Raise the Hammer

LL, without smart individuals, the resources of the environment offer nothing more than what they have since time began. That is why Japan is much richer than Russia. While Russia was still the U.S.S.R, they decided that building bombs and nuclear weapons was more important than allowing individuals to decide what was important. As a result, this centrally planned Marxist utopia created the worst environmental landscape the world has ever seen. In, contrast, Japan, turned a nation with few natural resources into the second largest economy in the world.

You mention that value is relative to the social purpose, I disagree. Value is measured by how much people are willing to pay over and above what it takes to produce the good or service being offered. Since everybody recognizes that money doesn't grow on trees, when it is spent, it is done so as to maximize the utility in the spenders life. Therefore, if a person values the natural environment more than anything else, he/she will derive great value from a trip to the Amazon. To the extent that others feel the same way, profit seeking companies will ensure that consumers are able to enjoy this adventure for as long as they are willing to pay for it. In this case, business simply reflects the values that consumers have, as reflected in their personal spending decisions.

Furthermore, value can't be produced over the long term without focus on the individual. Since a nation is nothing more than a collection of millions of individuals, each trying to live the best life they can, any attempt by planners to create value for the average person is nothing more than a wild guess. In fact, the "average person, or "average Canadian", doesn't exist. There is only Jane S., Bill N., Amy K., etc. Each one of these people spends their money in order to maximize its utility and in so doing, they do what no central plan can ever do, namely to produce an enormous diversity of goods and services.

Over time, this economic diversity stops us from making huge bets that fail to return value to the capital employed and it also keeps on on the cutting edge of technology and innovation. Compare 1988 U.S.S.R to 1988 U.S.A and you can see the benefits of allowing the consumer to control the bulk of spending decisions in the economy. In the former, production was based on the imaginations of a few chosen people, whereas in the U.S., production was based on the choices and inventions of millions of people.

Therefore, it should be no surprise that harnessing the power of millions of micro-planners was much more efficient than leaving all production decisions to a tiny fraction of this number. The world is simply to complex to allow a few people final say on what is needed and furthermore, what is wanted.