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Thursday, February 18, 2016

Listen to “I, Pencil” on Freakonomics Radio

What a humble pencil teaches us about social order


It’s thrilling that a full episode of the popular Freakonomics podcast is dedicated to Leonard Read’s legendary essay “I, Pencil.” The episode interviews pencil makers and sellers, economists and writers, and provides a look back at what gave rise to this essay in the first place.

It also features the crucial role that FEE has played in emphasizing the decentralized and spontaneous processes that build the good society, in contrast to the fashion for central planning that has defined economic and social policy in the 20th and 21st century.

The host, Stephen Dubner, says:

Let’s begin in 1946. That’s when a man named Leonard Read starts an organization called the Foundation for Economic Education, or FEE. The FEE is a think tank meant to extol the virtues of free-market capitalism. It’s an early proponent of libertarianism in the U.S. Read was a businessman, from Michigan. He started out in wholesale groceries, later ran the Los Angeles Chamber of Commerce. In 1958, the FEE published an essay, written by Read, called “I, Pencil.” …

It’s a bold claim the pencil makes – “not a single person knows how to make me.” But the claim would seem to be justified. And it’s an interesting way of looking at the world, yes? At how interdependent we are, at how specialized we are. The deeper conclusion that Leonard Read was making, however – this is where things get really interesting.

The episode is beautifully produced, the product of massive research and interviews. It updates some of the details from Read’s pencil 58 years ago, and re-applies the lesson in the case of a man who tried to make an ordinary $10 toaster from scratch and on his own.

In the end, the lesson is the powerful one that any student can absorb from a detailed knowledge of economics: even the simplest products require a vast and extended order of market production, made possible through ownership, capital, trade, the division of labor, and signaling systems such as prices. No one person can do it, and certainly no government can do it.

Listen to the podcast here or on iTunes.