Milton Friedman’s Pencil

Why has pencil making proved a seductive metaphor for spontaneous order?

“'I want to mark!’ cries the child, demanding the pencil. He does not want to eat. He wants to mark. He is not seeking to get something into himself, but to put something out of himself.”

—Charlotte Perkins Gilman, Women and Economics

In 1980, Milton Friedman presented his vision of how the free market might bring about world peace in a 10-hour PBS broadcast series called Free to Choose. In a clip from the show (several versions are available on YouTube alone, totaling over 200,000 views, not counting multiple tribute videos), Friedman distills his argument into a two-minute-and-forty-one-second parable about a common household object:

Look at this lead pencil. There’s not a single person in the world who could make this pencil. Remarkable statement? Not at all. The wood from which it is made, for all I know, comes from a tree that was cut down in the state of Washington. To cut down that tree, it took a saw. To make the saw, it took steel. To make steel, it took iron ore. This black center—we call it lead but it’s really graphite, compressed graphite—I’m not sure where it comes from, but I think it comes from some mines in South America. This red top up here, this eraser, a bit of rubber, probably comes from Malaya, where the rubber tree isn’t even native! It was imported from South America by some businessmen with the help of the British government. This brass ferrule? [Self-effacing laughter.] I haven’t the slightest idea where it came from. Or the yellow paint! Or the paint that made the black lines. Or the glue that holds it together. Literally thousands of people co-operated to make this pencil. People who don’t speak the same language, who practice different religions, who might hate one another if they ever met! When you go down to the store and buy this pencil, you are in effect trading a few minutes of your time for a few seconds of the time of all those thousands of people. What brought them together and induced them to cooperate to make this pencil? There was no commissar sending … out orders from some central office. It was the magic of the price system: the impersonal operation of prices that brought them together and got them to cooperate, to make this pencil, so you could have it for a trifling sum.

That is why the operation of the free market is so essential. Not only to promote productive efficiency, but even more to foster harmony and peace among the peoples of the world.

Friedman chose the pencil as an homage to a colleague and mentor, although his name doesn’t come up in Free to Choose. Both the metaphor and its quasi-religious tone originate in a 1958 text called “I, Pencil,” by Leonard Read, who is sometimes referred to as a poet or a fiction writer, when he is acknowledged. In fact, he was an economist, a close compatriot of Ayn Rand’s, who founded the Foundation for Economic Education, a think tank devoted to preserving economic license in the U.S.

With its series of minor to downright false epiphanies pleasantly told, “I, Pencil” is the progenitor of TED Talks and This American Life. Quick and clever narratives, sprinkled with down-home-isms, certainly come off as common sensical, unless you look more closely at what is said. (Indeed, more than one of the former directly references Friedman/Read.) Like Friedman’s, Read’s pencil backstory is an uplifting conflation of domestic factory production, social justice, and right Christian thinking—all told from the point of view of the poor, neglected pencil:

I am a mystery—more so than a tree or a sunset or even a flash of lightning. But, sadly, I am taken for granted by those who use me … This is a species of the grievous error in which mankind cannot too long persist without peril …

It has been said that “only God can make a tree” … Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.

Production becomes mystery becomes proof of the Almighty: an assembly line so complex even God may not understand it. What Friedman presented as humble begins to lose a certain humility under Read. At one point, his pencil becomes downright self-aggrandizing. “Simple?” The writing implement retorts.

Not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn't it? … 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.

If I, Pencil, were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there is testimony galore; it's all about us and on every hand.

On every hand. Get it? While Adam Smith’s Invisible Hand here is essentially attached to God’s arm, Read lists a plethora of other righteous phenomena—mail service, automobile manufacture, grain combines, milling machines, telephone lines, television broadcasts, gas and oil pipelines. All are proof that unregulated markets naturally foster the best possible outcome for individuals. But only one fits comfortably in every hand.

Are we, then, to simply overlay the script of the free market atop a Christian worldview and equate market regulation and its inevitable endgame, socialism, with Hell? Unclear. Unimportant. Heed. “The lesson I have to teach is this,” Read’s pencil concludes. “Leave all creative energies uninhibited. 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.”


