Midway through a fairly ordinary speech by the port of Baltimore Wednesday night, President Joe Biden said a few words which will make libertarians’ ears ring.
Biden stated that even simple products like pencils, such as pencils, must use graphite from India and wood from Brazil before they are assembled in a United States factory. This may sound absurd but it’s how things work.
Yes, it appears the president (or one of his speechwriters) has at least a passing familiarity with “I, Pencil” the 1958 essay by Leonard Read that offers a first-person perspective—that of a simple pencil—into the incredible supply chains that make even the most common household products readily available. This is still the best (and most concise) argument for free markets and free trading.
It’s not silly. Read’s pencil explained that “not a single person knows how to make you.” Complex markets allow for wood, graphite or rubber to be made, shipped, combined, and controlled by no government bossbody. It is not an act of altruism to produce pencils for others. Read explains that every step of the process, by each self-interested worker, is crucial.
Biden used “I, Pencil”, as an example of how he tried to understand some of America’s current supply chain problems. Biden explained that it is possible to obtain the product if you suddenly have a Brazil COVID emergency.
“Products such as smartphones often combine parts from France, Italy and chips from the Netherlands. Touchscreens are from New York, while camera components come from Japan,” the president said. Then he acknowledged that global supply chains had helped to dramatically lower the prices we pay for things.
But—and you You already knew there had to be a “but” coming—it took Biden less than five minutes to toss all that aside and begin promoting his “Buy American” agenda. Biden promised it would be more than a promise. It will become a “solid reality”.
It is possible to wonder what became of the graphite and wood from India that was used for pencils in Brazil.
Biden’s “Buy American” rules will have little effect other than forcing taxpayers into paying higher prices for nearly everything that the government buys. The pencil-making metaphor is simple. Those rules also mean that Biden’s just-passed $1 trillion infrastructure spending plan—Wednesday’s speech was a victory lap moment for the president—will be less significant than it otherwise would be.
It means that Biden did not really understand the meaning of Pencil’s “I,”
The lesson Read offers in the essay’s final paragraph is thus: “Leave all creative energies uninhibited…let society’s legal apparatus remove all obstacles the best it can. These creative skills should be allowed to free flow.
It is not clear how to stop creative energy flowing freely if it contains less than 50% of its origin in America. Import quotas and tariffs are also absent. Perhaps Biden’s speechwriters next time will finish the entire speech.