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Ed Driscoll

MR. DRISCOLL:  Kevin, you mentioned the Apple iPhone a minute ago.  Your book begins with a marvelous update of an essay originally written in the late 1950s by libertarian economist Leonard Read, and later adapted in the ‘70s into a television segment by Milton Friedman, that’s pretty easily found on Youtube called “I, Pencil,” which you’ve updated with the Apple-friendly spelling of iPencil.

Could you talk a bit about that, and why both those who sell the iPhone, and so many who purchase them, want highly customizable twenty-first century technology in their day-to-day lives, and yet they want socialized healthcare and retirement schemes that are straight out of the 1930s smokestack era?

MR. WILLIAMSON:  Yeah, even before that.  Yeah, the — the iPhone — I’ve got one sitting here in front of me — is kind of an amazing thing when you think about it.  Not just because it’s a technological marvel, although we shouldn’t be as blasé about technological marvels as we are.  We’ve just gotten used to them.  You know, get a new one every six months.

But if you think about it, you know, I always think about the movie Wall Street, with Michael Douglas, and, you know, he’s Gordon Gekko, this Wall Street kingpin gazillionaire, master of the universe.  And he’s got this ridiculous Motorola cell
phone –

MR. DRISCOLL:  The giant brick.

MR. WILLIAMSON:  — in the size of a cinderblock.  You know, in 2011 dollars, that thing cost ten grand, and it cost about a thousand dollars a month to operate.  It had a talk time of something like twelve minutes.  Couldn’t play “Angry Birds” on it, much less trade a stock.  You know, you couldn’t give away a piece of junk like that now to the, you know, poorest kid in the country, because nobody would want it.

So in a very short period of time, we’ve gone from, you know, you could be a billionaire in 1985 and not have a cell phone as good as a iPhone — it just didn’t exist — to everyone’s got one now.  You know, the sort of thing that used to be a luxury for millionaires is now as commonplace as it can be.  Regular cell phone, you know, non-smart phones, lower end phones, are literally free.  Any cell phone provider in the country would be happy to give you one if you’ll sign up for service.  And of course the services have gotten very cheap too, compared to where they used to be.

So we have this one set of products that keeps getting better and cheaper, you know, every month, every six months, every — every year you’ve got a new generation of product and the prices fall.  But some things that are really important, like healthcare and education and retirement, just don’t follow that same trajectory.  And so I was looking to explore why that is.

Now, Read’s essay is one of my favorite things in the economics literature, “I, Pencil,” where he writes this autobiography of a number 2 pencil.  And he comes to a really interesting conclusion.  If you look at everything that goes into making pencil, you know, the graphite, the rubber, the brass for the ferrule, the wood, all that, and you take it one order of magnitude back from there, you know, the forestry techniques that go into making the wood; the mining woods that go into getting the metal out that you make the brass out of; the agricultural techniques necessary for producing the rubber and the mining for the graphite.  If you look at the machinery that’s necessary to do that and the technology that’s necessary to produce that machinery, something as simple as a number 2 pencil ends up being the process of a system that is so complex, that the complexity of it is literally incalculable.

You know, we have a modern thing called complexity science, where we study really, really complex systems and how order emerges out of them; things like evolution and how consciousness arises in the brain and that sort of thing.  And there are various levels of measuring degrees of complexity; and the system that produces the, you know, simple, humble, number 2 pistol — pencil, rather — is really beyond measure.

So we’ve got this thing that’s cheap and ubiquitous, and you know, it’s so cheap that if somebody asks you, can I borrow your pencil, you say sure.  You never even really worry if you’re going to get it back.  But it takes, you know, more capital than you imagine to make that system work, more expertise, and there’s more complexity in that system than you can really even calculate.

And the point that Read takes away from it is that you’ve got a system that produces pencils even though nobody knows how to make a pencil.  Various people have little pieces of the knowledge necessary to do that, but no one actually knows how to do it, much less something complex like an iPhone.

So then you’ve got 535 guys in Washington who say, oh, we’re going to plan healthcare for you, or we’re going to show you how to run education.  Well, these things are much, much more complicated than a simple number 2 pencil, and yet we’ve got these political bureaucracies and elected officials and especially presidents, are bad about this, who say well, we just had a panel of experts and we get the right guys in there with — put them in the a room, and they’ll smart and they’ll figure this stuff out; it’s just literally not possible.  It’s not even possible in principle for them to even understand the stuff that they’re pretending to solve, much less actually solve the problems.

