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I, Pencil My Family
Tree as told to Leonard E. Read
Introduction, by Milton Friedman. Professor
Friedman, the 1976 Nobelist in Economic Science, is
Senior Research Fellow at the Hoover Institution,
Stanford, California.
Leonard Read's delightful story, “I,
Pencil,” has become a classic, and deservedly so. I
know of no other piece of literature that so
succinctly, persuasively, and effectively
illustrates the meaning of both Adam Smith's
invisible hand—the possibility of cooperation
without coercion—and Friedrich Hayek's emphasis on
the importance of dispersed knowledge and the role
of the price system in communicating information
that “will make the individuals do the desirable
things without anyone having to tell them what to
do.”
We used Leonard's story in our
television show, “Free to Choose,” and in the
accompanying book of the same title to illustrate
“the power of the market” (the title of both the
first segment of the TV show and of chapter one of
the book). We summarized the story and then went on
to say:
“None of the thousands of persons
involved in producing the pencil performed his task
because he wanted a pencil. Some among them never
saw a pencil and would not know what it is for. Each
saw his work as a way to get the goods and services
he wanted—goods and services we produced in order to
get the pencil we wanted. Every time we go to the
store and buy a pencil, we are exchanging a little
bit of our services for the infinitesimal amount of
services that each of the thousands contributed
toward producing the pencil.
“It is even more astounding that the
pencil was ever produced. No one sitting in a
central office gave orders to these thousands of
people. No military police enforced the orders that
were not given. These people live in many lands,
speak different languages, practice different
religions, may even hate one another—yet none of
these differences prevented them from cooperating to
produce a pencil. How did it happen? Adam Smith gave
us the answer two hundred years ago.”
“I, Pencil” is a typical Leonard Read
product: imaginative, simple yet subtle, breathing
the love of freedom that imbued everything Leonard
wrote or did. As in the rest of his work, he was not
trying to tell people what to do or how to conduct
themselves. He was simply trying to enhance
individuals' understanding of themselves and of the
system they live in.
That was his basic credo and one that
he stuck to consistently during his long period of
service to the public—not public service in the
sense of government service. Whatever the pressure,
he stuck to his guns, refusing to compromise his
principles. That was why he was so effective in
keeping alive, in the early days, and then spreading
the basic idea that human freedom required private
property, free competition, and severely limited
government.
I, Pencil My Family Tree as told to Leonard E. Read
I am a lead pencil—the ordinary wooden pencil
familiar to all boys and girls and adults who can
read and write.∗
Writing is both my vocation and my avocation; that's
all I do.
You may wonder why I should write a genealogy. Well,
to begin with, my story is interesting. And, next, I
am a mystery—more so than a tree or a sunset or even
a flash of lightning. But, sadly, I am taken for
granted by those who use me, as if I were a mere
incident and without background. This supercilious
attitude relegates me to the level of the
commonplace. This is a species of the grievous error
in which mankind cannot too long persist without
peril. For, the wise G. K. Chesterton observed, “We
are perishing for want of wonder, not for want of
wonders.”
I, Pencil, simple though I appear to be, merit your
wonder and awe, a claim I shall attempt to prove. In
fact, if you can understand me—no, that's too much
to ask of anyone—if you can become aware of the
miraculousness which I symbolize, you can help save
the freedom mankind is so unhappily losing. I have a
profound lesson to teach. And I can teach this
lesson better than can an automobile or an airplane
or a mechanical dishwasher because—well, because I
am seemingly so simple.
Simple? Yet, not a single person on the face of this
earth knows how to make me. This sounds fantastic,
doesn't it? Especially when it is realized that
there are about one and one-half billion of my kind
produced in the U.S.A. each year.
Pick me up and look me over. What do you see? Not
much meets the eye—there's some wood, lacquer, the
printed labeling, graphite lead, a bit of metal, and
an eraser.
Innumerable Antecedents
Just as you cannot trace your family tree back very
far, so is it impossible for me to name and explain
all my antecedents. But I would like to suggest
enough of them to impress upon you the richness and
complexity of my background.
