In his 1958 essay "I, Pencil," Leonard Read used the ordinary pencil to illustrate the extraordinary coordination of a free economy. Cedar, graphite, clay, lacquer, metal, rubber, machinery, transportation, and innumerable varieties of human knowledge come together to produce an object that sells for pennies. No single person directs the process.
The United States and Canada are now demonstrating the opposite lesson. Call it "I, Pencil: Trade War Edition." Canada's new retaliatory tariffs, which took effect this week, include a 50 percent levy on a customs category expressly covering "ferrules for use in the manufacture of pencils." A ferrule, for anyone fortunate enough not to speak fluent customs code, is the tiny metal collar joining the eraser to the pencil. Government officials do not know how to make a pencil either. But they do know how to make its parts more expensive.
