Dani Rodrik challenges Milton Friedman's riff on free markets from "Free to Choose," seen above. Most of the world's pencils today are produced in China, "an economy that is a peculiar mix of private entrepreneurship and state direction":
[T]he present-day pencil story would be incomplete without citing China’s state-owned firms, which made the initial investments in technology and labor training; lax forest management policies, which kept wood artificially cheap; generous export subsidies; and government intervention in currency markets, which gives Chinese producers a significant cost advantage. China’s government has subsidized, protected, and goaded its firms to ensure rapid industrialization, thereby altering the global division of labor in its favor. … Given China’s economic success, it is hard to deny the contribution made by the government’s industrialization policies.
The Dish 