Maximum Social Confidence

Leverage The Secret of Economics

There’s a concept in economics called the “invisible hand.”

It was described first by Adam Smith a few hundred years ago.

It’s basically the idea that a mass of people, all operating independently can solve problems much more quickly and effectively than a central authority.

For example, let’s say there’s a city that has a bunch of hamburger shops. They all buy their bread from a few different bread factories.

And the bread factories buy their raw materials from a few different countries.

But for some reason, the price of wheat goes up. Which makes the bread more expensive, which makes the hamburgers more expensive.

One hamburger shop gets an idea to wrap their burgers in lettuce, (for example).

One guy with one idea. Then all the other shops copy him and pretty soon all burgers are cheap again, and everybody’s happy.

Meanwhile, the bread factories have found some other sources of wheat that are cheaper, and now the bread is cheap again.

End result is now the hamburger shops have two different types of burgers.

Those with bread and those wrapped in lettuce.

The bottom line of this goofy example is nobody really needs to know WHY the wheat suddenly got expensive. Everybody from the bread factories to the hamburger customers only knew that they had a problem, and EVERYBODY, on their own, in their own way, figured out how to solve it.

And when one guy figured it out, everybody knew as well.

Compare this to the central authority model, that says you need to study why the wheat is so expensive and come up with farming reforms and all that stuff.

That would take YEARS.

But in the above example, the solution took maybe a week, at most.

All because people interact, share information based on their own view of their own world around them.

Being alive right now is significant in that there are TONS of ways to connect with other people.

No matter WHAT kind of problem you have, no matter what kind of idea you have, you will more than likely find the solution within your own social circle.

Which means the BIGGER your social circle, the more effective you’ll be.

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