In this essay, Mr. Read walks us step-by-step through the entire process of how a single pencil is produced; I recapitulate it here because it is the only argument you’ll ever need in support of the absolute economic superiority of laissez-faire capitalism.
In the beginning of the essay, we are shown the many materials needed to make a single pencil, among them: wood, rubber, paint, lacquer, graphite, metal, zinc, and many other things.
We are then shown how these materials are really only the beginning of the process; for a whole industry is in turn required to produce each of those materials.
There is, for example, the lumber industry needed to produce the wood; the mining industry to mine and mill and smelt the zinc and lead and metal; the rubber industry, of course, and the paint and graphite, and so on.
Then, within each of these industries, there are numerous sub-divisions, such as chemical industries, which make up the groundwork for paint and lacquer, and the engineering companies to supply all the tools, and even the lighthouse workers to guide the ships safely into port.
Of course there is also the singular fact that our solitary pencil could neither be manufactured nor produced without all the various other forms of transportation required to get the products from place to place, and of course this transportation requires its own set of industries (not just oil), and on and on, all of which industries, in turn, are no less involved than the manufacturing of the wood or graphite or rubber.
So that when everything is said and done, the making of one pencil requires thousands of people, most of whom have specialized knowledge and specialized jobs, in hundreds of different industries.
Furthermore, these people come from all over the world. No centralized government imaginable, even with an army of super-genius planners, could organize the countless factors that go into the making of that one small pencil.
And yet in this country, as in all developed countries, pencils are so cheap and abundant that nobody thinks twice about them. How is this so?
The answer is deceptively simple: private property and free markets.
The free market, and its corollary, the profit motive, are what bring these thousands of people from these hundreds of different industries the wide-world over, into peaceful and mutually beneficial cooperation with one another.
The free market instantly and smoothly organizes this entire process of complexity, and the free market does so without any bureaucratic coercion or political force.
Indeed, this singular fact is what the word “free” refers to in the term “free markets.” That is the beauty of capitalism at work: the free and voluntary exchange of goods and services, which presupposes the inalienable right to your own life and your own property.
This process, outlined eloquently in Leonard Read’s pencil example, is precisely what our peace-loving greens wish to subvert.
It is also what our peace-loving greens, like all proponents of mercantilism, think that they themselves can achieve – and do so by means of a massive centralized planning bureau.
It is a literal impossibility, as history has demonstrated time and again.
It is also an exercise in governmental compulsion.
It is, finally, anti-freedom and anti-private property, which is exactly what environmentalism as a political philosophy is and always will be.
The green party can indeed try to organize all this industry, as they have tried many times before, but the result will be the same result as always: chaos and poverty. The free market will then be called upon to bail them out, and the free market will bail them out, just as it always has, and then the free market and all its big bad corporations will be maligned, just as the free market and corporations always are.
And so it goes.
But the next time an environmentalist tells you to “bicycle more and save the planet” think of I, Pencil, by Leonard Read.
Because I promise you that all the filthy, hardcore industry that goes into the manufacturing of one simple pencil is multiplied a thousandfold just to make and transport a single bicycle to you there in Boulder, Colorado, or wherever.