I, Toaster

A British artist inadvertently brings Leonard Read's classic essay "I, Pencil" to life.*

Radley Balko | June 24, 2009

(*Note: Artist Thomas Thwaites responds to this article here.)

This week, a new exhibit called "The Toaster Project" opens at the Royal College of Art in London, England. On his website, artist Thomas Thwaites explains the gist: "I'm trying to build a toaster, from scratch—beginning by mining the raw materials and ending with a product that Argos sells for only £3.99." So Thwaites has been traveling around the world to acquire iron, nickel, copper, and oil from which he planned to make refined petroleum for the appliance's plastic moldings.

Thwaites was inspired by a passage from Douglas Adams' book Mostly Harmless, in which the protagonist attempts to win over the inhabitants of another planet by wowing them with the advanced technology of Earth. But, as Adams writes in the passage quoted on Thwaites' website, "Left to his own devices he couldn’t build a toaster. He could just about make a sandwich and that was it."

The basic theme of Thwaites' Toaster Project, however, was first conceived back in 1958 in the brilliant essay "I, Pencil," written by Leonard Read, founder of the libertarian think tank Foundation for Economic Education. Read's influential essay meticulously runs through the processes required to create something as simple as an Eberhard Faber pencil, including the harvesting and processing of cedar, the mining of graphite, and the mining, processing, and application of the many minerals and chemicals that make up the pencil's eraser, ferrule (the bit of metal that holds the eraser in place), lacquer, ink, and the black nickel rings that fasten the ferrule to the pencil's wooden rod. Read also included those things that power the processing and refining plants, as well as the automobiles that transport the pencil ingredients to those factories (which are themselves made up of thousands of parts made up of millions of ingredients, also mined, processed, and assembled all over the world).

Read's conclusion, written in the first-person voice of the pencil:

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which 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 master-minding!

 

In other words, the division of labor is what makes pencils—and, for that matter, all of the conveniences of modern life—possible. Millions of people are involved in the manufacture of a single pencil, or in Thwaites' case, a single toaster. No single human being could possibly possess the know-how to make one on his own.

Thwaites may well end up making some approximation of a modern toaster, but he'll come nowhere near his stated goal of having made one on his own. He notes on his website, for example, that he used a microwave (which of course he didn't create from scratch) to smelt the iron ore he found into steel. He used modern transportation to collect his various raw ingredients. And he fed and nourished himself through the whole process with food produced by modern agriculture and industry. No single man can make a pencil, and as Thwaites' project will demonstrate, no single man is capable of making a toaster, either.

Read's larger point was that no single person involved in the making of a pencil is in his respective business because he necessarily wants or needs a pencil. From the miners to the factory workers to the truck drivers to the smelters to the architects of the factories to the executives that run the companies that fund and organize each step of the process, each and every participant is in the game for his own self interest—to make a living, and to make a contribution that's really only a tiny part of the end result of a product, even one as insignificant as the humble pencil. Pan back until you've framed the entire world economy, and it's hard not to marvel at the wonder and miracle of capitalism's invisible hand.

But as you might have guessed, the miracle of modern capitalism is lost on Thwaites and the eco-arts websites celebrating his experiment. He sees his project as a condemnation of trade, technology, and mutually beneficial exchange, not a celebration of it (note: after the publication of this article, Thwaites objected to this characterization of his position). Thwaites writes:

The point at which it stopped being possible for us to make the things that surround us is long past...This faintly ridiculous quest to make a toaster from the 'ground up' serves as a vehicle through which questions about economics, helplessness and life as a consumer can be investigated.

It's a peculiar kind of "helplessness" that enables us to benefit from the shared labor of millions of workers and the collected knowledge of millions of people accumulated over hundreds of years by merely traveling to the nearest Wal-Mart or appliance store, or, better yet, by merely clicking the mouse on a computer a few times and having the toaster (or, for that matter, groceries, or clothing, or medicine) brought directly to our homes.

And where Read expressed awe at the way so many people worked together—motivated only by self-interest—to produce not only pencils, but millions of other products that make our lives better, Thwaites oddly sees waste:

Commercial extraction and processing of the necessary materials happens on a scale that is difficult to resolve into the humble toaster. This contrast in scale is a bit absurd—massive industrial activity devoted to making objects which enable us, the consumer, to toast bread more efficiently. However, this ridiculousness dissipates somewhat when you consider that life pre-toasters required stoking the fire when a piece of toast was desired.

