by Sally Morem

Created on: February 21, 2009

"While it is true that all of us share - for good and for bad - in one society, we are not one giant, unthinking mass that should be steered by central planners. Rather, society is comprised of individuals, each facing events, decisions and responsibilities, with the multiplied complex choices of millions of lives impossible to command from any central location; the gulag or concentration camps excepted."

-From an editorial in the "Fairmont Sentinel"

Do you have any concept of human limits? If you do, you already know something about economics. The First Law of Economics can be summarized in three words: Markets manage scarcities.

Most things self-organize. We seem only to note the things that are made - those things that are made by us. We know how the potter throws clay on the wheel and fashions a bowl. We know how the weaver works a loom. We know how a blacksmith shapes iron into horseshoes. These things are human things; they're important to us. But, they make up the merest sliver imaginable of the uncountably many processes that make up the universe.

Envisioning self-organizing systems at work is one of the most difficult things we can do. It is not natural to us. We are used to working or observing the work of single, individual makers, fabricators, inventors, cobblers, farmers, tailors, potters, etc. Or, small groups of the same. We see that whatever is made in the human world is made on purpose and by design by a maker.

The free market is one of countless self-organizing systems that occur in nature. It grew out of our desire to exchange our scarce skills for the other fellow's scarce goods. But how can it be self-organizing when it's the aggregation of conscious, deliberate economic decisions made by billions of sentient beings. Wouldn't that make it a mere artifact, a planned thing?

Actually, no. No one ever planned the global market or any of its component markets, including the New York Stock Exchange. The NYSE of today certainly was not envisioned by the 24 men who gathered daily outside on Wall Street to trade shares of stock in 1792. Markets, as the word suggests, arose out of the practice engaged in over thousands of years by artisans and farmers who periodically gathered in a meadow somewhere, set up booths, and bought and sold their excess produce and handcrafts from one another. It permitted division of labor and as a result, huge growth in the human ability to build wealth.

Markets now encircle the globe. They are composed of trade in produce

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