Got a Pencil? You Didn’t Build That

Nobody, Leonard Read once explained, can make a pencil by himself.

Most people would never accuse President Obama of memorizing Milton Friedman under the covers at night. Yet the patron saint of laissez-faire probably would not take as much exception as many Republicans have to Obama’s comment in Roanoke three weeks ago that “if you’ve got a business – you didn’t build that. Somebody else made that happen.”

Republicans have given Obama quite a rhetorical thrashing for that gaffe, and the attacks show little sign of letting up. That’s because his remarks are not only extremely convenient to the GOP; they also reopen an ideological fault line that goes back decades.

The gaffe plays right into the Republican narrative about Obama: that he does not understand business and free enterprise, that he thinks everything good flows from government; that he is at heart an economic collectivist. It took the Romney camp roughly two picoseconds to line up a phalanx of entrepreneurs to testify that they built their businesses with their own sweat and blood, thank you very much.

Democrats have counterpunched, but not well. Their argument boils down to: (a) Obama didn’t say that, and (b) he was right!

All of this is a fresh gloss on an old debate. In 1934, FDR attacked what he called the notion of “the self-supporting man”: “Without the help of thousands of others, any one of us would die, naked and starved. Consider the bread upon our table, the clothes upon our backs, the luxuries that make life pleasant; how many men worked in sunlit fields, in dark mines, in the fierce heat of molten metal, and among the looms and wheels of countless factories, in order to create them for our use and enjoyment.”

Yet what journalist Elmer Davis once said of Roosevelt could be said as well of Obama: “You could not quarrel with a single one of his generalities.” Nobody denies that man is a social being who relies on others from the moment he is born. Indeed, when Obama said in Roanoke that “somebody helped to create this unbelievable American system that we have that allowed you to thrive,” he could have cited Milton Friedman or any one of a dozen other free-market economists as evidence.

Example: In Leonard Read’s famous essay “I, Pencil” – later popularized by Friedman – Read demonstrates the miracle of the free market's invisible hand. Nobody, he explains, can make a pencil by himself. A pencil’s wood comes from cedar trees in California; can you make a saw or fell a tree? It is shipped by rail; can you run a railroad? It is dried in kilns; can you build a kiln? The graphite comes from mines in Ceylon; can you mine graphite? Each pencil is coated in lacquer; can you make lacquer? The brass ferrule – well, you get the point.

Read and Friedman use the pencil to show the folly of central planning: Nobody can possibly know enough to manage the production of pencils. And indeed, history has proven that when governments create Pencil Ministries (metaphorically speaking), they fail – inevitably and spectactularly.

Obama, by contrast, seems to draw the opposite lesson: that because “there are some things we do better together” (his words in Roanoke), those things should be done by, or at least managed by, central government – preferably with him at the helm. (“That’s the reason I’m running for president,” as he said.) Like another liberal heartthrob, Elizabeth Warren, Obama also concludes that entrepreneurs deserve less credit than they take – and less earnings than they keep. And that’s where he goes astray.

What we need here is a distinction between a necessary and sufficient condition. A complex society is necessary for the creation of business, but it is not sufficient. Countless people made modern computing and the Internet possible. But Elon Musk, not anybody else, made PayPal happen.

And even if that were not so – even if Musk’s contribution to the creation of PayPal were no greater than the contribution from Phil, the goateed baristo at Starbucks with the Occupy Everything sticker on his car – Obama’s approach leaves a crucial question unanswered: Why should Phil, rather than Elon, enjoy the proceeds from PayPal’s success?

Suppose you sell me a pencil. You didn’t make that. Still, I freely gave my dollar to you. How much right do you have to that dollar? That’s hard to say, but this is not: You have far more right to keep it than any third party has to take it away.

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  • robc||

    That’s hard to say

    No it isnt.

    100 cents.

    Everyone who helped make the pencil already got their cut, whether the pencil was sold or not.

  • Tulpa Doom||

    See that nail? You didn't hit it on the head. Someone else hit it for you.

  • anon||

    That post? You didn't do that. Someone else made that happen.

  • Mike M.||

    The bottom line is that this bullcrap flowing from his big stupid mouth is an attempt to try and justify funneling more of our money towards his preferred unprofitable entites like Solyndra. And pretty much everyone knows it.

  • T o n y||

    If you think a overseeing the production of a pencil is unfathomable, think about a criminal justice system. Or air traffic control. Nothing can be centrally planned, say the libertarians, so only the most important things must be centrally planned.

  • Mike M.||

    Now a liberal is citing our criminal justice system as evidence of the wonders of central planning? That some of the most dissonant cognitive dissonance I've ever heard in my life.

  • CampingInYourPark||

    "If you think a overseeing...is unfathomable"

    Fuck off, slaver

  • Tulpa Doom||

    It's not the importance of criminal justice that means it has to be handled by govt, it's the fact that criminal justice is inherently coercive. Markets and coercion don't mix.

    Food production is even more important than criminal justice and we don't entrust that to the govt, the nostalgia you and your pals have for Soviet famines notwithstanding.

  • EDG reppin' LBC||

    I'm pretty sure Tony would be cool with centralized food production.

  • Zeb||

    And when he starved, he'd blame it on Republicans.

  • Randian||

    Lilly’s father then told a story that has stuck with me ever since. As she lay dying in a pool of her own blood and vomit, the overpoweringly putrid scent of death wafting in the air as her father cupped the intestines spilling out her mangled abdomen, the littlest Ledbetter faintly breathed her final words. And like columnist Ezra Klein, she was laudably on message.

    “It’s so cruel,” she said, whimpering as tears fell from her bloodshot eyes to her blood-smeared cheek, “what Mitt Romney did to that dog.”
  • advancedatheist||

    I think a lot of us would starve with the imposition of the Austrian Just Economy because the gold standard assumes Malthusian reasoning. When you abolish fractional reserve lending, farmers won't get the loans they need to go about their business, they won't plant crops and agricultural production will crash.