Of course, the "commercial extraction and processing of the necessary materials" makes a hell of a lot more than toasters, so Thwaites' suggestion that all of this energy is simply expended on toasting bread is absurd. Minerals and metals are extracted and processed to form millions of products. As for "pre-toaster" lives, most people who lived in the age before the toaster could expect to die by about age 40 (the toaster was invented in 1893, when life expectancy in the U.S. was about 43 years).

We don't live longer today because of toasters, of course, but the advances in technology, the division of labor, and the specialized knowledge that brought us the modern toaster have also given us the advances in food preparation and storage, medical technology, and other modern marvels that are the reason we live longer, healthier, and more fulfilling lives.

Read's essay and Thwaites' experiment (the latter unintentionally) also have lessons for the current economic crisis, one explicit and one implicit.

The implicit lesson is that the accumulated knowledge it takes to make both a pencil and a toaster has been aggregating for hundreds of years through the process of trial and error. No one person woke up one morning with the knowledge of how to smelt iron ore into steel. Every successful idea is built on dozens or hundreds or thousands of failures, successes, and improvements. Capitalism and the benefits we derive from it thrive on failure. When we stop letting companies fail, we smother both innovation and the free market's rewards system.

The explicit lesson is the futility of central planning. The surest sign a Soviet-era communist country had a government office of food distrubtion was the presence of food lines—again, no one person or even group of people staffing a government agency can possibly possess all of the knowledge required to move a food item from raw materials to the packaged goods in your cabinet. If there isn't a single person on the planet who can make a pencil or toaster without the aid of millions of others motivated by their own self-interest, it seems ludicrous to think, for example, that we can save the entire U.S. economy if only we can find the right all-knowing experts to use the power of government to "more properly" allocate resources.

All of which is to say that Thwaites' frustrations at making a toaster from scratch don't illustrate the "helplessness" capitalism has created in consumers, it illustrates the way free markets have liberated us. Instead of the day-to-day struggle to stay nourished or to collect wood to fuel the fire that cooks our food so it's safe to eat, developed economies have food that is plentiful, safe, and mostly delicious. That has freed us from substistence struggles to pursue other intersests, such as culture and the arts—even, inevitably, art projects that mock and denigrate the very economic processes that made art possible in the first place.

Radley Balko is a Reason senior editor.

Comments

|6.24.09 @ 3:08PM|#

"I'm trying to build a toaster, from scratch-beginning by mining the raw materials and ending with a product that Argos sells for only £3.99."

Good luck with that. There is probably no corporation that could build a toaster from scratch.

What? No pencil czar? How could they possibly exist?

|6.24.09 @ 3:17PM|#

"Good luck with that. There is probably no corporation that could build a toaster from scratch."

I bet Yamaha could.

Eric S.|6.24.09 @ 3:24PM|#

That.Was.Awesome.

Thank you Radley

Jeff P|6.24.09 @ 3:29PM|#

I, for one, do indeed leave longer because of toasters. I catch them and feed on the little crumbs of their essence laying at the bottom...

Mark Speener|6.24.09 @ 3:53PM|#

Wasn't life expectancy much lower due to infant mortality? I don't think the average person who made it to maturity 100 years only lived to be 40.

|6.24.09 @ 4:01PM|#

Mark,

And your point is that advances in technology (or medical knowledge, another form of labor specialization) do not contribute to the infant mortality rate?

I, Vibrator

Barry Loberfeld|6.24.09 @ 4:24PM|#

From Anti-Trade: A Vortex of Absurdity:

Recognizing the implications of this rhetoric, the interviewer asks another logical question: But humans are social animals. Isn't it necessary for us to rely on each other? Division of labor, it seems, creates only "a form of dependence that comes from relying on others who have specialized skills you don't have. They now have power over you. Whether they are 'benevolent' in using it is really beside the point." Mr. Zerzan then translates theory into practice with a statement I really must quote in full:

In addition to direct control by those who have specialized skills, there is a lot of mystification of those skills. Part of the ideology of modern society is that without it, you'd be completely lost, you wouldn't know how to do the simplest thing. Well, humans have been feeding themselves for the past couple of million years, and doing it a lot more successfully and efficiently than we do now. The global food system is insane. It's amazingly inhumane and inefficient. We waste the world with pesticides, herbicides, the effects of fossil fuels to transport and store foods, and so on, and literally millions of people go their entire lives without ever having enough to eat. But few things are simpler than growing or gathering your own food.

