Elon Musk recently voiced his opposition to President Trump's tariffs on foreign imports by sharing a famous video of Milton Friedman explaining the complexity of global supply chains. In the video, Friedman articulates how countless individuals around the world contribute to the simple act of creating a pencil, emphasizing the importance of free markets and the price system in facilitating cooperation. Musk's post, which lacked commentary but highlighted Friedman’s insights, underscores his concerns about tariffs affecting international trade and manufacturing processes.
There's not a single person in the world who could make this pencil. The wood from which it's made, for all I know, comes from a tree that was cut down in the state of Washington.
Literally, thousands of people cooperated to make this pencil ... What brought them together and induced them to cooperate to make this pencil? There was no commissar sending out orders from some central office. It was the magic of the price system.
The pencil's graphite center came from mines in South America, while its rubber eraser came from Malaya, where the rubber tree isn't even native.
A PhD in Econ from Harvard doesn't necessarily translate to wisdom and a deep understanding of market dynamics; it's more complex than that.
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