    That probably sheds light on why Murray Rothbard argues in one of his books that children have no right to eat, and that their parents can legally starve them to death without interference. He got that provision in place because he knew that his system would cause a famine.

  • Zeb||

    It just amazes me that anyone can still think that about food (not that Tony necessarily does, but people do). Of all of the massive failures of central planning, food seems the most obvious and spectacular failure. In every case, attempting to centralize and plan food production ends up with lines for food at best and outright starvation in many cases.

  • Mr. FIFY||

    Shit, folks, he thinks "at least" 25% of Americans are "racist hillbillies", though I suspect he's lying - he probably considers _everyone_ to the right of him, to be racist hillbillies.

    Why expect anything coherent or truthful out of him on this topic?

  • sarcasmic||

    I'm pretty sure Tony would be cool with centralized food production.

    If you don't want centralized food production then you want people to starve.

    How can food be produced without central planning?

  • anon||

    How can food be produced without central planning?

    Obviously, it can't. I mean, when's the last time you waited in a line for bread?
    /sic

  • Brendan||

    The bread line concept and it's devolution make a great counterpoint.

    At some point when talking about eliminating or simply reducing some specific aspect of government, someone will always call me (or the person who brought up) greedy because we're trying to take away something that we had.

    It goes along the lines of "You grew up with public schools, and now that you don't need them, you just want to take them away from everyone else. How pathetic [or selfish]"

    I always imagine that at least once, someone in a bread line or shortly after finally making it through one, commented that the government shouldn't be handing our bread, but rather they should get out of the way and let stores choose what bread they want to carry and charge money for it like 'I' heard they do in America. You just know that at least one apologist castigated this person for being so greedy that they would take away another person's ability just to get bread once they got their bread.

    You could do the same thing with larger central planning of food. "Comrade, you've grown up your whole life eating food that was part of central planning, and now you want to get rid of it, how greedy and short sighted to take it away once you don't need it anymore."

    Anyhow, I've found that they hate the bread line example and either go into name calling or change the subject.

  • Brendan||

    Toss in some inane goal or need to prop up some house of cards, and you have the standard lefty talking point. "The private market could never make sure everyone got enough to eat for free" or something along those lines. It's always some benchmark that the private market would have to meet that is inane or suspect on its face. Why everyone would have eat for free is never really explained, nor do they defend it without counterattack "I suppose you just want everyone to starve"

  • T o n y||

    Are you suggesting that food production and distribution in this country isn't subsidized or managed at pretty much every step?

  • anon||

    Managed? No. Managed by government? Yes, I am suggesting that.

  • Randian||

    Just because it has One Drop does not make the entire system engendered by the government, nor is the government entitled to take credit.

  • T o n y||

    I fail to see what distinguishes government central planning from other forms of central planning in terms of inherent efficacy. I get that you guys think it's morally wrong because of coercion, but that doesn't automatically mean it's ineffective.

    There is no a single aspect of food production and distribution in this country that isn't affected by government management, from subsidizing production to subsidizing access (food stamps) to regulating preparation to nutrition labels. Food is about the worst industry imaginable for you guys to counter arguments about government involvement with, but you guys always do for some reason.

  • Brendan||

    Why does it need to be centrally planned at all?

  • T o n y||

    Because famines happen from time to time in nature (or the "free market"), and preventing famines is something civilized countries do.

  • sarcasmic||

    preventing famines is something civilized countries do

    Wrong. As usual.
    Governments hurt people in famine ravaged areas through price controls and other market interference.
    Lower supply means higher prices, and higher prices draw goods in as people seek to make a profit. This raises supply and allows people to eat. Sure it costs a bit more, but that's better than starving.
    Price controls take away that profit incentive which means goods are not drawn in, resulting in shortages and starvation.

  • Brendan||

    Famines happen a lot more often in government systems where food production/distribution is centrally planned. The late USSR is a fantastic example of how harmful central planning can be to the area of food.

  • Paul Thiel||

    Please say Hi to the "Dear Leader" next time you see him for me.

  • Anomalous||

    In at least the past three centuries, all famines have been caused by governments.

  • sarcasmic||

    There is no a single aspect of food production and distribution in this country that isn't affected by government management

    Which is not the same thing as central planning.

    Tony logic FAIL

  • T o n y||

    Fine, it's a heavily regulated and subsidized market. You good with that?

  • Concerned Citizen||

    It is successful because it's managed by people driven by the profit motive. Nothing makes more goods available at the lowest prices than the profit motive. And nothing causes scarcity and famine like gov't.

  • Sam Grove||

    I fail to see what distinguishes government central planning from other forms of central planning in terms of inherent efficacy.

    That you seem to be willing to get into this shows how clueless you are.

    The correct answer to the question of what distinguishes government central planning from distributed market planning: Profit and loss.

    Government intervention into agriculture has done nothing but make food more expensive for consumers.

    List:

    Marketing orders to limit production of certain foods.

    Paying farmers to not grow wheat.

    Paying farmers to grow corn for synfuels instead of for food.

    Buying and storing surplus dairy to keep prices higher.

    Sugar protection makes sugar prices several times higher than world price.

  • ||

    I fail to see what distinguishes orangutan central planning from other forms of central planning in terms of inherent efficacy. I get that you guys think it's morally wrong because of coercion, but that doesn't automatically mean it's ineffective.

  • ||

    Tony said: "I fail to see what distinguishes government central planning from other forms of central planning in terms of inherent efficacy. I get that you guys think it's morally wrong because of coercion, but that doesn't automatically mean it's ineffective."

    Actually, there are many, many regulations in the federal government that explicitly require less efficiency. For example, small business initiatives. If a small company bids a higher cost on a government contract, they get preferential treatment over larger companies that outbid them. Federal contracts are often a long, inefficient bureaucratic process set up specifically to spend more money than necessary.

