“Literally thousands of people cooperated to make this pencil. People who don’t speak the same language; who practice different religions; who might hate one another if they ever met. When you go down to the store and buy this pencil, you are, in effect, trading a few minutes of your time for a few seconds of the time of all of those thousands of people. What brought them together and induced them to cooperate to make this pencil? There was no Commissar sending out orders from some central office. It was the magic of the price system – the impersonal operation of prices that brought them together and got them to cooperate to make this pencil so that you could have it for a trifling sum.”
Milton Friedman on the complex and not readily appearent beauty of the capitalist system. Most of us have probably heard this before especially if you’re an armchair economist like me 🙂
A friend passed this along yesterday via Facebook. Enter the Competitve Enterprise Institute‘s short movie “I, Pencil:”
Yes, the beautiful, complex yet mundane pencil is a good example on why the market works. Every time. No Government bureaucrat put these people together to make this pencil.
“Ok, ok I blog about aviation so let’s get to it will you?” you say. Last I watched an episode of National Geographic’s Megfactories. I saw the episode on the Learjet factory in Wichita (that’s Wah-chee-ta in aviation parlance…lol):
The connections between the pencil and the Learjet are readily apparent to me. Yes, the airplane clearly more complex than the pencil but the same free market economic prinicples apply here. The raw materials were acquired and processed to become parts of the latest incarnation of Bill Lear’s dream, the Learjet 60XR. Again, no Government bureaucrats involved to say build that airplane. People thousands of miles apart, having never met working towards a common goal “guided” by Adam Smith’s “invisible hand.”
Yes, it’s physical beauty is appearent but the beautiful complexity that place to bring things we normally take for granted is less so and takes time to think about.
Another point to be made is, could you imagine the complex decisions that would need to be made for central planners undertake production of pencils…nevermind something more complex like aircraft. History is littered with failure of centrally planned economics.
A “happy medium” you say? Government is force. How do you compete in the marketplace with what your told is a competitor AND is acting as the referee? (*Obamacare mandated state exchanges*).
In everything from pencils to Learjets, there’s beauty in what was thought to be mundane because of the free-market system.