Pencils and Miracles
This is an article on the importance of freedom, the invisible hand of the market, and the shortcomings of socialism.
By Mark W. Fowler, J.D., M.D
Leonard E. Read, an American economist, once wrote of socialists:
History is littered with their presumptuous plans for rearranging society to fit their vision of the common good, plans that always fail as they kill or impoverish other people in the process.
We are witnessing a remarkable time. Never before in human history has there been more freedom, more opportunity, more social mobility than at the present. Any time of the day or night it is possible to walk into a big-box store and buy any number of items. What is not available in the store is available online. Most Americans have access to extraordinary healthcare and an increasing number are able to avail themselves of a solid education at a state university. These possibilities exist because of the abundance of wealth that exists not because of government but in spite of it.
Lamentably, too many clamor for the security blanket of socialism, the false promise of free healthcare, subsidized housing, guaranteed free college education, and a “living wage.” Perhaps to their credit they clamor for these things for illegal immigrants as well, as though there are unlimited resources hiding in a vault waiting to be justly distributed.
Winston Churchill opined on the generalized willingness of many to criticize capitalism, or to capture its success for their own ends:
Some people regard private enterprise as a predatory tiger to be shot. Others look on as a cow they can milk. Not enough people see it as a healthy horse pulling a sturdy wagon.
And so those would abandon capitalism have in their heads a vision of a world that has never existed anywhere at any time. Indeed, every attempt to create such a society has failed. From the early Christians to the Mayflower colony to the U.S.S.R, North Korea, China, and Venezuela, every attempt at sharing wealth in a communal effort has failed. Moreover, such attempts have often led to death, poverty, and want on a large scale.
The essence of capitalism is not well understood in this country and it is essential for our survival to illuminate that darkness with a simple story. First published in 1958, “I, Pencil” by Lawrence W. Reed is an essay told in the first person by a pencil.
Consider, then, the pencil. It would be hard to identify a simpler instrument than the pencil. No moving parts, no batteries, no Internet access necessary. First invented in 1564, following the discovery of graphite in Borrowdale, Cumbria, England, it has been used in its basic form for centuries. It is ubiquitous. A supply can be found in any rural convenience store, grocery store, hardware store, or big-box store in the country of which there are thousands. It is inexpensive. It is simple. It has few components: wood, graphite, lacquer, brass, factice.
That such a thing exists is, well … miraculous.
And yet, no one person in the world has the requisite knowledge needed to make a pencil. There is no one man, one committee, or group of committees anywhere with the expertise it takes to harvest the basic ingredients from the earth, process them, transport them, and assemble them into the final form. There are components from all over the world that must be processed with care to make the final product.
But there is more. Of the thousands (tens of thousands?) involved in making this, very few of them talk to each other. Most have complete knowledge of only a small part of the process. They follow no plan other than their day-to-day operations. No government czar or committee tells them what, when, where, or how to do it.
There is no shortage of pencils anywhere. From Manhattan to San Diego, from Portland to Miami, and everywhere in between, pencils exist in abundance, and always have. Let us extrapolate from this notion and apply it to automobiles, batteries, concrete, diamonds, etc.
That is the free market, driven by the invisible hand that coordinates all these people and organizes their effort to produce a pencil. On the other hand, we have the government involved in a variety of endeavors. Let’s take a look at those efforts: Amtrak operates across the country, and particularly on the Eastern Seaboard, transporting many thousands to and from work including many who are among the highest wage earners in the country. It operates in the red and has for years. The Veterans Administration/Department of Veterans Affairs has had for decades the responsibility of providing healthcare to veterans. Wait times are long — so long that many veterans die of conditions that could be treated if seen timely. Things are not better at the Post Office, which has the relatively simple (but logistically large) task of delivering the mail. The Post Office loses billions annually.
On the other hand, UPS and FedEx have similar challenges and do so at a profit, and more reliably than the Post Office. And finally, there is the rollout of ObamaCare. The computer program designed to enroll patients was flawed. You would think that $2 billion would have been enough to make a system that worked. In the private arena, Amazon offers for sale a wide variety of goods, takes your payments, coordinates with multiple suppliers, and arranges for shipment with minimal difficulty.
Some of the politicians leading the charge to convert that part of the private economy dealing with healthcare and who claim to know just how to fix it have never run anything as complicated as a Dairy Queen. One has virtually no experience in the private sector, having worked in government as a small-town mayor or in Congress. The other is an economic illiterate whose prior work experience was as a bartender. Do you think they could make a pencil?
The lesson here is eloquently stated by Mr. Read: “Leave all creative energies uninhibited.”