Lecture #5 "I, Pencil's 4 concepts Points....but now I, Coffee" (09/112/2011)

We read "I,Pencil" last week and had some explanations about it. However, after understanding completely the reading Rizzo decide to retake the reading for the last time to explain the 4 main points of the essay comparing them to the scenario of being a coffee instead of a pencil. 

Four main Points of "I, Pencil/Coffee) 

(i) Impersonality: 

         It was shown in the essay how no one actually knew names or the persons that were involve in doing the pencil. You can have an example as the one Rizzo said which states that everyday he wakes up and gets a coffee in the same exact place without remembering the name of anybody in the coffee shop. Furthermore, no one in the coffee shop knows him. Most of the things in our life are personal but we do have some that are personal like the class emails which you could actually establish a conversation with somebody and not knowing him or remembering his name. 

(ii) Self-Interest: 

Who really does their job or task in order to obtain a coffee? The answer is no one. Every single person involve in the process of making coffee makes it for their own interest. Maybe the interest is just to give do their job in order to obtain money in give food to their family. Moreover, the guy driving the truck in the field or the lawyer settling everything for the real state have their own interest as well. An example could be a professor that gives class not with the final objective of main stuendest learn but just earn some money to buy a car. Everybody has their own self-interest and at the end they end up creating the coffee all together. 

(iii) Cognitive Issue:

This point can be explained short and briefly by stating that their is not a single person that can actually do the coffee all the way from the seed to delivering the coffee in a shop to the final consumer. Now, imagine somebody that could....Would he do it for just $1.49? The answer is clear. Is not something simple it is complex and it requires a big team. 

(iv) Who gives the orders? 

In reality their is no central office of coffee or a super policeman telling every single person involve in the process to deliver the coffee to Rizzo every morning. No orders involve. What happens is a vas inter-connecting web and all the efforts together in order to deliver a final product that maybe people at the beginning of the process don't even know. 

2 Main Terms or Concepts

1) Invisible Hand: Described as the possibility of people to cooperate without without coercion and provoking a collective/creative energy. 

2) Tacit Knowledge: The ability of individuals to know .... and know how to use it. 

Modern Market Economies: 

What is this think that makes the people work impersonal together on a market economy? Price Systems!

Price Systems are the terms of exchange.....Who sets them? No one! Sellers don't set prices. 

After this last concepts Rizzo open a 150 slide PP that basically will cover the next three lectures. 

PowerPoint Presentation

• Economy: Is the Study of how the world emerges and the consequences that come with it. 
• Not everything that is produces is valuable.
• Not everything valuable is produced. 
• We have learned that for a period of 10 thousand years that world saw not advance at all or a very slow one. 

Interesting Fact: In 15 years we can be twice as rich.