Seth Godin, read "I, Pencil"
Seth Godin is one of the smartest marketing guys around. But he seems misinformed about economics.
In his article No stoplights, Seth says:
While individuals might moan about how they were treated, we all realize that without some sort of central allocation of scarce resources (like a piece of tarmac or a booth at a trade show), chaos ensues. And the chaos hurts everyone.
Well, no. Consider the lowly pencil. Cheap, effective, ubiquitous. But nobody knows how to make one. Nobody.
There is no one person on Earth who knows how to find, process, and assemble all of the materials that go into a pencil. A lot of people know their own parts of the puzzle, but nobody knows the whole thing.
No central allocator. But somehow pencils get made, and plenty of them.
Leonard Read can explain it better than I can:
Now, if nobody knows how to make a pencil, how could anyone centrally allocate all of the scarce resources needed to make one? How in the world would they know what to allocate?
And watch out. If you do get that central allocator, it will turn out to be somebody who believes:
A pencil factory is not a big truck. It’s a series of tubes.
And if you don’t understand those tubes can be filled and if they are filled, when you put your lead in, it gets in line and its going to be delayed by anyone that puts into that tube enormous amounts of material, enormous amounts of material…