Sayings of Milton Friedman 2

Our thanks to John Hawkins at Townhall, for compiling these quotations:

[July 31st] would have been the 103rd birthday of Milton Friedman, who was one of the most brilliant economists of the last century. In honor of Friedman, here are his 20 best quotes.

20) “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

19) “Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like political freedom: the typical state of mankind is tyranny, servitude, and misery. The nineteenth century and early twentieth century in the Western world stand out as striking exceptions to the general trend of historical development. Political freedom in this instance clearly came along with the free market and the development of capitalist institutions. So also did political freedom in the golden age of Greece and in the early days of the Roman era.”

18) “It is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both. If you have a welfare state, if you have a state in which every resident is promised a certain minimal level of income, or a minimum level of subsistence, regardless of whether he works or not, produces it or not. Then it really is an impossible thing.”

17) “So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

16) “When everybody owns something, nobody owns it, and nobody has a direct interest in maintaining or improving its condition. That is why buildings in the Soviet Union – like public housing in the United States – look decrepit within a year or two of their construction…”

15) “The great danger to the consumer is the monopoly – whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.”

14) “Two major arguments are offered for introducing socialized medicine in the United States: first, that medical costs are beyond the means of most Americans; second that socialization will somehow reduce costs. The second can be dismissed out of hand — at least until someone can find some example of an activity that is conducted more economically by the government than private enterprise. As to the first, the people of the country must pay the costs one way or the other; the only question is whether they pay them directly on their own behalf, or indirectly through the mediation of government bureaucrats who will subtract a substantial slice for their own salaries and expenses.”

13) “Nothing is so permanent as a temporary government program.”

12) “The supporters of tariffs treat it as self-evident that the creation of jobs is a desirable end, in and of itself, regardless of what the persons employed do. That is clearly wrong. If all we want are jobs, we can create any number – for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs – jobs that will mean more goods and services to consume.”

11) “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.”

10) “There is all the difference in the world, however, between two kinds of assistance through government that seem superficially similar: first, 90 percent of us agreeing to impose taxes on ourselves in order to help the bottom 10 percent, and second, 80 percent voting to impose taxes on the top 10 percent to help the bottom 10 percent – William Graham Sumner’s famous example of B and C decided what D shall do for A. The first may be wise or unwise, an effective or ineffective way to help the disadvantaged – but it is consistent with belief in both equality of opportunity and liberty. The second seeks equality of outcome and is entirely antithetical to liberty.”

9) “When the United States was formed in 1776, it took 19 people on the farm to produce enough food for 20 people. So most of the people had to spend their time and efforts on growing food. Today, it’s down to 1% or 2% to produce that food. Now just consider the vast amount of supposed unemployment that was produced by that. But there wasn’t really any unemployment produced. What happened was that people who had formerly been tied up working in agriculture were freed by technological developments and improvements to do something else. That enabled us to have a better standard of living and a more extensive range of products.”

8) “I want people to take thought about their condition and to recognize that the maintenance of a free society is a very difficult and complicated thing and it requires a self-denying ordinance of the most extreme kind. It requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to do something about them you not only may make them worse, you will spread your tentacles and get bad results elsewhere.”

7)“We economists don’t know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can’t sell tomatoes for more than two cents [adjust to today’s equivalent] per pound. Instantly you’ll have a tomato shortage. It’s the same with oil or gas.”

6) “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

5) “Workers paying taxes today can derive no assurance from trust funds that they will receive benefits from when they retire. Any assurance derives solely from the willingness of future taxpayers to impose taxes on themselves to pay for benefits that present taxpayers are promising themselves. This one sided ‘compact between the generations,’ foisted on generations that cannot give their consent, is a very different thing from a ‘trust fund.’ It is more like a chain letter.”

4) “There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.”

3) “Indeed, a major source of objection to a free economy is precisely that it… gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.”

2) “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”

1) “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.”

Posted under Capitalism, Economics, government by Jillian Becker on Sunday, August 2, 2015

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Why socialism must always fail 1

Friedrich von Hayek on why socialism must always fail:

Posted under Capitalism, education, Socialism, Videos by Jillian Becker on Monday, July 6, 2015

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Socialism must always fail 0

Yet another socialist state – Greece – finds itself insolvent. When will they ever learn?