What began with tariffs on imports, ends with each man picking his own berries for food. We have pursued this premise around and down to its nadir. Now, division of labor is not a global, national or even local evil, but an intrinsic one. The inequity of the "power" that the capitalist has over the workers by owning the means of production is eclipsed by the inequity of the "power" that Peter has over Paul simply by being able to do something he can't.

Theory and history demonstrate that at one pole of the opposition to free enterprise looms the total domination of society by the State; at the other, the total obliteration of society as such. Applied consistently, the policy of anti-trade would transform the entire world into a deserted island on which we are each of us stranded all alone. State despotism or social disintegration, 1984 or Robinson Crusoe -- this is the choice that the critics of capitalism offer as a more just alternative to the freedom and cooperation of the market.

|6.24.09 @ 4:28PM|#

Part of the ideology of modern society is that without it, you'd be completely lost, you wouldn't know how to do the simplest thing.

He's just making that up. The ideology of modern society is that, without it, you wouldn't be able to live the lifestyle that you enjoy, which is vastly superior to what you could achieve in isolation.

|6.24.09 @ 4:31PM|#

Another way to look at this is that human beings are predisposed to seek, recognize, and use tools (and ingredients). The more tools or ingredients are available to a given user of tools, the more competently a broader range of purposes can be suited, because the most necessary and convenient resources are more readily at hand. At some point, the person who needs and conceives of a pencil is in a resource-rich environment, in which the necessary components are immediately found among or soon fashioned from, those that already exist. This is the same tool-using behavior that primitive people employed to chip arrowheads out of flint shards, except that it is now practiced in the context of a different, more diverse set of source materials.

Economic activity of the "I, Pencil" sort seems inevitable, as the manifestation of fundamental human behavior traits. Especially harsh environments or especially small group populations retard this activity, but as the environment becomes gentler and richer, the activity increases, until we have an "economic system" that is as complex as the one we know today, or even moreso.

|6.24.09 @ 4:35PM|#

Instead of the day-to-day struggle to stay nourished or to collect wood to fuel the fire that cooks our food so it's safe to eat, developed economies have food that is plentiful, safe, and mostly delicious.

Well, dunno about the mostly delicious part, on average.

mark|6.24.09 @ 4:42PM|#

Seems like a good thread to plug this guy:

Tom Palmer (about 1.5 hours)

The idea that free trade leads to division of labor and thus better outcomes than could be centrally directed, is so simple and yet so obscure as to be almost unintelligible to your average college graduate. The example of the pencil and the toaster help to bring the idea into better focus. I hope Reason publishes more stories on this very basic idea, and the corresponding ignorance of "planning" advocates. And read Hayek!

|6.24.09 @ 4:48PM|#

Great piece Radley.

Thwaites' unintentional demonstration of the power of decentralized free markets reminds me a little bit of David Simon with The Wire. Here's a self-described "social democrat", who strongly advocates for an increase in worker unionization, social welfare, etc. And yet, his TV show -- possibly the seminal entertainment work of the decade -- goes to great lengths to show how stagnating, oppressive, and ineffective large centralized institutions are.

Chad|6.24.09 @ 5:36PM|#

But McMansions! SUV's! Cheap Chinease Crap! ®

hmm|6.24.09 @ 5:40PM|#

The point at which it stopped being possible for us to make the things that surround us is long past...

I can choose to make everything that surrounds me. I simply choose not to. This isn't to say that I can make my TV, computer, desk, microwave, and every other convenience. I can live without them and live with less and in fact, make, grow, or kill everything that surrounds me that I need to live. I choose to partake of the conveniences provided by the rest of the world. (Of course, I am an abnormally crafty bastard anyway. I don't even smoke. go figure.)

I never failed once. It just happened to be a 2000-step process.

hmm|6.24.09 @ 5:45PM|#

It would be an interesting experiment for a corporation to try. Something alluded to above. A true test of vertical integration of production for a firm. Not to mention a decent marketing tool.

hmm|6.24.09 @ 5:51PM|#

TRIFECTA of postage!

I'm not surprised the artist missed the underlying point and flaw in his expirement
Obesity, lung cancer from smoking, alcoholism, even depression. In a sense these illnesses are purchased. Most people know what kind of lifestyle will make them healthy and happy, but impulse gets in the way - another drink, a cigarette, that shiny new product you can't afford.

But if your wallet stops you from being able to pay for the things you know are bad for you...

E-money presents exciting opportunities for public health.

David Pinto|6.24.09 @ 6:01PM|#

I own the model toaster pictured.

