ABSTRACT
The way in which the institutions of a market economy coordinate economic activity is nothing short of astounding. Consider that a computer designed in the United States might have a microprocessor manufactured in Israel, a hard drive manufactured in Taiwan, and might be assembled in China using other parts manufactured in other locations all over the world. This remarkable cooperative effort coordinates the economic activities of people throughout the world, even though those people whose coordinated activities go into building the computer will never see each other, and if they did meet may not be able to communicate directly with each other because they speak different languages. Yet the fact that they will never interact directly with each other does not hinder their abilities to coordinate their economic activities to see that computer constructed, from design, to manufacture, to sale, for the benefit of the final user – another person that none of those who had a hand in producing the computer are ever likely to interact with directly.
