David R. Henderson  

We, Cheap Pencils

Margaret Sullivan's Hilarious ... Trump's Trade Fallacies...

Pencils, IMG_1441.JPG

I went to Staples on Sunday to buy some pencils and a pencil sharpener. I needed new pencils with good erasers that were not all hardened from age.

I didn't need to buy a pencil sharpener. The price of the box? Under $4.00, which means under 10 cents each. Made in the Philippines. Thank you, free trade and international division of labor.

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CATEGORIES: International Trade

COMMENTS (8 to date)
john hare writes:

Yes, I am happy to buy work jeans at $10.00 out of my 2016 income in preference to $20.00+ out of my 1976 income. And for the competition that woke up domestic vehicle manufacturers. And so on for the good life I have now on an income that is supposedly below average.*

* Company owner, invest pretax.

MikeP writes:

The miracle pencil I recently discovered never needs sharpening: the disposable 0.7mm mechanical pencil.

Bic, 25 cents a piece from Target. Interestingly, it's made in the USA, though our box at home says it's made in France.

If you want to go store brand, they're 8.5 cents a piece and "imported".

RPLong writes:

A short while back, I bought a similar box of pencils from Target, along with a big book of acid-free, plain white paper, for sketching. I was amazed by how many hours of entertainment I purchased for myself for less than $5.

Sardonicus writes:

I have found the cheap pencils in question to break often, be difficult to sharpen, etc. I spend a bit more on better pencils like the Dixon Ticonderoga. All that to say, it's nice to have the market produce better pencils as well.

Chris L writes:

MikeP, I also use cheap mechanical pencils. For a long time they were expensive but a some years ago cheap ones started showing up everywhere. I figured some patent must have expired.

Hazel Meade writes:

What on earth do you need that many pencils for?

MikeP writes:

In my case, they were a birthday trinket for a kid's class.

But we had some left over, so they're now in the house. I have to say, when you want a pencil it is easier to find a disposable mechanical pencil than it is to find both a standard pencil and a pencil sharpener.

michael pettengill writes:

What did you sell to the Philippines?

$4 in ownership in US pork production capital by way of China selling $4 of goods to the Philippines and then buying existing capital in the US? Or perhaps $4 in real estate in California removing housing from the reach of Californian workers?

In the former, China is gaining technology it will deploy in China to become a bigger pork producer and possibly put Americans out of work by capping the growth in US pork production driven by exports. China can buy subsidize grain from the US to produce pork the American way with Chinese labor, possibly exporting to the region, cutting out US exports.

In the latter, China gains access to the US education system, sending kids born in California back to California to live in the housing and thus becoming residents entitled to California education building human capital that is taken back to China to be productive.

If trade were about labor, the imbalance in labor value flow would result in the exchange rate changing so the imported pencil costs more and exported US labor goods costs less to the importer.

Instead trade is generally trading labor for old existing capital assets. The worst case is Saudi Arabia and Venezuela where workers are put out of work by imported labor value goods traded for old capital assets. After all, in these nations, cheap food is imported at prices lower than local food producers can manage, with cheap food called a welfare enhancing good that benefits the nation's people who benefit by not paying costly local farm labor.

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