
I, Pencil (1958) - Tomte
http://www.econlib.org/library/Essays/rdPncl1.html
======
unknown_apostle
This is one of the great texts on economics. Together with "Economics in One
Lesson" by Hazlit, should be required high school reading all over the planet.
These texts immunise the mind against logical fallacies about material
progress. They will make mankind come together without politicians or enemies.

"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." This is one of the
beautiful miracles of our kind, a fact that remains unknown to most of us.
Including many who figure themselves at the commanding heights.

Every attempt to make this fictional mastermind more powerful makes our fate
worse.

~~~
bo1024
Sorry, I think it's very interesting and makes some nice points with beautiful
language, but I don't follow the conclusion. It oversteps in arguing without
proof that all forms of enterprise must function just like pencils, soluble by
the natural dynamics of a free market. But not all forms of enterprise have
the same properties as pencil production.

You could imagine an antithetical essay "I, police" involving a lawless
village in which each person trains extensively in martial arts and
marksmanship in order to protect themselves. Then each realizes it is more
efficient to focus on their own vocation and hire a private security guard.
Then a few neighbors realize it is more efficient to pool their money and hire
just enough security to protect their block, and finally the whole village
realizes it is most efficient to pool their money into just enough security,
at which point they realize they have formed a government with taxes and
police force. The story could end with "It is a fact most astounding that the
forces of an unencumbered free market lead directly to an inevitable
centralization into a collective governing whole."

Of course this story does not prove that all affairs should be handled by the
government; but the pencil doesn't prove the opposite either.

~~~
BurningFrog
One difference is that the pencil story actually happened. It describes real
practical life.

Your village police story OTOH is made up.

~~~
falsedan
Pretty sure there are police forces.

~~~
wojt_eu
I usually hear about villages forming militias rather than hiring professional
security. It would be interesting to read examples of primitive governments
formed like that.

~~~
TeMPOraL
If you count in "hiring" security from within the community, then this would
probably describe most governments.

------
GabrielF00
This piece gets posted here occasionally, and I really disagree with the
conclusion that people think that we have to have government because they
don't understand the capabilities of non-directed, bottom-up systems.

> 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 "master-minding."

It's possible to understand that non-directed systems can produce impressive
results and still believe that a directed system might be the right choice for
certain situations. Plenty of biologists were Marxists for example (JD Bernal,
Steven Jay Gould was very left wing). Surely, they would have understood that
complex organisms don't arise from central planning, but from an undirected,
emergent process. Yet they also believed that government should play a major
role in human society.

~~~
jxramos
I can't find the source but I remember hearing of some tale of Margaret
Thatcher strolling around London or someplace with some Soviet official.
Supposedly he was astounded at the bustling economic activity whizzing about
them. He asked her something along the lines of "who is your central planner
that has yielded all this?", to which she replied something to the effect of
"no, one, this is the Free market operated by individuals, etc etc."

Doing a cursory search for the above, I did find this quote that seemed to
capture her sentiments against central planning, to which I think a lot of
people use the I, Pencil fable to show the folly that some centralized
individuals would have knowledge at all times and all places about what goods
and services should be in demand and what they should be priced at and that
there's an arrogance to even attempt so much.

"The lesson of the economic history of Europe in the 70's and 80's is that
central planning and detailed control do not work and that personal endeavour
and initiative do. That a State-controlled economy is a recipe for low growth
and that free enterprise within a framework of law brings better results…. And
that means action to free markets, action to widen choice, action to reduce
government intervention. Our aim should not be more and more detailed
regulation from the centre: it should be to deregulate and to remove the
constraints on trade.”

~~~
pjc50
Of course, as soon as you go into a shop and ask the question "how did this
get on the shelf?", you find that rather than being done by free individuals
interacting on an adhoc basis it's done by employees taking hierarchical
direction from a centralised business, run by a single person who pays
themselves a huge amount while congratulating themselves on creating all those
jobs.

(See Coase on the _Theory of the Firm_ )

~~~
cam_l
Exactly what I was thinking when reading this story.