Quotations from Socialism: An Economic and Sociological Analysis, by Ludwig von Mises –

Wherever Europeans or the descendants of European emigrants live, we see Socialism at work to-day; and in Asia it is the banner round which the antagonists of European civilization gather. If the intellectual dominance of Socialism remains unshaken, then in a short time the whole co-operative system of culture which Europe has built up during thousands of years will be shattered. For a socialist order of society is unrealizable. All efforts to realize Socialism lead only to the destruction of society. Factories, mines, and railways will come to a standstill, towns will be deserted. The population of the industrial territories will die out or migrate elsewhere. The farmer will return to the self-sufficiency of the closed, domestic economy. Without private ownership in the means of production there is, in the long run, no production other than a hand-to-mouth production for one’s own needs.

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All rational action is economic. All economic activity is rational action. All rational action is in the first place individual action. Only the individual thinks. Only the individual reasons. Only the individual acts.

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The average man is both better informed and less corruptible in the decisions he makes as a consumer than as a voter at political elections.

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When we call a capitalist society a consumers’ democracy we mean that the power to dispose of the means of production, which belongs to the entrepreneurs and capitalists, can only be acquired by means of the consumers’ ballot, held daily in the market-place. 

Posted under Capitalism, Commentary, Economics, liberty, Socialism by Jillian Becker on Monday, July 6, 2015

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A clean, cool, beautiful, fertile planet – praised be mankind 12

Jorge Mario Bergoglio, an Argentinian Communist and Pope, is telling whoppers.

Fortunately, Christopher S. Carson puts him right with a wonderfully cheerful story. It comes from Front Page. We slightly abbreviate it:

Last week, Pope Francis released his controversial environmental Encyclical, Praised Be, to the public.  It is not simply a matter of global warming endangering the planet, he writes.  The Pope has a comprehensively dark vision of the world.  He writes that

The Earth, our home, is beginning to look more and more like an immense pile of filth … beautiful landscapes are now covered with rubbish … Never have we so hurt and mistreated our common home as we have in the last two hundred years.

In other words, the Industrial Revolution is to blame for covering the planet in rubbish.  But if it’s covered in trash, it’s a strange kind of trash that has caused global crop yields to increase by 160 percent since 1961 and deaths from droughts to be reduced by 99.8 percent since the 1920s.

It’s an odd kind of “mistreatment” of the planet over the life of the Industrial Revolution that’s resulted in the global life expectancy rising from 26 years in 1750 to 69 years in 2009.  This is in spite of the fact that Earth’s population increased from 760 million to 6.8 billion and incomes (in real dollars) rose from $640 to $7,300 during the same period. …

If the globe were truly turning into a great heap of exploited waste, you would expect natural resources to become more expensive as the cost of extracting rises and scarcity becomes the norm.  But natural commodities are cheaper today than ever.  The real price of almost all natural resources – from iron to salt to coal – is cheaper today in than 50 or 500 years ago.  In Britain, artificial light is 20,000 times cheaper per man hour worked than it was in 1300.

On a global scale, with only a few exceptions like China, air and water is cleaner than ever. Since the late 1970s, pollutants in the air have plunged.  In advanced countries, lead pollution declined by almost 100 percent, carbon monoxide and sulfur dioxide by more than 50 percent; ozone and nitrogen dioxide declined as well.

A car today emits less pollution cruising at full speed than a parked car did in 1970.

In the America of 1900, about 25% of all deaths were from contaminated drinking water.  Today, hardly anyone here dies from this scourge.  The Pope seems oblivious to the fact that the richer the nation is, the cleaner its environment.

Despite the masses wading around in the Pope’s seas of “filth,” and despite a world population of 7.3 billion, the poorer countries’ incomes have surged since 1975; since 1981, the number of Earth’s people in extreme poverty fell by an amazing 1 billion, even as the population increased by more than 1.5 billion.

But if there is one environmental issue that most exercises the Supreme Pontiff, it is global warming.  “A very solid scientific consensus,” he writes, “indicates that we are presently witnessing a disturbing warming of the climatic system. In recent decades this warming has been accompanied by a constant rise in the sea level and, it would appear, by an increase of extreme weather events.”

Well, the warming over “recent decades” apparently does not include the last two decades, because over the past 18 years no net increase in global temperature has been recorded, despite the atmosphere’s CO2 content rising by 8 percent.  Both the Arctic Ocean and Antarctica have this year posted record high ice packs.

