The Democratic Socialists that were elected last week might learn a simple lesson from “Rinkonomics.” That was an article written many years ago by Daniel Klein. He used the idea of a skating rink to illustrate some important economic principles.

​If we had never seen a roller rink or skating rink, we would assume that you would need lots of organization. Imagine a 100 people skating around. Wouldn’t you need smart leadership to keep skaters from injury? Of course, whenever you see a skating rink, you don’t see that at all. There are some reasons for that.

One important quality governing the possible collisions is “mutuality.” If I keep from colliding with you, you don’t collide with me. I promote my interest and your interest by avoiding a collision with you.

​Another key concept is “coincidence of interest.” I don’t intend to promote your interest, but I end up doing so by promoting my own interest. Spontaneous order surfaces from seeking your self-interest.

John Stossen filmed a video of him using a bullhorn in which he would call out directions. His attempt to keep order made the circumstances worse.

​Daniel Klein also points out that central planning gets harder the more complex the interactions. If you have 4 skaters, you could probably control all the actions with a bullhorn. But if you have 100 skaters, there is simply no way you could effectively and efficiently control all the actions.

​There is a lesson here for socialists and central planners. The thousands and millions of interactions in a market economy are too difficult to predict. In fact, many of the government restrictions are like a foolish central planner trying to impose restrictions on 100 skaters. It ends up interfering with the spontaneous order that naturally surfaces in skating or the economy.