“Global? Oh, great. I’ve doomed humanity.†– 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 I’d bring up an old essay we’d 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, he’s right. A pencil, even a 1958 version, uses components that are sourced all over the globe. Mr. Read makes a great point – 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 – 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? It’s made of rubber from the Congo. I’d make fun of the Congo, but, really. It’s 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. Don’t forget the graphite – it’s 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 they’re pointless.
While we talk about globalization as being a new phenomenon, Globalization has been a thing since the days of the American Revolution – 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 – 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 aren’t available around the world – resources come from other places for a reason – 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 – 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 doesn’t 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, “learn to code.† 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 won’t 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 – warning – 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 – they’ve 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 hasn’t 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. I’m 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 “portable digital automatic data processing machine not weighing more than 10 kilograms†comes from China – all $37 billion worth.
- 65% of cell phones – $72 billion.
- 80% of “other radio telephones†$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™ can’t build a car because it’s 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 – 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 don’t have precise figures but I can guess – 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.
I’m probably not the guy to talk about how the Wuhan Flu is going to spread. I’m 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 . . . .
Funny coincidence, you mentioning yellow #2’s today. I sat in on a telecon at the job yesterday, fighting the urge to nod off (only because I drool) and amused myself by glancing around the conference room table at the others in attendance. To my utter amazement, one of the ladies present was taking notes in longhand on a pad with one of those old Ticonderogas. It suddenly occurred to me to wonder how on earth she kept it sharp. I have not seen such a forgotten tool as a ‘pencil sharpener’ in the office, or indeed, anywhere, since one appeared on an Antiques Roadshow rerun. The pencil itself was about half its original length and did not appear to be gnawed, so clearly this resourceful woman manages, somehow, to keep a point on it.
And that puts me in mind of one of life’s great mysteries which we, as college hoods, debated endlessly between bong hits back in the 80s. How, for the love of Pete, are pencils MADE? One resident genius suggested that after boring out the wood with long, thin drill bits, the ‘lead’ is melted and poured in. (This guy is today a physicist, complete with PhD. Don’t judge.) It took the miracle of the Internet to finally learn that they are actually created in two long sections which are then glued together around the fragile graphite core. Sometimes Google takes all the fun out of life.
Now that China is on the ropes, economically, could we Americans re-learn how to make such clever little devices as pencils? Zippers? Pez dispensers? Its a long road back, but any country that could fake a man on the moon, rebound after the Germans bombed Pearl Harbor and commit collective seppuku by electing both Bill Clinton and Barack Obama, twice each, is undoubtedly capable of ANYTHING.
Well, there’s an electric pencil sharpener in the local public library for public use. I carry a snappy portable manual model (Like this) in my mom purse (which weighs as much as a small wolverine according to the B.C. Museum of Natural History: but I digress.
And if course, for backup, also in said purse, is my pocket knife, which sharpens pencils just fine (It has an exacto knife blade. Seriously, try it yourself and see. Easy peasy).
Like this https://www.amazon.com/Prismacolor-VE99016-Premier-Pencil-Sharpener/dp/B004ZDL0K2 (sorry)
Bhttps://www.amazon.com/dp/B005A720RY/ref=sspa_dk_detail_0?psc=1&pd_rd_i=B005A720RY&pd_rd_w=GRubE&pf_rd_p=c83c55b0-5d97-454a-a592-a891098a9709&pd_rd_wg=HrxN5&pf_rd_r=K4DXH2RVK16Z53HSYQ2N&pd_rd_r=8509530a-3e8e-45ef-b984-3fd92061c4aa&smid=A3B004UD81OKDR&spLa=ZW5jcnlwdGVkUXVhbGlmaWVyPUEyTjFNVVAyN0laODAwJmVuY3J5cHRlZElkPUEwMjQ2NzQ4M1BQVUpBNlNBMEZVSyZlbmNyeXB0ZWRBZElkPUEwMjc4MTA4OUpJVkVSS01GUVlXJndpZGdldE5hbWU9c3BfZGV0YWlsX3RoZW1hdGljJmFjdGlvbj1jbGlja1JlZGlyZWN0JmRvTm90TG9nQ2xpY2s9dHJ1ZQ==
And firestarter
Wow. According to the package, that gadget is New, Nouveau and Nuevo. No wonder I’d never heard of it before, as I only possess things that are Old, Olde and Auld. If I ever happen upon a Ticonderoga #2 again in my travels, I may have to invest in one.
@Two Buck Chuck- That is the best Comment that I have read this year- as of February 20th.
