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What can toilet paper and the air conditioner teach us about capitalism and Friedrich Hayek?

'Spontaneous order' and 'the fatal conceit.'

Michelle Malkin's new book, "Who Built That: Awe-Inspiring Stories of American Tinkerpreneurs*" is not only a powerful rebuke of President Barack Obama's "You didn't build that" remark, but a celebration of the virtues of free enterprise, providing a series of valuable and entertaining lessons on entrepreneurship, innovation and markets through compelling individual stories.

We had the chance to sit down with Malkin to discuss "Who Built That," and in one particularly interesting part of our in-depth interview discussed "I, Toilet Paper," a chapter the author based on the essential Leonard Read essay "I, Pencil," the development of the air conditioner, and how these stories give us insight into capitalism and free market economist Friedrich Hayek.

 

I remember reading this ["I, Pencil"] early on as a young conservative -- this essay that used the pencil to illustrate the magic of not only the mundane (you know just this lowly little consumer product), but also as an illustration that there is no federal edict, no central command in the world that could produce a pencil. That in fact it takes many many people around the world pursuing their own self-interest -- whether it's the rubber makers in India who supply the rubber for the eraser, or the timber mill operator in Oregon, who doesn't give a hoot about the people in India, who is simply pursuing his own profit. And somehow they all magically are able to cooperate to produce one single pencil.

 

And so I adapted that concept with the roll of toilet paper, which is just as mundane and just as lowly as a pencil. And I walk through the entire sort of family tree of capitalists who helped produce toilet paper.

It's funny because this exact chapter was the target of smearing mockery by the book reviewer at the Washington Post this week, who engaged in a lot of literal bathroom humor when he was trying to mock my book. And all of his liberal journalist friends all ate it up. And I think that's quite a shame. And it actually kind of illustrates exactly why I wrote this book, because I am trying to immunize kids against that kind of smugness. I mean, [it's] so out of touch.

I think it's cool, I think it's a miracle when you hold up a roll of paper and you think of -- all the way back to the Revolutionary Age, the colonial times when our Founding Fathers were the first investors in paper mills all up and down Pennsylvania, who, you know, had no imagination, no vision of thinking that ... when you're sitting in the bathroom, that they were helping you. They didn't care about us, they didn't care about our backsides, they cared about their own bottom lines. And that's a good thing.

Our interview continued:

Ben Weingarten: One real takeaway from "I, Toilet Paper," "I Pencil," anything else which shows you how you pull together all of these different processes and resources, and no one person's coordinating it but it all comes together, is that that really undermines all elements of central planning, and government's roll in an economy in and of itself.

You know I was reading an article in the Wall Street Journal recently, and they were talking about the Federal Reserve. And without getting into the specifics of it, they talk about how the Fed has a computer system that has thousands of variables or hundreds of variables in it, and they tweak the different assumptions to see what the right interest rate should be.

And when you think about "I, Pencil" or "I, Toilet Paper," it shows you that no one person and no one computer could ever figure out what the ideal price of anything is, whether it's an interest rate, or an iPad or any other product. It is people working together and through, you know sort of spontaneous harmony -- to speak to something like [Friedrich] Hayek, "spontaneous order" -- that's how the world works.

Michelle Malkin: Yes, yes. And I love the invocation of Hayek, because of course the other concept here is the idea of "The Fatal Conceit" -- that these central planners know all. And to your point, it's not merely that these people -- that they fail to know what the proper price of anything is, but what the proper use of anything is. And I think that the chapter -- I did chapter 2 on "The Wizards of Cool," the Carrier Corporation -- Willis Carrier and Irving Lyle, and their band of brothers -- who brought these massive innovations in cooling and then eventually heating to America. And when they initially started out it was really to help a print company that was having problem with humidity in New York City kind of in the middle of one of these early 20th century heat waves. And the ink was running and so they needed somebody to solve that problem.

Well, you know eventually the air conditioning and the coolant systems that they introduced really are responsible for Hollywood and the movie industry, malls, the entire development of the Southwest and the South for that matter on the East Coast, hospitals. Vaccines wouldn't exist without a lot of their innovative breakthroughs.

But they could have not imagined when they embarked on that journey that it would lead to all of those things, and it shows you that -- the contrast between just the utter lack of vision that government bureaucrats have, and what's possible when you give individual profit-seekers the opportunity to pursue their ends as far as they can go.

During the interview, we also had a chance to discuss a series of other topics including:

  • The paradox on the left/in Hollywood of supporting entrepreneurship and commerce while funding its opponents
  • Why "socially responsible" business is a misnomer
  • A lesson from HBO's "Silicon Valley"
  • The importance of the patent system to the American experiment [Click to listen]
  • Market capitalists versus crony capitalists and the story of Roebling and the Brooklyn Bridge [Click to listen]
  • Bernie Sanders' comments on Americans having too much consumer choice
  • And much much more

*Malkin's new book was published by Mercury Ink.

Note: The link to the book in this post will give you an option to elect to donate a percentage of the proceeds from the sale to a charity of your choice. Mercury One, the charity founded by TheBlaze’s Glenn Beck, is one of the options. Donations to Mercury One go towards efforts such as disaster relief, support for education, support for Israel and support for veterans and our military. You can read more about Amazon Smile and Mercury One here.

Follow Ben Weingarten (@bhweingarten) and TheBlazeBooks on Twitter and Facebook.

You can find all of our Blaze Books interviews on Soundcloud and Stitcher, and subscribe to our podcast automatically via iTunes.

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