    So, in theory, it isn't required to be less inefficient. In practice, it has a horrible track record, and frequently requires inefficiency (See history).

  • Caleb Turberville||

    "Soviet famines"

    HEY, HEY, HEY! The Soviets put Sputnik in orbit! Thank you very much.

  • Rasilio||

    Given that the state owns a monopoly on the use of force it is probably not possible for there to be a private criminal justice system, however I'm betting you could pick up any major newspaper in the country on any given day and by page 6 have more than enough evidence that the criminal justice system is an abject failure by virtually any measure.

    As far as Air Traffic control, I see no evidence whatsoever that this is something which needs to be done by a centralized authority, nor that it is actually improved by being so. The odds that the free market would not create an air traffic control service at least as good as what we have today are nil, there is simply too much economic interest in ensuring that very expensive aircraft full of expensive cargo's do not crash.

  • EDG reppin' LBC||

    What, you think maybe the airlines, their shareholders, and their insurance companies wouldn't want their multi-billion dollar assets running into each other and crashing? They might even be able to do it more cheaply, too?

  • Brendan||

    Nope, I have it on good authority that the existence of the FAA is what "keeps planes from falling out of the sky". Airlines would put profit above everything else (like all corporations) and would do the calculation about how many flights they could lose and still be profitable.

    The FAA is even justified in enforcing rules on intrastate flights because there should be one uniform set of rules to protect everyone regardless of what state they're in. Apparently the idea that a person wouldn't be as protected from something in one state that they would in another is wrong and calls for the FAA to just come in and apply one set of rules. Also, 50 sets of rules would be expensive. This kind of thing is also not that big of a deal because the FAA does the same thing a state level AA would and there's apparently no difference.

    The quote is direct, the rest is a very close paraphrasing. After that I was told that the states were not sovereign and there no barrier to the feds doing this kind of stuff, my head hurt and I couldn't believe that I was still talking to this person.

  • Paul Thiel||

    How is it profitable for the airlines to allow their multi-billion dollar assest to be destroyed?

    As far as avoiding 50 sets of rules, wereo is the government coordinating air traffic rules of the 195 countries on this fair globe?

  • Brendan||

    Those are the types of things I brought up, and got misdirection and weird subject changes.

    I can't figure out where the profit motive succeeds when an airline loses a $50 million aircraft** and faces lawsuits from the families of at least 100 people (assuming 94 passengers, 4 crew, 2 pilots).

    **Wikipedia says that a 727 was approximately 22 million in 1982. The Bureau of Labor Statistics CPI calculator says $10,000,000 in 1982 is worth $23,780,103.63 today. Multiply by 2.2 and I got around 52 million.

    Given the (fairly low if I understand right) profit margins of air travel, it's HUGE gamble to put poorly maintained aicraft in the air. What kind of shaving can they do to make it worth it to risk $100 million? (assume the aircraft and $500,000 per person.)

    This goes up pretty steadily once you start getting into more expensive aircraft and higher passenger numbers.

    As for counties, I brought that up and the person replied that it was different because the countries are sovereign, but states were not. I couldn't take anymore and found something else to talk about.

  • Brendan||

    As for counties,

    That should be countries.

  • ||

    Since airliners aren't 100% safe, this implies that they already do the economic calculation about how many flights they could lose an still be profitable. It's required to do rational economic decision making.

    An FAA is not required to induce a cost to an airliner crashing. In addition to the cost of losing an aircraft and its trained crew, they would owe restitution to those harmed and their families. Saying the FAA is the only thing keeping planes from falling out of the sky sounds like an argument from ignorance: I can't imagine why airlines would care about safety without the FAA, so it must be necessary for safety. One wonders how the airline industry survived without it.

  • Brendan||

    They were arguing from a position of almost pure-anti corporatism and pro-statism, specifically federal government statism.

    A conversation about limiting the government and how many things the government does right now could be done in part or almost in whole under the 14th amendment and that the severe abuse of the commerce clause wasn't necessary to achieve much of what was achieved with the civil rights act, or how certain agencies impede and encourage as much death and sickness as they ostensibly prevent (the FDA was at the top of that list).

    Talking about limiting the federal government was naturally interpreted as advocating eliminating it and I was treated to series of inane and absurd examples in defense of the federal government. Roads and schools took the top, then it went to the FAA and their single handed ability to keep airplanes from falling out of the sky. I had had my share of ignorance and found other things to talk about.

  • Randian||

    As far as Air Traffic control, I see no evidence whatsoever that this is something which needs to be done by a centralized authority

    Something that our normally-more-socialist brethren in Canada have already aptly demonstrated.

  • T o n y||

    It's a government-granted monopoly.

  • Randian||

    So what? It already demonstrates that ATC needn't be government run. Private monopolies are a step away from government control. Its status undercuts your stance here, not bolsters it.

  • Tulpa Doom||

    The comment you quoted said "centralized authority", not government specifically. NAV CANADA is as centralized as it gets. The fact that it's nominally private doesn't help much -- look at the sad story of Ma Bell.

  • Death Rock and Skull||

    Government protected monopolies are always fucking stupid. There is no reason that aviation traffic should be a centralized monopoly. One or more voluntary industry organizations would work fine- or airlines establishing their own monitoring infrastructure and directing their own shit and communicating with each other as needed. Canada is too attached to their "crown corporations" and does many things half assed.

  • ||

    see: IATA

  • ||

    T o n y said:
    "It's a government-granted monopoly."

    Which apparently are the only "good" monopolies, right?

  • Ptah-Hotep||

    NAV CANADA, the country's civil air navigation services provider, is a private sector, non-share capital corporation financed through publicly-traded debt. With operations coast to coast to coast, NAV CANADA provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation.

