Politics Foreign Affairs Culture Fellows Program

We Are Not Pencils

We are witnessing firsthand the dangers of absolute reliance on complex, uncontrolled, globalized supply chains.

In December 1958, early American libertarian Leonard Read published a blockbuster essay in the Freeman, which had a few years prior been acquired as a for-profit project by his Foundation for Economic Education. In “I, Pencil,” Read outlines the staggering complexity of the globe-spanning market network by which an object so seemingly simple as a common pencil is brought into being.

Countless laborers have been involved even in the production of the wood component by the time it reaches the pencil factory, all the way back to the lumberjack who chopped down a tree a few hundred miles away; and of course we must consider the factory workers who assembled the truck the lumberjack drove to the forest that day, the craftsman who forged the axe he swung to fell the tree, the South American peasants who picked the beans he ground and brewed for a cup of joe before heading in to work that morning.

The capacities of individual market actors “naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand.” Without ever realizing it, the Brazilian bean-picker plays an integral role in the arrival of a yellow Ticonderoga No. 2 on the American writer’s desk; had he not done so, each of them would be worse off for it.

Read concludes his paean to the pencil:

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

“I, Pencil” treats supply chains in the language of religion. They are miracles in which we must have faith. They are the product of some inscrutable but benevolent superhuman intelligence. The precision alone of the Invisible Hand demands from us reverence and wonder.

And yet such far-reaching complexity—by its very nature, and Read’s insistence, unconquerable by human intellect or power—is not without its pitfalls. Read himself effectively admits as much, albeit accidentally, when he writes that “Neither the miner nor the logger can be dispensed with, any more than can the chemist at the factory or the worker in the oil field—paraffin being a by-product of petroleum.”

This is meant only to reinforce our awe, but to the discerning or critical reader—especially in 2021—it is, in fact, an admission of the supposed miracle’s profound fragility. If neither the miner nor the logger can be dispensed with, what happens if the miner or the logger stops showing up to work? What happens, for that matter, if half the truck drivers suddenly decide to stop driving all in quick succession?

It looks like we’re about to find out.

Right now, all across America and elsewhere in the world, shelves that would have been stocked two years ago stand empty for days on end. At major ports along the coasts, massive and mounting quantities of cargo are backed up waiting for distribution networks to “naturally, yes, automatically” sort themselves out. The same great chains that just yesterday brought us cheap clothes and biohazards from our neighbors across the ocean now, by and large, are frozen at best and fractured at worst.

We find ourselves here, on the brink of crisis, not only thanks to some Invisible Hand but thanks to a series of active choices. In important ways, America chose to take Leonard Read’s advice: “Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can.” The most significant development in American political economy since Read’s writing more than six decades ago has been the removal of nearly every obstacle to such organization at the international level.

The Invisible Hand wrenched away not just American jobs but America’s very capacity to produce things. This is the darker side of Read’s miracle: tradeoffs not just of one good or service for another, but of the very ability to do something ourselves for the luxury of not having to. Nor is this problem unique to deindustrialization and the ascendance of Red China. It can just as easily be tied to industrialization: As reliance on complex systems (both mechanical and social) became the norm for production, the human capacity for self-reliance and the social-economic primacy of craft virtually disappeared. In return for their abandonment we got vastly increased capacities for innovation and creation—Leonard Read’s miracle of “creative human energies…configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding.”

And when it works, miracle is a fair enough word. We get not just pencils but out-of-season fruits, foreign crops, iPhones, cars, electric power—all kinds of things we could not possibly have produced ourselves.

When it doesn’t work, we find ourselves thoroughly screwed. Forget about pencils; we can’t even get meat. If we’re lucky, we’ll have enough non-perishables stocked up to tide us over until the next delayed shipments caterpillar their way from the ports to our front doors. We certainly cannot provide for ourselves, because we have placed so much faith in the perfect function of a spontaneous arrangement of millions of individuals acting independently at a million different points across the globe. In these moments we see clearly how tenuous our position is, how fully we have subjected ourselves and our communities to the mercy of the Invisible Hand. Think long and hard about the nature of an inhuman intelligence whose end result is the fracture of human society and the eradication of human powers.

What do we do with that realization? We can Buttigieg our way through it: Insist that it’s all some kind of creative destruction and things are just going so badly because they’re going so well. This is the libertarian method, too. Sure, we may be entirely incapable of fending for ourselves independent of Mammon and Leviathan; our entire world may be upturned in an instant by any one of the superhuman energies unleashed with faith in freedom; we may not actually own any substantial property, including the land our families live on, nor have any useful skills that are not contingent on the miracle’s survival; but you can “pick up your iPhone push 5 buttons and have tasty, hot, pizza delivered to you within 30 mins for $15.”

Or we can reject the miracle, as fully as we’re able. Withdraw from dependence on the global system and reconnect ourselves to local, tangible, human networks of production and consumption. Accept, humbly, that subjection to forces we cannot control may not be a reasonable price for the creation of products we could not have made.

Now, you don’t have to go live in a cabin in the forests of Montana. But you can take small steps to wean yourself off of fragile global supply chains and onto antifragile ones. Grow as much food as you can, and learn as many back-pocket skills as you can manage. Join co-ops for meat and vegetables with local gardeners and farmers. Shop at farmers markets and with local craftsmen. (It is worth noting, in light of these particular suggestions, that independence from the system is not an antisocial repudiation of the libertarians’ faith in cooperation, but an insistence on actual sociality in a social market.) If you’re in a position to do so, maybe even encourage the production of complex goods at sustainable levels—e.g., with regulations and incentives to build and buy in-country.

There will always be risk in the world—famine or a meteorite could strike your land tomorrow—but it is always wise to reduce your vulnerability to chance to the lowest level possible.

Maybe you’ll have to do without your pencil, but—if current trends hold—the long, winding, miraculous supply chain isn’t likely to get that to you either. Or anything else, for that matter.



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