I, Pencil (December 31st, 2005)

"I, Pencil", by Leonard E. Read, is required reading for anyone who wants to understand how markets work. Whether you stand in awe of what markets have brought us, or you enjoy speculating on government policies that can improve on markets, you should take a moment to contemplate what they do and how they achieve it.

It's hard to pick any single quote to pull out, because the essay is short and full of productive insights. Here's one that's most relevant for policy enthusiasts:

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.

For those of a humanist persuasion, I direct your attention here:

Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who 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 among this vast multitude who never saw a pencil nor would they know how to use one. Their motivation is other than me. 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. I may or may not be among these items.

So long as people are forced to play nice with each other, it doesn't matter that they are greedy and self-interested and could care less about pencils, per se, much less good, cheap pencils.

Go check it out if you haven't already.