The Pope’s letter seems quite concerned about the poor of Africa experiencing crop failures as a result of global CO2 emissions.  But the opposite appears to be true: CO2 is plant food, and the rising CO2 levels are helping to water and green the continent.

According to a 2007 study in the science journal Geology, Africa is currently “experiencing an unusually prolonged period of stable, wet conditions in comparison to previous centuries of the past millennium. … The patterns and variability of 20th century rainfall in central Africa have been unusually conducive to human welfare in the context of the past 1400 years.”

If the trends of higher CO2 concentrations continue, and political strife abates, Africa, far from being a ruined land of desiccated drought, could well become the breadbasket of the world.  All it needs from the West is fertilizer and genetically hardened crop strains that resist insect damage.

“Praised be” … Mankind, which has so rapidly improved his lot and that of his Earthly home.

Time to blame the Third World – and bring back empires? 1

Countries trying to be nice help bad countries to do worse.

The people in Third World despotisms are victims for sure – but not victims of the First World. They are the victims of their own tyrants.

By accepting those who flee from them, the successful, prosperous, civilized West is allowing the tyrants to carry on as usual.

This is from an important editorial in Investor’s Business Daily:

At 60 million and rising, the global refugee population has never been larger. But instead of blaming the states that take in the refugees, isn’t it time to demand accountability of the nations that create their misery?

The UN’s refugee agency’s “Global Trends Report: World at War” got virtually no press when it was released Thursday, but it should have. Its stark data signal a global crisis of refugees and a great wrong in the established world order. Fifty-nine-and-a-half million people were driven from their homes in 2014 as a result of war, conflict and persecution, the highest number in history, as well as the biggest leap in a single year. A decade ago, refugees totaled 37.5 million. An average 42,500 are displaced each day, 1 out of every 122 people on earth, or, if placed together, a nation that ranks 24th among world populations.

“We are witnessing a paradigm change, an unchecked slide into an era in which the scale of global forced displacement as well as the response required is now clearly dwarfing anything seen before,” said UN High Commissioner for Refugees Antonio Guterres.

Guterres rightly sees the scope of the problem, and as a global bureaucrat can be forgiven for his concern about “the response required”. But that focus on the response is precisely why the crummy Third World dictatorships, terrorist groups and corrupted democracies that create the refugees keep getting away with it.

Where is the scorn for the nations whose anti-free market, oligarchical and hostility-to-minority policies are the root of the problem?

It seems that the only criticism and attention that ever comes to refugee issues centers on whether the countries are able to take them in.

Southern Europe, for example, is being browbeaten by the UN, the Vatican and the European Union for not rolling out the welcome mat for the thousands of smugglers’ boats full of refugees from Syria, Niger, Chad, Libya, Afghanistan and elsewhere fleeing to their shores.

The same can be said of the United States, which is watching a stop-and-go border surge of Central Americans who insist they’re escaping gang violence in their home countries. Australian and Southeast Asian states have been berated by the same actors for not wanting to take in thousands of refugees sailing from Bangladesh and Burma.

The Dominican Republic is taking global brickbats for trying to preserve the integrity of its borders.

Are there any war-crimes tribunals in the works for captured Islamic State members whose terror is the No. 1 reason for refugee flight? Where’s the criticism of the government of Afghanistan, which makes corruption the priority over a livable homeland?

How about the governments of Chad, Niger and Somalia, or the leftist regimes in Central America, that actually encourage refugee outflows so they can live off their remittances instead of developing their economies through free markets?

Are any of these places being kicked out of international organizations for the misery they are responsible for? Has anyone ever been singled out for their failure to make their states livable? Not one.

Colombia was a creator of refugees a decade ago, but no longer. Why? It put itself under the wing of the US through Plan Colombia in 1998 and learned how to take control of its country and initiate free-market reforms.

Which brings up one idea that isn’t being discussed amid so much wretchedness: empire. In a 2014 article in the Atlantic Monthly, geography expert Robert D. Kaplan pointed out that empires are the foremost creators of stability and protectors of minorities. The topic is taboo. But in light of the growing failures of the international community to halt the refugee problem, it belongs on the table just as much as the UN’s solution — throwing more money at it.

With global refugees on the rise, it’s time to talk about the cause of the crisis as well as the cure.

