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View Full Version : How to make a Pencil via Capitalism or Central Planning?



Libhater
08-06-2014, 03:54 PM
Leonard Read, the founder of the Foundation of Economic Education in Irvington, New York, discussed the many materials necessary to produce a pencil: wood, metal, zinc, rubber, paint, and dozens of other things. But that is just the beginning, for there is an entire industry to produce each of those materials--a lumber industry to get the wood, a mining industry to get the zinc, and so on. Moreover, engineering and tool-making businesses are required to supply al of those industries. Finally, neither the pencils themselves nor the various elements needed to manufacture pencils could be transported without the oil and shipping industires.

 

All told, making the most simple of objects, a pencil, involves thousands of people who possess very detailed knowledge and information about their day-to-day jobs, whether they are in the lumber industry, the rubber industry, or elsewhere. And these people come from all over the world. No central planner or "pencil czar"--even with access to the most powerful computer imaginable--could possibly possess and utilize all the detailed and constantly changing information that goes into making pencils. And yet we still have our pencils. How? Because of private property and the free-market capitalism it enables. Under a free-market system, all of these thousands of people, very few of whom actually know one another, have an economic incentive to cooperate with one another under a division of labor and produce pencils.

The delusion that a single person or group of government planners could possibly possess such information and manage an entire economy is what Nobel laureate economist Friedrich Hayek called the "pretense of knowledge" or the fatal conceit." Central planning inevitably leads to economic chaos.

How Capitalism Saved America, by Thomas J. Dilorenzo

I give you my extreme partisan permission to use the above example of making a simple pencil under true capitalism and to compare it to the central planning (socialism) of a more complex product or service, i.e. our healthcare system under obama to see if you can imagine how this central planning by our government could possibly work.

Blackrook
08-06-2014, 08:18 PM
I agree with you, but you'll never convince those who want to seize power away from the private sector to make pencils. They don't care if they can make a better pencil, or better meet the demand for pencils. What they care about is exercising power over other people's lives, and deciding who gets to have a pencil. And you can be sure that those in charge will always have a pencil for themselves, even when most people have to wait in long lines to get a pencil, and maybe not get a pencil at all.

Bob
08-06-2014, 08:30 PM
Please read link since this is just a small partial

http://www.fee.org/library/detail/not-your-to-give-2

“At the appointedtime I was at his house, having told our conversation to every crowd I had met,and to every man I stayed all night with, and I found that it gave the peoplean interest and a confidence in me stronger than I had every seen manifestedbefore.
“Though I wasconsiderably fatigued when I reached his house, and, under ordinary circumstances,should have gone early to bed, I kept him up until midnight, talking about theprinciples and affairs of government, and got more real, true knowledge of themthan I had got all my life before.
“I have known andseen much of him since, for I respect him–no, that is not the word–I reverenceand love him more than any living man, and I go to see him two or three timesevery year; and I will tell you, sir, if every one who professes to be aChristian lived and acted and enjoyed it as he does, the religion of Christwould take the world by storm.
“But to return to mystory. The next morning we went to the barbecue, and, to my surprise, foundabout a thousand men there. I met a good many whom I had not known before, andthey and my friend introduced me around until I had got pretty wellacquainted–at least, they all knew me.
“In due time noticewas given that I would speak to them. They gathered up around a stand that hadbeen erected. I opened my speech by saying:
“‘Fellow-citizens–Ipresent myself before you today feeling like a new man. My eyes have latelybeen opened to truths which ignorance or prejudice, or both, had heretoforehidden from my view. I feel that I can today offer you the ability to renderyou more valuable service than I have ever been able to render before. I amhere today more for the purpose of acknowledging my error than to seek yourvotes. That I should make this acknowledgment is due to myself as well as toyou. Whether you will vote for me is a matter for your consideration only.’
“I went on to tellthem about the fire and my vote for the appropriation and then told them why Iwas satisfied it was wrong. I closed by saying:
“‘And now,fellow-citizens, it remains only for me to tell you that the most of the speechyou have listened to with so much interest was simply a repetition of thearguments by which your neighbor, Mr. Bunce, convinced me of my error.
“‘It is the bestspeech I ever made in my life, but he is entitled to the credit for it. And nowI hope he is satisfied with his convert and that he will get up here and tellyou so.’
“He came upon thestand and said:
“‘Fellow-citizens–Itaffords me great pleasure to comply with the request of Colonel Crockett. Ihave always considered him a thoroughly honest man, and I am satisfied that hewill faithfully perform all that he has promised you today.’
“He went down, andthere went up from that crowd such a shout for Davy Crockett as his name nevercalled forth before.
“I am not much givento tears, but I was taken with a choking then and felt some big drops rollingdown my cheeks. And I tell you now that the remembrance of those few wordsspoken by such a man, and the honest, hearty shout they produced, is worth moreto me than all the honors I have received and all the reputation I have evermade, or ever shall make, as a member of Congress.
“Now, sir,”concluded Crockett, “you know why I made that speech yesterday. see link