We have a printing paper problem

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I, Magazine, simple as I appear to be, deserve your wonder and admiration. I am apparently so simple, but not a single person on this Earth knows how to make me.

Fans of the great Leonard Read will recognize (and hopefully forgive) the bastardization of his beautiful market parable, “I, Pencil.” As Milton Friedman wrote of this brief and powerful essay by the founder of the Foundation for Economic Education: “I know of no other literary work which illustrates so succinctly, persuasively and effectively the significance both of Adam Smith’s invisible hand – the possibility of cooperation without coercion – and Friedrich Hayek’s emphasis on the importance of the dispersion of knowledge and the role of the price system in the communication of information.”

Although my affection for Read’s essay remains intact, my faith in the mechanisms he describes has been tested over the past few months. I’m not alone in this: consumers around the world are more aware than ever of how their supply chains work and what happens to prices and availability when those lines are stretched. From the toilet paper shortage that sparked the pandemic to the semiconductor crisis of 2022, it’s been an education.

Until recently, I had only a vague idea of ​​the specific complex market that allowed the physical version of Raison magazine to see the light of day. It is as it should be; my ignorance was one of the great gifts of how markets work.

For 17 years, Raison bought its paper in huge batches from UPM-Kymmene Oyj, a company based in Helsinki. A typical order is 20 metric tons. UPM paper shipping containers float from Kotka-Hamina or other ports to Baltimore on the slowest of slow boats, where they are unloaded onto trucks and taken to Little Rock, Arkansas. The, Raison is printed by Democrat Printing & Lithographing Co., a family business founded in 1871, alongside dozens of other publications. Each issue is then delivered to readers by the planes, trains, trucks and weary feet of the US Postal Service. All this is coordinated by RaisonMike Alissi’s editor.

Several months ago, however, prices began to rise at every step of this process. And prices, as Hayek taught us, contain information. It turns out they were warning of a disastrous turn of events.

The story of what went wrong with the paper supply begins before the pandemic. While many publications – periodicals and books, as well as commercial mailings, election materials, etc. – went digital, paper mills found themselves with too much capacity and too much supply. Prices were low and paper was easy to get on short notice. So available, in fact, that most customers didn’t bother to keep large amounts of inventory on hand.

This situation was not very favorable to paper producers. So they adapted. They took some factories offline and revamped others to produce the type of paper useful in packaging, a growing segment of the market with the rise of e-commerce.

Then the pandemic hit and the paper industry suffered, like all industries, from shutdowns, labor shortages and ultimately a lack of raw materials as global shipping got weird.

The price of wood pulp has soared, for example. China overtook the United States in 2009 as the top producer and consumer of paper products, and an environmental initiative in China that closed 279 pulp and paper mills may have been partly responsible for the rise in the price of wood pulp – it went from around $750 per metric ton in 2020 to almost $1,200 per metric ton in 2021.

Things were already tight when UPM workers went on strike. The relationship between employers and workers in Finland tends to be quite peaceful, so at first it didn’t seem like much of a cause for concern, even though the system was already under strain. But the strike, which began on January 1, 2022, dragged on.

Since Finnish labor policy is rarely covered in detail in the English-language press, our trusty paper broker Cliff Roth resorted to hot gossip from a friend in Finland. The news was not good. “As you will read,” Roth wrote above a Google-translated dispatch in April, “the ‘print paper’ talks have been temporarily suspended by the arbitrator, while talks in other product areas are continuing, because the “printing paper” parts are so far apart.”

Finally, on April 22, the parties reached a resolution and the strike ended. But, as described above, the paper does not move quickly. Even without an ongoing pandemic, it would take some time to get factories back online, shippers under contract, and more.

“I started in the paper business in 1969,” says Roth, who provided Raison with paper for decades. “During this period, there were tight markets. There were markets where buyers were scrambling and sellers were more or less at the top of the hill. This repeats itself every four or five years. But I’ve never seen anything like it in all these years. It’s just absolutely amazing.”

As we search for paper in difficult times, I remember another girl who faced similar challenges.

Ayn Rand, not famous for her brevity, struggled to find an editor for Source then immediately found themselves facing wartime paper shortages. She fiercely fought cuts in her copy, and when the book was finally printed in 1943 it was a relatively small print run of 7,500 copies. Despite heavy criticism, demand grew until his publisher had to strike a deal with another printer, Blakiston – “a small press with a big paper quota”, according to Rand biographer Jennifer Burns.

Rand was the master of the snippy business letter. I recommend that you peruse the archives of the Ayn Rand Institute if you are at a loss for words in your own daily correspondence. In one of many harassing missives, she wrote to her publisher: “The wartime conditions of the printing industry do not relieve you of the contractual obligation to keep my book in print at the rate of demand. Since we know that everything is done more slowly now, we have to do our calculations accordingly.”

And so must Raison. It is fitting that this is our summer double issue and a special book issue, resurrected from a bygone era when magazine editions devoted to books were more common. Book sales have hit an all-time high during the pandemic, with people putting aside once-popular self-help books to read first about baking, then about social justice, before finally giving in to the temptation to adult fiction. This increase in reading is a double-edged sword for us this month, editorially. With so many books to cover, we needed every page of this double issue, even though those pages have become both expensive and rare. The 2022 issue of books focuses on banned books, with a fairly broad interpretation of the forces that can keep books out of readers’ reach, including factors you might not think of as traditional state censorship.

The race to find paper has been tough, but it’s still infinitely preferable to any centrally managed or allocated process. On the one hand, you can be pretty sure that a magazine that questions the conduct of economic regulators at every turn would find itself at the end of the line for the paper, even in the best of times.

Short term, Raison will come to you on an unusual piece of paper. Our usual products won’t be available for months. We’ve already replaced some slightly different papers, but this one should noticeably change: it’s matte, instead of our usual silk. According to Roth, it is also “toothier”. It’s also a little more likely to wrinkle, and a lot more expensive to ship, because it’s heavier.

We hope you will support us, because we are not yet ready to abandon the dead trees. As Read well knew, there is something miraculous about holding in one’s hands the product of so many people’s labor and ideas – a tangible representation of the wonderfully free and interconnected world in which we live.

“The lesson I have to teach is this,” Read’s personified pencil said. “Let all creative energies uninhibited. Just organize society to act in harmony with this lesson. Let the legal apparatus of society remove all obstacles as best it can. Let these creative skills flow freely Trust that free men and women will respond to the Invisible Hand, and that faith will be vindicated.

I, Magazine, seemingly simple as I am, offer the miracle of my creation as a testimony that it is practical faith.

This article originally appeared under the title “We have a printing paper problem”.

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