My family tree begins with what in fact is a tree, a
cedar of straight grain that grows in Northern
California and Oregon. Now contemplate all the saws
and trucks and rope and the countless other gear
used in harvesting and carting the cedar logs to the
railroad siding. Think of all the persons and the
numberless skills that went into their fabrication:
the mining of ore, the making of steel and its
refinement into saws, axes, motors; the growing of
hemp and bringing it through all the stages to heavy
and strong rope; the logging camps with their beds
and mess halls, the cookery and the raising of all
the foods. Why, untold thousands of persons had a
hand in every cup of coffee the loggers drink!
The logs are shipped to a mill in San Leandro,
California. Can you imagine the individuals who make
flat cars and rails and railroad engines and who
construct and install the communication systems
incidental thereto? These legions are among my
antecedents.
Consider the millwork in San Leandro. The cedar logs
are cut into small, pencil-length slats less than
one-fourth of an inch in thickness. These are kiln
dried and then tinted for the same reason women put
rouge on their faces. People prefer that I look
pretty, not a pallid white. The slats are waxed and
kiln dried again. How many skills went into the
making of the tint and the kilns, into supplying the
heat, the light and power, the belts, motors, and
all the other things a mill requires? Sweepers in
the mill among my ancestors? Yes, and included are
the men who poured the concrete for the dam of a
Pacific Gas & Electric Company hydroplant which
supplies the mill's power!
Don't overlook the ancestors present and distant who
have a hand in transporting sixty carloads of slats
across the nation.
Once in the pencil factory—$4,000,000 in machinery
and building, all capital accumulated by thrifty and
saving parents of mine—each slat is given eight
grooves by a complex machine, after which another
machine lays leads in every other slat, applies
glue, and places another slat atop—a lead sandwich,
so to speak. Seven brothers and I are mechanically
carved from this “wood-clinched” sandwich.
My “lead” itself—it contains no lead at all—is
complex. The graphite is mined in Ceylon. Consider
these miners and those who make their many tools and
the makers of the paper sacks in which the graphite
is shipped and those who make the string that ties
the sacks and those who put them aboard ships and
those who make the ships. Even the lighthouse
keepers along the way assisted in my birth—and the
harbor pilots.
The graphite is mixed with clay from Mississippi in
which ammonium hydroxide is used in the refining
process. Then wetting agents are added such as
sulfonated tallow—animal fats chemically reacted
with sulfuric acid. After passing through numerous
machines, the mixture finally appears as endless
extrusions—as from a sausage grinder-cut to size,
dried, and baked for several hours at 1,850 degrees
Fahrenheit. To increase their strength and
smoothness the leads are then treated with a hot
mixture which includes candelilla wax from Mexico,
paraffin wax, and hydrogenated natural fats.
My cedar receives six coats of lacquer. Do you know
all the ingredients of lacquer? Who would think that
the growers of castor beans and the refiners of
castor oil are a part of it? They are. Why, even the
processes by which the lacquer is made a beautiful
yellow involve the skills of more persons than one
can enumerate!
Observe the labeling. That's a film formed by
applying heat to carbon black mixed with resins. How
do you make resins and what, pray, is carbon black?
My bit of metal—the ferrule—is brass. Think of all
the persons who mine zinc and copper and those who
have the skills to make shiny sheet brass from these
products of nature. Those black rings on my ferrule
are black nickel. What is black nickel and how is it
applied? The complete story of why the center of my
ferrule has no black nickel on it would take pages
to explain.
Then there's my crowning glory, inelegantly referred
to in the trade as “the plug,” the part man uses to
erase the errors he makes with me. An ingredient
called “factice” is what does the erasing. It is a
rubber-like product made by reacting rape-seed oil
from the Dutch East Indies with sulfur chloride.
Rubber, contrary to the common notion, is only for
binding purposes. Then, too, there are numerous
vulcanizing and accelerating agents. The pumice
comes from Italy; and the pigment which gives “the
plug” its color is cadmium sulfide.
No One Knows
Does anyone wish to challenge my earlier assertion
that no single person on the face of this earth
knows how to make me?