And not only was each step along the way to the pencil a result of direct and
carefully planned action, the side effect of pencils from rail cars is only
made possible at all because pencils are economically viable. Otherwise they
may not (still) exist.

There is a certain harsh reality to this free market—it does not favour
quality or popularity or even efficiency.. The blade falls on just how much
rent can be extracted at each step without nudging itself into oblivion. What
is the practical difference (for a pawn like myself) between a system or a
person giving directorial control over the allocation of resources?

------
tn13
I am always fascinated by the fact that in a remote village in India I am
eating with a disposable spoon which I deem cheaper than wasting 10 seconds
washing a steel spoon.

That disposable spoon comes from a local shop which buys it from a distributor
in a factory 100 miles away who buys plastic raw material from a seller 1000
miles way who brings the crude from middle east (10K miles) to make that
plastic. Someone has built Oil rig deep into ocean spending billions of
dollars to extract that crude oil.

More importantly people of all castes religions races are working to achieve
this none of whom have any special love for each other yet everyone benefits.

~~~
coldtea
> _More importantly people of all castes religions races are working to
> achieve this none of whom have any special love for each other yet everyone
> benefits._

Well, "everyone benefits" is the Disney version.

Oil producing countries and their citizens are usually royally fucked over,
either from foreign powers invading/meddling to take control of the oil
supply, or by their friendly lackeys (royal families etc) in power.

Ways of living (farmland, hunting spaces etc) are destroyed along the way, for
pollution, extraction of resources etc.

Workers leave their villages (which are often ravaged from modernization,
their previous jobs, commodities, commerce etc drying up) and are forced to
seek work in large industrial towns in Dickensian conditions.

And all for "disposable spoons", which will merely save "10 seconds washing a
steel spoon", end up in huge piles of other plastic garbage in dumps, oceans,
etc.

Even those "10 seconds washing a steel spoon" saved, and most of the other
savings due to such products, will end up being eaten up completely by the
modern life and modern pace that makes those products possible in the first
place -- the average working person in the US having less free time than
comparable professionals (even CEOs) in the 50s or 60s.

~~~
tn13
> Oil producing countries and their citizens are usually royally fucked over

Mostly fucked up by politicians. Nothing to do with the fact that people on
Oil rigs and me both willing to co-operate.

> Ways of living (farmland, hunting spaces etc) are destroyed along the way,
> for pollution, extraction of resources etc.

Don't see the problem with that.

> Workers leave their villages

They leave for better life. I left my village for better life. Village life
sucks.

> And all for "disposable spoons", which will merely save "10 seconds washing
> a steel spoon", end up in huge piles of other plastic garbage in dumps,
> oceans, etc.

Dont know if it worse that wasting water on washing steel spoons but surely
technology helps us manage that problem well too.

> the average working person in the US having less free time than comparable
> professionals (even CEOs) in the 50s or 60s.

The average working person in USA is having much better life that CEO in
1950s.

~~~
coldtea
> _Mostly fucked up by politicians. Nothing to do with the fact that people on
> Oil rigs and me both willing to co-operate._

I don't think it's that clear cut, the "bad politicians" vs the "peaceful
people". Peoples (citizens of a country) will pursue their interests, even if
that means stealing/taking advantage of others as a nation.

At least, throughout history, that has been the case, even in very explicit
scenarios, e.g. ancient Athens, when the will of the citizens was pretty much
directly put into policy, they opted to take advantage of nearby countries to
build their power and economy.

What politicians/governments in powerful nations do is not just to serve their
self interest, it's also in the interests of their country. In less powerful
nations, politicians can be "bought" by foreign powers, so that's not always
the case, but an "empire" like nation will promote the "strategic interests"
of its people (way beyond mere defense). Of course that goes first through the
interests of its rich people, but that also trickles to the common folk (e.g.
cheap oil).

> _Don 't see the problem with that._

Sure, no problem with pollution and exhausting farmland etc...

> _They leave for better life. I left my village for better life. Village life
> sucks._

Not everybody leaves for a "better live". A lot like their life just fine,
thank you, but then its destroyed by external forces (in some cases, they are
outright forced too, like in several "urbanization" and "industrialization"
pushes, from Industrial Revolution era England to Stalin's USSR and beyond).

> _The average working person in USA is having much better life that CEO in
> 1950s._

Citation needed. More toys != "much better life".

