(Saigon Times Daily ngày 10-6-2003)
3. Invisible Hand
Economists define efficiency in a way different from, say, engineers. An
engineer would say that if cook stove A uses less energy to produce die
same amount of heat as cook stove B, then cook stove A is more efficient.
But the economist would say that the efficient cook stove is the one with
the lower cost for a given amount of heat produced. Resources, the term in
economics for the goods and services which are used to produce other
goods and services, should be directed to those areas where society values
them most.
Many people in Ho Chi Minh City eat breakfast at small cafes or noodle
stands. These people are directing their labor to where it will give them the
most value - rather than spending time shopping, cooking and cleaning,
they get to work earlier (or sleep a little later) by letting someone else cook
breakfast for them. This society values good, inexpensive food that is
readily available and resources have flowed into that industry. The
sidewalks are crowded with food stalls and vendors.
How does this work? It would seem to be more efficient to have market
activities planned. Surely human intervention can do better than the
chaotic, unrelated activities of buyers and sellers. Ah, but this is the beauty
of market economics, and the genius of Adam Smith, who posited that the
market is not chaotic at all, but instead is guided by an "invisible hand." As
Smith pointed out, it is not the goodness of their hearts that motivates
people to sell food on the street. They are motivated by theữ own self-
interest in having goods and opportunities for themselves and their
families. This "invisible hand" is what keeps resources flowing to those
activities where they will have the most value, thereby increasing the
"wealth of the nation."