Actually, 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. Now, you may say that I go
too far in relating the picker of a coffee berry in
far off Brazil and food growers elsewhere to my
creation; that this is an extreme position. I shall
stand by my claim. 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. From the standpoint
of know-how the only difference between the miner of
graphite in Ceylon and the logger in Oregon is in
the type of know-how. Neither the miner nor the
logger can be dispensed with, any more than can the
chemist at the factory or the worker in the oil
field—paraffin being a by-product of petroleum.
Here is an astounding fact: Neither the worker in
the oil field nor the chemist nor the digger of
graphite or clay nor any who mans or makes the ships
or trains or trucks nor the one who runs the machine
that does the knurling on my bit of metal nor the
president of the company performs his singular task
because he wants me. Each one wants me less,
perhaps, than does a child in the first grade.
Indeed, there are some among this vast multitude who
never saw a pencil nor would they know how to use
one. Their motivation is other than me. Perhaps it
is something like this: Each of these millions sees
that he can thus exchange his tiny know-how for the
goods and services he needs or wants. I may or may
not be among these items.
No Master Mind
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. No trace of such a person can be found.
Instead, we find the Invisible Hand at work. This is
the mystery to which I earlier referred.
It has been said that “only God can make a tree.”
Why do we agree with this? Isn't it because we
realize that we ourselves could not make one?
Indeed, can we even describe a tree? We cannot,
except in superficial terms. We can say, for
instance, that a certain molecular configuration
manifests itself as a tree. But what mind is there
among men that could even record, let alone direct,
the constant changes in molecules that transpire in
the life span of a tree? Such a feat is utterly
unthinkable!
I, Pencil, am a complex combination of miracles: a
tree, zinc, copper, graphite, and so on. But to
these miracles which manifest themselves in Nature
an even more extraordinary miracle has been added:
the configuration of creative human
energies—millions of tiny know-hows configurating
naturally and spontaneously in response to human
necessity and desire and in the absence of any human
master-minding! Since only God can make a tree, I
insist that only God could make me. Man can no more
direct these millions of know-hows to bring me into
being than he can put molecules together to create a
tree.
The above is what I meant when writing, “If you can
become aware of the miraculousness which I
symbolize, you can help save the freedom mankind is
so unhappily losing.” For, if one is aware that
these know-hows will naturally, yes, automatically,
arrange themselves into creative and productive
patterns in response to human necessity and
demand—that is, in the absence of governmental or
any other coercive masterminding—then one will
possess an absolutely essential ingredient for
freedom: a faith in free people. Freedom is
impossible without this faith.
Once government has had a monopoly of a creative
activity such, for instance, as the delivery of the
mails, most individuals will believe that the mails
could not be efficiently delivered by men acting
freely. And here is the reason: Each one
acknowledges that he himself doesn't know how to do
all the things incident to mail delivery. He also
recognizes that no other individual could do it.
These assumptions are correct. No individual
possesses enough know-how to perform a nation's mail
delivery any more than any individual possesses
enough know-how to make a pencil. Now, in the
absence of faith in free people—in the unawareness
that millions of tiny know-hows would naturally and
miraculously form and cooperate to satisfy this
necessity—the individual cannot help but reach the
erroneous conclusion that mail can be delivered only
by governmental “master-minding.”
Testimony Galore
If I, Pencil, were the only item that could offer
testimony on what men and women can accomplish when
free to try, then those with little faith would have
a fair case. However, there is testimony galore;
it's all about us and on every hand. Mail delivery
is exceedingly simple when compared, for instance,
to the making of an automobile or a calculating
machine or a grain combine or a milling machine or
to tens of thousands of other things. Delivery? Why,
in this area where men have been left free to try,
they deliver the human voice around the world in
less than one second; they deliver an event visually
and in motion to any person's home when it is
happening; they deliver 150 passengers from Seattle
to Baltimore in less than four hours; they deliver
gas from Texas to one's range or furnace in New York
at unbelievably low rates and without subsidy; they
deliver each four pounds of oil from the Persian
Gulf to our Eastern Seaboard—halfway around the
world—for less money than the government charges for
delivering a one-ounce letter across the street!