~~~
tn13
> Sure, no problem with pollution and exhausting farmland etc...

None at all.

> Citation needed. More toys != "much better life".

Are you kidding ? I would rather be an average working man in USA in 2016 than
a rich guy in 1950s. Hands down.

~~~
coldtea
> _Are you kidding ? I would rather be an average working man in USA in 2016
> than a rich guy in 1950s. Hands down._

Then you probably have no clear idea what either entails., except if you think
that the differentiators, like access to the web and mobile phones as an
"average working man in 2016" are so much better than a cozy and much simpler
life in the 50s (there are social differentiators that could turn the tables,
of course, e.g. if one is black etc, but you only mentioned "rich guy").

------
Ajedi32
There's also a version of this condensed into a short, ~7 minute video:
[https://www.youtube.com/watch?v=IYO3tOqDISE](https://www.youtube.com/watch?v=IYO3tOqDISE)

------
mrchucklepants
There is a great children's version of this as well:
[http://tuttletwins.com/pencil/](http://tuttletwins.com/pencil/)

~~~
ersii
It sure is a great edition. It's available in multiple languages as well, such
as: Spanish, Swedish, Portuguese, Italian.

I'd also recommend [http://tuttletwins.com/law/](http://tuttletwins.com/law/)
\- which is available in all of the above languages and German as well.

Great reads regardless of the size/age of the person. And definitely thought-
provoking, considering the questions they yield.

------
nickik
I highly recommend the podcast that is sponsored by econlib. Its called
Econtalk and it one of the best podcasts that exist.

He had many great economists and other people on his show, like 10 nobel price
winners, both Friedman and Coase shortly before they died.

[http://www.econtalk.org/archives.html#date](http://www.econtalk.org/archives.html#date)

------
cybernytrix
The article is well written but takes a little anti-social view of how things
come to be. The private industry is doing a great job of procuring,
manufacturing and delivering of consumer goods at affordable prices. However
many of these inventions were either discovered by scientist and inventors who
either pursued it for purely intellectual reasons or were funded by public
money by grants. For example, the Darpa grants were the main cause for the
internet today. The article does a great disservice by not giving this aspect
its rightful due.

~~~
coldtea
> _The article does a great disservice by not giving this aspect its rightful
> due._

That's because it has a predetermined agenda, nothing scientific about it.

------
djschnei
If I believed in requiring work from other people; this would be required
reading :)

------
wscott
Freakonomics did a nice podcast on this topic:
[http://freakonomics.com/podcast/i-pencil/](http://freakonomics.com/podcast/i-pencil/)

The idea is that no one alive has all the skills to make something as simple
as a pencil from scratch. This is a result of our industuralized socity.

~~~
jameshart
"This is a result of our industrialized society"

Is that the idea? Isn't the point rather that the existence of a pencil is
only possible as a result of industrialization and trade. It's not as if
before industrialization, there was an artisanal pencil maker who traveled the
world gathering the materials needed to make a batch of pencils, and crafted
them together using pencil-making secrets passed down from father to son over
generations.

No person has EVER been able to make a pencil; it's something that has only
ever been possible for a network of interdependent industrial concerns.

------
qwertyuiop924
Classic.

