Note: This essay’s framing is drawn from Leonard E. Read’s famous 1958 essay, “I, Pencil,” which attempts to show that spontaneous market forces are responsible for all productive activity. The recent Wall Street Journal story, “Sharpie Found a Way to Make Pens More Cheaply—By Manufacturing Them in the U.S.,” provides a set of facts that confounds Read’s narrative and depicts more accurately how production happens in the real economy.
I am a Sharpie pen—the permanent marker familiar to all boys and girls and adults who can read and write, or who become president and get to sign bills and letters and mark things up.
Writing things and marking things up is all I do.
You may wonder why I should write a genealogy. Well, to begin with, my story is interesting: from America, to China, and back again. My company moved most of my manufacturing over to China in the early 2000s to cut costs. A lot of companies did that after the United States granted Permanent Normal Trade Relations to China. We made it easy for companies to move production out of America, in hopes that this would turn China into a liberal democracy, or create new jobs for Americans selling other things to China, or something. It didn’t make much sense to me but, then, I’m just a marker.
I had a pencil friend once, he tried to explain it all to me as the miraculous workings of an “Invisible Hand.” He attributed his existence to “millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding.” He even made the rather peculiar claim that “since only God can make a tree, I insist that only God could make me.” That seemed strange to me, because I’m pretty sure he was made by the Eberhard Faber Pencil Company in Wilkes-Barre, Pennsylvania back in the 1950s. They seemed to do a good job of it. But then again, the people who owned the company sold it to some other people in Germany, who then sold it to some other people, and those other people closed their last American pencil factory in 2009. So much for that miracle, I guess.
I, Sharpie, simple though I appear to be, merit your respect and attention, because I represent something far more useful than a concocted miracle. In fact, if you can understand me—or even just understand the tradeoffs and decisions faced by the people who do understand me and use that understanding to decide how I will be produced—you can help save the industrial base that America has been so unhappily losing for decades.
I have a basic lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher. Actually, no, automobiles and airplanes and dishwashers can teach it perfectly fine too. In fact, wherever you look, you will find carefully calculated decisions by producers, responding to market incentives, determining how things are made. But perhaps in my simplicity I am an especially useful case.
Simple? Yes. I’m made in a single factory, in Maryville, Tennessee. This sounds fantastic, doesn’t it? It is!
I’m Made in America because a particular person, Chris Peterson, CEO of Newell Brands, maker of Sharpies, decided that should be a priority. His company was dealing with all kinds of supply chain uncertainty, what with pandemics, Houthi rebels, a state-controlled economy of 1.4 billion people dead set on seizing industrial power, stuff like that. Also, tariffs. “Trump is talking about very large tariffs on China imports,” he said in 2024. Democrats were talking about keeping tariffs on China too. So either way, he realized, “there’s a lot of uncertainty. We just want to reduce our exposure regardless of the outcome” because “it’s hard to move supply chains on a real-time basis.”
You see, people at companies like Newell have to decide through planning processes how to allocate the firm’s resources and where to build relationships with suppliers. They deploy enormous amounts of capital, committing for long periods of time to certain patterns of production. And Mr. Peterson decided that his company’s writing business would be better off if he invested in America. “I felt like we had an opportunity to dramatically improve our U.S. manufacturing,” he said.
And he did!
Pick me up and look me over. Not much meets the eye. That’s because I am made of six parts, five of which are now made in America, one of which is imported from Japan, none of which are imported from China anymore, and all of which are assembled with remarkable efficiency in Tennessee.
Complicated Machinery
Does anyone wish to challenge my earlier assertion that carefully calculated decisions by producers, responding to market incentives, determine how things are made?
In many ways, making me in China was easier. China withholds labor rights, suppresses wages, and subsidizes producers. You can make a lot of Sharpies really cheaply that way, if you want to. And if no one in America is thinking about the big picture, or the interests of the United States and American workers, that’s kind of what happens.
But with careful collaboration from many people who knew a lot about how to make me, and with management willing to commit capital and take risks, we found a better way. Here is an astounding fact: Newell invested $2 billion in new machinery to automate many of the processes in my production. The result was that I could be produced three to four times faster than before, at a cost competitive with China’s.
These days everyone seems so afraid of automation taking their jobs. Turns out humans and machines can work really well together; not by a mystical invisible force, but by thoughtful efforts taken to achieve that outcome. No one at my company knows how to do everything. But everyone knows how to do a lot of really important things, because the company chose to invest in training them—people like Mike Newcomb, who leads the molding department. He’s in charge of producing the pen barrels and caps that form my body, and all the other 4.3 billion pen barrels and caps that my Tennessee facility makes every year.
He didn’t always know how to do that. Nor did he figure it out through price signals. He used to pack floormats, but Newell decided to supercharge its career-training program to help employees learn how to do the new jobs created by the new machines and new processes. During my time in Tennessee I haven’t seen any invisible hands fix a single machine, but Mike seems to be running things pretty well.
Here is another astounding fact: with all this training plus all the new machinery, wages for my creators increased by more than 50% over the past few years, and headcount didn’t decline at all.
And all that points toward a fact still more astounding: business leaders decide where things are made, and policy can push them toward one decision or another. There is no mystery here, just political economy.
The above is what I meant when writing, “if you can understand me, you can help save the industrial base that America has been so unhappily losing for decades.” One who is aware of these facts, that the outcomes in markets are a function of the choices made by businesses within the constraints set by policy, will possess an absolutely essential ingredient for freedom—which requires a capitalism that advances the national interest and the common good. Freedom is impossible without understanding this.
Leave Men Free (To Do Political Economy)
The lesson I have to teach is this: domestic production matters, and we can totally do it. We can innovate and benefit workers all at the same time. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus point us in this direction and shape incentives as best it can. Permit these policymakers to cook. Have faith that free men will understand what Alexander Hamilton and Abraham Lincoln and American leaders in the post-war period and even Adam Smith understood: that the Invisible Hand isn’t a mystical force. It’s just a useful way of saying that the private pursuit of profit will redound to the public good, if productive domestic investments are what’s most profitable—and it turns out, policy is what can ensure that happens. This faith will be confirmed. I, Sharpie, seemingly simple though I am, offer the common-sense fact of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, an Apple A16 Bionic system-on-chip, the good earth.