    Just saying.

  • KDN||

    There's like no people living in Canada. Private ATC can only function in super low density areas; try that shit somewhere like NYC and there will surely be plane collisions at least daily.

  • CampingInYourPark||

    JFK and LGA both have less aircraft movements than YTO

  • CampingInYourPark||

    That aircraft movement - your high fiber diet didn't make THAT!

  • KDN||

    I wasn't serious, but I do find it terribly unlikely that Toronto's airports have more volume than LGA, JFK and EWR combined. Have a link to figures?

  • Tulpa Doom||

    Privatization doesn't help that much when you still have a state-enforced monopoly. What's needed to make things work well is competition. No Canadian airport can hire an alternative to NAV CANADA to handle their air traffic control.

    A truly free market air traffic control system would be extremely difficult and lead to market power issues as it would be a perfect means for large airlines to keep competitors out of the market.

  • ||

    "it would be a perfect means for large airlines to keep competitors out of the market."

    So?

  • Sam Grove||

    A truly free market air traffic control system would be extremely difficult and lead to market power issues as it would be a perfect means for large airlines to keep competitors out of the market.

    Why go to all that bother when you can just lobby government and the FAA to do the competition restricting?

  • Tulpa Doom||

    I'm sure that the big airlines would collude to create an air traffic control system over the airports they operate. One problem would be the creation of market power, as they could exclude competitors from the system they create.

    A more fundamental problem is that you're not taking into account Johnny Hayseed flying his Cesna rustbucket toward the same point in space as that packed United 757 is flying toward. Who determines who has the right of way? Extremely doubtful that Hayseed is part of the big airlines' air traffic control system, so you have to work him into the system somehow, whether he wants to be part of it or not.

  • Rasilio||

    2 things.

    1st: large airlines could only control an airport, meaning if they colluded to exclude competition and then used that market dominance to charge monopoly prices then a competitor would simply open up a competing airport with it's own ATC in the same market. The existing airlines in the absence of coercive government force would have no choice but to work out agreements allowing that 2nd airport to function to protect their own assets from possible collision. Even more likely however is that private 3rd party Air Traffic Control systems would arise, after all you only need a radio and a radar and then tell the aircraft where the other aircraft are. The only exception to this are in the landing patterns which would have to be governed by the local airports.

    2nd: Johnny Hayseed probably has no interest in having his remains scattered over several square miles following a collision with a 747 going 500 MPH and so it it pretty obvious he's gonna see to it that he has some way to avoid this scenario (see the note about the private ATC providers)

  • Death Rock and Skull||

    Privately organized aviation traffic direction services, funded by major airlines, would probably find it in their interest to offer assistance to general aviation. If nothing else, old fashioned nautical right of way guidelines are also an option.

  • ||

    A Cessna isn't going to be flying anywhere near the same flight levels as a 757, and the rule of thumb in ATC is that the aircraft with the most mobility is required to alter course. Also, as probably stated below, that Cessna would likely be operating in restricted airspace if it were on a collision course with a 757 in the midst of take-off or landing.

  • ||

    Point is, if he ventures inside private airspace, he's trespassing and will be liable for any damage caused by his inability to follow VFR

  • ||

    Navigation rules have existed long before governments regulated them. For example, ocean shipping traffic. Navigation was safely accomplished with right of way rules, and still is, to much extent. Since everyone typically values their own life, that's usually motivation enough for people to be aware of them.

    It's so sad that we see a government claim to regulate something and assume that it's necessary.

  • Sam Grove||

    Certainly the government has proven able to fill the prisons with criminals forged out of stupid legislation.

  • ||

    Tony said:

    "If you think a overseeing the production of a pencil is unfathomable, think about a criminal justice system. Or air traffic control. Nothing can be centrally planned, say the libertarians, so only the most important things must be centrally planned."

    In what sense is air traffic control more important or complex than the entire economy?

  • Caleb Turberville||

    "In 1934, FDR attacked what he called the notion of 'the self-supporting man': 'Without the help of thousands of others, any one of us would die, naked and starved.'"

    "You see that World War? That massive loss of life, liberty, and resources? You didn't build that! Somebody else did!"

  • Dr. Frankenstein||

    Obama's point isn't that no man is an island. He's trying to lay a guilt trip on us to get us to give him everything we have and more.

  • Pro Libertate||

    Yes, it's pretty clear from the whole speech that he wasn't talking about the wonders of individuals cooperating through a free market system. It's all about how we should be grateful to the collective and submit to the volonté générale as exercised by, well, him and his friends.

  • Drake||

    Friedman would hardly need to seize on one of Obama's meaningless platitudes to slice and dice him. Every specific proposal made by Obama reveals his collectivist mindset.

    Unfortunately it is the slogans and one-liners that most of our stupid voters base their decisions on. So the Republicans have precisely tuned their rhetoric to them, not the readers of free-market economists.

  • o3||

    “if you’ve got a business—you didn’t build that. Somebody else made that happen.”
    _
    did somebody else put that dash in that-quote?

  • Jordan||

    The same person who stole all of your capital letters.

  • o3||

    the-cookie monster ?

  • Jordan||

    You're behind on the times. He's now the veggie monster. No, I'm not kidding.

  • ||

  • Lord Humungus||

    Let's say for argument's sake that the rich "aren't paying their fair share". At what point does it become fair again? What tax level - including dividends and long-term stock sales - is fair?

    Also, why would someone who is richer than average have to pay more for the "services" of the state - roads, police, etc? Wouldn't it make more sense, for example, to have a private fire department that bills you depending on the size of the house and/or blaze?

  • Pro Libertate||

    Since they pay incredibly more in dollars and carry a hugely disproportionate share of the tax burden, I think we're way past "fair share." It's only in playing on class envy and taking advantage of the greater numbers that aren't rich that such outright theft is possible.