By the way, the same applies to software: If any developer can say they're
"full-stack" without further specification (i.e, they're full-stack
everything) with a straight face, than they should be punished by being given
$200 or less of electronic components and a processor of their choice, and
asked to make a webapp. No external libraries, that's cheating. Maybe give
them an assembler if you start feeling sorry for them.

~~~
smaddox
Am I allowed to reinvent my own protocols? How much time do I have? Will you
cover my living expenses in the mean time? If so, sign me up.

Edit: I guess you said no external libraries, not no manuals/specs. That makes
it less fun.

~~~
qwertyuiop924
Yeah, it's got to be a webapp, so that means implementing actual TCP/IP and
Ethernet. And you'll probably want to implement a compiler for an HLL (even a
rudimentary) one, at some point, before you lose your mind. Then you'll have
to implement at least some percentage of the HTTP spec, because you're writing
a webapp, remember?

However, you _don 't_ have to implement an FS or a display module (but you'll
probably want to implement a serial monitor).

But yeah, if I had the time, I might consider doing this ( _after_ I finish my
Z80 SBC and actually learn more electronics (the Z80 SBC is a popular enough
project that I don't have to do all the circuits myself. And I can do the bare
minimum)). This probably doesn't reflect well on me.

~~~
smaddox
Why stop at hardware, though? I can imagine the book title now: "FULL Stack:
From Electrons to 'Electron'". The first chapter would review basic quantum
mechanics and semiconductor physics, MOSFETs, and CMOS gates. The second
chapter would review digital logic design and computer architecture. The third
chapter would move into compiler and OS theory and design. The fourth chapter
would briefly diverge to discuss microwave and fiber optic transmission lines,
and the fifth chapter would return to discuss network architectures and
communication protocols. The sixth and last chapter would tie it all together
with a MVP implementation.

~~~
qwertyuiop924
That would be awesome. I would absolutely write this, but I don't have the
requisite knowledge. So unless you're willing to wait quite a long time, or
for someone else (or, more likely, several someone elses) to pony up, you'll
have to make do with NAND2Tetris.

~~~
smaddox
If someone would pay me to, I would love to write it. I would definitely need
several reference books, but there's nothing in there I couldn't handle given
enough time. I could even imagine some people on this site being interested
enough to purchase it.

I hadn't seen NAND2Tetris before, thanks for that.

------
manualcrank
I Residential Mortgage-backed Security Collateralized Debt Obligation

~~~
skylan_q
Ironically, as hard as it is for people to understand what those are, they are
much simpler to produce than pencils.

------
kriro
I also really like "How an Economy Grows and Why it Doesn't". There are some
issues with it and you have to ignore the political stuff if you don't enjoy
those but by and large I enjoy the simple explanation.

Link to PDF version: [http://freedom-school.com/money/how-an-economy-
grows.pdf](http://freedom-school.com/money/how-an-economy-grows.pdf)

------
thomasthomas
my favorite pencil story:
[https://www.facebook.com/TheRealMikeRowe/posts/9442877455813...](https://www.facebook.com/TheRealMikeRowe/posts/944287745581369:0)

 _Archimedes said he could move the world with a lever long enough, but when
it came to proving it, he needed a pencil to make the point_

------
CalChris
Corollaries are:

    
    
      You didn't build that.
      It takes a village.

~~~
jxramos
haha, are you quoting Obama in the first line and Hillary in the second?

~~~
CalChris
Actually, that's President Obama borrowing from Elizabeth Warren.

[https://en.wikipedia.org/wiki/You_didn't_build_that](https://en.wikipedia.org/wiki/You_didn't_build_that)

------
rdiddly
The need for government or direction is seen not so much in the pencil's
ancestors or antecedents, as in all its offspring, which curiously go totally
unmentioned. The pencil's family tree might have a lot of roots but it has a
lot of branches too.

Example from Ceylon: toxic mine tailings, leading to soil pollution, leading
to either poisonings/cancers/deaths when attempting to grow food locally, or
to having to import it from afar, or move away. Broken homes/families. Strains
on the social safety net if there is one.

