The problem with complicated systems


Who is smart enough to make a pencil? No one. That’s the finding of Leonard E Read in his economic fable, I, Pencil.

The question is not “who can assemble the components of a pencil?” not. Rather, “there is a single individual who possesses all the expertise to identify the right wood and saw it into the right shape, to mine and cut the graphite, to produce the paint for the outside of the pencil, to to manufacture an eraser for the stem and to supply glue to attach the whole thing together?”.

There is clearly no such person. Hundreds, or perhaps even thousands, of people are involved in the production of every single pencil.

Who designed the system of pencil production and who oversees it? No one.

The hundreds of people and various entities involved in the production of the pencil are each doing their own thing, for their own reasons. Yet nowhere have we heard of serious pencil shortages in the country. Or read anywhere about the pencil supplier capitalists who want to exploit consumers with their exorbitant prices. Also, the president has never proposed to set up a ministry of pencil matters, or to put together a national pencil plan.

The reason for this is clear: the system of pencil manufacturing is too complicated to be successfully managed centrally. A single person cannot do it. A committee of experts might, but everyone knows that it is more efficient and profitable to leave the system to the free market.

From pencils to fever pens

This brings us to the point where I want to challenge your assumptions. You may have thought before that something simple – such as the production of pencils – could be done by the free market, but that something complicated – such as national health care – should ideally be managed by experts according to a pre-planned system. However, I want to argue the opposite: because the production of pencils is so complicated, it should be left to the free market.

This is all the more the case with the provision of health care (which is much more complicated) – it must be done through the free market.

The draft law on National Health Insurance (NHI) suggests that the health system will be even more centralized than it already is and that everything will be planned and managed even further in advance. This entails, among other things, that medical funds will no longer be allowed to offer health insurance for services that are included in the NHI scheme and that private health institutions must first register with the NHI before they may offer services.

This approach was doomed from the start (and we haven’t even begun to mention the corruption and incompetence of the ANC government!).

Solomon’s proposal to the ANC

“Go to the ant, sluggard, look at his ways, and become wise. He what not having a captain, overseer or ruler, prepare his food in the summer, gather his food in the harvest.” (Proverbs 6:6-8)

When the Proverb wants to address the sloth, he refers to the fastest, busiest thing he can think of: an ant’s nest. There is much to admire about an ant’s nest: diligence by the bank, good internal communication, efficient casting, and so on. But what is the one, characteristic feature of the productive hive system that Solomon is referring to here?

The absence of central control…

  • Louis Boshoff is a campaign officer at AfriForum and spokesperson for NGV. He has a degree in pharmacy (BPharm cum laude) and is currently working on a master’s degree in pharmacoeconomics at the NWU. He is co-presenter of Podlyticsfan of good Afrikaans literature and a adventurous rock climber in his spare time. Louis campaigns for the message of the rule of Jesus Christ over all things.