  • Randian||

    Mitt Romney may be able to sew this thing up with one remark:

    "Define Fair Share"

  • Pro Libertate||

    An equitable amount. To make up for millennia of oppression.

  • Sam Grove||

    Ludwig von Mises:

    "Nothing is more calculated to make a demagogue popular than a constantly reiterated demand for heavy taxes on the rich. Capital levies and high income taxes on the larger incomes are extraordinarily popular with the masses, who do not have to pay them."

  • Zeb||

    The "pay their fair share" thing doesn't make any sense to me. Rich people pay a much higher share of taxes than their proportion of all of the income earned in the country. Seems to me that that means that they are paying at least their fair share. And the poor make a lot of their income under the table, so the proportion is even bigger than officially reported (though sales taxes and other local taxes may even that out a bit). But I can't think of any measure by which the rich don't pay a "fair share" of taxes, particularly at the federal level.

  • Mike M.||

    75% according to the French commies. Best of luck with that, Pierre.

  • Marshall Gill||

    Let's say for argument's sake that the rich "aren't paying their fair share". At what point does it become fair again? What tax level - including dividends and long-term stock sales - is fair?

    Obviously a poll tax. One man, one vote, one tax.

  • Matrix||

    perhaps make it that you pay $10 per vote. If you wish to vote, give $10 to the treasury. Maybe the more you give, the more votes you receive?

  • Rasilio||

    I actually think a system like this would work quite well, but additional votes increase in costs logarithmicly.

    Everyone gets the first vote for free.
    You can buy a 2nd vote for $1
    A 3rd vote is $10
    A 4th vote is $100
    a 5th vote is $1000
    and so on with no maximum number of votes.

    It will even be legal to give money to other people for the purpose of buying votes, of course they are still free to vote the conscience meaning there would be nothing stopping them from either using your money to vote against you or simply pocketing it.

    It would be very interesting to see the vote buying schemes that would arise in such a system.

  • anon||

    It would be very interesting to see the vote buying schemes that would arise in such a system.

    No, it wouldn't.

    It's been done before. It was this little empire called "Great Britain."

  • Rasilio||

    No it hasn't There has never in history been a system in which a Democratic Republic specifically allowed purchasing votes in exactly this way. If you have some evidence to the contrary I'd love to see it.

  • Matrix||

    well, here is the potential problem with the fire department being private, not that I necessarily agree or disagree. But if your neighbor's house is burning down and they do not call the fire department because they cannot afford it, your own house runs the risk of being hit by the same disaster.

    Also, who pays to stop forest fires?

  • Lord Humungus||

    "only you can prevent forest fires..."

  • Randian||

    Then my private company will put out the fire to make sure my house does not burn down.

    Also, who pays to stop forest fires?

    That government, but having some public firefighters for public lands does not mean that all firefighters must be public.

  • Lord Humungus||

    or a private fire fighting company could stop the blaze and then bill the government.

  • Zeb||

    Indeed. Forest fires are generally only a problem when people live in fire prone areas (and are exacerbated by many years of overzealous fire suppression). The people who choose to live in fire prone areas can pay for it themselves.

  • The Hammer||

    Private fire insurance with rates based on where you choose to live?

  • Ptah-Hotep||

    Also, who pays to stop forest fires?

    Make the forests private property and that issue goes away.

  • Dr. Frankenstein||

    But, then I'm not free to gambol.

  • mnarayan||

    We're talking about forest fires, not field fires.

  • Rasilio||

    Who owns the forest?

  • Death Rock and Skull||

    "your neighbor's house is burning down and they do not call the fire department because they cannot afford it, your own house runs the risk of being hit by the same disaster."

    Call the horn and tell the fire company to position their personnel.

  • ||

    And what effect does the government stopping forest fires have on the environment?

    Large, devastating forest fires are exacerbated by the government intervention. By preventing forest fires from occurring, they create conditions for larger forest fighters later.

    In terms of neighborhood fires: I am sure that private fire fighters could offer a multitude of options for fire protecting. For example, an insurance model, where you pay an annual fee whether or not you need it, or a "come save me now" fee, if you only want to call them in case of a fire. I am sure they could also offer services for protection from dangerous, nearby fires. However, since government fire fighters don't necessarily deploy to every fire in every place near their constituency, it also suffers from the same risks: what prevents a fire outside their jurisdiction from spreading into it?

  • sarcasmic||

    At what point does it become fair again?

    As long as they are still rich then they have not paid their fair share.

    We will know that the rich have paid their fair share when they are no longer rich.

  • anon||

    It's not enough for them to merely be "no longer rich;" they must be starving and begging for food and abortions.

  • Brendan||

    BINGO.

    To me, percentages aren't as important as dollars.

    Nothing is paid for in percentages.

    I think Boeing would rather be paid 100,000 dollars for that small jet engine. If they have to choose a percentage based check;
    "0.25% of Johnny Cash Value Powerball winner's 2009 AGI"
    is far preferable to
    "20% of Bill Williamson gas station attendant of Omaha, NE's 2011 AGI"

  • MRK||

    To extend the analogy 1 step further...

    What stops me from walking over and taking that pencil by force? The police dept.

    Police must be paid for somehow. Thus, society came up with sales tax that takes a portion of the dollar's sale price.

    That's not central planning, that's having laws to enforce fair play.
    Free Markets cannot exist in the total absence of government.

    What constitutes fair play is of course subject to debate. Everything from Police to prevent theft and fraud to Auto bailouts to USDA inspection is some kind of market regulation.

  • EDG reppin' LBC||

    Few on this website will argue that there should be no police protection from force or fraud. That is an essential role of the government, and indeed does make a "free market" possible.

    The problem however is when government decides it's role is also to determine what materials pencils can be made of, what color pencils can be, how pencils can be marketed, and where pencils can be manufactured, or spending money on solar powered pencils that fail in the marketplace.

