Leonard E. Read’s 1958 essay, “I, Pencil,” deservedly has taken its place on the top shelf of economics lessons mankind has produced. Told from the perspective of a single Number Two Pencil, it is a witty, trenchant, calm, and beautifully understandable analysis of the axioms of subjective human valuation, resource discovery and creation, supply and demand, the price system, prices communicating information, resource allocation, and the decentralized “invisible hand” nature of how all of these constantly fluctuating variants work only within a free market to allow people from all over the world to catch the signals of profit, which represent human want, and then supply something to fill that want.
The key in the essay is that no one man likely could make a single tool like a pencil in a year. Graphite from one part of the world goes inside wood from another, is connected to rubber taken from trees in another, and they are sealed with a small metal connector that comes from yet another. The paint comes from multiple factors, each of which come from their own locales, with specialized workers doing their thing, each likely unaware of the final product for which a portion of what they make will be made, and each using tools that, themselves, come from their own supply chains.
The central point is that a central planner, or team of central-planners, cannot do through compulsion and government scheming what the free market does – which is to allow preference to be shown, allow those choices to influence prices, allow prices to influence production decisions, and allow those profit incentives to influence anyone to enter that market and supply a valuable product or service.
So, leave it to Joe Biden, whose hatred of market economics seems matched only by his hatred of natural rights (in fact, they are the same thing), to implicate “I, Pencil” in what, to economists, is about as heretical a way as one possibly could.
As Eric Boehm writes for Reason, the President Wednesday took to defending his Soviet-style control of U.S. ports, trucking, rail, gas, and more. And he did it by way of the “I, Pencil” revelation about market complexity, flipping on its head Read’s warning about command-and-control, and, instead, trying to make complexity an argument for command-and-control.
’Even products as simple as a pencil,’ Biden said, ‘have to use wood from Brazil and graphite from India before it comes together at a factory in the United States to get a pencil. It sounds silly, but that's exactly how it happens.’
This, coming from the guy who made it harder to transport oil across North America, when he killed the Keystone XL pipeline, coming from a man who was vice president when the Obama administration made it more difficult, bureaucratic, and expensive for truckers to handle long hauls, a problem that saw truckers protest against the feds. This, coming from a guy who has suspended oil-drilling leases in Alaskan land that is unconstitutionally run by the feds - oil, by the way, that could help bring down international fuel costs, which have contributed to a near doubling in the price of shipping between China and the U.S.
This from the man whose COVID-19 mandates, support for federal subsidies to people who don’t return to work (including longshoreman at the ports of San Diego and Los Angeles, ports that handle 40 percent of all cargo entering the U.S.), and whose leftist friends in the government of California have set such draconian emissions standards that vast swaths of trucking fleets literally would break the law if they tried to haul into or out of the state.
But Mr. Biden is ready to teach Americans, those knuckle-dragging cavemen, about “supply chains,” even offering October 6 this snide swipe at the capacity of Americans to comprehend what His Mightiness understands.
If we were all going out and having lunch together and I said, 'Let’s ask whoever's in the next table, no matter what restaurant we’re in, have them explain the supply chain to us.' Do you think they’d understand what we’re talking about?
Evidently, Joe doesn’t think that’s the case, so he invokes the pencil -- the most popular, most powerful symbol of decentralized free markets -- to push for centralized, unfree markets.
Command-and-control has been tried, over and over, Joe, and it always leads to privation, starvation, and death.
And to cap it off, Biden then mixed his “it’s complicated, you wouldn’t get it” vibe with his “it’s international” smokescreen to then push, not for more openness to international markets by lowering tariffs and allowing consumers to save more thanks to the international division of labor, but for more government central planning, in the form of protectionism against low-priced foreign goods to artificially boost favored U.S. corporations. Boehm observes that it took only minutes for Biden to shift from waxing pseudointellectual to:
…begin promoting his ‘Buy American’ agenda. That ‘won't just be a promise but an ironclad reality,’ he promised.
In the iron-clad 1992 book by James Bovard entitled “The Fair Trade Fraud” the author and legendary researcher exposed how federal tariffs on foreign goods cost consumers eight times more than the "sales benefits" shifted towards particular favored US business the politicians try to “boost." That's important, and it's something most politicians likely would prefer American consumers did not know as the Biden gang try to impose higher costs on foreign goods, making it harder to get what consumers want and harder to save money.
Money that could be used to start new businesses, in the U.S., Joe.
But there’s another lesson here.
As Boehm notes, one of the key lessons in “I, Pencil” is about international trade, how free trade fosters international peace, and how political controls harm that peace.
So now we can apply that lesson to America’s current supply chain problems.
Many kids aren’t taught in school that embargos are a form of aggressive war. When FDR imposed an embargo on Japan prior to Pearl Harbor, many savvy people recognize the aggression for what it was, and knew the Japanese would retaliate, not making the Japanese the initial aggressors, but revealing them to be what they were: the respondents.
Likewise, Joe Biden’s jab mandates, his vast array of regulations and trend towards blocking international items from entering the us without massive tariff-taxes placed on them? Those are embargos – against YOU.
Biden is waging war on you. And anyone who supports his aggressive policies is an accomplice.
It’s time to return intellectual fire to help people learn how destructive his command-and-control mindset is.
(Cover Photo: Gage Skidmore)