Pencil and Doll Superabundance

The innovation of simple things for kids.

President Trump recently argued at a speech on the economy: “You can give up certain products. You can give up pencils…They only need one or two. They don’t need that many…You don’t need 37 dolls for your daughter. Two or three is nice, but you don’t need 37 dolls.”

Free-market capitalism has made pencils and dolls astonishingly affordable.

Dolls

Thirty-three years ago, Donald Trump made a cameo appearance as himself in Home Alone 2: Lost in New York (1992).

What does Christmas Past tell us about time prices back then? According to the Bureau of Labor Statistics, toy prices have fallen 76.8 percent since 1992, while blue-collar wages have increased 191.1 percent over the same period.

That makes for a 92 percent decrease in the time price for blue collar workers, who now get 12.55 toys for the time price of one toy back in 1992.

Pencils

Joseph Dixon, inventor of the famous Ticonderoga pencil, was born in Marblehead, Massachusetts in 1799 and was naturally curious and entrepreneurial. He made his first pencil at age 13 by baking the graphite in the oven at home. By 1822 he was making pencils out of cedar slabs, graphite, and clay, and selling them for 5 cents apiece. Workers at the time were earning around 5 cents an hour so the time price was one hour. Imagine spending an hour today working to earn the money for one pencil. That would be $36.67 for an average worker today.

By 1872, his company was making 86,000 pencils per day. Erasers were added to the pencils in 1876. In 1913, the yellow No. 2 Ticonderoga pencil was introduced. The pencil was originally manufactured with a brass ferrule, but it was temporarily changed to green plastic, because metal was rationed during World War II. The now-iconic color scheme continued after the war.

In 1980 you could buy a pack of 12 Dixon Ticonderoga pencils for $1.29, or 10.7 cents each. Entry-level workers were earning around $4.06 an hour, putting the time price at 1.58 minutes each. Workers get 38 times more since 1822.

Today you can buy a pack of 12 Ticonderoga pencils at Walmart for $2.97 or 25 cents each. Entry-level workers are now earning $18.67 an hour, putting the time price at 0.8 minutes, or 48 seconds. The time price has fallen by 50 percent since 1980. You get two pencils for the time price of one in 1980, and 75 for the time price of one in 1822.

Free-market competition also creates substitutes when prices get too high. On a tight budget, you can buy a Pen+Gear pencil for about 7.6 cents—roughly 15 seconds of work for an entry-level employee. For the price of a single Ticonderoga, you can get 3.2 Pen+Gears.

Capitalism multiplies abundance and choices. You get 240 pencils today for the time price of one in 1822. Plus a nice eraser.

The simple pencil is a marvel of innovation and knowledge, but no one person really knows what it takes to make one as Nobel-laureate economist Milton Friedman points out.

If you learned something surprising, share this post with a friend who likes data analysis and history.

Please let me know in the comments if there is a product you would like to see analyzed in a future article.

Learn more about our infinitely bountiful planet at superabundance.com. We explain and give hundreds of examples why more people with freedom means much more resource abundances for everyone in our book, Superabundance, available at Amazon.

Gale Pooley is a Senior Fellow at the Discovery Institute, an Adjunct Scholar at the Cato Institute, and a board member at Human Progress.