[Read] I, Pencil

7/23/2019 [Read] I, Pencil

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There is no better, more easily understood, and more fun

explanation of the complexity of markets than Leonard

Reads I, Pencil. It ought to give considerable pause when

we listen to the arrogance of politicians who tell us they

can manage an economy better than millions, perhaps

billions, of independent decision makers in pursuit of their

own goals. Its message to would-be planners is to bug out!

WALTER E. WILLIAMS

PROFESSOR OF ECONOMICS GEORGE MASON UNIVERSITY

I, Pencil is a superb case study of free markets in action.

Half of the worlds economic problems would vanish if

everyone would read I, Pencil.

BURTON W. FOLSOM

PROFESSOR OF HISTORY HILLSDALE COLLEGE

What have economists contributed to human knowledge?

Plenty, but the magical, beautiful idea of the division of

labor might rank as the most important insight. I, Pencil

explains we create so much more wealth as a community

than we ever could alone- in fact, even the simplest item

cannot be made without a complex division of labor.

JEFFREY A. TUCKER

DIRECTOR OF DIGITAL DEVELOPMENT FEE

I, Pencil provides remarkable insights into the complexitygenerated by market mechanisms. Textbook economics

almost never incorporates these insights.

MICHAEL STRONG

CO-FOUNDER CONSCIOUS CAPITALISM

CEO RADICAL SOCIAL ENTREPRENEURS


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connect future leaders with the economic,

ethical, and legal principles of a free society.

Find us online at:FEE.org

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Contact us directly at: 1-800-960-4FEE (4333)

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Print ISBN: 978-1-57246-043-0Ebook ISBN: 978-1-57246-042-3

Published under the Creative CommonsAttribution 4.0 International License.

Cover design by CrowdskoutPrint layout design by Lauren Hicks

Foundation forEconomic Education

We invite you to advance liberty with us.

VISITFEE.org


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My Family Tree as Told to

Leonard E. Read


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IntroductionBY LAWRENCE W. REED

Eloquen. Exraordinary. Timeless. Paradigm-shifing. Classic.Six decades afer i firs appeared, Leonard Reads I, Pencil sillevokes such adjecives o praise. Righully so, or his litle essay

opens eyes and minds among people o all ages. Many firs-ime

readers never see he world quie he same again.

Ideas are mos powerul when heyre wrapped in a

compelling sory. Leonards main poineconomies can hardly

be planned when no one soul possesses all he know-how andskills o produce a simple pencilunolds in he enchaning

words o a pencil isel. Leonard could have writen I, Car or I,

Airplane, bu choosing hose more complex iems would have

mued he message. No one personrepea, no one, no mater

how smar or how many degrees ollow his namecould creae

rom scrach a small, everyday pencil, le alone a car or an airplane.

This is a message ha humbles he high and mighy. Ipricks he inflaed egos o hose who hink hey know how o

mind everybody elses business. I explains in plain language why

cenral planning is an exercise in arrogance and uiliy, or wha

Nobel laureae and Ausrian economis F. A. Hayek aply ermed

he preence o knowledge.

Indeed, a major influence on Reads hinking in his regard

was Hayeks amous 1945 aricle, The Use o Knowledge in

Sociey. In demolishing he spurious claims o he socialiss o he

day, Hayek wroe, This is no a dispue abou wheher planning

is o be done or no. I is a dispue as o wheher planning is o be

done cenrally, by one auhoriy or he whole economic sysem,

or is o be divided among many individuals.

Maximilien Robespierre is said o have blessed he horrificFrench Revoluion wih his chilling declaraion: On ne saurai

pas aire une omelete sans casser des oeus. Translaion:

One can expec o make an omele wihou breaking eggs.

A consummae sais who worked irelessly o plan he lives

o ohers, he would become he archiec o he Revoluions

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bloodies phasehe Reign o Terror o 179394.

Robespierre and his guilloine broke eggs by he housands

in a vain effor o impose a uopian sociey wih governmen

planners a he op and everybody else a he botom. Tha French

experience is bu one example in a disurbingly amiliar patern.

Call hem wha you willsocialiss, inervenioniss, colleciviss,

saisshisory is litered wih heir presumpuous plans or

rearranging sociey o fi heir vision o he common good, plans

ha always ail as hey kill or impoverish oher people in he

process. I socialism ever earns a final epiaph, i will be his: Here

lies a conrivance engineered by know-i-alls who broke eggs wih

abandon bu never, ever creaed an omele.

None o he Robespierres o he world knew how o make a

pencil, ye hey waned o remake enire socieies. How uterly

preposerous, and mournully ragic! Bu we will miss a large

implicaion o Leonard Reads message i we assume i aims only

a he yrans whose names we all know. The lesson o I, Pencil

is no ha error begins when he planners plan big. I begins

he momen one osses humiliy aside, assumes he knows heunknowable, and employs he orce o he Sae agains peaceul

individuals. Thas no jus a naional disease. I can be very local

indeed.

