Self-sufficiency and Poverty vs. Specialization and High Productivity

British journalist, author and an economist Matt Ridley talks about how people working for each others, by specializing through division of labor - rather than relying on self-sufficiency, are able to mass produce incredibly complex products that no one single person knows how nor is able to produce. For more information about these ideas read Leonard E. Read's famous classic essay "I, Pencil." Source: zeitgeitminds YouTube channel.

Translated by: Jadranko Brkic

(see video below transcript)

Transcript:

Counterintuitively, we have become more prosperous as we have moved away from self-sufficiency. The more we work for each other, the better off we are. The more we rely on our own efforts, the poorer we are. That's why we call it subsistence. "Self-sufficiency" is indeed another word for "poverty."

The story of human prosperity is that through the magic of exchange, we get more and more specialized as producers, more and more narrow in our work so that we can become more and more diversified in our consumption.

On my desk at home sit two objects, which are exactly the same size and shape. One is a Acheulean hand axe from half a million years ago of the kind used by homo erectus. The other is a computer mouse from a half-decade ago. They are identical in size and shape because they are both designed to fit the human hand.

But one was homemade, the axe. The other was made for me. And that's, in a sense, the secret of human progress. Because compared with homo erectus, I am well off because I have thousands -- nay, millions of servants. They club together to make me that mouse. There was a coffee grower in Brazil whose coffee was being drunk; oil rig hand in Mexico whose oil was being turned into plastic in America; whose plastic was molded into a mouse in Korea; which was marketed here in Britain. They were all part of my support team, my staff, my backup crew. And yet do you know what? Not only did none of them know they were working for me. Not one of them knows how to make a computer mouse.  Because there's nobody on the planet who knows how to make a computer mouse. Quite literally.

The knowledge is not in any individual's head, because the man who knows how to drill the oil well doesn't know how to refine it into plastic. And the man who runs the computer mouse company, all he knows is how to run a company. He doesn't know how to make a computer mouse, and so on. That's the incredible, peculiar, almost irrational thing about the modern world. It achieves things that nobody actually knows how to do.