Well thank you, kind sir or madam! Posting at WW&W is my lone creative outlet, now that TakiMag has shut the door on its former cadre of irregulars, and I’ve been cordially invited to not return to any number of other sites where my brand of irreverence is not welcome. John Wilder has been tolerant, so far. Lets see how much more he can take!
The Invisible Hand will work – and many a fortune will be made. Some of them even here. I’m starting up the Plastic Dog Poo factory next week . . . .
And then there was the constipated mathematician. Fortunately, he was able to work it out with a #2 pencil.
No, no, it was a constipated engineer. And he worked it out with a slide rule.
Groooooaaaaaaaaan. Both of you. That was Wilder-iffic.
(groans)
That story was a long time coming.
I think the saying goes something like “Never put all your vaccine-production eggs in a communist basket.”
They generally do a good job, when given real oversight. Without oversight, the rule of law doesn’t seem to exist.
This has been the greater lesson all along: the problem is not the Kung Flu getting here nearly so much as it’s about the second- and third-order effects, , of Kung Flu rampaging across China, there.
This is the Mel brooks Comedy Theory, applied to economics: “Tragedy is me stubbing my toe. Comedy is you falling off a cliff.”
They have 400,000,000 people in China on house arrest, most of them in their industrial belt.
If you get anything made in China, you won’t be getting it, probably for the rest of 2020.
Period.
No Keebler elves making your crap means no Keebler cookies. Or anything else.
Multiply that times the second largest economy on the planet, and we have a problem, Houston.
But the beauty of the Invisible Hand is that (assuming people who aren’t lunchmeat for brains running the show) capitalism starts doing workarounds ASAP for all the things China cannot provide.
Kung Flu is going to be the Third World Full Employment Act of 2020, and entire industries elsewhere are going to reap the windfall.
Eventually.
In the short term, expect scattered PITA, with a chance of disasterpiece theatre.
There will be dislocations. I myself think that it’s probable that it will take us into recession, and probably around election time.
The only parties that need to be worried about a > 5% hit to the economy (for any reason) are those that have more debt than assets.
Those for whom assets are less than debt, those that are over leveraged and reliant on free flowing liquidity from constant large cash flows, however, are at extreme risk and are tangoing with death.
Thank God every guv’ment in the world is solvent.
Along with all the financial institutions that run global commerce.
Along with all the multi national corps that provide 90% + of what we wear/consume/drive/etc/etc/etc. Not like they took out trillions in loans at 0% to buy back stocks to make it look like they were profitable so mgmt could get huuuuuuuge salaries and bonuses. Or have solvency due to stock prices that are paper assets that are based on hopium not future discounted profits.
Hey……wait a minute……who in that crowd above has more real assets than debt again???
No worries, the cascading bank and hedge fund failures (which will be amplified by derivatives) will only touch those who do business with too big to fail banks. Or those who do business with them.
But that’s not the whole nation either directly or indirectly, right?
Whew!
No chain is stronger than the weakest link.
Complexity = fragility.
Excellent comment, from start to finish. This may very well be a trigger.
. . . .quite an addictive set of graphs . . . .
No bikinis; I was so disappointed. Some graphologists just don’t have your imagination, John.
. . . . corn grows rather poorly in ice.
Ha! I saw Corn On Ice at the Civic Center. Skaters being stalked; it was quite chilling.
I thought the celery was stalked?
Bikinis in the Friday post, but no graphs.
Well, if you have to make a choice, that’s a better one, thank you. In future, at least no Graf Zeppelin bikinis, please.
In reference to your ‘zip-ties’ reference…
What do you think of the wind-propelled ‘strandbeest’ videos on YouTube?
Those are fascinating! I keep trying to think of a use for them, but that might be the point – no use?
I think that’s why Star Trek is so appealing. In the future, globalism morphs into a shining society, with the world part of the Federation of Planets, resources so plentiful, everyone can have just about anything they want with a command to a computer, and there are jet packs. It’s all good, except for the pesky Ferengis and Tribbles.
Maybe we can reach that point, but the perils of Globalization may lead to some dicey times. We humans have a tendency to be greedy, and greed leads to someone wanting too much of the cake.
I kindof think we don’t. Because (mainly) that we manage to be tribal, even when resources are plentiful – look at the immigrant communities in Sweden or Germany. Not good.
I was hoping it would start with an earthquake. Defeat never enters the thought. See the Binary Matrix Vision always.
Sir, I humbly submit that you are a Jedi Master of dank memes. Stank never, dank forever.
Thank you very much – I try to keep ’em home grown so they fit the vibe.