The lesson I have to teach is this: Leave all
creative energies uninhibited. Merely organize
society to act in harmony with this lesson. Let
society's legal apparatus remove all obstacles the
best it can. Permit these creative know-hows freely
to flow. Have faith that free men and women will
respond to the Invisible Hand. This faith will be
confirmed. I, Pencil, seemingly simple though I am,
offer the miracle of my creation as testimony that
this is a practical faith, as practical as the sun,
the rain, a cedar tree, the good earth.
Leonard E. Read (1898–1983) founded FEE in 1946 and
served as its president until his death. “I,
Pencil,” his most famous essay, was first published
in the December 1958 issue of The Freeman. Although
a few of the manufacturing details and place names
have changed over the past forty years, the
principles are unchanged.
Afterword, by Donald J. Boudreaux
There are two kinds of thinking: simplistic and
subtle. Simplistic thinkers cannot understand how
complex and useful social orders arise from any
source other than conscious planning by a purposeful
mind. Subtle thinkers, in contrast, understand that
individual actions often occur within settings that
encourage individuals to coordinate their actions
with one another independent of any overarching
plan. F. A. Hayek called such unplanned but
harmonious coordination “spontaneous order.”
The mark of the subtle mind is not only its ability
to grasp the idea of spontaneous orders but also to
understand that conscious attempts to improve or to
mimic these orders are doomed to fail. “Why so?”
asks the simplistic thinker. “How can happenstance
generate complex order superior to what a conscious
mind can conceive and implement?” In responding to
this question, a subtle thinker points out that
spontaneous orders do not arise from happenstance:
the continual adjustments by each individual within
spontaneous orders follow a very strict logic—the
logic of mutual accommodation. Because no central
planner can possibly know all of the details of each
individual's unique situation, no central planner
can know how best to arrange each and every action
of each and every individual with that of the
multitudes of other individuals.
In the eighteenth century, a handful of
scholars—most notably David Hume and Adam
Smith—developed a subtle understanding of how
private property rights encourage self-regarding
producers and consumers to act in mutually
beneficial ways. Spontaneous ordering forces were
thus discovered, and with this discovery modern
economics began to take shape.
Over the next two centuries economics achieved
enormous success in furthering our understanding not
only of industry and commerce, but of society
itself. Modern economics—that is to say, economics
that explores the emergence of spontaneous orders—is
a sure-fire inoculant against the simplistic notion
that conscious direction by the state can improve
upon the pattern of mutual adjustments that people
make within a system of secure private property
rights.
But learning modern economics requires some
effort—in the same way that breaking free of any
simplistic mindset requires effort. It isn't
surprising, then, that those economists who've
contributed most to a widespread understanding of
the subject have been clear and vivid writers,
skillful in using analogies and everyday
observations to lubricate the mind's transition away
from superficial thinking and toward a grasp of
subtle insights. The best economic writers cause
once simplistic thinkers to say “Aha! Now I get it!”
Skillfully tutored, a simplistic mind becomes a
subtle mind.
For its sheer power to display in just a few pages
the astounding fact that free markets successfully
coordinate the actions of literally millions of
people from around the world into a productive
whole, nothing else written in economics compares to
Leonard Read's celebrated essay, “I, Pencil.” This
essay's power derives from Read's drawing from such
a prosaic item an undeniable, profound, and
spectacular conclusion: it takes the knowledge of
countless people to produce a single pencil. No
newcomer to economics who reads “I, Pencil” can fail
to have a simplistic belief in the superiority of
central planning or regulation deeply shaken. If I
could choose one essay or book that everyone in the
world would read, I would unhesitatingly choose “I,
Pencil.” Among these readers, simplistic notions
about the economy would be permanently transformed
into a new and vastly more subtle—and
correct—understanding.
[∗]My
official name is “Mongol 482.” My many ingredients
are assembled, fabricated, and finished by Eberhard
Faber Pencil Company.
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