Science beyond individual understanding – Michael Nielsen

Two years after the breakup of the Soviet Union, British economist Paul Seabright was talking with a senior Russian official who was visiting the UK to learn about the free market. “Please understand that we are keen to move towards a market system,” the official said, “But we need to understand the fundamental details of how such a system works. Tell me, for example: who is in charge of the supply of bread to the population of London?” [1] The familiar but still astonishing answer to this question is that in a market economy, everyone is in charge. As the market price of bread goes up and down, it informs our collective behaviour: whether to plant a new wheat field, or leave it fallow; whether to open that new bakery you’ve been thinking about opening on the corner; or simply whether to buy two or three loaves of bread this week. The price thus aggregates an enormous amount of what would otherwise be hidden knowledge from all the people interested in the production or consumption of b

Two years after the breakup of the Soviet Union, British economist Paul Seabright was talking with a senior Russian official who was visiting the UK to learn about the free market. “Please understand that we are keen to move towards a market system,” the official said, “But we need to understand the fundamental details of how such a system works. Tell me, for example: who is in charge of the supply of bread to the population of London?” [1] The familiar but still astonishing answer to this question is that in a market economy, everyone is in charge. As the market price of bread goes up and dow