From Kleenex to Zippers: The Unpredictable Results of Entrepreneurs

Commentary from Burton W. Folsom on FEE.org:

The 1920s was a decade that taught us many lessons in economics—perhaps foremost among them is that cutting tax rates encouraged entrepreneurs to invest in a variety of revolutionary products, from radios to refrigerators.

A corollary lesson, however, is also important: When entrepreneurs are turned loose and their property rights are protected, what they eventually produce can’t be predicted—even by them. I want to describe four products that became part of American life in the 1920s—Kleenex tissues, the zipper, air conditioning, and Scotch tape.

Kimberly-Clark developed the material in Kleenex tissues from wood pulp in World War I as a substitute for cotton, which was in short supply. Originally called cellucotton, it was first used in wadded form as a surgical dressing. Later in the war, in its modern tissue form, it was used as a filter in gas masks.

After the war Kimberly-Clark had large supplies of cellucotton on hand and the company searched for years for new uses for their product. Finally, in 1924 the cellucotton became Kleenex tissues. The marketing staff at Kimberly-Clark believed the tissues had a niche market for removing cold cream and other cosmetics. Endorsements from Hollywood stars such as Helen Hayes and Gertrude Lawrence promoted Kleenex as soft and efficient for cleaning their faces.

Fortunately for Kimberly-Clark, their marketers were wise enough to read their mail, and expand their market. Many letters from customers asked,“Why don’t you ever say it’s good for blowing your nose?” That led the company to do test-marketing—and yes, indeed, more customers preferred Kleenex tissues to handkerchiefs. In fact, the company now boasted that tissues were healthier because they were disposable. “Don’t put a cold in your pocket” was the theme of the next wave of advertising. In 1929 Kimberly-Clark introduced the pop-up box. Sales grew further and were even strong during the Great Depression of the 1930s. [read more]

No planned economy can create products like those named in the article above. Why? Because socialism and communism cannot manufacture creativity and innovation. Although a planned economy can hamper creativity and innovation.

It is interesting to note that the most inventions came out of the 1920s when conservative Calvin Coolidge was president. Coincidence? I’ll let the reader decide.