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Top Rated Comments   
Not only is this NOT "lightweight stuff", it is positively brilliant.

Thank you, Ed.

For those of us who actually care about the implications on our future, this piece was a true gift. Great work.
1 year ago
1 year ago Link To Comment
All Comments   (15)
All Comments   (15)
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For the left, as with morons and children, there is no tomorrow. People without minds only have appetites.
1 year ago
1 year ago Link To Comment
None of this will make sense to democrats until they stop getting other people's money directly deposited to their bank accounts. Where's my check? Where's my check? THEN and only then will it make sense. I mean let's face it, the world looked the other way and kept on walking and whistling while blaming the Muslim Jihadi attack at Benghazi on a YouTube video poster (who is still in jail). There will be weeping and gnashing of teeth folks.
1 year ago
1 year ago Link To Comment
Rome II.
1 year ago
1 year ago Link To Comment
Rome III. Constantinople kept going for 1,000 years after Rome itself was conquered and abandoned.
1 year ago
1 year ago Link To Comment
History never repeats, but it rhymes.

We've got rhythm.
1 year ago
1 year ago Link To Comment
Why was Mitt Romney so ineffective in communicating Economics 101 to the American voters?

Perhaps one major reason is because Mitt Romneycare did not believe all of his talk about economic freedom and limited government. How else to explain why he tried (and failed) to run on his efforts to save the Olympics instead of his lousy, nanny-government record as governor?
1 year ago
1 year ago Link To Comment
Nobody longs for the restoration of the limits of civil authority to it's legitimate functions of sane systems of criminal justice and national defense more than I do. (Of course, this begs the question of what makes those limits legitimate.) I have to say, though, that the absolute materialism of the libertarian worldview really disgusts me. This economic analysis ignores the fact that we all live in a room full of an entire herd of elephants. We have theft, fraud,and covetousness institutionalized on massive economies of scale, we have rampant, unbridled sexual immorality and the purposeful destruction of the God-ordained institutions of the church and marriage, we have political systems that have become little more than kingdoms of lies and the deep rooted idolatries of state power and wealth, we have the daily slaughter of countless, nameless infants, we have a radical religion asserting it's self-professed love of death, and on and on. I realize the concept of judgment is utterly passe' and un-hip in our radically secularized world, but somebody ought to think about it. Do we think God just sits by in total, passive disinterest as the whole world rots spiritually? There are no larger consequences to any of this? Is the adjudication of all these pathological crises only beyond this world or do they simply fade from memory? I must say that I believe in a redeemed future, but I also believe the journey to it is going to be awesomely painful in ways Mr. Williamson apparently hasn't considered.
1 year ago
1 year ago Link To Comment
I think you might be mis-characterizing the libertarian (as opposed to the Libertarian, as in the party) worldview.

It is not about absolute materialism ... it is about maintaining the freedom to be as materialistic AND/OR as moral and compassionate as our OWN character will allow us to be.

It is about keeping the freedom to dodge the elephant herd and keep moving down a righteous path to a brighter future ... for us, and our neighbors ... as opposed to being sat upon by those elephants and reduced to simply rendering unto Caesar so that Caesar can cut checks on our compassionate behalf, as Caesar pours the scraps from the tables of the elites upon the elephant dung.

I for one do oppose some of the Libertarian positions - legalizing perception-altering drugs in a free society that depends upon citizen self-control for its continued existence is a non-starter for me, and I think that wars to pre-empt tyrants and establish rights-respecting governance in their place are a justified, wise - and frugal, in the long run - investment for free people to make.

But the basic philosophy of the small-l libertarian regarding government is the same as that codified around 04 July 1776 ... "That to SECURE THESE RIGHTS, Governments are instituted among Men, deriving their JUST powers from the consent of the governed".

Mr. Williamson here makes what I think is the greatest case for limited government: that, REGARDLESS OF THE NOBILITY OF THEIR INTENT, there is NO plausible way "that a little intellectual elite in a far-distant capitol can plan our lives for us better than we can plan them ourselves," as Ronald Reagan described the basic Progressive paradigm back in the 1960's.

Our elites would have to be OMNISCIENT to pull that off ... and they are anything but omniscient.

This needs to be repeated, again and again - for despite being tarred as "haters" for challenging the Progressive orthodoxy, it is not about wishing evil or harm upon others that compels us to stand against the Progressives' simplistic attempts to "help". Far from it.