The song of Western triumphalism 0

Listen to this inspirational song that is sung continually by white men, capitalists, Israelis, and American conservatives:

Posted under America, Capitalism, Islam, Israel, jihad, Muslims, United States, Videos by Jillian Becker on Saturday, June 20, 2015

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The 100th Man 0

Here is a refutation of Socialism in under 10 minutes.

An African parable on how profits work to the benefit of all society. Produced by the Free Market Foundation as a gift to African Students For Liberty.

Posted under Africa, Capitalism, Economics, education, Videos by Jillian Becker on Friday, June 19, 2015

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Keynes must die 4

To follow yesterday’s post on the GOP proposals for repealing Obamacare and replacing it with free-market solutions to health care needs (Health in the market place, June 7, 2015), we reproduce a comment made by Tibor Gaspardyn, originally on our Facebook page.

It provides important information on little-known problems of Health Care in America – and prescribes a cure for them.

From its founding in 1846, the American Medical Association (AMA) has been a union … a union by exclusion. It has been less concerned with improving medical practice, which it does, but with advancing professional prestige and economic reward. (Why does it so vigorously hide doctors’ performance information?)

In the 1880s it became one of the first and perhaps the most influential lobbying organizations in the Republic; only the banking lobby had greater influence. With the imposition of the progressive movement, in the American Republic (1890’s into the late 1920s) significantly promoted by Teddy Roosevelt and continuing under and through Woodrow Wilson, the AMA was granted, and it retains, incredible power and control over medical practice. The AMA’s stranglehold on medical practitioners and services was increased under FDR and it continues to grow stronger. There has never been an administration or Congress, since the AMA’s founding, that has ever challenged it’s economically-destructive control.  As with all unions, political contribution and support gains “look-the-other-way” privilege. And the AMA union members have some really deep pockets.

The AMA/political cabal allows the AMA to govern, with power and authority emulating law, the number of hospitals; the number of teaching hospitals; the number of those training as doctor, nurse and other related vocations; what the definitions and responsibilities are of the various medical vocations; the requirements, certifications, accreditations and qualifications for participation in the medical field – and more. In other words, the AMA, not free market capitalism, controls the entire supply, and therefore the quality and COST, of medical delivery, doctor’s incomes, within the USA. 

Too few doctors relative to those seeking medical care means fees go up. Nurses not allowed to perform routine procedures means billings go up. So, any plan to “fix” healthcare must eliminate the control of the AMA. Otherwise, there is no “patient-orientation”, costs will not be market-based; it will still be a union managed for the benefit of the purposefully-limited providers system. Critically, the self-balancing of supply and demand afforded under a real free market system is missing. Who is being served in our current AMA-based system?Consumers don’t count. Are you being made to sit in a  waiting room for an hour and a half? Is ‘house call’ still in the dictionary?

That analysis and description was just about the medical side of healthcare. Insurance and pharmaceuticals are also fully managed for the benefit of the suppliers. Not, however, by a self-serving  wolf-in-sheep’s-clothing union but by the suppliers themselves through their favorite career-politicians.

Health insurance is a government granted monopoly (anti-consumer monopolies and cartels are an impossibility in a free market capitalistic system). By law, only a handful of cartelized-insurers are allowed to operate in a state. No sales are permitted across state lines. That choice is outlawed. Why aren’t there any insurance policies that go with you, cover existing illness, offer all those coverages the liberals demand? Because they don’t have to. The insurers need only contribute to a campaign … serving consumers isn’t required! It is the same for the pharmaceutical industry.

Indeed, healthcare and all industries have become self-serving plunderers through political connection, technically called mercantalism – today wrongfully termed “crony ‘capitalism'”, and managed in an authoritarian – ie. fascist –  manner (the application of legislation, taxes, fees, certifications, inspections, etc. in order to control firms/the economy whilst allowing the appearance of private ownership and control). And, everywhere you turn you hear the cry for even more regulation. Regulation is simply code for anti-competition government intervention for the benefit of a favored company or industry - typically, called for covertly by the industry to be regulated. How many cable companies exist in your area … one? Yet, they claim stiff competition. Like so many, just another government granted monopoly at your expense. Further, incredibly, all the regulators come right out of the industries they are charged to regulate … no conflict there! The bottom line,all this political/re-election-directed economic intervention, healthcare or otherwise, increases costs above market pricing with quality of goods and services well below competition-based offerings.

