In the middle of a wide-ranging conversation about remote work and creative collaboration, a friend blurted out “The pencil proves remote collaboration works!” It was an esoteric claim but one that makes a strong case. Let’s call it the pencil collaboration.

Way back in 1958, an economist named Leonard Read wrote an essay called ‘I, Pencil’ which points out that no one person knows how to make a pencil. On the surface, the pencil seems like a simple invention. In reality, it is the result of a vast range of specialties which are not centrally coordinated:

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. […] millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others. There isn’t a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. […] There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being.

The pencil collaboration is a testament to highly-distributed processes in diverse disciplines collaborating to solve problems. Said more simply, it shows that loosely coordinated networks of people can produce concrete results. Here’s an animated film from the Competitive Enterprise Institute which reinforces this point:

Of course, this isn’t limited to a pencil but is true of virtually every invention and of society in general. The Nobel-prize winning economist Milton Friedman used a similar story to illustrate how the free market system promotes cooperation and harmony among those with no common interest. It’s not much of a leap from the pencil collaboration to decentralized autonomous organizations.

The pencil collaboration also reminds us that, no matter how indispensable we think we are, everything we do is dependent on others. The modern version of ‘no one is an island’ might be ‘we are all nodes in the network’.

Now back to The Matrix Resurrections to see if there’s a yellow pencil hidden somewhere as clue, in addition to the white rabbit.

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There’s no such thing as a free lunch.

In English, this is a popular phrase that suggests you can’t get something for nothing.  (Readers, is there a similar saying in other languages?) Like many common phrases, its origin is shrouded in mystery.

At the heart of the phrase, the concept of a “free lunch” refers to the late 1800’s practice of American saloons offering a no-cost lunch to customers who purchased a drink. Even though the lunches were worth more than the price of the drink, the expectation was that most patrons would buy more than one drink and that they would become loyal customers. In other words, the proprietors wanted the free lunch to have hidden costs.

One of the earliest mentions of this practice of giving free lunches is in the 1872 NY Times article called “The Loafer and Free Lunch Men”.  While the article suggests that the practice was not very successful, it doesn’t explicitly use the phrase.

In the Yale Alumni Magazine, Fred Shapiro traces the phrase’s origin to a June 27, 1938 El Paso Herald-Post called “Economics in Eight Words.” A king asks his advisors to summarize economics in a simple way. Because being brief is hard,

they respond with 87 volumes of 600 pages each, drawing the king’s wrath and accompanying executions. Further demands and more executions force ever-briefer summations, until, finally, the last economist, “a man of profound wisdom,” speaks: “Sire, in eight words I will reveal to you all the wisdom that I have distilled through all these years from all the writings of all the economists who once practiced their science in your kingdom.

Here is my text: ‘There ain’t no such thing as free lunch.’

This may be the earliest use but Milton Friedman popularized the phrase by using it as the title of his classic 1975 economics book.

From an economics point of view, there’s no such thing as free lunch demonstrates the concept of opportunity cost. While something might not have an explicit price, hidden or implicit costs must be considered to understand the full picture. Because implicit costs are usually not obvious, especially to the casual observer, the concept of ‘free’ is an extremely powerful marketing tool. “Buy one, get one free” requires you to buy one — often one of something you might not have otherwise purchased.

It’s time to get back to the seemingly free lunch provided by my employer.

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