover how monopolies and patents breed deadweight loss, market inefficiencies, and corruption.
Ever wonder why pharmaceuticals are so expensive? In this video, we show how low elasticity of demand results in monopoly markups
As someone who researches inequities in health care, I’ve diligently followed the debate about healthcare reform.
However, most of my friends (and I suspect most Americans) wonder exactly what single payer healthcare is and how will it affect them.
Did you know it takes two types of leaders at the helm of a 10-250 person entrepreneurial organization to have the “Rocket Fuel” it needs to hit the next level? They’re known as the Visionary and the Integrator.
As a Visionary entrepreneur, your passion, drive and creativity are the key elements that helped launch your business and fuel your company’s growth. But now… your company is growing and you’re swamped with an overwhelming workload, your engine is sputtering, stalling and your momentum stagnating. Every great Visionary hits this threshold. Enter the Integrator. You need someone detail-oriented, who knows how to keep the team harmonious and productive, is great at resolving conflict, and can execute detailed plans for maximum results. That will give YOU the freedom to focus on what you were built to do-- blast off and catapult your company to its full potential.
Our latest Freakonomics Radio episode is called “How Can This Possibly Be True?”
Our latest Freakonomics Radio episode is called “How Can This Possibly Be True?” A famous economics essay features a pencil (yes, a pencil) arguing that “not a single person on the face of this earth knows how to make me.” Is the pencil just bragging? In any case, what can the pencil teach us about our global interdependence — and the proper role of government in the economy?
How do we change the way people think about your brand? Back in the 18th century, Frederick II of Prussia (also known as Frederick the Great) was looking for ways to feed his nation and lower the price of bread. He proposed the potato as a suitable new addition to the nation’s diet. But peasants resisted growing it.
Five brands, in particular, stand out for excellence in customer-centric innovation.
According to the Huffington Post, 70 percent of companies that deliver outstanding customer experience rely on customer feedback. Smart brands have long since realized that it’s customers control whether a product or service goes to market successfully.
The end could soon be near for Kodak, and the iconic film manufacturer may have itself to blame.
Kodak is trying to move into new product lines like inkjet printers, but in the meantime it's attempting to raise cash by selling off some of the patents it's developed over the years.
On today's show: The bold experiment in capitalism that brought together an economist, hundreds of food bank directors from around the country, and, just to spice things up, a socialist.
When Susannah Morgan was running a food bank in Alaska, she always needed produce. Items like fresh oranges or potatoes. But her food bank didn't get much. Feeding America, a major supplier for food banks, assumed transporting fresh produce would be too expensive. Instead, among other things, Susannah's food bank got pickles. A lot of them. At the same time, Feeding America was flooding Idaho with potatoes.