Pencils and Liberty by Gary North

Back in 1958, Leonard E. Read wrote what has become the most popular essay ever written in defense of the free market. It was better than Frederic Bastiat‘s 1850 essay on a broken window as destructive, not productive. It was as clever as Bastiat’s humorous petition of the candlemakers calling for laws against the ruinous competition from the sun. Milton Friedman recommended it highly.

Leonard Read’s delightful story, “I, Pencil,” has become a classic, and deservedly so. I know of no other piece of literature that so succinctly, persuasively, and effectively illustrates the meaning of both Adam Smith’s invisible hand – the possibility of cooperation without coercion – and Friedrich Hayek‘s emphasis on the importance of dispersed knowledge and the role of the price system in communicating information that “will make the individuals do the desirable things without anyone having to tell them what to do.”

For over half a century, this essay has stuck in the collective craw of Keynesians, who regard the free market as in need of government regulation and extensive government ownership of natural resources. But Keynesians tend to write turgid, incomprehensible articles. They do not have the gift of satire. One Keynesian has attempted to refute Read’s essay by an appeal to government ownership of forests and government regulation of industry. This is what made pencils possible, he says.

So, I have updated Read’s essay.

via Pencils and Liberty by Gary North.