  • MRK||

    There is a role for govt even in the manufacture of pencils (or any good/service)

    e.g. It is currently illegal for me to make my pencils out of asbestos.

    But that isn't central planning, that is regulation.

    Could regulation become so onerous that it is effectively central planning? of course. However no one in Congress or the president has suggested that for any industry.

    I'm just trying to bring the hyperbole to reasonable levels.

  • Zeb||

    I've been dealing with building codes a lot lately and I think that regulation is coming very close to central planning in a few areas.

  • Jordan||

    The vast majority of regulations, unlike those against the use of asbestos, have absolutely nothing to do with preventing the use of force and fraud.

  • Rasilio||

    "Could regulation become so onerous that it is effectively central planning? of course. However no one in Congress or the president has suggested that for any industry."

    Um, have you actually READ Obamacare because that is pretty much exactly what they did with that law.

  • MRK||

    Good point.

    The affordable care act is essentially a government health program that is subcontracted out to private companies to implement that all citizens are forced to buy.

  • ||

    "Few on this website will argue that there should be no police protection from force or fraud."

    DROs.

  • Night Elf Mohawk||

    What stops me from walking over and taking that pencil by force? The police dept.

    Just because you are apparently some kind of sociopath who is restrained only by the threat of force doesn't mean everyone is.

  • MRK||

    The existence of a single greedy person who is willing to use force (or trickery) to take what he wants necessitates the existence of a police force.

    People are inherently greedy, and will take what they want if they think they can get away with it.

  • Night Elf Mohawk||

    Or it necessitates a pencil owner with a gun.

    If taxes were limited to actual shared-use infrastructure and protection, I think most of the current taxpayers in the US would be dancing in the streets. Some here will disagree, but I think such taxes would be a reasonable price for participation.

  • Fatty Bolger||

    What stops the greedy person from using the police force to take what they want?

  • LTC(ret) John||

    He couldn't afford enough lobbyists and campaign donations?

  • ||

    MRK said "People are inherently greedy, and will take what they want if they think they can get away with it."

    This implies that you are inherently greedy, and will take what you want if you think you can get away with it. Is this correct?

  • Rasilio||

    Um, I am fairly certain that no amount of police could prevent you from taking the pencil by force. They might be able to punish you for the act after the fact, and maybe even in some cases recover the pencil for me but they could not prevent it.

    Further much of the same benefit that police provide could be provided by free market private services. While I am anot an An Cap and do not believe that a full on anarchist society could ever be stable they have done quite a bit of good work on investigating how to set up private protection services.

    Finally even to the extent that you may be correct that government police forces funded by taxes are a necessary component of a free market you have a problem. Currently the US spends across all levels of government about 2% of GDP on "protection" (this is both police and fire) with close to half of that going towards laws that protect no one (drugs, prostitution, etc.) yet government spending across all levels is over 40% of GDP.

    In otherwords we could eliminate ALL state and federal taxes and adequately fund police and fire services on just what is collected locally with a good sum left over for education.

  • MRK||

    Your are focusing too much on someone stealing your pencil and less on the metaphor the pencil represents.

    I am not saying that all govt spending is money well spent. There is able waste in every sector of the government.

    However I disagree that a privatized police force would work. Where there are a myriad of issues, the big one is accountability. e.g. Who watches the watchers?

    Yes, the current police system also has accountability issues, but at least with the current system voters have some choice in the matter.

  • Zeb||

    "Myriad" is an adjective, damn it! Why does everyone seem to use it as a noun? "Myriad issues" not "A myriad of issues".

  • MRK||

    Oops. I also said "able" not "ample".

  • Fatty Bolger||

    I would like to know where the accountability is now.

  • ||

    and that's why you always stay with your accountabilibuddy

  • Rasilio||

    No I am not focusing on the pencil and ignoring what it represents.

    Police cannot prevent crime, in fact the Supreme Court has even ruled that they are not even obligate to try and do so. They simply have no preventative value.

    My point on financing was also not about waste. The point was that saying that police must be paid for is irrelivant, the cost of providing police, courts, jails, and fire protection is such a tiny fraction of what the government currently extracts from the economy that it is not worth mentioning. Seriously we could probably adequately fund all necessary protection services on donations alone if we wanted to, the average annual per household donation literally would have to be around $100. Of course within that $100 a year you still have the same levels of fraud and abuse we have today, just no drug war, locking up prostitutes, or swat raids on people selling raw milk.

  • T o n y||

    Law and order don't exist for the sake of psychological comforting of victims. It's reasonably presumed that the threat of police power does prevent crime, not to mention when police catch perpetrators in the act.

  • Rasilio||

    I see no evidence whatsoever for your presumption to be reasonable because I see no evidence whatsoever that it is true.

    Sure, at the margins the threat of being caught and prosecuted may prevent a handful of people from acting on their baser urges, but similarly the idea that there is some uniformed protector out there will make some people act more cavilierly about their personal security creating more opportunities for crime.

    There is also the problem with presuming that in the absence of uniformed government employees investigating and punishing crimes that no alternative system for achieving similar goals would arise, a very suspect presumption.

    In fact the only real benefit that police can reasonably be shown to provide is by giving an alternative way of achiving some semblance of "justice" it mitigates or eliminates the need for blood feuds.

  • T o n y||

    Besides, there's no inherent moral distinction between collectively paying to prevent someone from shooting you and collectively paying to prevent you from dying of the flu. Except perhaps that disease is more likely to get you than thugs.

  • ||

    Except that libertarians don't support collectively paying to prevent you from dying of the flu either. If you're referring to public vaccination programs, then that would be different to the extent that communicable diseases inherently compromise my safety.

  • ||

    I actually vaccinate myself because I want the protection, regardless of what society does (I like to travel).

  • ||

    Police prevent people from shooting me? You mean they show up before the bullets leave the chamber? Holy shit you're stupid.

