Transcript - Izzit.org

WOMAN: So they did. And this is our village.
MAN: …and that’s Mr. Mason.
WOMAN: Oh, yes, hello!
MAN: …and the Shepherds are over there.
WOMAN: Umm.
MAN: We explained how everybody grows what they like, and brings it here to the market. We used to
swap our goods, but that became too complicated. We solved that problem with money. It’s the price of
the goods that keeps the balance between supply and demand. Nobody tells anybody what they have to
produce or what they have to consume. Simple, you see
WOMAN: “Yes, but…” They weren’t fools, our new friends, they could see problems.
MAN: “Is it possible,” they said, “for one person to pay another to do a job”
WOMAN: “Yes,” we said.
MAN: “Well, in that case” they said, “then the employer must tell the employee what to produce. That’s
right, isn’t it” And you’ve got to admit it’s a fair point.
WOMAN: “And who,” they asked, “took the decision to build the road”
MAN: “And who is responsible for building this bridge to the meadow Who is going to build that
watchtower we’ve been talking about”
WOMAN: “And what happens when there is a wheat blight or a fowl pest, and one family has nothing to
take to the market”
MAN: We explained that we sorted some of these things out at the village meeting. Everybody who
turns up has a right to a say. We eventually come to an agreement how much everybody will chip in to
pay for things like that.
WOMAN: “Ah, but supposing you don’t agree” they asked.
MAN: Well, we just do. We have to.
WOMAN: “You have to” they said, “In that case, it’s just like how our council of elders plan. You
contribute what they decide, and they distribute it how they choose.”
MAN: The truth is we both work the same way, both of us have some voluntary exchanges, and both
have some planning and allocation. The only difference is we do things in different proportions.
WOMAN: What we have seen is an imaginary illustration of the two principle economic systems. This
village is an example of a market economy – a system based on voluntary exchanges with a price
mechanism taking care of many allocation problems. But even the best markets can’t take care of
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