The “how badly people do on civics and general knowledge test” sub-category of Cheap Journalism is always good for some light entertainment. But this recent example from Newsweek is especially delightful for the pontificating it inspires.

For more than two centuries, Americans have gotten away with not knowing much about the world around them. But times have changed—and they’ve changed in ways that make civic ignorance a big problem going forward. While isolationism is fine in an isolated society, we can no longer afford to mind our own business. What happens in China and India (or at a Japanese nuclear plant) affects the autoworker in Detroit; what happens in the statehouse and the White House affects the competition in China and India. Before the Internet, brawn was enough; now the information economy demands brains instead.

Goodness, where to begin!

Let’s start with the obvious. It’s always puzzling to see “competition” used with blithe disregard for what it means; why is it that competition is considered a lovely value at the level of the firm but a horror at the level of the country? Does a similar principle not apply? Of course decisions are interrelated and it is worthwhile to understand that interrelation, but the latent assumption seems to be that if we ain’t getting ahead we’re falling behind. It is not a fundamentalist opinion to demonstrate that the global economy is not a zero-sum game.
But that’s too close to real arguments for my taste. Let’s focus instead on

Before the Internet, brawn was enough; now the information economy demands brains instead.

This is a remarkably peculiar statement. To achieve more with a given set of resources requires innovation: once upon a time the only “production” humans achieved was to transform time and stone tools into dead animals and dinner. “Brains” have, of course, are irreplaceable in the process of achieving more. This is not abstract: the printing press, electricity, the loom, agriculture… we could populate this list ad infinitum. One entry on the list would be the Internet. The article is instead in a peculiar corner of arguing that brawn was enough to invent the Internet which immediately made brawn redundant.

Which is trivially nonsense. The “information economy”, whatever that may be, is not a revolution in the progress that pushes gently but tangibly at the constraint inherent in turning scarce resources into output that humans value. That process has never been the brute force of brawn.

Big picture

Neat little story related by Tim Harford:

Shortly after the Soviet Union collapsed, a Russian bureaucrat travelled to the west to seek advice on how the market system functioned. He asked the economist Paul Seabright to explain who was in charge of the supply of bread to London. He was astonished by the answer: “Nobody.”

I like that because it is astonishing that these things take care of themselves (well, not that bread is wandering in to London by itself, but you see what I mean). It’s also a fun reminder of the massive economic policy differences that are possible in the world – a reminder of the size of the question “how should I/we/the country allocate resources”.