The Pencil Is a Free Market Miracle

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The wonderful, miraculous supply chain. That’s right. I just said it. The wonderful, miraculous supply chain. One point that I often make is again, my, look at the world and so many ways, whether it be nature or whether it be the free market. And I look at it with amazement, with wonder. I make fun of.

make fun of the central planner types, the utopian types that think that they have some sort of control, some sort of control over the markets, the communists, the Zizhen pings of the world, that they’re gonna engineer it. They’re gonna engineer it out of some capital somewhere with all of their experts. I’ve talked about this story by Leonard Read. It’s from the 1950s.

many, many times over the years here on the program. I’ve never read it. I’ve never read it. again, this is parents, grandparents out there. This is a great way, great way of trying to explain to your kids just the wonders of the free market, wonders of freedom and how it works and how miraculous it is. Story is,

I, Pencil. I am a lead pencil, the ordinary wooden pencil familiar to all boys and girls and adults who can read and write. Writing is both my vocation and my avocation. That’s all I do. You may wonder why I should write a genealogy. Well, to begin with, my story’s interesting. And next, I am a mystery, more so than a tree or a sunset or even a flash of lightning.

But sadly, I am taken for granted by those who use me, as if I were a mere incident and without background. This attitude relegates me to the level of commonplace. This is a species of grievous error in which mankind too long persists without peril. For the wise G.K. Chesterton observed, we are perishing for want of wonder, not

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for want of wonders. 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, now 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 of mankind is so unhappily losing.

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 so seemingly so simple. Simple yet not a single person on the face of this earth knows how

to make me. Sounds fantastic, doesn’t it? Especially when it’s realized that there are about one and one half billion of my kind produced in the United States each year. Again, I don’t know what that number is now. This is the 1950s. Pick me up and look me over. What do you see? Not much meets the eye. There’s some wood, lacquer, printed labeling, graphite, lead, a bit of metal, and an eraser. Just as you cannot

trace your family tree back very far, so it is impossible for me to name and explain all of my incentives. But I would like to suggest enough of them to impress upon you the richness and complexity of my background. 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 to harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into that fabrication, the mining of the ore, the making of the 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

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had a hand in every cup of coffee the loggers drink. The logs are shipped to a mill in California, San Leandro. Can you imagine the individuals who make flat cars and rails and railroad engineers and who construct and install the communication systems? These legions are my descendants. Consider the mill work in San Leandro. The cedar logs are cut into small pencil-length slats less than one fourth of an inch in thickness. These are kiln dried and then tilted

for the same reason women put rouge on their faces. People prefer that I look pretty, not a pallid white. The slats are waxed and kiln dried again. How many skills went into the making of the tint and the kilns? Into supplying the heat, the light, the power, the belts, motors, and all the other things a mill requires? Sweepers in the mill, among my ancestors, yes, and are included are the men who poured the concrete for the dam of the Pacific Gas and Electric Company hydro plant

which supplies the mills power. Don’t overlook the ancestors present and distant who have a hand in transporting 60 carloads of slats across the nation. Once in the pencil factory, again, this is 1950s, $4 million 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 lead 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. My lead itself contains no lead at all. It’s complex. The graphite is mined in Sri Lanka. Consider these miners and those who make their many tools and the makers of the paper sacks in which the graphite is shipped.

and those who make the string that ties the sacks and those who put them aboard the ships and those who make the ships, even the lighthouse keepers along the way assisted in my birth and the harbor pilots. The graphite mixed with clay from Mississippi in which an ammonium hydroxide is used in the refining process. Then wedding agents are added as sulfonated tallow, animal fats chemically reacted with sulfuric acid.

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After passing through numerous machines, the mixture finally appears as endless extrusions from a sausage grinder cut to size, dried and baked for several hours at 1,850 degrees Fahrenheit. To increase their strength and smoothness, the lids are then treated with a hot mixture which includes Candela wax from Mexico, paraffin wax, and hydrogenated natural fats. My cedar receives six coats of lacquer. Do you know the ingredients of lacquer?

Who would think that the growers of castor beans and refiners of castor oil are a part of it? They are. Why, even the process by which the lacquer is made, a beautiful yellow, involve the skills of more persons than one can enumerate. Observe the labeling. That’s a film formed by applying heat to carbon black mixed with rosins. How do you make rosins and what, pray, is carbon black? My bit of metal.

The fruel is brass. Think of all the persons who mined zinc and copper and those who have the skills to make shiny sheet brass from these products of nature. Those black rings on my fruel are black nickel. What is black nickel? How is it applied? The complete story of why the center of my fruel has no black nickel on it would take pages to explain. Then there’s my crowning glory. Inelegantly referred to in the trade as the plug. The part man uses to erase

the errors he makes with me. An ingredient called Factus is what does the erasing. It is a rubber-like product made by reacting rapeseed oil from the Dutch East Indies, Indonesia, with sulfur chloride. Rubber, contrary to the common notion, is only for binding purposes. Then, too, there are numerous vulcanize and accelerating agents. The pumice comes from Italy, and the pigment which gives the plug its color

is cadmium sulfide. Does anyone wish to challenge my earlier assertion that no single person on the face of the earth knows how to make me? Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a few of the others. Now you may say that I go too far.

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and relating the picker of a coffee berry in far off Brazil and food growers elsewhere to my creation, that this is an extreme position, I shall stand by my claim. 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 Sri Lanka

and the lager in Oregon is the type of know-how. Neither the miner nor the lager can be dispensed with any more than the chemist at the factory or the worker in the oil field, paraffin being a byproduct of petroleum. Here’s an astounding fact. Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any other 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. Indeed, there are some things, some among this vast multitude who never saw a pencil, nor would they even know how to use one. Their motivation is other than me. Perhaps it’s something like this. Each of these million sees

that he can thus exchange, exchange, trade his tiny know-how for the goods and services he needs or wants. I may or may not be among these items. 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. This is the mystery to which I earlier referred. It’s been said that only God can make a tree. Why do we agree with this? Isn’t it because we realize that we ourselves could not make one. Indeed, can we even describe a tree? We cannot, except in superficial terms.

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Say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the lifespan of a tree? Such a feat is utterly unthinkable. 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 know-hows, configuring naturally and spontaneously in response to a human necessity and desire and in the absence of any human masterminding.

Since only God can make a tree, I insist that only God can make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree. The above is what I meant when writing, if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is unhappily losing. For if one is aware,

that these know-hows will naturally, yes, automatically arrange themselves into creative and productive patterns in response to human necessity and demand. That is, 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.

Once government has had a monopoly of a creative activity, such for instance as the delivery of mail, most individuals believe that the mail could not be efficiently delivered by men acting freely. And here’s the reason. Each one acknowledges that he himself doesn’t know how to do all the things incident to mail delivery. He also recognizes that no other individual could do it. Assumptions are correct. No individual possesses enough

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know how to perform a nation’s mail delivery any more than an individual possesses enough know-how to make a pencil. 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 these erroneous conclusions that mail can be delivered only by government mastermind.

pencil were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there’s testimony galore. It’s all about us and on every hand. Male delivery is exceedingly simple when compared to, for instance, the making of an automobile or a calculating machine or a grain combine or a milling machine or tens of thousands of other things. Delivery? Why, in this area?

where men have been left free to try, they deliver the human voice around the world in less than a second. They deliver an event visually and in motion to any person’s home when it’s 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 low rates without subsidy. And 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.

The lesson I have to teach is this, leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the invisible hand. This faith will be confirmed. I pencil.

seemingly simple though I am, awful the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth. Watchdog on wallstreet.com.