We are very happy to have Matt Ridley here, to talk about what I think is the foundational issue in economics. The very first paragraph of the second chapter of Adam Smith’s Wealth of Nations says that economic prosperity rests on the:
division of labour… not originally the effect of any human wisdom… [but] the necessary… consequence of a certain propensity in human nature… to truck, barter, and exchange one thing for another…
The fact that human group sociability and solidarity is based on exchange rather than, as with chimpanzees, grooming each other or, as with dogs–well, I don’t think I should go there–has, Adam Smith thought, extraordinary consequences. I think Smith was right. So does Matt Ridley. He is here to tell us about them.
Of course, the nutters over at the nef take exactly the opposite view.
That we should stop being sociable in this uniquely human manner and reverse the division of labour and go off and do everything (or at least more things) for ourselves.
Which is why they’re nutters, they’re advocating for humans exactly the opposite of what makes us humans.
4 responses so far ↓
1 Roger Thornhill // Nov 16, 2010 at 12:33 pm
People do DIY. I wonder if this is, in some cases*, because there is some State interference pricing the building trades and professions above a level to which it makes sense to hire in.
* Of course, some of use are hobbyists or tasks are too small, but wait until people realise what tasks cannot be done under new electrical regulations, for example…
Tim adds: Well known point. There was one economist who pointed out that having Swedish neurosurgeons paint their own houses as a result of the tax wedge was as productive as having Swedish housepainters do their own neurosurgery.
2 SadButMadLad // Nov 16, 2010 at 1:13 pm
Point about electrical regs – all tasks can still be done on a DIY basis, it’s only the notification process that makes it not cost effective to DIY. Either DIY adding a new socket in the garden and pay full building notice fee of approx £100 plus the cost of an electrician to sign it off £100 or get the electrician to do the whole lot for £125.
Figures are only indiciative.
3 pete // Nov 16, 2010 at 2:27 pm
“Either DIY adding a new socket in the garden and pay full building notice fee of approx £100 plus the cost of an electrician to sign it off £100 or get the electrician to do the whole lot for £125.”
Or do the sensible thing. DIY the new socket & enjoy.
As for the regs – b******s. Dirty it up a bit & it’s always been there. Who’s bloody house is it anyway? Most of these nonsense regs are brought in to provide jobs for council workers & the trades.
Oh, & I was in the building business.
4 john b // Nov 16, 2010 at 4:12 pm
I can’t believe people are pretending this exists in real life. If you’re a landlord and you burn people to death it matters; otherwise it doesn’t exist. See also: most regulations.
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