https://fee.org/resources/i-pencil/
Smith is describing the division of labour in an elegantly and interesting way. Read uses the same kind framing around a familiar object to say:
If you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing.
I'll take Smith.
Milton Friedman described the pencil in his Free to Choose series: https://www.youtube.com/watch?v=67tHtpac5ws
And in 2012 CEI made a movie version: https://www.youtube.com/watch?v=IYO3tOqDISE
I know the rules here are such that we don't talk about voting up/down, but I have no idea why you were voted down. Your post is on-topic and informative. I didn't know their was a book version or the CEI movie version, I had only watched the Free to Choose series. Thanks for sharing.
http://crookedtimber.org/2011/04/16/i-pencil-a-product-of-th...
Food safety regulation, worker and environmental protections, antitrust laws - they did not come from theory.
No. The pencil is built because of the incentives (read: potential for profits) for each of the people involved. The lighthouse keeper maintains the lighthouse to earn a salary. The truck driver earns his/her paycheck based on milage&tonage hauled. The entrepreneur bought the rights to log the land because he/she believed he could make a buck. Etc.
I, Pencil is not a story of cooperating for social/feel-goody sake - but rather for individual incentives all along the way. The million people involved in making that pencil - none of which knows any of the others.
I, Pencil is a story that shows government intervention is not needed to build the pencil.
I never claimed otherwise, so that 'no' is unnecessary.
> I, Pencil is a story that shows government intervention is not needed to build the pencil.
No-one claims government intervention is needed to build pencils or more complex goods. But it is needed to, for example, prevent corporations from polluting rivers with mercury: https://en.wikipedia.org/wiki/Minamata_disease
The whole story is nothing more than an attack on an implied strawman.
I think when it came out, the world was a very different place. A large chunk of the world lived in command economies (USSR, China, etc...), and even in the west, where WWII and the massive government involvement in the economy was a very recent memory, the notion that someone could just calculate all the pieces better than the market probably wasn't quite so foreign as it seems today.
The pencil today, as are many other products, is produced by the free market and many many entities along the way. Focusing on whether companies vertically integrate miss the bigger point that it is free markets and Capitalism which provide us with the world we have behind us in the Western world.
At the same time, it's also nice to have some rules and regulations and people who enforce them so that, say, one of the suppliers tries to start using toxic ingredients in the pencil's paint, and gets thrown in jail for it.
[0] https://en.wikipedia.org/wiki/Pencil#Discovery_of_graphite_d...
Not just building pencils but also delivering the mail as one given example, in fact it explicitly broadens the scope of its argument to “...tens of thousands of other things”. ‘I Pencil’ is explicitly an argument against the need for government intervention and planning in general, as it makes very clear at the end - “The lesson I have to teach is this: Leave all creative energies uninhibited”.
It is an argument that creating pencils and many other essential activities can, and implicitly should occur “...in the absence of governmental or any other coercive masterminding”.
As deogeo pointed out in reality governmental masterminding made many clear and beneficial contributions to the efficiency, safety and sustainability of the pencil’s manufacture. It’s argument that no masterminding occurred is in practice not strictly true. We can argue about how necessary such contributions are, but I don’t see how we can argue they are irrelevant to the discussion when ‘I Pencil’ so clearly broadens the scope of its claims.
If I Pencil were to stick to being an eulogy to creative market forces that would be fine. That aspect of its exposition is well reasoned and compelling, but it completely fails to address the issue of externalities. We don’t need government or regulation to have pencils, we need it to also have other things which market forces frequently despoil or fail to provide. Worker safety, sustainable natural resources, etc. That’s what deogeo is talking about.
It's demonstrably not true for large game-changing R&D projects which open up entirely new sectors for innovation.