  • Rasilio||

    Oh yes, and as for accountability. No, I am sorry but there is none whatsoever, nor do voters have any choice in the matter.

    The most you could do is to elect an entire new mayor/city council (whichever has the power in your locality) and then hope that your reform slate is in office when the union contract is up for renewal, they you have to negotiate with the union in hopes to get at least some of your desired reforms through, any attempts to impose reforms will of course be dealt swiftly with a NLRB complaint and even then you have the state police forces, federal police forces, and various state and federal laws granting immunities to police to deal with.

    Police as a group in the real world are largely unaccountable and are NEVER accountable to taxpayers. Individual officers may occasionally be punished for extreme examples of wrongdoing but the force as a whole can get away with pretty much anything it wants with no reprecussions.

  • The Hammer||

    Wow, do you write for Huffington Post? When you undeniably lose the argument, you seamlessly shift to "It's a metaphor! You're just too dumb to understand!!"

  • ||

    "Yes, the current police system also has accountability issues, but at least with the current system voters have some choice in the matter."

    In a private system, customers have a choice in the matter. I would expect much more accountability from that than I do any service in which elections from politicians are the only choice in the matter. The most frequent consequence of a politician losing power appears to be retiring from public life early and rich.

  • Ken Shultz||

    When Barack Obama says that people depend on each other, he doesn't mean the same thing Milton Friedman meant when he said that people depend on each other.

    When Milton Friedman said it, he meant that government should get out of the way so people can solve their problems, but when Barack Obama says it, he means that people should get out of the way so that the government can solve our problems.

    Not the same thing at all.

  • CampingInYourPark||

    "but when Barack Obama says it, he means that people should get out of the way so that the government can solve our problems."

    IMO, what he really means is "We know what is best for you, now take your yoke and stop complaining."

  • Drake||

    Exactly. Friedman was talking about voluntary participation in markets. Obama is talking about the wonders of the State.

  • Matrix||

    you were close. The word rhymes with wonders. But you meant to say blunders.

  • anon||

    "Government: If you think the problems we cause are bad, wait until you see our solutions."

  • Marshall Gill||

    Their argument boils down to: (a) Obama didn’t say that, and (b) he was right!

    I have quite enjoyed this.

  • Pro Libertate||

    It's utterly flabbergasting that this is true. He didn't mean that, but that's what he meant. That's seriously the argument many--including him--are making.

    Note for the record that Obama could easily have refuted the implications of his statement by a flat-out denial. Why hasn't he done that? Because he repudiates the idea of a free market and a free country. Submit.

  • o3||

    because he repudiates the idea of-country

    ANARCHIST OBAMA !11!!1!!1

  • Sevo||

    BRAINDEAD 03 !11!!1!!1

  • Ken Shultz||

    *yawn*

  • The Hammer||

    You realize that the "dash" you're trying to use as a gotcha is actually from the Whitehouse.gov transcript of the speech, right? If you're trying to imply that it is out of context, you should be focusing on the sentence before, like the competent Obama knob-polishers did, not accusing Hinkle of omitting something that he didn't omit. Unless you think Whitehouse.gov is part of the vast right-wing conspiracy to make Obama look stupid?

  • Pro Libertate||

    Unless you think Whitehouse.gov is part of the vast right-wing conspiracy to make Obama look stupid?

    Actually, I think that, except that I think it's a left-wing conspiracy that Obama participates in, and I don't think they quite realize the stupid part yet.

  • Marshall Gill||

    Not just some, it seems to me but most! They venomously denied he was talking about businesses but instead "roads and bridges" and then go on to claim what he said applies to businesses. I have read several such articles.

  • Pro Libertate||

    A couple of times, I've thought the defenses were even worse than the seeming plain meaning of his statement.

  • sarcasmic||

    They venomously denied he was talking about businesses but instead "roads and bridges"

    I read the quote in full and I agree that in context he was referring to "roads and bridges", but even then it's bullshit to say that businesses owe a debt to those who built the transportation network.

    The whole "social contract" is an oxymoron because you can't be in debt for something you didn't agree to or ask for.

  • anon||

    but even then it's bullshit to say that businesses owe a debt to those who built the transportation network.

    Especially when you consider that everyone that works at a company pays income taxes, state taxes, social security taxes, medicare taxes, unemployment insurance (read:tax)...

    Oh, and then the corporation pays another 25% on top of that.

    Yeah, if anyone owes anyone money, I'ma go with the government owes it to the corporations it's been fucking over with the huge black dildo.

  • Brendan||

    It goes from being anti-business to painfully idiotic. I understand if a 5th grader doesn't really understand how roads are built beyond taxes and "the government"

    It's a totally different story when the head of executive branch and constitutional law professor doesn't understand that most roads and bridges are actually built at the local and state level, and that the federal government's role consists of taking money collected from drivers in those states and handing it back to the states for interstate highways.

    If he's talking about people paying 'their fair share' for local roads, he's out of line and has no business inserting himself into very local matters.

    If he means fair share for interstate highways, he's uninformed if he thinks that there's a free ride possible and a total moron if he thinks that the federal taxes on things like fuel and tires don't count towards the federal money given to the states (with strings of course) for interstate highways.

    There's not a way to interpret this speech that doesn't how Obama to be a total moron at best and an outright socialist at worst.

  • Concerned Citizen||

    We're bound by an "implied contract", per my leftist acquaintences.

  • Brendan||

    Ahh yes, the 'social contract'

    When I ask what limits are in this social contract or why only one party can change the terms, I get some vague answer about how it's the price of civilization, another term without limit or definition.

    A couple of times they've told me that the rich need to pay more in order to prevent a "pauper's revolt" or that the rich benefit more from society in that they get the use of roads, the courts, etc. and that they need the police to prevent the poor from "cracking their heads open" and taking what they have.