In our mids are people who hink ha i only hey had

governmen power on heir side, hey could pick omorrows

winners and losers in he markeplace, se prices or rens where

hey ough o be, decide which orms o energy should power our

homes and cars, and choose which indusries should survive and

which should die. They should sop or a ew momens and learn

a litle humiliy rom a lowly wriing implemen.

While I, Pencil shoos down he baseless expecaions or

cenral planning, i provides a supremely uplifing perspecive o

he individual. Guided by Adam Smihs invisible hand o prices,propery, profis, and incenives, ree people accomplish economic

miracles o which socialis heoreicians can only dream. As he

ineress o counless individuals rom around he world converge

o produce pencils wihou a single maser mind, so do hey also

come ogeher in ree markes o eed, clohe, house, educae, and

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enerain hundreds o millions o people a ever higher levels.

Wih grea pride, FEE publishes his new ediion o I,

Pencil o mark he essays imeless message or a new generaion.

Someday here will be a cenennial ediion, maybe even a

millennial one. This essay is ruly one or he ages.

-Lawrence W. ReedPresident FEE

Atlanta, Georgia

May 2015

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I, PencilMy Family Tree as Told to Leonard E. Read

I am a lead pencilhe ordinary wooden pencil amiliar oall boys and girls and aduls who can read and wrie. Wriing is boh my vocaion and my avocaion; has all I do.

You may wonder why I should wrie a genealogy. Well, o

begin wih, my sory is ineresing. And, nex, I am a mysery

more so han a ree or a sunse or even a flash o lighning.

Bu, sadly, I am aken or graned by hose who use me, as i I

were a mere inciden and wihou background. This superciliousatiude relegaes me o he level o he commonplace. This is a

species o he grievous error in which mankind canno oo long

persis wihou peril. For, he wise G. K. Cheseron observed,

We are perishing or wan o wonder, no or wan o wonders.

I, Pencil, simple hough I appear o be, meri your wonder

and awe, a claim I shall atemp o prove. In ac, i you can

undersand meno, has oo much o ask o anyonei you canbecome aware o he miraculousness which I symbolize, you can

help save he reedom mankind is so unhappily losing. I have a

proound lesson o each. And I

can each his lesson beter han

can an auomobile or an airplane

or a mechanical dishwasher

becausewell, because I am

seemingly so simple.

Simple? Ye, no a single

person on he ace o his earh

knows how o make me. This

sounds anasic, doesn i?

Especially when i is realizedha here are abou one and

one-hal billion o my kind produced in he U.S.A. each year.

Pick me up and look me over. Wha do you see? No much

mees he eyeheres some wood, lacquer, he prined labeling,

graphie lead, a bi o meal, and an eraser.

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If you canbecome aware ofthe miraculousness

which I symbolize,

you can help

save the freedome

mankind is so

unhappily losing.


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INNUMERABLE ANTECEDENTS

Jus as you canno race your amily ree back very ar, so is

i impossible or me o name and explain all my anecedens. Bu

I would like o sugges enough o hem o impress upon you he

richness and complexiy o my background.

My amily ree begins wih wha in ac is a ree, a cedar o

sraigh grain ha grows in Norhern Caliornia and Oregon. Now

conemplae all he saws and rucks and rope and he counless

oher gear used in harvesing and caring he cedar logs o he

railroad siding. Think o all he persons and he numberless skills

ha wen ino heir abricaion: he mining o ore, he making oseel and is refinemen ino saws, axes, moors; he growing o

hemp and bringing i hrough all he sages o heavy and srong

rope; he logging camps wih heir beds and mess halls, he

cookery and he raising o all he oods. Why, unold housands o

persons had a hand in every cup o coffee he loggers drink!

The logs are shipped o a mill in San Leandro, Caliornia.

Can you imagine he individuals who make fla cars andrails and railroad engines and who consruc and insall he

communicaion sysems incidenal hereo? These legions are

among my anecedens.

Consider he millwork in San Leandro. The cedar logs are

cu ino small, pencil-lengh slas less han one-ourh o an

inch in hickness. These are kiln dried and hen ined or hesame reason women pu rouge on heir aces. People preer ha

I look prety, no a pallid whie. The slas are waxed and kiln

dried again. How many skills wen ino he making o he in

and he kilns, ino supplying he hea, he ligh and power, he

bels, moors, and all he oher hings a mill requires? Sweepers

in he mill among my ancesors? Yes, and included are he men

who poured he concree or he dam o a Pacific Gas & ElecricCompany hydroplan which supplies he mills power!