It needs to be known that the AMA represents only 17% of doctors in the USA. The AMA agenda is not supported by those actually in the profession.  The agenda is supported by the politicians benefiting from the AMA’s substantial financial contribution and their lending of prestige (stooging) to political shenanigans through the 3rd-Party Authority Agrees Deception & Deflection Tactic (to pass a program and then after the program fails -  “Leading doctors agree…I relied on leading doctors”).

Lastly, until the Republic’s leadership is de-careered & un-partied, and the rigged regulation system is disbanded, and the Federal Reserve engine financing corruption and socialism is got rid of, the Republican group can plan all they want … election after election … there will not be change.

Keynes must die … if the American Republic is to live!

Posted under Capitalism, Economics, Socialism, United States by Jillian Becker on Monday, June 8, 2015

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“I, Pencil” forever 2

We posted this classic essay by Leonard E. Read at least twice before, but it seems to have dissolved in the mists of time. We were recently reminded of it by our contributing commenter, Don L.

It needs to be known by all generations down through the ages.

So here it is, or most of it. (We have made a few small cuts to appease our prejudices.)

As I sat contemplating the miraculous make-up of an ordinary lead pencil, the thought flashed in mind: I’ll bet there isn’t a person on earth who knows how to make even so simple a thing as a pencil.

If this could be demonstrated, it would dramatically portray the miracle of the market and would help to make clear that all manufactured things are but manifestations of creative-energy exchanges, that these are, in fact, spiritual phenomena. The lessons in political economy this could teach!

There followed that not-to-be-forgotten day at the pencil factory, beginning at the receiving dock, covering every phase of countless transformations, and concluding in an interview with the chemist.

Had you seen what I saw, you, also, might have struck up a warm friendship with that amazing character, I, PENCIL.

Being a writer in his own right, let I, PENCIL speak for himself:

I am a lead pencil — the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.

Writing is both my vocation and my avocation; that’s all I do.

You may wonder why I should write a genealogy. Well, to begin with, my story is interesting. And, next, I am a mystery — more so than a tree or a sunset or even a flash of lightning. But, sadly, I am taken for granted by those who use me, as if I were a mere incident and without background. This supercilious attitude relegates me to the level of the commonplace. This is a species of the grievous error in which mankind cannot too long persist without peril. …

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me — no, that’s too much to ask of anyone — if you can become aware of the miraculousness that I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because — well, because I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn’t it? Especially when it is realized that there are about one and one-half billion of my kind produced in the United States each year.

Pick me up and look me over. What do you see? Not much meets the eye — there’s some wood, lacquer, the printed labeling, graphite lead, a bit of metal, and an eraser.

Just as you cannot trace your family tree back very far, so is it impossible for me to name and explain all my antecedents. But I would like to suggest enough of them to impress upon you the richness and complexity of my background.

My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods. Why, untold thousands of persons had a hand in every cup of coffee the loggers drink!

The logs are shipped to a mill in San Leandro, California. Can you imagine the individuals who make flat cars and rails and railroad engines and who construct and install the communication systems incidental thereto? These legions are among my antecedents.

Consider the millwork in San Leandro. The cedar logs are cut into small, pencil-length slats less than one-fourth of an inch in thickness. These are kiln dried and then tinted … [because] people prefer that I look pretty, not a pallid white. The slats are waxed and kiln dried again. How many skills went into the making of the tint and the kilns, into supplying the heat, the light and power, the belts, motors, and all the other things a mill requires? Sweepers in the mill among my ancestors? Yes, and included are the men who poured the concrete for the dam of a Pacific Gas & Electric Company hydroplant, which supplies the mill’s power!

Don’t overlook the ancestors present and distant who have a hand in transporting 60 carloads of slats across the nation.

Once in the pencil factory — $4,000,000 in machinery and building, all capital accumulated by thrifty and saving parents of mine — each slat is given eight grooves by a complex machine, after which another machine lays leads in every other slat, applies glue, and places another slat atop — a lead sandwich, so to speak. Seven brothers and I are mechanically carved from this “wood-clinched” sandwich.

My “lead” itself — it contains no lead at all — is complex. The graphite is mined in Ceylon. Consider these miners and those who make their many tools and the makers of the paper sacks in which the graphite is shipped and those who make the string that ties the sacks and those who put them aboard ships and those who make the ships. Even the lighthouse keepers along the way assisted in my birth — and the harbor pilots.