    There's a weird dynamic at work here in that the people talking about "pauper's revolt" are the same ones who say that people with guns wouldn't be able to mount a successful stand against the government.

    I used to wonder why they assumed that the poor would always just kill the rich and take what they had absent a police force. Then I realized much of their position relied on a need to be amoral and it all fit.

  • ||

    Exactly. Nobody asked them to build the roads and bridges. If anything, they owe us the roads and bridges for robbing us at gunpoint. At least then, our stolen resources aren't completely wasted.

  • anon||

    Their argument boils down to: (a) Obama didn’t say that, and (b) he was right!

    Of course he didn't say that. Someone else made it happen.

  • Y||

    My whole issue with Obama's argument is that it stinks of the One Drop Rule (or the one cent rule in this case). If the Government does anything that affects your business then they did it. You grow corn, gov built roads and runs the FDA (keeping food safe) so if they didn't do it no one would, thus without the Government you can't run your business.

  • Bill Dalasio||

    Neither Roosevelt's nor Obama's claim is really supported by the division of labor, though. The reason all of these resources come together is trade. But, if I engage in uncoerced trade with a willing partner, I've only converted the nature of my wealth. And if that wealth is the product of my previous accomplishments, I've only transformed the physical manifestation of those accomplishments. Sure I may not have grown the tree or mined the graphite. I (or my investors) did something that the graphite miner or lumberman (or someone who trades with them at some chain of proxies) values more than those things. But, that doesn't make the pile of wood or the block of graphite any less the product of my achievements.

  • ||

    Sure I may not have grown the tree or mined the graphite. I (or my investors) did something that the graphite miner or lumberman (or someone who trades with them at some chain of proxies) values more than those things.

    Precisely.

  • Lisa||

    The people who built the pencil didn't build the pencil, unless they are public union workers and politicians.

    Of course, few people accomplish anything great without help, but the problem with the "you didn't build that" quote was the implication of the social contract which is the liberal justification for increasing taxes indefinitely.

    I actually agree with Obama that a lot of small business owners are pretty self-important and take more credit for everything in their business than might be due, but I strongly disagree with his conclusion that business owners should take a collectivist mindset like him. If an entrepreneur's inflated sense of self-importance is the price we have to pay for getting someone to do the hard work of implementing an idea and providing a service more efficiently, then it's more than worth it. You get annoying egoists in both the public and private sector, but at least in the private sector the effect of that ego is avoidable.

  • Canman||

    Think Joe Pesci in Casino. "You only have your fucking pencil factory because we made that possible!"

    http://www.youtube.com/watch?v=R5rGHyyTcpk

  • Ted S.||

    Where the hell is my hat tip, Mr. A Barton Hinkle?

  • Mainer2||

    Who are these people that claim they succeeded all on their own? When successful people are recognized with some award or accolade, they alway thank a mentor, a teacher, their parents, friends, the team...etc, etc, etc. The whole speech is just another dishonest strawman argument.

  • Ragnar||

    "Read and Friedman use the pencil to show the folly of central planning: Nobody can possibly know enough to manage the production of pencils."

    And yet pencils are made by the thousands every day. Obviously someone knows enough to manage production.

    Geez, Hinkle, get a clue.

  • LTC(ret) John||

    "gaffe"

    You twice use that term to excuse/explain/minimize what was said....but then spend the rest of the article making a very good case that this was no "gaffe" - but rather a position taken that cannot be defended very well.

    A "gaffe" would be if he said "business groaners" instead of "business owners" or thanked the crowd for its Southern hospitality when he was in Minneapolis. Think Slow Joe Biden telling a wheelchair-bound man to "stand up".

  • advancedatheist||

    The pencil example shows confirmation bias. Several years before Read published his essay, we saw the introduction of "I, the AK-47 Assault Rifle," a product of Soviet central planning, but designed by one guy, which (1) happens to work, and (2) has found many fans among firearms enthusiasts in the U.S., even libertarian ones.

    Even in the U.S. in the 1950's, ATT and its Bell Labs branch centrally ran the nation's phone system and planned for its needs years in advance, including the introduction of technological innovations to keep up the level of service the company's customers expected.

  • advancedatheist||

    BTW, I enjoy it when private companies ignore Hayek's armchair philosophizing and figure out how to coordinate and centralize widely dispersed knowledge from around the world. Can you imagine Hayekian customer service when you order something and want to find out when the package will arrive? "We're sorry, but the knowledge of your package's whereabouts is dispersed and tacit, and beyond the ability of any central authority to know."

  • H. Reardon||

    This is the product of profit motivation, not central planning. Confirmation bias...how does it work?

  • H. Reardon||

    Talk about confirmation bias. You obviously agree with Obama's sentiment, so you see the product of one man's ingenuity instead as the product of the system in which he was forced to work (AK-47). An your example of ATT/Bell Labs? I suppose you must feel that the field of telecomminication has fell into an era of technological stagnation since their breakup? I know I wish I had some other option than the rotary phone tied to my kitchen wall.

  • Landyn||

    If I were to make a writing utensil for myself, why is it that you assume I would make a pencil? Is Friedman aware that necessity gives birth to invention. If I need a writing utensil and none are available... I suppose I should attempt to create one? Government cannot always do things more "efficiently" or "cost effectively", but I beg to ask whether or not efficiency is actually a better way living? As far as I can tell, effeciency is the cause of massive human population growth ie industrial revolution. Our population will soon be unsustainable. So should we be striving for a more efficient world or a less efficient world?

  • jason||

    I am still agree with this statement because government provide the infrastructure to create that pencil.

  • Ardelle||

    Consider the bread upon our table, the clothes upon our backs, the luxuries that make life pleasant; how many men worked in sunlit fields, in dark mines, in the fierce heat of molten metal, and among the looms and wheels of countless factories, in order to create them for our use and enjoyment.”

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