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Lift your lamp beside the golden door, Break not the golden rule, avoid well the golden calf, know; not all that glitters is gold, and laissez faire et laissez passer [let do and let pass] but as a shining sentinel, hesitate not to ring the bell, defend the gates, and man the wall

Friday, January 6, 2012

Milton Friedman's I, Pencil

Look at this lead pencil. There's not a single person in the world who could make this pencil. Remarkable statement? Not at all. The wood from which its made for all I know comes from a tree that was cut down in the state of Washington, to cut down that tree, it took a saw, to make the saw it took steal, to make the steal, it took iron ore. This black center, we call it lead but its really compressed graphite. I'm not sure where it comes from but I think it comes from but I think it comes from some mines in south America. This red top up here, the eraser, a bit of rubber, probabbly comes from malaya where the rubber tree isn't even native, it was imported from south America by some business men with the help of the British Government. This brass farel, I haven't the slightest idea where it came from, or the yellow paint or the paint that made the black lines or the glue that holds it together. 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 those thousands of people. What brought them together and enduced them to cooperate to make this pencil? There was no Comisar 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. That is why the operation of the free market is so essential, not only to promote productive efficiently but even more, to foster harmony and peace among the people of the world.

I, Pencil: My Family Tree as told to Leonard E. Read - http://www.econlib.org/library/Essays/rdPncl1.html#I,%20Pencil