Not a person
alive knows how to make a simple ordinary wood pencil. Not even the
president of the largest pencil factory and over 14 billion are made each
year. Sounds fantastic, doesn't it? I further contend that not only cannot
even a discrete group of legislators make a pencil but they cannot create an
infinitely more difficult universal health care system for one-sixth the
U.S. economy.
Because a
pencil appears so simple, it offers a terrific lesson about the free market.
Pick up a pencil -- what do you have? Some, wood, lacquer, the printed
labeling, graphite lead, a bit of metal and an eraser. Let's trace back its
family tree for a moment to see just how complex this little writing
instrument really is.
The family
tree begins with a tree, in fact, a cedar that grows in Northern California
and Oregon. The logs are shipped to a mill in San Leandro, Calif., where
they are cut into small, pencil-length slats less than 1/4 inch in
thickness. These are kiln dried and then tinted for the same reason that
women put on rouge. People prefer to look pretty, not pale. The slats are
waxed and kiln dried again. How many skills went into making the tint and
the kiln, the supplying of heat, the light power, the belts and motors,
everything that makes the mill work?
Once in the
factory, millions of dollars in machinery and buildings, all the capital
accumulated by many, many people, each slat is given eight grooves by a
complex machine, after which another machine lays in the lead in every other
slat, applies glue and places another slat on top. A lead sandwich, so to
speak. Seven mates are carved mechanically from this wood-clinched sandwich.
The lead
contains no lead at all. It's graphite mined in Ceylon. Consider the men who
work the mines and their tools, and the men who put sacks filled with
graphite on ships and the lighthouse keepers along the way.
The graphite
is mixed with clay from Mississippi in which ammonium hydroxide is used in
the refining process. Then wetting agents are added such as sulfonated
tallow -- animal fats that chemically react with sulfuric acid. After
passing through numerous machines, the mixture is extruded and cut to size,
dried and baked at 1,850 degrees. To increase strength, the leads are then
treated with a hot mixture that includes candilla wax from Mexico, paraffin
wax and hydrogenated fats. Next the cedar receives six coats of lacquer. Do
you know how to make lacquer, all of its ingredients? Who would think that
castor oil and castor beans are part of it? Why, even the process that adds
pigment to make the lacquer yellow uses the talents of numerous people.
Observe the labeling. The film is formed by applying heat to carbon and
mixing with resins. How do you make carbon and resins?
Next we see
the metal -- the ferrule -- it's brass. Think of the people who mine zinc
and copper and those who have the skill to make shiny sheets of brass from
products of nature. The rings are made from green nickel. What is green
nickel and how is it applied?
And now the
crowning glory, inelegantly referred to as the plug. The part with which to
erase mistakes that mortal men make when using it. An ingredient called
factice is what does the erasing. It is a rubber-like substance made by the
reaction of rapeseed oil with sulfur chloride. Rubber, contrary to common
notion is only for binding purposes. Included is pumice that comes from
Italy and the pigment, which gives the plug color, is cadmium sulfide.
Who wishes to
challenge the assertion than no single person on the face of the earth knows
how to make a pencil?
Now here's
the most astounding fact: Neither the workers in the oil fields nor the
chemists, nor the diggers of graphite or clay nor the men who make the ships
or who run the machines that do the knurling on the tiny bit of metal nor
the president of the company perform their task because they want a pencil.
Indeed, there is a multitude who adds to the production who have never seen
a pencil nor would they even know how to use one. Their motivation is other
than the acquisition of a pencil.
Each of the
millions of people involved in the making of a pencil sees that by
exchanging a tiny bit of know-how, can acquire the goods and services he or
she needs or wants. The free market is not a place or a thing, it is a
process in which trillions of decisions are made daily through voluntary
cooperation under the division of labor. No government no matter how much
compulsion and coercion can possibly equal it.
What is even
more astounding: There is no master planner dictating and forcing countless
actions, which bring pencils into being. No trace of such a man can be
found. Instead, we find Adam Smith's "Invisible Hand" at work. Each pencil
is a complex combination of miracles -- the miracles of the free market.
Each of the factors brought together is the result of the creative energy of
humans working in harmony in response to human necessity. The pencil
symbolizes the freedom of mankind, a freedom we seem to be losing. It is the
faith in free men that has made America's economic system the envy of the
world, the most efficient and productive ever known.
The pencil,
simple as it is, is a miracle which serves as testimony that by having faith
in free men we can explain why in a short 233 years, more has been done to
benefit mankind than governments in the world were able to accomplish in all
of preceding history.
Knowing this,
is it wiser to place our trust in the free market or a government-run health
care system?
Note:
I, Pencil was edited
by Fred Schnaubelt (condensed from seven pages).
I, Pencil was written in 1958 and told to me by my friend Leonard Read. To read the
more detailed original seven pages:
http://www.thefreemanonline.org/featured/i-pencil/
