The creation of a technology actually a communaloperation? How is the nature of technology?what must we as humans,living in a shared environment, consider in the creation oftechnology? Have we lost sight of the wonder oftechnology?
There is no better, more easilyunderstood, and more fun explanation of the complexity of marketsthan Leonard Read’s “I, Pencil.” It ought to give considerablepause when we listen to the arrogance of politicians who tell usthey can manage an economy better than millions, perhaps billions,of independent decision makers in pursuit of their own goals. Itsmessage to would-be planners is to bug out!
Leonard Read’s delightful story, “I, Pencil,” has become aclassic, and deservedly so. I know of no other piece of literaturethat so succinctly, persuasively, and effectively illustrates themeaning of both Adam Smith’s invisible hand—the possibility ofcooperation without coercion—and Friedrich Hayek’s emphasis on theimportance of dispersed knowledge and the role of the price systemin communicating information that “will make the individuals do thedesirable things without anyone having to tell them what todo.”
We used Leonard’s story in our television show, “Free toChoose,” and in the accompanying book of the same title toillustrate “the power of the market” (the title of both the firstsegment of the TV show and of chapter one of the book). Wesummarized the story and then went on to say:
“None of the thousands of persons involved in producing thepencil performed his task because he wanted a pencil. Some amongthem never saw a pencil and would not know what it is for. Each sawhis work as a way to get the goods and services he wanted—goods andservices we produced in order to get the pencil we wanted. Everytime we go to the store and buy a pencil, we are exchanging alittle bit of our services for the infinitesimal amount of servicesthat each of the thousands contributed toward producing thepencil.
“It is even more astounding that the pencil was ever produced.No one sitting in a central office gave orders to these thousandsof people. No military police enforced the orders that were notgiven. These people live in many lands, speak different languages,practice different religions, may even hate one another—yet none ofthese differences prevented them from cooperating to produce apencil. How did it happen? Adam Smith gave us the answer twohundred years ago.”“I, Pencil” is a typical Leonard Read product:imaginative, simple yet subtle, breathing the love of freedom thatimbued 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 conductthemselves. He was simply trying to enhance individuals’understanding of themselves and of the system they live in.That washis basic credo and one that he stuck to consistently during hislong period of service to the public—not public service in thesense of government service. Whatever the pressure, he stuck to hisguns, refusing to compromise his principles. That was why he was soeffective in keeping alive, in the early days, and then spreadingthe basic idea that human freedom required private property, freecompetition, and severely limited government.ProfessorFriedman, the 1976 Nobelist in Economic Science, is Senior ResearchFellow at the Hoover Institution, Stanford, California.
