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Milton Friedman takes a look at Adam Smith’s invisible hand of the market in the episode “The Power of the Market” in the film series Free to Choose. Letting the free market work has been one of the principles followed by the USA that has made our country exceptional.
Both Max Brantley and John Brummett have a problem with the issue of American Exceptionalism and I do too if the term is meant to imply that we have more exceptional people than other nations. It is my view that we have followed principles that have enabled our nation to thrive. One of those principles is that we have allowed the invisible hand of the free market to work without much regulation in the past and the result has been building a great society that benefits a great number of people.
Adam Smith wrote in the Wealth of Nations, “By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain. . . . 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. . . . By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”
Milton Friedman observed:
Two hundred years ago in Scotland, Adam Smith taught at the University of Glasgow. His brilliant book, The Wealth Of Nations, was based on the lectures he gave here.
The basic principles underlying the free market, as Adam Smith taught them to his students in this University, are really very simple. Look at this lead pencil, there is not a single person in the world who could make this pencil. Remarkable statement? Not at all. The wood from which it’s made, for all I know, comes from a tree that was cut down in the State of Washington. To cut down that tree, it took a saw. To make the saw, it took steel. To make the steel, it took iron ore. This black center, we call it lead but it’s really compressed graphite, I am not sure where it comes from but I think it comes from some mines in South America. This red top up here, the eraser, a bit of rubber, probably comes from Malaya, where the rubber tree isn’t even native. It was imported from South America by some businessman with the help of the British government. This brass feral __ I haven’t the slightest idea where it came from or the yellow paint or the paint that made the black lines __ or the glue that holds it together.
Literally thousands of people cooperated to make this pencil. People who don’t speak the same language; who practice different religions; who might hate one another if they ever met. When you go down to the store and buy this pencil, you are, in effect, trading a few minutes of your time for a few seconds of the time of all of those thousands of people. What brought them together and induced them to cooperate to make this pencil? There was no Commissar sending out orders from some central office. It was the magic of the price system __ the impersonal operation of prices that brought them together and got them to cooperate to make this pencil so that you could have it for a trifling sum.
That is why the operation of the free market is so essential. Not only to promote productive efficiency, but even more, to foster harmony and peace among the peoples of the world.
The USA has followed the principles of the free enterprise system for a longer period of time than any other nation in the history of the world and that has played a big part of our success. We have been using the magic of the invisible hand (of the price system) to direct us, and the result has been a great economy.
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Today I profiling State Lawmaker Jonathan Dismang:
Arkansas House of Representatives
Family
Husband to Mandy Dismang
(Daughter of Dr. David & Beverly Staggs of Searcy)
Father to Cade (age 6) & Sawyer (born July 28, 2009)
Son of Paul & Nancy Dismang
(Retired Beebe Principal and School Teacher)
Brother to Willam, Kyle & Elizabeth (Mitch Breitweiser)
Brother in Law to David & Katy White
Member of the Beebe Church of Christ
Professional
Honor Graduate of Harding University with
Degrees in Accounting & Economics
Chairman of the National Association of
Royalty Owners, Arkansas Chapter
8 Years of Public Accounting
Experience with Emphasis in Taxation
Worked to Help Provide Guidance to Over
350 Arkansas Small Business Owners
Member of the Beebe Economic
Development Committee
Member of the Searcy Regional
Chamber of Commerce
Member of the Jacksonville
Chamber of Commerce
Member of the Beebe Chamber of Commerce
Political
Freshman Representative for District 49
Chair of the ALC-
PEER Committee
Vice Chair of the Income Taxes-
Personal & Corporate Subcommittee
Member of Revenue & Taxation Committee
Member of State Agencies &
Governmental Affairs Committee
Member of ALC Personnel Committee
Member of ALC Charitable, Penal, &
Correctional Institutions
Recent Honors
Named by the Arkansas Democrat Gazette as
One of the top Six Freshman to Watch
State Senate District 29 Candidate Rep. Jonathan Dismang Champions State Government Efficiency
Little Rock, Ark. – Candidate for State Senate District 29 Rep. Jonathan Dismang, R-Beebe, championed government efficiency Thursday when the state Board of Finance approved a plan to increase earningsfrom tobacco tax funds after recommendations he made in September.
From “Finance board OKs plan to earn more from tobacco funds,” Arkansas Democrat-Gazette, Michael Wickline, 10/1/10:
The state Board of Finance signed off Thursday on a plan to increase interest earnings on investments of tobacco settlement funds, a change that one official said could bring in $1 million more a year than those funds have been bringing in.
Autumn Sanson, chief investment officer for the state treasurer, said after the meeting that she expected the interest earnings for the Tobacco Settlement Commission to increase from about $49,000 earned in fiscal 2010 toabout $1.05 million this fiscal year.
The board’s action came a month after state Rep. Jonathan Dismang,R-Beebe, suggested the Legislature would manage the money if the board didn’t do better.
“Thanks to Representative Jonathan Dismang, the state will be earning over $1,000,000 in additional interest per year on tobacco settlement funds,” said Republican Party of Arkansas Executive Director Chase Dugger. “Dismang is the only candidate for State Senate District 29 with a proven record of increasing government efficiency and promoting fiscal responsibility in Arkansas. The Republican Party looks forward to the conservative leadership Dismang will continue to display as the next State Senator from District 29.”
The Daily Hatch 