Read’s essay is no brief for anarchy. “I, Pencil” is a plea for humility among economic central planners that is desperately needed by the utopian thinkers of our day, and every era.
Leonard Read’s immortal essay “I, Pencil” has persuaded more people of the wonders of the free market than possibly any other comparable work—so many that the BBC recently posted an article attacking it. However, anyone reading both articles will conclude that Read’s pencil comes out looking sharper.
The mere fact that Read’s article can still elicit rebuttals 60 years after it appeared in the December 1958 issue of FEE’s The Freeman is testimony to its significance. As such a powerful and persuasive essay, it had to be destroyed. //
The ability to transport a product from factory to store shelf is a necessary condition for its sale—and thus, its mass production—but not a sufficient one.
If roads created businesses, then there should be no stretch of asphalt in the country not festooned with stores, shops, or offices. Roads facilitate commerce; they do not necessarily cause it. If the government bears responsibility for all the commerce that flows over its roads, then the federal government smuggled all but the 370,000 pounds of drugs stopped at legal ports of entry last year—and the U.S. Post Office trafficked all but the 40,000 pounds of drugs seized in the mails in 2017. Clearly, this is a reductio ad absurdum whether applied to narcotics or number two pencils.
The creative process begins when an entrepreneur senses the underlying need for a product or service, which is confirmed by someone’s willingness to pay for it. One might call this—to coin a phrase—the “magic of the price system.”
Furthermore, just as no Pencil Czar directs the construction of pencils, no Transportation Czar tells the company whether to transport its cargo by truck, rail, ship, drone, or private courier. The firm chooses the method of shipment that best fits its needs based on price signals. //
The second fallacious assumption is that everyone who supports the free market is an anarchist. The Lockean conception of ordered liberty tasks government with defending the right to life, liberty, and property—a position that Leonard Read and Milton Friedman happened to share. Read wrote in his lesser-known work Government—An Ideal Concept that the State should be confined to “protecting the life and property of all citizens equally, and invoking a common justice under law.” Friedman believed the government had three primary functions: to “provide for military defense of the nation,” “enforce contracts between individuals,” and “protect citizens from crimes against themselves or their property.”
The point of “I, Pencil” is best captured by Read’s successor at the helm of FEE, Lawrence W. Reed. “None of the Robespierres of the world knew how to make a pencil, yet they wanted to remake entire societies,” he wrote. Ambitious bureaucrats, eager to impose their ignorance on economics or politics, lack the information and creativity generated spontaneously by free people. “Leave all creative energies uninhibited,” wrote Leonard Read. “Permit these creative know-hows freely to flow.”
Read’s essay is no brief for anarchy. “I, Pencil” is a plea for humility among economic central planners that is desperately needed by the utopian thinkers of our day, and every era.
All of which leaves Harford without a point to make.
Thankfully, pencils have erasers. //
The second fallacious assumption is that everyone who supports the free market is an anarchist. The Lockean conception of ordered liberty tasks government with defending the right to life, liberty, and property—a position that Leonard Read and Milton Friedman happened to share. Read wrote in his lesser-known work Government—An Ideal Concept that the State should be confined to “protecting the life and property of all citizens equally, and invoking a common justice under law.” Friedman believed the government had three primary functions: to “provide for military defense of the nation,” “enforce contracts between individuals,” and “protect citizens from crimes against themselves or their property.”
The point of “I, Pencil” is best captured by Read’s successor at the helm of FEE, Lawrence W. Reed. “None of the Robespierres of the world knew how to make a pencil, yet they wanted to remake entire societies,” he wrote. Ambitious bureaucrats, eager to impose their ignorance on economics or politics, lack the information and creativity generated spontaneously by free people. “Leave all creative energies uninhibited,” wrote Leonard Read. “Permit these creative know-hows freely to flow.”
Read’s essay is no brief for anarchy. “I, Pencil” is a plea for humility among economic central planners that is desperately needed by the utopian thinkers of our day, and every era.
All of which leaves Harford without a point to make.
Thankfully, pencils have erasers.
