Monday, April 23, 2012

I, Geoduck

In his afterword to Leonard Read's famous story of the humble pencil, Milton Friedman said;
“It is even more astounding that the pencil was ever produced. No one sitting in a central office gave orders to these thousands of people. No military police enforced the orders that were not given. These people live in many lands, speak different languages, practice different religions, may even hate one another—yet none of these differences prevented them from cooperating to produce a pencil. How did it happen? Adam Smith gave us the answer two hundred years ago.”
Now comes the Seattle Times' Craig Welch to provide even more proof of the power of prices to coordinate economic activity to the mutual benefit of numerous people, just as Adam Smith told us 236 years ago;
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and 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.
As the Welch piece demonstrates;
A single pair of these gleaming mollusks sold at a Puget Sound dock could pay for an upscale Seattle dinner for two. A half-dozen sold in a Hong Kong grocery could fetch nearly enough cash to make a four-figure mortgage payment. Three milk crates of these shellfish purchased at a Shanghai restaurant could pay for a year of undergraduate tuition at the University of Washington.
Washington geoducks (pronounced "gooey ducks"), the strange, long-necked clams prized in Asia for their crisp, briny sweetness, long have been Puget Sound's highest-value seafood. But a confluence of regional and global events recently has sent geoduck prices soaring far higher.
Where a perfect, pearly white, 2.5-pound geoduck once brought $20 at the dock, a similar clam in the past year sometimes sold for three times more. In a restaurant in China, where 95 percent of the region's geoducks land, top-grade clams are selling for $100 to $150 or more — per pound. 
Definitely something to think about the next time you hear someone--even someone with the education to know better--complain about the U.S.A. sending jobs overseas.  Chinese (and other foreigners) supply Americans with shoes, clothing, name it, because they have a demand for things Americans produce; Boeing aircraft, apples, bourbon, trips to Disneyland....

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