I, Pencil: My Family Tree as Told to Leonard E. Read

“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.”

No individual could possibly assemble all of these know-hows on their own; this is what Read means when he says that no reader is capable of “understanding” the pencil. The pencil symbolizes the “miraculousness” of “the Invisible Hand,” and people need to understand its logic to avoid the erroneous belief in the necessity of government intervention. The “freedom mankind is so unhappily losing” is the individual’s freedom to make economic decisions without government interference.

“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.”

Read is again emphasizing that even the simplest commodity is the product of a complex, geographically dispersed supply chain. He maintains that it is beyond the capacity of any single individual to efficiently manage the entire chain. This concept develops the theme of The Advantages of Dispersed Knowledge.

“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!”

Read launches his detailed description of the pencil’s supply chain. To ensure the reader’s active attention, he uses direct address, as if in conversation or delivering a public speech. In persuasive writing, direct address is a rhetorical device used to enhance the reader’s interest.

“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.”

Read personifies the pencil by referring to its “brothers” and its “parents”—that is, the owners of the capital invested in creating the pencil factory. He elicits the reader’s sympathy for these owners by describing them as “thrifty and saving,” in contrast to public perceptions of capitalists as greedy and selfish.

“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.”

Read emphasizes that there is a complicated history behind every aspect of pencil production. He goes on to explain that, beyond the makers of ferrules, no other contributors to the supply chain actually need to understand that history. Read reflects the ideologies of Hayek, who maintained that knowledge need not be centralized, and develops the theme of The Advantages of Dispersed Knowledge.

“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. […] 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.”

This passage provides the clearest statement of Hayek’s argument about the role of dispersed knowledge, emphasizing that each bit of local know-how makes an indispensable contribution to the supply chain. Read uses repetition to thematically underscore The Advantages of Dispersed Knowledge.

“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. […] 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.”

Read starts to hint at the role of “the Invisible Hand.” The countless individuals who participate in making the pencil are motivated not by a singular desire to make pencils, but simply by the desire to earn wages that they will spend satisfying their particular needs and wants. Read uses this point to transition into a thematic exploration of The Value of Freedom.

“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.”

With the word “astounding,” Read encourages the reader to step back and appreciate the power of “the Invisible Hand.” He doesn’t define the term because he expects his readers to be familiar with the principles of classical liberalism. In propounding “the Invisible Hand” over “a master mind,” Read is thematically asserting The Value of Freedom.

“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 knowhows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding!”

This is Read’s most concise explanation of “the Invisible Hand.” Price signals in free markets automatically transmit vital information about supply and demand to all market actors, enabling them to adjust their activities to maximize efficiency. Read repeats the word “miracle” to elicit a sense of reverent awe, depicting “the Invisible Hand” as a natural yet quasi-divine force.

“For, if one is aware that these knowhows 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.”

Read returns to the theme The Value of Freedom, which he defines in the strictly negative sense of freedom from external coercion: People are free if they are able to make their own economic decisions. Having “faith in free people” means believing that “the Invisible Hand” will always guide them to rational decisions. By repeating the word “faith,” Read is again investing “the Invisible Hand” with holy significance.

“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 ‘masterminding.’”

Read returns to the “grievous error” warned of at the beginning of the essay: the belief that government intervention in economic decision-making is necessary. The words “faith” and “miraculously” reinforce the religious undertones of the section.

“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!”

Read demonstrates the power of “the Invisible Hand” by listing various highly complex tasks that are accomplished effectively every day through free-market exchange. His aim is to elevate The Value of Freedom. Read uses the US Postal Service as the crux of his argument, suggesting that private sectors are more favorable than public sectors. However, Read does not address the unfavorable outcomes of privatization.