Sometime before 1989, a Soviet official asked economist Paul Seabright who was in charge of London’s bread supply. Seabright gave him an answer that is comical but also true: ‘nobody’. The bread we eat turns up on our tables thanks to an incredible team effort (bakers, machinists, electricity suppliers, distributors etc etc). And even more incredibly, there is no-one in charge of that team. It just happens.
Also - please do weigh in on this, its a genuine question - we are used to the idea that markets are efficient in that way - as described above. But that efficiency of the current state, but doesn't seem to take account of the evolution that happened to get to that point. Has anyone measured the work it takes to get the market to that endpoint? Is there even a name for this concept?
That is: For every business that is involved in the supply of bread to london today, there must also be lots of businesses that tried to be involved but failed. Is there an economic term for the work that goes into the failed businesses and initiatives that dont survive long enough to become players in the market? The bankruptcies, the people that had to sell their business off cheap to a competitor, the people who spent a few years trying then gave up and pivoted to something else. Is there a name for that lost effort?
Because it seems that if were comparing against a planned economy thats what we should compare with - the total effort over time to produce whatever X.