It is about acknowledging the reality of our world - that a welfare state and command economy directed by beings of limited perception that are prone to error, mendacity, and greed simply cannot be relied upon as a sustainable support structure ... and that you need to responsibly exercise the personal initiative to take care of yourself, and your neighbor, instead of continuing to swallow the Biggest Lie of All:

"All you need to do is show up for work or go to school; we have experts who have the answers to your housing needs, your health care needs, your financial needs … no need to plan for your future or actively manage your career, since we can do a better job than you can; just trust us to solve those problems FOR you."
1 year ago
1 year ago Link To Comment
Boy, you sure are a wet-blanket poopy-head, aren't you? And the worst part? You're essentially correct. ALL societies and systems of governance fail faster when the governed lose even basic virtues.
1 year ago
1 year ago Link To Comment
Part of the really painful part of the end is that people will discover that all those "icky" things that we old "fuddy duddies" harp on are actually needful to a healthy society. Women will discover that you actually can't raise children on your own, especially when the raging hordes of rabid man-beasts their sisters in the struggle raised before them get to raping and pillaging in roving packs. And the rest of us will discover that if you can't trust your immoral neighbors, the center will not hold with those raging hordes come after the few societies that do form around families that have managed to survive (because, after all, those raging hordes can't be bothered to actually work and be productive, can they?).
1 year ago
1 year ago Link To Comment
He finally got to the nub of things at the end when he spoke of whether we would have a slow evolution or a fast crisis - THAT IS THE ISSUE.

A fast crisis will bring the declaration of an economic emergency and government as configured under the Defense Production Act of 1950 and its associated laws and executive orders.

I'd give the slow evolution two chances, Slim and None. Slim left town on the 8:00 am bus.
1 year ago
1 year ago Link To Comment
Not only is this NOT "lightweight stuff", it is positively brilliant.

Thank you, Ed.

For those of us who actually care about the implications on our future, this piece was a true gift. Great work.
1 year ago
1 year ago Link To Comment
This is all light weight stuff!
The global economy will not change course for the better without a massive reset.This may include class conflict,famine or even outright warfare.The economic problems we have are fueled by social & political inequities which may not be easily resolved.The political classes own the world & the financial classes owns the politicians! I have read that in previous societies the financial classes (banking,insurance,real estate,financial markets, etc.)accounted for 2%-3% of an economy.In the U.S.,& perhaps the rest of the industrial nations, that number is around 20%. These financial subgroups own the world & do what they like,above,& unimpeded by, the law.The SEC & other regulatory bodies,controlled by the politicians who are controlled by the financiers are largely ineffectual.If new resources were to be added to the nation's wealth,by way of streamlining government spending,these new resources would not be used to alleviate the public debt.The financial & political classes ,who are untouchable,would find new ways to redirect the new found wealth into their own pockets.In short,we have ruling elites that are running wild, & they will keep running wild, until the financial house of cards collapses.When the financial house of cards falls apart it will take the financial oligarchs,& their politicians,with it !Unfortunately the rest of us will be buried as well.
1 year ago
1 year ago Link To Comment
They can only do it because too many of us have sat back and let them do it ... being led to believe that only from THEIR ranks can the Great Leaders come to solve our problems FOR us.

Millions of us have been fooling ourselves, for decades, that we CAN'T get ahead by our own initiative, so we outsource that effort to these elites ... and make ourselves highly vulnerable, with little or no ability to work around the consequences of their efforts ... as we go swill our $tarbuck$ and chase that new iThingy and expect our elites in business, academia, and especially government to secure our future - FOR us.

You may be right ... it may take total collapse to finally resolve this problem ... but the problem is as much in our own minds, as it is in the minds of the oligarchs and the politicians.
1 year ago
1 year ago Link To Comment
A bit breathless, ret22, but not far wrong. The financial elites may not own the world, but they could by it and finance the purchase.

Remind me again, how many Wall Street bankers went jail after the greatest financial crash since the '30s? How many bureaucrats lost their jobs? How many Congressmen were not reelected?

I'll be convinced there is one law for the elites in this country and another for you and I until we see Jon Corzine in wide horizontal pinstripes.

True, business failure in and of itself is not criminal. But Big Jon and the boys (and girls) at M F Global managed to "accidentally" commingle trust assets with company assets and couldn't explain how such a grievous error occurred. That kind of "accident"would put you or me in jail.
1 year ago
1 year ago Link To Comment
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