No Name Guy|6.24.09 @ 7:22PM|#

I can see further because I stand on the shoulders of Giants who came before me

http://en.wikipedia.org/wiki/Standing_on_the_shoulders_of_giants

Excellent article Radley. Econ 101.

|6.24.09 @ 7:54PM|#

Isn't there a very high probability that the modern toaster and the modern pencil we interact with on a daily basis are made by communists, and not by capitalists?

Vendor Xeno|6.24.09 @ 8:11PM|#

Unfortunately, the author falls into the same pit so many libertarians do, making wild assumptions about the nature and motivation of other people. To him, untested (and untrue) is the idea that the only thing motivating people is self interest, and yet the amount of contribution the world enjoys via people who are interested not merely by the self, or not motivated by the self at all, is huge.

An excellent example is in the world of linux. Literally millions of people contribute their free time and expertise to exploring, expounding and building upon the linux concept, not out of "Self interest" but out of curiosity, cultural interest, etc. And this is true of a good portion of the industries and efforts around the world.

Even in the US, the notion of the "work ethic" prevails, and relates not merely to what you can do for your family, but what you can do for you community. The idea that self motivation is even the primary factor here, much less the exclusive one, is that special kind of ignorance that only comes from willfully ignoring the real world at even the most immediate level.

Balloon Maker|6.24.09 @ 8:15PM|#

So how much will Thwaites sell his toaster for when it's done?

|6.24.09 @ 8:35PM|#

While Capitalism has its ups and downs I am entirely insulted by the flippant suggestion that Capitalism is responsible for the development of arts and culture, as if cave paintings and dance wouldn't exist without Disney, taxes and crooked politicians. Capitalism, like all other systems of government is deeply flawed.

Brian|6.24.09 @ 10:04PM|#

Vender Xeno, your mention of linux is a perfect example of a decentralized group of people working in their own self interest. Curiosity, like hunger and thirst, manifests as a need. For the curious person, that individual need must be fulfilled. The person doesn't contribute to fulfill YOUR curiosity, or YOUR cultural interest, but their own. Self interest working at its finest.

Jonas|6.24.09 @ 10:27PM|#

Vendor Xeno, how are "curiosity" and "cultural interest" NOT under the blanket category of "self-interest". I have a cultural interest in studying the Japanese language, but it's because *I enjoy studying foreign languages*. I'm not learning Japanese for the "greater good", even though I do think that learning to speak foreign languages does contribute to society at large, I study Japanese because of personal, individual curiosity.

In short, "self-interest" is more than just wanting to make money (NTTAWWT), dumbass.

Warty|6.24.09 @ 11:07PM|#

not out of "Self interest" but out of curiosity, cultural interest, etc

You see, when they're pursuing something that interests them, they're not really pursuing their self-interest. You foolish ideological fools!

P.S. any replies to this post will almost certainly consist of ad homs, thereby conceding my points and showing the childish, anti-intellectual nature of libertarians.

|6.24.09 @ 11:32PM|#

"Capitalism, like all other systems of government is deeply flawed."

Capitalism is not a system of government.

Technomist|6.25.09 @ 3:36AM|#

"P.S. any replies to this post will almost certainly consist of ad homs, thereby conceding my points and showing the childish, anti-intellectual nature of libertarians."

That would be because the basic article is one great big pointless and ill-conceived ad hom, if you think about it. The writer assumes stupidity on the part of Thomas Thwaites and takes his piece from there.

Thwaites says his activity is an excercise in asking questions, as an artist, not necesarily in giving all the answers. Why not just accept that?

Marian Kechlibar|6.25.09 @ 5:20AM|#

Two of my ex-girlfriends were Linux developers. I do not know whether this qualifies me as a Linux "insider" (don't take offense at my innuendo), but still I happen to know something about the open source development world.

You would be surprised how many OSS developers are actually paid for OSS development by commercial corporations. Corporations like Sun Microsystems or Novell sponsor OSS projects with big bucks; and the main motivation seems to be to poke Microsoft in the eye and prevent it from total domination of the market. (BTW The market domination game is far from over. Microsoft currently enjoys strong domination in the desktop world, but on servers and handheld devices - not so much.)

This is not just battle of implementations, but of data formats. For large competitors of Microsoft (like Sun, IBM, Novell, SAP ...), it is crucial to prevent establishment of MS-owned, closed proprietary formats (think DOC or XLS) as the de-facto standard, or, even worse, as de-iure standard. This would create a "vendor-lock-in" situation, in which migration from MS to any other vendor would be prohibitively expensive.