Don overlook he ancesors presen and disan who have a

hand in ransporing sixy carloads o slas across he naion.

Once in he pencil acory$4,000,000 in machinery and

building, all capial accumulaed by hrify and saving parens

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o mineeach sla is given eigh grooves by a complex machine,

afer which anoher machine lays leads in every oher sla, applies

glue, and places anoher sla aopa lead sandwich, so o speak.

Seven brohers and I are mechanically carved rom his wood-

clinched sandwich.

My lead iseli conains no lead a allis complex. The

graphie is mined in Ceylon [Sri Lanka]. Consider hese miners

and hose who make heir many ools and he makers o he paper

sacks in which he graphie is shipped and hose who make he

sring ha ies he sacks and hose who pu hem aboard ships

and hose who make he ships. Even he lighhouse keepers along

he way assised in my birhand he harbor pilos. The graphie is mixed wih clay rom Mississippi in which

ammonium hydroxide is used in he refining process. Then

weting agens are added such as sulonaed allowanimal as

chemically reaced wih suluric acid. Afer passing hrough

numerous machines, he mixure finally appears as endless

exrusionsas rom a sausage

grindercu o size, dried, andbaked or several hours a 1,850

degrees Fahrenhei. To increase

heir srengh and smoohness

he leads are hen reaed wih

a ho mixure which includes

candelilla wax rom Mexico,

paraffin wax, and hydrogenaed

naural as.

My cedar receives six coas

o lacquer. Do you know all he

ingrediens o lacquer? Who

would hink ha he growers o casor beans and he refiners o

casor oil are a par o i? They are.Observe he labeling. Thas a film ormed by applying hea

o carbon black mixed wih resins. How do you make resins and

wha, pray, is carbon black? Why, even he processes by which

he lacquer is made a beauiul yellow involve he skills o

more persons han one can enumerae!

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Why, even the

processes by which

the lacquer is made

a beautiful yellow

involve the skills of

more personsthan one can

enumerate.


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My bi o mealhe erruleis brass. Think o all he

persons who mine zinc and copper and hose who have he skills

o make shiny shee brass rom hese producs o naure. Those

black rings on my errule are black nickel. Wha is black nickel

and how is i applied? The complee sory o why he cener o my

errule has no black nickel on i would ake pages o explain.

Then heres my crowning glory, ineleganly reerred o in he

rade as he plug, he par man uses o erase he errors he makes

wih me. An ingredien called acice is wha does he erasing.

I is a rubber-like produc made by reacing rapeseed oil rom

he Duch Eas Indies [Indonesia] wih sulur chloride. Rubber,

conrary o he common noion, is only or binding purposes.Then, oo, here are numerous vulcanizing and acceleraing

agens. The pumice comes rom Ialy; and he pigmen which

gives he plug is color is cadmium sulfide.

NO ONE KNOWS

Does anyone wish o challenge my earlier asserion ha nosingle person on he ace o his earh knows how o make me?

Acually, millions o human beings have had a hand in my

creaion, no one o whom even knows more han a very ew o he

ohers. Now, you may say ha I go

oo ar in relaing he picker o a

coffee berry in ar-off Brazil and

ood growers elsewhere o my

creaion; ha his is an exreme

posiion. I shall sand by my

claim. There isn a single person

in all hese millions, including

he presiden o he pencil

company, who conribues morehan a iny, infiniesimal bi o

know-how. From he sandpoin

o know-how he only difference beween he miner o graphie

in Ceylon and he logger in Oregon is in he ype o know-how.

Neiher he miner nor he logger can be dispensed wih, any

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Actually,millions of humanbeings have had a

hand in my creation,

no one of whom

even knows more

than a very few ofthe others.


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more han can he chemis a he acory or he worker in he oil

fieldparaffin being a by-produc o peroleum.

Here is an asounding ac: Neiher he worker in he oil field

nor he chemis nor he digger o graphie or clay nor any who

mans or makes he ships or rains or rucks nor he one who runs

he machine ha does he knurling on my bi o meal nor he

presiden o he company perorms his singular ask because he

wans me. Each one wans me less, perhaps, han does a child in

he firs grade. Indeed, here are some among his vas muliude

who never saw a pencil nor would hey know how o use one.

Their moivaion is oher han me. Perhaps i is somehing like

his: Each o hese millions sees ha he can hus exchange hisiny know-how or he goods and services he needs or wans. I

may or may no be among hese iems.

NO MASTER MIND

There is a ac sill more asounding: The absence o a maser

mind, o anyone dicaing or orcibly direcing hese counlessacions which bring me ino being. No race o such a person can

be ound. Insead, we find he Invisible Hand a work. This is he

mysery o which I earlier reerred.

