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Source link: http://archive.mises.org/14195/i-pencil/

I, Pencil

October 11, 2010 by

This classic article by Leonard Read illustrates how completely dependent the world is on the division of labor — and the more of it the better. Not even the smallest manufactured item can be made by one person alone. FULL ARTICLE by Leonard Read


mushindo October 11, 2010 at 8:21 am

seen this before over the years, but htat takes nothing away from its cogency: INdeed, I have seen a similar deconstruction of the modern cellphone’s provenance , with its component parts sourced from all continents without exception. But when the same point is made with the humble and decidedly lo-tec pencil, its all th emore impressive.

I particularly liked this passage:

‘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.’.

This may be an astounding fact to many people, but it is in fact uttely mundane: this defines all usiness ( any kind, anywhere), and indeed defines the part any given man plays in the society of which he is a part: Delivering that which others find more valuable than he himself does. If you get that right, your business thrives and makes profits.

Martin OB October 11, 2010 at 9:24 am

I’ll play the Devil’s advocate a little bit.

I’ve always found the “I, Pencil” argument kind of fallacious. The fallacy can be phrased as “No one knows every detail of how this particular pencil was made (including such irrelevant things as the coffee the loggers drank during their breaks), or how most pencils are actually made nowadays, therefore, no-one knows how to make a pencil”. The same kind fallacy is repeated in the “only God can make a tree” phrase. For the moment, there’s no technology to assemble a living organism from nonliving ingredients, but it’s clearly not necessary to track every molecule of a given tree in order to create another tree.

Just because division of labor is everywhere nowadays, it doesn’t mean that nothing can be done without it. There’s ample historic evidence of housing and utensils made with little or no division of labor.

More generally, the article is an attack on centralized planning, and it seems to imply that a socialist planner can’t even design a pencil production infrastructure. The argument, as I said, is fallacious, and the point is not proven.

Of course, it’s still useful as an illustration of how the market actually works, how the “invisible hand” guides everyone’s actions to bring the pencil to its consumers. So, as mushindo points out, the important lesson is not so much that no-one knows; it is that (almost) no-one cares, except for the children who are not even involved in its creation.

Carlos Castro October 11, 2010 at 11:03 am

Martin OB,

I agree that the argument is kind of fallacious. However, I disagree as to how to phrase the fallacy. In my opinion, the fallacy is just that, instead of saying that “not a single person on the face of this earth knows how to make me!”, the pencil should have said that “not a single person on the face of this earth can make me!”. No individual in the world can make a pencil without other people’s cooperation. Even if a single individual were in a position to assemble all the raw materials into the shape of a pencil, bringing those raw materials to the assembly table would be impossible without other people’s cooperation.

When you say that there is ample historic evidence of housing and utensils made with little or no division of labor, you are correct, but you are probably not keeping in mind that pencils, unlike those utensils, are mass produced as the result of the division of labor.

In respect of centralized planning, I think that the point of the article, rather than implying, as you say, that a socialist planner can’t even design a pencil production infrastructure, is that, even if a socialist planner could do so, that planner would show a lack of faith in people’s creative energy which would result in the loss of freedom.

I think that another important point, although made just in passing by the author, is that we take the products of our society (including progress) for granted, when in fact nothing can guarantee that those products will be there in the future. In summary, I like the article, and I believe that, if we thought a little bit more often about how dependent we are on other people for our daily lives (including our coffee), we would probably understand a little bit better how important it is for us that those other people enjoy the advantages of freedom.

Martin OB October 11, 2010 at 12:25 pm


Well, maybe you are pointing out yet another fallacy (there may be more than one!).

My point is, there’s nothing specific of pencils in the article’s line of reasoning; instead of a pencil we could be talking about a mug, and we could apply the same reasoning about all the people involved in extracting and transporting the clay, baking it, transporting the finished product, making the fuel for the trucks, and so on and so forth, but at the end of the day, a skillful artisan could make a decent mug with little or no help, as it happened in the past. So, it is misleading and fallacious to point at the complexity of the process by which an article is actually made, and the number of people involved, as proof that such complexity and cooperative work is the only way to make this product. Instead it’s just one very convenient way to make it.

As for centralized planning, I still think the article is all about the “socialist calculation problem”. Freedom is clearly presented as the best means to achieve wealth by the division of labor; the idea that freedom is desirable for its own sake is not emphasized.

Overall, I also like the article and I think it has some useful insights. I just think the case would be stronger with a different phrasing.

Carlos Castro October 11, 2010 at 3:08 pm

Martin OB,

I agree that Read could be talking about a mug and that, at the end of the day, a skillful artisan would be able to make one mug (or maybe 10 or 100). But the artisan, no matter how skillful, would not be able to mass produce mugs, and would likely not be able to make the tools or even obtain the raw materials necessary to make the mugs, without other people’s direct or indirect cooperation.

Having said that, if the same reasoning is applied to a more complex item, such as a computer, a cell phone or an airplane, then it becomes clear that the conclusion (that there is no single person who knows how to, or can, make those items) applies to almost everything that we do in our society. The fact that that reasoning and that conclusion apply even to such “simple” items as pencils is what gives Read’s example its power.

Joe October 11, 2010 at 2:19 pm

The article speaks for itself. I think you trying to hard to make something out of nothing. I guess everyone will take away a different perspective based on their biases. Let’s take your observation that it attacks “centralized planning and it’s fallacious to imply that a socialist planner cannot even design a pencil production infrastructure.” You almost reached the point of being insightful. The process of making a pencil is a natural outcome of the individuals applying their minds and capital to create an outcome of profits for their efforts and a product of little cost for consumers. The socialist might be able to come up with a design pencil production infrastructure but couldn’t eventually delivery the pencil. Now why is that? First of all the work would be farmed out to unions and manufacturers that would charge standard union wages. The materials would have to come from countrys that only followed “green earth policies” and they would have to be manufactured in the USA because all the foreign countries would pay substandard slave wages. So now we have the $200 pencil. I don’t think so.