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 chemically reacted with sulfuric acid. After passing through numerous machines, the mixture finally appears as endless extrusions — as from a sausage grinder — cut to size, dried, and baked for several hours at 1,850 degrees Fahrenheit. To increase their strength and smoothness the leads are then treated with a hot mixture that includes candelilla wax from Mexico, paraffin wax, and hydrogenated natural fats.

My cedar receives six coats of lacquer. Do you know all the ingredients of lacquer? Who would think that the growers of castor beans and the refiners of castor oil are a part of it? They are. Why, even the processes by which the lacquer is made a beautiful yellow involve the skills of more persons than one can enumerate!

Observe the labeling. That’s a film formed by applying heat to carbon black mixed with resins. How do you make resins and what, pray, is carbon black?

My bit of metal — the ferrule — is brass. Think of all the persons who mine zinc and copper and those who have the skills to make shiny sheet brass from these products of nature. Those black rings on my ferrule are black nickel. What is black nickel and how is it applied? The complete story of why the center of my ferrule has no black nickel on it would take pages to explain.

Then there’s my crowning glory, inelegantly referred to in the trade as “the plug,” the part man uses to erase the errors he makes with me. An ingredient called “factice” is what does the erasing. It is a rubberlike product made by reacting rapeseed oil from the Dutch East Indies with sulfur chloride. Rubber, contrary to the common notion, is only for binding purposes. Then, too, there are numerous vulcanizing and accelerating agents. The pumice comes from Italy; and the pigment that gives “the plug” its color is cadmium sulfide.

Does anyone wish to challenge my earlier assertion that no single person on the face of this earth knows how to make me?

Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others. Now, you may say that I go too far in relating the picker of a coffee berry in far-off Brazil and food growers elsewhere to my creation; that this is an extreme position. I shall stand by my claim. There isn’t a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how. Neither the miner nor the logger can be dispensed with, any more than can the chemist at the factory or the worker in the oil field — paraffin being a byproduct of petroleum.

Here is an astounding fact: neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me. Each one wants me less, perhaps, than does a child in the first grade. Indeed, there are some among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me. Perhaps it is something like this: each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants. I may or may not be among these items.

There is a fact still more astounding: the absence of a mastermind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found. Instead, we find the Invisible Hand at work. This is the mystery to which I earlier referred.

… I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles that manifest themselves in nature an even-more-extraordinary miracle has been added: the configuration of creative human energies — millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding! …

The above is what I meant when writing, “If you can become aware of the miraculousness that I symbolize, you can help save the freedom mankind is so unhappily losing.” For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand — that is, in the absence of governmental or any other coercive masterminding — then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

Once government has had a monopoly of a creative activity such, for instance, as the delivery of the mails, most individuals will believe that the mails could not be efficiently delivered by men acting freely. And here is the reason: each one acknowledges that he himself doesn’t know how to do all the things incident to mail delivery. He also recognizes that no other individual could do it. These assumptions are correct. No individual possesses enough know-how to perform a nation’s mail delivery any more than any individual possesses enough know-how to make a pencil. Now, in the absence of faith in free people — in the unawareness that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy this necessity — the individual cannot help but reach the erroneous conclusion that mail can be delivered only by governmental “masterminding.”

If I, Pencil, were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there is testimony galore; it’s all about us and on every hand. Mail delivery is exceedingly simple when compared, for instance, to the making of an automobile or a calculating machine or a grain combine or a milling machine or to tens of thousands of other things.

Delivery? Why, in this area where men have been left free to try, they deliver the human voice around the world in less than one second; they deliver an event visually and in motion to any person’s home when it is happening; they deliver 150 passengers from Seattle to Baltimore in less than four hours; they deliver gas from Texas to one’s range or furnace in New York at unbelievably low rates and without subsidy; they deliver each four pounds of oil from the Persian Gulf to our Eastern Seaboard — halfway around the world — for less money than the government charges for delivering a one-ounce letter across the street!

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow.

Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

Posted under Capitalism, Commentary, Economics by Jillian Becker on Monday, May 18, 2015

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Hayek speaks 2

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Posted under Capitalism, Economics, Socialism by Jillian Becker on Wednesday, April 1, 2015

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