On the other hand, it is not feasible for each major IT company to have its own preferred format. That would be a Babel tower of modern IT.

Therefore, "everyone but Microsoft" tries to push open formats as the standard. Which means that appropriate software for processing such formats must exist. And hey presto - that is a purely market motivation to subsidize OSS from other, profitable activities.

Without this source of funding, OSS world would be much smaller than it is.

A T|6.25.09 @ 6:50AM|#

Is it just me or since that Krugman post there seem to be a lot of his followers lurking on Reason? All these collectivist answers, not unthought mind you, but clearly uninformed about capitalism and libertarians...

flix|6.25.09 @ 7:32AM|#

excellent Radley!

Zeb|6.25.09 @ 10:55AM|#

"To him, untested (and untrue) is the idea that the only thing motivating people is self interest"

This is not necessary to the argument. The point is that all of this can get done with self interest as the only motivation. Everyone is necessarily motivated in large part by self interest. So even though some may be motivated by something other than self interest, self interest is sufficient to get complicated tasks done which make everyone's life better.

|6.25.09 @ 12:06PM|#

"Read's larger point was that no single person involved in the making of a pencil actually wants or needs a pencil."

I realize you're simplifying for the point of brevity, and I'm being incredibly flippant, but still The Invisible Hand Don't Need No Stinkin' Pencils is a pretty big leap of faith. The people in the supply chain never wanted a pencil, ever? How'd they fill out their job applications?

What happens if you're one of these cogs in this mighty wheel and you need to write an IOU, a love note to your Argentinian mistress, an expose against the pencil factory's child labor violations or a plea for safer mining practices? Then you might move heaven and earth to acquire a pencil if The Factory denied you access to the finished product.

|6.25.09 @ 12:07PM|#

Christina | June 24, 2009, 8:35pm | #

While Capitalism has its ups and downs I am entirely insulted by the flippant suggestion that Capitalism is responsible for the development of arts and culture, as if cave paintings and dance wouldn't exist without Disney, taxes and crooked politicians. Capitalism, like all other systems of government is deeply flawed.

Uh, Disney is only an entertainment industry. It exists because we have spare time (and money) just as all other entertainment services do.

|6.25.09 @ 12:08PM|#

Doh... Forgot to CLOSE the blockquote.

Andrew|6.25.09 @ 12:37PM|#

Very good article, thank you for writing it. Very interesting.

As for the arguement that pencil making is wasteful: "Trade is voluntary." -LB

Zeb|6.25.09 @ 1:38PM|#

While Capitalism has its ups and downs I am entirely insulted by the flippant suggestion that Capitalism is responsible for the development of arts and culture

Insulted, why? You clearly have no idea what capitalism is (as someone pointed out above, it is NOT a system of government), so you should probably learn some basic economics before taking it personally.
Art and culture can only develop when people have leisure time, i.e. that does not need to be spent providing for the basic necessities of life. This is only possible in a system with division of labor and trade among different groups.

|6.25.09 @ 4:47PM|#

"I, Pencil" is a tissue-thin farce that ignores massive governmental intervention at virtually every step of the process.

The cedar was likely logged from public lands at rates far below true market value. The railroad that shipped the cedar to San Leandro (the Southern Pacific) would not exist had it not been the recipient of massive federal subsidies, in the form of bonds and land grants. The Pacific Gas and Electric Company is a regulated monopoly public utility, and the Sierra Nevada hydrodam was assuredly built on more public lands acquired, no doubt, below market value.

The carloads of slats would then be shipped across the country on one of the transcontinental railroads, all of which were built with the above-referenced aid of subsidized bonds and land grants.

Even the zinc and copper for the ferrule, if mined in the U.S., were likely taken out of public lands purchased at a ridiculous, far-below-market-value price thanks to the Mining Act of 1872.

Kirk|6.25.09 @ 6:14PM|#

Hi Travis,

You are certainly preaching to the choir, here. Just think of how much cheaper that No.2 would be if not for that gummint intervention...

Loupeznik|6.25.09 @ 7:47PM|#

Thank you!!! This is gospel!

|6.25.09 @ 11:07PM|#

Wow I thought my artistic skills were down to years of training and good motor skills. Now I realise it's because someone has been making the toasters that I presumably should have been making if I wan't an artist.
That's not just absurd; it's offensive.