Example from Oregon: clearcuts, leading to soil instability, leading to
landslides, leading to deaths and destruction of property, and also to the
silting/sedimentation of streams & rivers, destroying salmon spawning habitat,
leading to decline of the fishery, unemployed fishermen, broken
families/alcoholism/crime/strains on society.

Technology metes out equal parts punishment and convenience; this site's
audience should know that better than anyone, or they'll learn it soon.

------
CaptainSwing
beautiful text but, as with others, I take issue with the conclusion.

What about the internal hierarchies of the firms involved? Who was freer, the
owner of the pencil factory or the men in Sri-Lanka working for pennies to
mine the graphite?

And the crass juxtpositioning of 'central planning' and the 'free market' is
lazy and disingenuous. I'm no celebrant of the USSR but they weren't incapable
of abstraction in their central planning,a s this seems to suggest. They
werecapable of coordinating the production of pencils without Stalin knowing
every process involved (just as mail functions without one man who knows each
of the streets in America)

It's far from a perfect comparison, but I'm reminded of this classic Brecht
poem: [http://www.poemhunter.com/poem/a-worker-reads-
history/](http://www.poemhunter.com/poem/a-worker-reads-history/)

------
tn13
Milton Friedman's book "Free To Choose" opens with a reference to this essay.
At the core of it is the idea that Human beings indeed co-operate and help
each other at a massive scale that what we might perceive individually.

It is also a reminder that politicians who claim that they can make college
and healthcare free, create jobs, increase wages, protect use from Chinese
people stealing jobs, negotiate "smart trade deals" are basically people who
have no clue what they are talking about.

~~~
falsedan
Have you heard of "Countries that aren't the USA"? Many of them have
politicians & have achieved those claims.

~~~
tn13
I am not from USA and there is no country where politicians have achieved
that. If they had wouldnt Americans move to those countries instead ?

~~~
Chinjut
There are certainly countries where healthcare is free to the patient at the
point of delivery; countries where no one is ever refused healthcare for lack
of ability to pay, or need ever consider such a thing. If your quibble is that
it's actually paid for by general taxation, well, yes, but this is well
understood by everyone as what is meant by "make healthcare free".

(Similarly for college tuition, while we're at it. As for "create jobs" and
"increase wages", these are relative terms, but there are certainly countries
where such things have gone up at times in response to specific policy
decisions (including here in the U.S.!). I'll leave the rest untouched upon
for now.)

Sometimes Americans do move to other countries! Sometimes they don't. More
factors generally go into a person's decisions to move or not move than any
one policy choice, and people have attachments to where they grew up, and so
on. It's no small matter.

~~~
tn13
> healthcare is free to the patient at the point of delivery

Sure I can offer you an rotten apple for free as the ONLY choice and claim you
are getting a free apple. But that is not any better than USA where government
mandates the floor on quality of apple and gives freedom to set the price
(which will be high because of quality floor).

Both scenarios are very different. When cost of things is distributed over
large population it might not be visible to a naive mind but it is indeed the
cost one ends up paying.

For example wait times for an ordinary surgery in Canada are simply
mindblowing: [http://www.ctvnews.ca/health/healthcare-wait-times-
hit-20-we...](http://www.ctvnews.ca/health/healthcare-wait-times-hit-20-weeks-
in-2016-report-1.3171718)

You wont hear an old lady complaining about wait time but you will hear a man
praising that he did not pay anything for a bypass surgery.

------
jaza
Great read. Reminds me of an article I read a few years ago (which I now
notice includes an acknowledgement of "I, Pencil" in its footnotes), "What
Coke Contains": [https://medium.com/@kevin_ashton/what-coke-
contains-221d4499...](https://medium.com/@kevin_ashton/what-coke-
contains-221d449929ef)

------
pastProlog
> 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.

If everybody is working in this process, then where do the people who
expropriate the most from this process - the idle class heirs - get their
profits?

> 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.

