How can this be true

And I think where Leonard Read was absolutely right was to suggest that when the free market works well, it delivers amazing results. Well, why does it deliver amazing results? There are pencil manufacturers or lumberjacks or coffee companies or truck companies making bad decisions and going bankrupt all the time.

But the system as a whole is resilient and stable and creative. And, as Leonard Read rightly pointed out, it produces miracles.

Jim Weissenborn. Jim Weissenborn is We even do all our own marketing. There are only a couple other U. Weissenborn led our producer Christopher Werth on a tour. These are tumbling barrels. And what you hear going around in there are Belgium stones off the coast of Belgium. That fine mixture is then dried, ground up again, mixed with water.

Those are then dried again and fired in kilns at around 1, degrees Fahrenheit. In , Leonard Read wrote that the graphite for pencil lead came from Ceylon, which is present-day Sri Lanka. Most of the graphite General Pencil uses today comes from Mexico; overall, China is the biggest supplier. What about the eraser? So our erasers are made for us in Spain. The tour heads into the woodshop. A machine is cutting a row of tiny grooves into thin, rectangular wooden slats.

This is how the lead gets into the pencil. A lead is laid into each of the grooves and then another grooved, wooden slat is glued on top. The slats — the bonding process is the glue goes in the bottom one. We had all the contracts for the L. Unified school districts, Seattle school districts, State of New York. We were running truckloads and truckloads of pencils out of here. This was back 40 years ago.

All told, there are steps in making a pencil in this factory, and Jim Weissenborn knows every single one. Yet, not a single person on the face of this earth knows how to make me.

Not that most of us would ever want or need to do such a thing, right? So a kiwifruit grown in New Zealand or Italy? I can buy that for a dollar in a New York grocery store — even an online grocery store, which delivers to my door. What do you want to buy?

A German-made car? A t-shirt made in Indonesia and Bangladesh, spun from cotton grown in Mississippi? Yep, you can buy that too. But this does not stop some people from trying to make their own stuff, from the ground up.

And that is Thomas Thwaites. He wanted to better understand just how finished consumer goods get to him. We British, we love our toast. THWAITES: And to my dismay there were kind of individual bits that had been made and then come together into this item whose sole purpose was to make toasting a slice of bread slightly more convenient in the morning.

Where do I start? Those five materials were steel, nickel, copper, mica and plastic. But even with the first material, steel, Thwaites hit a roadblock. The steel-making process is incredibly difficult, especially for an art-and-design student.

So he settled on iron, which is somewhat less complicated. But anyway, they cleared that up and he went back home with a suitcase full of iron ore. How do you turn iron ore into iron? How do you make metal from rock? I had a vague idea — you have to get it hot. Thwaites consulted professors and some books on metallurgy. He landed on a method from the 15th century, with a few modifications. The fire produced a big lump of heavy gray matter that looked like metal.

I must be some kind of genius because it took the rest of humanity thousands and thousands of years to move from the Bronze Age to the Iron Age but hey, me, I just pulled it out of the bag. Alas, Thwaites was not quite as genius as he imagined. The lump was still just iron ore. So he read some more and landed on another idea. With the nickel he needed, for example. The closest extant mine he could find was in Siberia. THWAITES: I was determined that this toaster would have a plastic case because a plastic case is kind of the defining feature of cheap consumer electrical objects.

You know, this kind of smooth, plastic shell to hide the mess inside. So, how do you make plastic? Plastic comes from oil. If they would put me, you know, spare seat in an helicopter, out to an oil rig in the North Sea, and then there I could get a jug full of crude oil and start going for plastic at source. In fact, it would sort of be easier for me to help you if you wanted a tanker full of crude oil to turn up outside your house.

Instead, Thwaites turned to a less-raw source of plastic: household waste on the streets of London. But imagine that before you did that, you drank five or six shots of whisky.

And so you were quite badly drunk and you tried to make this toaster cake. Does it actually make toast? An art gallery in Rotterdam invited Thwaites to show off his toaster and to try it out. Put my bread in, switched it on, and for like a beautiful moment, this thing was glowing red. It nearly brought a tear to my eye. It was slightly warm. And what was the final tally on this partially successful, drunken-caveman-birthday-cake bread warmer?

About nine months and …. And he had to cheat quite a bit along the way: the leaf blower, the Canadian nickels, the train from London to Wales.

Because if I was really going to be making this toaster from scratch, I would have to go to the middle of the woods, get rid of all my worldly belongings and burn my clothes, and that would be starting from scratch, starting from naked in the woods.

And then the process would begin of making this toaster. But that was impossible. I would have just died. I could have picked a pencil, I think, and had equally as difficult a time. Tim Harford, as an economist who himself lives near London, a most global city, he understands how any one of us might feel alienated by this pyramid — the big, complicated global processes — that produce the pencil or the toaster that show in up a local shop.

It works really well. All you need to do is trust the market. Nobody needs to understand it. It will get you your toaster. Let me ask you one more question. If you, Tim Harford, wanted to take up the Thomas Thwaites challenge or something like it and go into the forest naked and create something from scratch, anything, what do you think you could pull off? If I could be quickly eaten by squirrels, I would count myself lucky. We hear how Freakonomics Radio listeners have used the show to make some kind of change or difference in the world.

From donating a kidney to remaking the classroom and lots more of your stories. If you can't see the solution by looking you could try printing it and with your eye close to the page looking along the diagonals. Failing that then let me just tell you the answer An exaggerated outline might look like In summary the missing square in the bottom triangle is made up for by the fact that it's hypotenuse bends out where as for the top triangle it bends in.

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