I has been said ha only God can make a ree. Why do we

agree wih his? Isn i because we realize ha we ourselves could

no make one? Indeed, can we even describe a ree? We canno,

excep in superficial erms. We can say, or insance, ha a cerain

molecular configuraion maniess isel as a ree. Bu wha mind

is here among men ha could even record, le alone direc, he

consan changes in molecules ha ranspire in he lie span o a

ree? Such a ea is uterly unhinkable!

I, Pencil, am a complex combinaion o miracles: a ree,

zinc, copper, graphie, and so on. Bu o hese miracles whichmanies hemselves in Naure an even more exraordinary

miracle has been added: he configuraion o creaive human

energiesmillions o iny know-hows configuraing naurally

and sponaneously in response o human necessiy and desire

and in he absence o any human maserminding! Since only

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God can make a ree, I insis ha only God could make me. Man

can no more direc hese millions o know-hows o bring me ino

being han he can pu molecules ogeher o creae a ree.

The above is wha I mean when wriing, I you can become

aware o he miraculousness which I symbolize, you can help save

he reedom mankind is so unhappily losing. For, i one is aware

ha hese know-hows will naurally, yes, auomaically, arrange

hemselves ino creaive and producive paterns in response

o human necessiy and demand ha is, in he absence o

governmenal or any oher coercive maser-mindinghen one

will possess an absoluely essenial ingredien or reedom: a

aih in ree people. Freedom is impossible wihou his aih. Once governmen has had a monopoly o a creaive aciviy

such, or insance, as he delivery o he mails, mos individuals

will believe ha he mails could no be efficienly delivered by men

acing reely. And here is he reason: Each one acknowledges ha

he himsel doesn know how o do all he hings inciden o mail

delivery. He also recognizes ha no oher individual could do i.

These assumpions are correc. No individual possesses enoughknow-how o perorm a naions mail delivery any more han any

individual possesses enough know-how o make a pencil. Now,

in he absence o aih in ree peoplein he unawareness ha

millions o iny know-hows would naurally and miraculously

orm and cooperae o saisy his necessiyhe individual

canno help bu reach he erroneous conclusion ha mail can be

delivered only by governmenal maserminding.

TESTIMONY GALORE

I I, Pencil, were he only iem ha could offer esimony

on wha men and women can accomplish when ree o ry, hen

hose wih litle aih would have a air case. However, here isesimony galore; is all abou us and on every hand. Mail delivery

is exceedingly simple when compared, or insance, o he makingo an auomobile or a calculaing machine or a grain combine or amilling machine or o ens o housands o oher hings. Delivery?Why, in his area where men have been lef ree o ry, hey deliver

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he human voice around he world in less han one second; heydeliver an even visually and in moion o any persons homewhen i is happening; hey deliver 150 passengers rom Seatle oBalimore in less han our hours; hey deliver gas rom Texas oones range or urnace in New York a unbelievably low raes and

wihou subsidy; hey deliver eachour pounds o oil rom he PersianGul o our Easern Seaboardhalway around he worldor lessmoney han he governmen chargesor delivering a one-ounce leteracross he sree!

The lesson I have o eachis his: Leave all creaive energiesuninhibied. Merely organize socieyo ac in harmony wih his lesson.

Le socieys legal apparaus remove all obsacles he bes i can.Permi hese creaive know-hows reely o flow. Have aih haree men and women will respond o he Invisible Hand. This

aih will be confirmed. I, Pencil, seemingly simple hough Iam, offer he miracle o my creaion as esimony ha his is apracical aih, as pracical as he sun, he rain, a cedar ree, hegood earh.

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The lesson I have

to teach is this:

Leave all creative

energies

uninhibited.


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Leonard E. Read

Leonard E. Read (1898-1983) esablished he Foundaion orEconomic Educaion in 1946. For he nex 37 years he served as

FEEs presiden and labored irelessly o promoe and advancelibery. He was a naural leader who, a a crucial momen inAmerican hisory, roused he orces deending individual reedomand privae propery. His lie is a esamen o he power o ideas. As PresidenRonald Reagan wroe: Our naion and her people have beenvasly enriched by his devoion o he cause o reedom, and

generaions o come will look o Leonard Read or inspiraion. Read was he auhor o 29 books and hundreds o essays.I, Pencil, his mos amous essay, was firs published in 1958.Alhough a ew o he manuacuring deails and place nameshave changed, he principles endure.

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The Foundation for Economic Education (FEE) is the premier

source for understanding the humane values of a free society,

and the economic, legal, and ethical principles that make it

possible. At FEE, youll be connected with people worldwide

who share those values and are inspired by the dynamic ideas

of free association, free markets, and a diverse civil society.

Explore freedoms limitless possibilities through seminars,

classroom resources, social media, and daily content at FEE.

org. Learn how your creativity and initiative can result in a

prosperous and flourishing life for yourself and the global

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