Pencil Article and Its Relevance to Hong Kongs Economy - Essay Example

I, Pencil article and its relevance to Hong Kong’s economy 5th October, I, Pencil article and its relevance to Hong Kong’s economy 1. Main arguments of the paper This article has extensively advanced two major arguments. The first major argument that comes out of this article is that human desires and necessity are the primary agents contributing to the creation of any meaningful product. The genealogy of a pencil is given to trace the journey through which all the components of the pencil, even the most invisible ones are brought together by different parties, in order to result in that small piece of writing wood that has lead inside, used to write. However, the most notable of the narration of these genealogy is that back in the mind of millions or even billions of people who contribute the know-how, skills and labor towards the production of a single piece of pencil, most likely never have a pencil in mind as the final product of their contributions (Read, 2008). The only thing that binds all the numerous people together towards the production of a small piece of pencil, which they may never even use throughout their lifetime, is their personal needs. The people involved in cutting down the trees used to produce the wood pieces that are eventually turned into a pencil, do not even know what the tree will be used for, while the people who make the power saws and logging machines never take their time to think that the end product for their inventions is likely to be (Read, 2008). Similarly, the miners in the Mexico mines who produces graphite, the farmers in the Dutch East Indies who cultivates the rape-seed oil crops in their farms, the farmers who cultivate coffee in Brazil to be eventually brewed and served to the workers in the pencil manufacturing factory and offices, as well as the producers of pumice in Italy, do not know the end product of the labor. The fact of the matter is that all the small contributions that the billions of people make in their respective areas while in different countries, end-up as a piece of pencil in the shelves of book stores and shops. To this edge therefore, a single product that reaches the consumer is a factor of millions or billions of laborers, who do not actually know what they are contributing to, but only understands their desires and necessities (Read, 2008). Simply put therefore, the goods, services and innovations that have transformed the world are a product of people who neither know nor care about them. The desire to exchange the skills, know-hows and labor by different individuals for the goods and services they need is the ultimate source of a consumable product. The second main argument that has been advanced by this article is that; freedom is the core of development. This is because; all the labor, skills and know-hows that have been applied towards the production of a single piece of pencil are not a product of well planned, organized and coordinated operations, but rather a product of free, random and unrestricted contributions by different individuals and groups (Read, 2008). The provision of essential goods and services is a function of free, spontaneous and unrestricted activities by millions of individual contributors. The bottom-line is that there is no mastermind of the whole process, and there is neither dictation nor forcible directing that results in the provision of the essential consumable goods and services. Therefore, simply put, the production of goods and services is the sole responsibility of an inviable hand (Read, 2008). It is this invisible hand that is involved in configuring, coordinating and directing the skills, know-hows, creative energies and synergies into the production of the end product that eventually results. Thus, it is the spontaneous collaboration of the human needs and desires that results in the provision of goods and services, without any mastermind playing any meaningful role. In this respect, the government intervention and control is not necessary in the production of goods and services, and neither is it necessary for the coordination of the growth of the economy (Read, 2008). It is purely the needs, desires and necessities of millions of individuals that converge together in uncoordinated and purely spontaneous manner, to oversee the provision of goods and services and thus the growth of any economy. Therefore, freedom is the only essential component in the process of provision of goods and services and the resultant growth and development of the economy, since the different skills and know-hows from millions of individuals will naturally and automatically arrange in a creative and productive pattern in responding to the human desires and necessities (Read, 2008). This can simply be summarized to mean that; in the absence of the government, economic development will occur naturally and automatically, driven only by the needs, desires and necessity of the people. 2. The relevance of the arguments to the development of Hong Kong’s economy Hong Kong’s economy is a major financial-centered economy globally, which is predominantly a service driven economy (Li, 2012). The argument that freedom is the core necessity for economic growth and development as advanced by the article applies to the development of this economy perfectly. This is because, despite the fact that Hong Kong’s economy is a major financial economy globally, whose collapse would have a major negative implication, the sector is self-regulatory, with the commercial banks having the freedom to regulate the financial and monetary policies, without the control of a government-instituted central bank (Loh, 2006). This scenario serves to indicate that the invisible hand is the key driver of the economy, where the unrestricted and uncontrolled play of the desires and necessity of the people is capable of producing positive economic results. The argument that freedom is the core necessity of economic development as advanced by the article also applies in the case of Hong Kong’s economy, considering that since the Index of Economic Freedom was introduced to assess the most free economies in the world that are devoid of government control in 1995, Hong Kong has consistently ranked the first (HKETO, 2013). The relevance of this observation is that; other than the government acting as a control agent in the economy of Hong Kong, the government has always taken the back seat in running the economy, by providing positive interventions, but leaving the economy to run free. In this respect, the government plays the role of the protector of the freedom and liberty of individual and institutions to pursue their own economic interests (Do, 2014). The effect of this arrangement is that the different contributions in terms of labor, skills and know-hows within the Hong Kong economy configure and coordinate a pattern of creation and delivery of goods and services in the economy, purely driven by the desires and necessity of the individuals and institutions in the country. This has in turn delivered greater prosperity in the economy of Hong Kong. The concept of positive non-interventionism is a major concept that characterizes the Hong Kong’s economy, which simply provides for the absence of the government intervention in the economy (Li, 2012). In turn, the government plays the role of the regulator and facilitator, just to ensure that the liberty and freedom of the individuals and institutions operating the economy does not interfere or inhibit the spontaneous, automatic and natural arrangement of skills, labor and know-hows for the different contributors to the economy. Through the government acting as the facilitator, the drivers of the economy then becomes the desires and necessity of the people. This is one of the major argument that was advanced by the article. Thus, the concept of the invisible hand, designed in the form of freedom-absence of government intervention, and need-desires and necessity, which are argued for by the article, has been relevant for the development of the Hong Kong’s economy. References Do, J. (Oct 02, 2014). Hong Kong at a Crossroad: Economic Prosperity or Freedom? The American Media. Available at: http://newamericamedia.org/2014/10/hong-kong-at-at-crossroad-economic-prosperity-or-freedom.php Hong Kong Economic and Trade Office (HKETO). (2013). Economic Freedom: Hong Kong’s Path to Greater Prosperity. Available at: http://www.hketotoronto.gov.hk/newsletters/hkn1304/new-page/economic-freedom.html Li, K. W. (2012). Economic freedom: Lessons of Hong Kong. Singapore: World Scientific. Loh, C. (2006). Functional constituencies: A unique feature of the Hong Kong Legislative Council. Hong Kong: Hong Kong Univ. Press. Read, L. (2008). I, Pencil: My Family Tree as Told to Leonard E. Read. 50th Anniversary Edition, Irvington-on-Hudson: Foundation for Economic Education. Available at: http://www.econlib.org/library/Essays/rdPncl1.html Read More