Martin OB October 11, 2010 at 9:27 pm


What bias? I’m as opposed to socialism as it gets. It just happens I’m also biased against weak argumentation. That’s all.

After re-reading the article, I’ve found a more charitable reading, but I insist the phrasing is at the very least misleading.

The pencil says “No-one knows how to make me”. Since the pencil already made, the literal interpretation is absurd. It makes no sense to wonder how to make something which is already made. So, the real meaning is either:

_ No one knows how I was made, therefore no-one knows how to make a pencil, yet pencils are made, which is a miracle.

_ No one knows exactly how I was made, and yet I was made. Hundreds, thousands of people somehow cooperated with each other for my creation, without a central planner coordinating their actions, hence the miracle.

In the second case there’s no fallacy, and it sits well with all the “invisible hand” imagery evoked by the article. That’s probably the intended meaning, but the phrasing is misleading, and the confusion is reinforced in several sections of the text.

For instance, when it says “only God can make a tree”, and it proceeds to use the same kind of reasoning as with the pencil, the fallacy is crystal-clear, and it consists in assuming that knowing every detail of every molecule of a particular tree (or any other structure for that matter) is necessary for, or at least easier than, building a new tree from scratch (“Isn’t it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? “).

Another example: “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 byproduct of petroleum.” How about the coffee harvester? Can’t the loggers drink tea instead? Again, we see the confusion between how the pencil was actually made and how a pencil could conceivably be made.

Again, it should say “no one knows how I was made”, rather than “no-one knows how to make me”; it should also drop the “only God can make a tree” example and any implication that somehow every participant is indispensable.

Ben Pike October 11, 2010 at 10:07 am

This reminds me of a Milton Friedman video I saw on YouTube a few weeks ago: http://benpike.net/milton-friedman-the-pencil-why-capitalism-is

MB October 11, 2010 at 12:43 pm

What he said was based on Read’s article.

Thedo October 11, 2010 at 10:50 am

This essay is a joy.

I remember first reading it as an undergrad. At the time, with a less-informed mind, I referred to the essay in a class to argue how today individuals are less connected with their jobs. They’re de-personalized, if you will, because, as the essay says, nobody knows what it is they’re making. The logger who works to generate the wood for pencils doesn’t know he’s helping to make pencils. He simply does his job, disconnected to the job at large, and the world at large.

Now, this wasn’t an argument I created, but one I encountered in a reading for class on teaching methods. Suffice it to say, I don’t hold that point of view, and as this essay makes clear, the disconnect is part of the beauty of our larger economy.

ChrisK October 11, 2010 at 12:10 pm

‘I, pencil’ illustrated:


Something I posted awhile ago.

swinger October 11, 2010 at 1:08 pm

sealm arkadaşlar nasılsınız

Alexander S. Peak October 11, 2010 at 4:22 pm

“I, Pencil” is amazing. I first heard of it when I read Radicals for Capitalism by Brian Doherty. Following that, I went to the FEE website and listened to an audio recording of it.

FEE used to have an audio recording of it on their website read by Read himself. Unfortunately, I am unable to find the version recorded by Read himself; instead, all I’m finding is some version re-recorded by someone else. Nevertheless, “I, Pencil” is still astounding.

Alex Peak

Brian Gladish October 11, 2010 at 5:09 pm

If you ever have chance, drop by the Pencil Museum in Keswick, England (in the Lakes District). I was hoping I’d see a copy of Leonard Read’s essay there, but no luck. You can see how pencils are made – it’s quite fascinating – and learn how the first graphite pencils came from this beautiful area of England. It was a pleasant surprise for me.

Andross October 11, 2010 at 7:07 pm

The pencil story is just an elaboration of paragraphs written in The Wealth of Nations

Adam Smith basically wrote this.

Milton Friedman should’ve known this.

But he’s a nobel prize winner, after all.

jason October 12, 2010 at 12:18 am

This reminds me of a conclusion i came to in grade school which I later found fitting quote: ” To understand any one thing truly, you must first understand everything.”

Peter October 12, 2010 at 5:45 am

There’s a saying goes “how to make a cake from scratch: begin by creating the universe, …”

Robert October 12, 2010 at 1:28 pm

“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 that I symbolize, you can help save the freedom mankind is so unhappily losing”.

Definitely worth remembering and quoting!

Joe October 13, 2010 at 12:26 pm

You found the true essence of the article. The joy and wonder is not necessarily in the particulars but in the end result of doing something that is not planned, overly thought through but just the natural process of human cooperation based on their own self interest. Ayn Rand is smiling from her grave every time a person truly understands her position on selfishness. How a persons interest can provide freedom and comfort for all other people. It is truly a great unintended consequence.

MLJ June 2, 2011 at 1:07 pm

This reminds me of an article by Karen Selick. It begins by saying her town (Toronto I think) has shops selling pencils for 8 cents and others for $1,000. It shows that there is a wide range of goods within each “kind” of good–shoes, hats, everything. Her main point is medical treatment could be the same way. Noone says all pencils must be cheap or some people won’t have access to them. Free health care only means the wealthy must have just as rotten ‘care’ as the poor always get.

MLJ June 2, 2011 at 1:18 pm

This also reminds me there is a book on the importance of small things. The example was the paper clip. Knowing the clip leaves an impression on paper, one can tell whether two sheets of a legal document belong together. Ah, the interconnectedness of things. That was a theme of Scientific American’s series called “Connections”.

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