The invisible hand...this is Adam Smith being misquoted. Adam Smith did use
the metaphor of an invisible hand - Smith said the invisible hand was
something that _blocked_ free trade, not facilitated it. L. Read is using the
metaphor in the exact opposite manner in which it was proposed.

Also, much of this could be said about a pencil being made in the USSR. Did
any one person in the Soviet Union know how to make an entire pencil, from
tree to graphite and such? Perhaps some government bureaucrat looked at his
charts and ordered it to be made, but how different is that than the corporate
bureaucrat looking at his charts and ordering pencils to be made?

Also, in our era of TARP bank bailouts, quantitative easing, farm subsidies
and such, this notion of say the US government not having a central role in
the economy as it exists is absurd. This medium we read and type on now was
created through military contracts to Fairchild Semiconductor, DARPA grants
for ARPAnet research and such, over many decades.

~~~
rvern
> The invisible hand...this is Adam Smith being misquoted. Adam Smith did use
> the metaphor of an invisible hand - Smith said the invisible hand was
> something that blocked free trade, not facilitated it.

You're wrong about this:
[https://en.wikipedia.org/wiki/Invisible_hand](https://en.wikipedia.org/wiki/Invisible_hand).
Adam Smith is not being misquoted.

~~~
tpeo
Though he's indeed wrong in saying that the "invisible hand" acts only as to
hamper trade, he isn't far off. The only use of the expression "invisible
hand" in _The Wealth of Nations_ occurs amid the discussion of why investors
and traders might be biased towards their home country, which is still a
discussed issue [0][1] and is considered a kind of market failure.

But nowhere in the same passage does Smith's use of the expression suggest
that the "invisible hand" would act merely to hamper trade, but that this
simile generally describes an unintended outcome of a decentralized process.
The action of the invisible hand might not be necessarily beneficial, as it
isn't in this case.

[0] :
[https://en.wikipedia.org/wiki/Home_bias_in_trade_puzzle](https://en.wikipedia.org/wiki/Home_bias_in_trade_puzzle)

[1] :
[https://en.wikipedia.org/wiki/Equity_home_bias_puzzle](https://en.wikipedia.org/wiki/Equity_home_bias_puzzle)

------
jackfrodo
Hard to get past the capitalist propaganda in the article and introduction.
Maybe if the essay were hosted on a more neutral site.

I say this because when the article is hyping up the "timelessness" of this
essay, I know that there is political motivation behind it, rather than some
kind of (more nearly) objective opinion on it.

~~~
dang
I agree that the essay should just speak for itself, so changed the URL from
[https://fee.org/resources/i-pencil-audio-pdf-and-
html](https://fee.org/resources/i-pencil-audio-pdf-and-html) to the one that
has appeared on HN before.

~~~
jackfrodo
Thanks! And yes, perhaps my wording was overstimulated.

~~~
dang
Heh. I took that bit out as perhaps a little overstimulated in its own right
:)

------
24gttghh
I refute it as follows: I could wedge a thin piece of lead in a cleaved
branch, and tie it back together with fibrous material and make a pencil.

Apparently I'm the smartest man alive /s

This is more in response to the article than the contents of the actual paper,
which I won't be reading.

~~~
dang
Please don't post unsubstantive comments.

We detached this subthread from
[https://news.ycombinator.com/item?id=13017901](https://news.ycombinator.com/item?id=13017901)
and marked it off-topic.

~~~
coldtea
What exactly was unsubstantive about the parent's comment?

~~~
dang
Glib dismissal, snark, and making a virtue of not reading.

------
Jupe
Someone should show this to Donald Trump.

------
shuntress
What is 'from scratch'? Why can we use anything other than elemental hydrogen?

Shit. Turns out humans, as a species, cannot make a pencil from scratch.

~~~
jxramos
I'd say scratch means from raw materials as found in their natural state on
Earth.
[https://en.wikipedia.org/wiki/Raw_material](https://en.wikipedia.org/wiki/Raw_material)

