âGlobal? Oh, great. I’ve doomed humanity.â â Ash Versus Evil Dead
I hear it can only be caught from crowds. Introverts everywhere smiled as they stared at your shoes.
The other day I was emailing back and forth with James M. Dakin, proprietor of the Bison Prepper (LINK). I mentioned that Iâd bring up an old essay weâd both read back when Jim and I went to different high schools together.  That essay was I, Pencil.
I, Pencil was written by Leonard Read and published in 1958. The essay is available here (LINK). I, Pencil is a fairly short essay with a fairly long introduction. Spoiler alert: Leonard felt that no single person on planet Earth can make something as simple as a boring old yellow No. 2 pencil. And, heâs right. A pencil, even a 1958 version, uses components that are sourced all over the globe. Mr. Read makes a great point â the free market takes components from all around the world to make even the simplest and most mundane object.
I cut myself with a pencil â I drew blood.
Likewise, the knowledge required to make that pencil is distributed across the globe. No single person can make the pigments for the paint by milking the Tanganyikan paint turtles, and pick the aluminum from the Australian aluminum trees to make ferrule that holds the eraser on. And that eraser? Itâs made of rubber from the Congo. Iâd make fun of the Congo, but, really. Itâs the Congo and they have enough problems (LINK to a really fascinating story of crossing the Congo). Plus the wood is made from sustainably farmed free-range vegan trees in California. Donât forget the graphite â itâs from the Sri Lankan graphite glaciers.
The humble pencil is a creature of Globalization.
How much Globalization? Sadly, it looks like Dixon Ticonderoga used to make most of its pencils in the United States, but now apparently makes only enough pencils here to claim that it actually makes pencils in the United States (LINK). There were a few pencil jokes I was going to make here, but theyâre pointless.
While we talk about globalization as being a new phenomenon, Globalization has been a thing since the days of the American Revolution â the tea that Sam Adams threw in the harbor during the Boston Tea Party came from halfway across the planet. Even back to the days of Rome, there is evidence of far flung trade â shipwrecks found in the Mediterranean are often found filled with wine or olive oil being shipped across the Empire. Sadly, the Romans abandoned those cargos after they broke the V second rule of being on the bottom of the ocean. Â
X/X
Globalization provides a huge advantage. Some things arenât available around the world â resources come from other places for a reason â corn is imported to the South Pole because corn grows rather poorly in ice. Shockingly, wood comes from places with trees, and having Saudi Arabia export timber is probably not a great business strategy. But having Saudi Arabia export oil is. And having the United States export food also makes sense â we grow more than we can eat.
When done right, Globalization provides the benefits of bringing together resources and knowledge from far-flung corners of the world to meet the needs of people that most of them will never meet. But Globalization doesnât consist only of benefits. With Globalization, Ticonderoga® can decide to make pencils in China. Hundreds of jobs are then lost in the United States. A typical journalist would indicate that the people who lost pencil-making jobs should, âlearn to code.â  When those same journalists lost their jobs due to Globalization, they cried on Twitter® when told that perhaps it was their turn to #learntocode. The journalists even got people banned for suggesting they take their own advice (LINK). Still missing: journalists who became coders. Also missing: journalists with a sense of humor and irony.
Although the United States spends hundreds of millions of dollars a year on yellow No. 2 pencils made in China, should pencils stop showing up from China, there wonât be chaos and anarchy in the streets except around SAT® test taking time. I mean, we all remember the No. 2 pencil riots of 1989, right?
But that is just a humble pencil. What other things are imported from China (LINK â warning â quite an addictive set of graphs)?
You can tell that toothpaste was invented in New York City. Otherwise they would have called it teethpaste.
A lot of the things the United States imports from China are trivial, or convenience items that we could live without:
- Lots of toys are manufactured in China, including trikes and video game consoles, virtually all Christmas decorations, and (the census has a category for this) practical jokes. Yes, the Corona Virus could directly cause a shortage of fake dog poo.
- Strollers and toasters are almost all made in China. Why did I combine these items? No reason. None at all.
- Millions of wet heads could result.
- Artificial flowers. Now here the Chinese are particularly cunning â theyâve cornered the production of not only plastic artificial flowers, but also artificial flowers not made from plastic. This is a true strategic threat.
- Nearly every thermos. The United States could bankrupt itself in additional ice costs. Also, cold soup?
- 100% of lawn edgers are made in China. 100% of my lawn edger hasnât left the garage in five years.
Okay. There is a lot of stuff that comes from China we live without. Unless you work at Wal-Mart®. Without those imports to be sold, the impact should be minimal. Very few people have ever had a life or death situation that could be solved by fake dog poo. Iâm pretty sure this is the first time that last sentence was ever written in the English language.
Had much super fun time inserting receptacle into hand.
But . . .
- Nearly every âportable digital automatic data processing machine not weighing more than 10 kilogramsâ comes from China â all $37 billion worth.
- 65% of cell phones – $72 billion.
- 80% of âother radio telephonesâ $44 billion.
- And, oops, it seems that 80% of pharmaceuticals and 97% of antibiotics in the United States are imported from China ().
Amazingly, everything that China exports to the United States only amounts to (about) 3% or of the United States economy. Stopping Chinese imports to the United States would have an immediate impact because of lowered sales regardless of what we import. But as the bullet points above show, slowdown of imports from China could also have an immediate effect because of what we import.
The third impact would come from what we make out of the things that China sends us. Things like . . . cars and pickups. Where does the housing for the alternator in the Ford® pickup come from? Touch screens? How many are made in China? How many days until Chevy⢠canât build a car because itâs missing a switch that runs an air conditioner? Last time I checked, most cars need nearly 100% of the parts to be called a car. At least until I work on the engine â then I always seem to have a few bolts left over.
Not one of my repairs. But I have used zip ties as a structural material.
The third impact of reducing manufacturing in the United States would be large.  I donât have precise figures but I can guess â it might be as much as a 10% drop in the economy in the year it happened. For reference, the Great Recession of 2008 had a 4% drop in economic activity.
Iâm probably not the guy to talk about how the Wuhan Flu is going to spread. Iâm certainly not the guy to tell you how to treat it if you get it. But I do know that something like the shutting down of factories in China can spill over to the United States and cause recessions or worse, even if the Corona virus never became an epidemic here.
Stock up on pencils while you can . . . .