Sorry Radley, this is the point where I stop reading anything you write, except by accident.

randroid|6.26.09 @ 6:29AM|#

"The cedar was likely logged from public lands at rates far below true market value. The railroad that shipped the cedar to San Leandro (the Southern Pacific) would not exist had it not been the recipient of massive federal subsidies, in the form of bonds and land grants. The Pacific Gas and Electric Company is a regulated monopoly public utility, and the Sierra Nevada hydrodam was assuredly built on more public lands acquired, no doubt, below market value."

I bet if Copper had come from Chile (D'Anconia), wood from Brazilian amazon and it had all been shipped by JJH's Great Northwestern it would have been much cheaper! A boon for sketch artists everywhere!

roy|6.26.09 @ 6:32AM|#

"I, Pencil" is a tissue-thin farce that ignores massive governmental intervention at virtually every step of the process.

----
Well, the US has been a mixed economy for most of the 20th cent... so calling anything a capitalist product is bound to be a farce... but division of labour, trade, economic calculation all happen (hampered, yes) even in concentration camps... so there is still a point..

scott|6.27.09 @ 11:03AM|#

I get the gist of the article and experiment, but it raised different questions for me.

Aren't we ignoring the problem that one cannot opt out of the system at all due to a complete reliance on others? What if I don't want a damn toaster? What if I want to live in the woods and build my own crap and grow my own food? No matter if i didn't want modern amenities, I would have to participate in the money economy to raise the money needed to pay for the land to live on and continue to raise the money I need to pay taxes on my land.

Quite frankly, I love my HDTV and my ability to watch any football game I want by adjusting my contract with the cable or satellite company through one phone call. I like eating Hostess cupcakes and most other crap they make. I like to smoke without growing a damn thing in my backtyard and I like making money to participate how I choose in our economy. But what if I didn't want to? Isn't that a large question about individual freedom ignored in this article?

|6.28.09 @ 11:32AM|#

I think Radley, the author, and every commenter thus far misses the big point. What does a toaster do? It toasts bread. I can build a toaster in 5 min. Assemble wood, light it, hold bread over fire. Toast!

How does the toaster the artist wants to build, differ from my toaster? It can be used on a kitchen counter? It doesn't take much practice to be consistent? Really, nothing. Everything the toaster does can be duplicated by an oven, fireplace, or camp fire.

Everyone can do this, and it seems much more to the point than building an electric toaster:

1. grow and harvest wheat
2. mill the wheat into flour
3. collect yeast suitable for bread making
4. make bread
5. build fire
6. toast bread

Even this, "primitive", process is only a few thousand years old and you would have to rely on other humans for seeds and probably yeast (depending on how much baking you do in your kitchen).

|6.28.09 @ 11:53AM|#

Besides technical savvy, economies of scale are in play here.

In order to make a pencil, you need a bit of wood, some graphite, some rubber and a bit of metal and some paint. You also need some tools to cut and shape the materials and attach them together.

To make one pencil would cost a fortune. The wood is easy, but you need a hatchet for the branch and a knife to whittle it. Graphite is much harder to find and refine, and who can smelt iron in his own apartment? Even the smallest bucket of paint is going to be too much for one pencil, and you have to go to South America to get real rubber.

If you expand the process, you get make thousands of pencils for nearly the same price as making one. The marginal costs fall precipitously. The problem is that you will never use all those pencils, and you need to make other things. Why not sell those pencils for other stuff to people who make toasters and need pencils?

Once you start this Ricardian specialization, you are starting to form a modern economy.

|6.28.09 @ 6:46PM|#

For Reason, this article's conclusion largely lacked basic reasoning...

While there is no denying the benefits of free trade, and there is no denying that things are created in the absence of a mastermind, that in no way precludes the ability of such a mastermind to create something of that nature.

Additionally, the article's argument against government actions is absolutely worthless, because even if the government was to take up a certain enterprise (lets take, for example, public healthcare which is certainly the flavor of the month) it would NOT be doing it in the absence of other entities. There are millions of other stakeholders (patients, taxpayers, insurance companies, doctors, hospitals, educational institutions, religious institutions, charities etc.). In essence, you are knocking down a system based on a false choice, of no government, or only government, when in actuality the choice is a LOT of private enterprise with no government (regulations, participation, whatever, depending on the particular topic) or a LOT of private enterprise with little to a little more government.

And finally, even government is not this huge single entity people make it out to be... There are many different facets to it, and many decision making entities in it, and unlike private entities, it has extremely large decision makers lying outside of it (special interest groups, the general public, foreign govts., private firms, etc...).

|6.28.09 @ 7:00PM|#

So much for the "self made man". The age of social Darwinism is over.