On Milton Friedman and Pencil drawings
It’s amazing what things one can make out of a pencil. Take the picture above for example. A photo-realistic image created purely using a pencil. Without looking at the picture, perhaps you just imagine a pencil as the item you never had in primary school and had to borrow. But looking at that image, the pencil becomes art.
‘There’s nobody in the world who knows how to make a pencil.’ Leonard E reed said in his book.
The narrative goes that a pencil requires materials from all over the world. That is, graphite from South America, Wood from Washington, and rubber from Malaysia among other things.
Milton Friedman, in his series ‘Free to choose’ explains how this simple pencil came to be through cooperation of people. His underlying mechanism, in line with his free market theory, is price. In essence, Milton suggests that the free market system promotes cooperation and harmony among those with no common interest- and without coercion. And looks down upon the game theorists as having some form of zero-sum game mentality.
Here’s how I see it. The miners in South America want to feed their families, and so they produce. Similarly, Paul Lung, the artist of the image above, only buys the pencil to create his art. The problem here, is that in the end, the reduction or increase in price regardless of anonymity ultimately decides whether the miner eats or not or the artist draws.
There is no loyalty. Ultimately it is only cooperation as long as both are winning. Isn’t that a zero-sum game on its own?
Following traditional economics, should the miner increase his wage price, the pencil company increases its pencil price and the artist simply buys a different kind of pencil. The miner loses. Should the miner decide not to produce graphite, the pencil company would shut down and the artist cannot draw. The artist loses.
I am no economist though, your thoughts and insights are welcome.
Originally published on TALENDRR
