Cluelessness From a Harvard Professor
by Robert Wenzel: Proof
Banksters Running Scared
Rodrik, the Rafiq Hariri Professor of International Political Economy
at the John F. Kennedy School of Government, Harvard University,
famously used the pencil as an example of the virtues of markets.
A socialist/interventionist country (CHN) runs that industry now.
First of all,
it wasn't Milton Friedman that first pointed out the importance
of markets by using the pencil as an example.
It was Leonard
Read, who wrote about the manufacture of the pencil, in a piece
Pencil. second. Note that Friedman in an afterword to the piece
acknowledges Read as creator of the story.
Rodrik comments on the story, I doubt he has ever read it,(or he
really has a problem with comprehension, if he did) since he smugly
incorrectly states that the pencil is now made in China. It may
be assembled in China, but the sense in which Read (and Friedman)
look at the creation of the pencil goes way beyond where it is assembled.
As Read points
out, the lead in the pencil may come from an entirely different
country (In Read's story Sri Lanka]
Read goes on:
these [Sri Lankan]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
[the pencil's] 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 rubber-like product made by
reacting rapeseed oil from the Dutch East Indies [Indonesia] 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 which gives the plug its color is cadmium
Rodrik call China a socialist/interventionist state, it is far from
that. It is a mixed mayhem of parts government and parts private
sector. The pencils are made by a wide variety of Chinese private
sector manufacturers, including Tonglu
Kechao Pen Co., Ltd., Fujian
Best Stationery Co., Ltd., Jiangyin
Ordg Trading Co., Ltd., and Harbin
Hairun Pencil Co., Ltd.
Pencil assembly in China has nothing to do with the socialist/interventionist
Bottom line, and as read pointed out the fact holds that no one
knows how to manufacture a pencil from start to finish. Rodrik has
missed the complete point of Read's story and attempts to smear
it, without having an ounce of knowledge of what he is talking about.
If proof was
ever needed of Friedrich Hayek's assertion that knowledge is not
dispersed evenly to all, Rodrik sure just proved that.
with permission from Economic
Economic Policy Journal
Best of Robert Wenzel