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Blakedw
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What actually happens is that the fishermen buy the election of a new shaman. He then rules that the fishermen have property rights over the lake and the fishermen agree amongst themselves to limit overfishing to maintain higher prices for fish. They use the extra profit to buy the votes of the village council to ensure that there are no tolls on imports of the goods which fishermen want to buy. Adam Smith only used the phrase "invisible hand" once in his writings. It was not about the internal division of labour within society but about whether external trade restrictions were needed to ensure activity at home. His argument was that there were so many risks and uncertainties about doing business abroad that there was an enormous home bias working in favour of domestic activity. The whole of post-war globalisation has been about reducing this home bias. But a bit of home bias is actually a good thing. By the way, after a few years the village feasts are cancelled. The fishermen obtain proof from a number of independent economic research institutes which they fund that the feasts remove the incentive from non-fishermen who thus are unwilling to take jobs in domestic service at lower wages.
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Apr 17, 2011