Little wonder that pencils have proven such a popular tool of Christian conversion around the world. I was shocked, recently, to hear such a tale first-hand, from a friend in Cambodia. Sochea had been born a year before I was, which means that when she was 6 she watched the Khmer Rouge lead an extremely bloody revolution to try to turn her country into an agrarian utopia and permanently stamp out Western capitalism—an effort commemorated by starting the clock over. Year Zero followed several years of illegal American carpet bombings that wiped out livestock in mass numbers, contributing to a starvation that lead, some say, to nearly as many deaths as did the bloody regime. Under the Khmer Rouge, between 1.7 million and 2.2 million people died within four years, and with them perished the remaining intellectual, educational, and governmental infrastructure of Cambodia. When the Vietnamese invaded in 1979 and ousted the regime, little changed. Civil war continued for 19 years. Resources remained scarce when available at all. There wasn’t even, for example, money. Like: currency. When the Cambodian government began to rebuild in the early 1980s, it offered bags of rice as payment.

By 1980, Sochea was 11. She’d had no formal education for four years but was eager to pick up where she left off, once schools reopened. It was awkward: she was the tallest girl in her second-grade class by far. But she loved going to school and learning to read. Slowly, too, she was learning to write. Then she met some Christian missionaries.

Like her father, a monk, Sochea was a Buddhist. All of Cambodia, more or less, was too. Buddhism, she says, kept her alive under the Khmer Rouge and through the civil war. She’s still a Buddhist today: she organizes nuns in her day job, meditates twice daily in temples, gives alms to wandering monks. But the missionaries she met in 1980 wanted her to convert to Christianity, offering her the one thing she needed and that she couldn’t get anywhere else in exchange: a pencil. It’s true that she’s still a Buddhist, but she’ll admit if you ask that the pencil also made her Christian.

We could end the story there, with Sochea’s miraculous conversion, and certainly neither Friedman nor Read would see the need to press any further: shortly thereafter, Cambodia took to the unofficial but widespread use of the U.S. dollar. Beefed up amenities for American tourists. Created a garment industry largely focused on exporting to the U.S. (Regulations exist, but rampant corruption in the country means they are not routinely followed.) Began adopting policies to allow for U.S.-owned business to operate locally, again without much oversight. Turned a blind eye to foreign sex tourism, which, alongside the garment trade, are the only viable industries that offer women work in large numbers. Advertising, entirely absent until after the Vietnamese left power, grew rapidly in 30 years. Young urban Cambodians now see almost as many ads daily as American youth do; the difference is that almost none of the products Cambodians are primed to want are Cambodian-produced. Free-market paradise. Friedman and Read might call it “Heaven.”

But Sochea’s story didn’t end there, because shortly after she got her hands on that pencil, she was given a writing assignment: Why women should not be allowed to attend school. There is no dissent in a Cambodian classroom, no arguing with your teacher. There is only the dissemination of unquestionable knowledge. It is true that young women in Cambodia are increasingly pressured to drop out of school after the third grade, even today. By the time Sochea graduated high school and went on to college, she was one of only a handful of female students in the country. Upon graduation, the free market wonderland—foretold by Christian charity, organized partially in response to the after-effects of U.S. military destruction—had left little room for her.

At least she had a pencil.


“Why the pencil?” asked a student the other day. At an art school, I teach a course called Milton Friedman’s Pencil. The question made me panic, so like any halfway decent professor, I deflected it.

“Good question. Why the pencil?” I repeated to the rest of the group, thinking: please, someone tell me why you signed up for a class exploring a metaphor for free market fundamentalism in an art school when you could have sat around all day in a roomful of naked ladies and called that work.

Of course, they had answers. We live in a digital age, they noted, where kids will soon grow up without having to use a pencil at all, without having to work through a math problem on their own, without learning to spell. But the computers that increasingly make up our world churned through bazillions of pencils in their creation, each fundamental tool an element toward a larger more significant milestone, much as several words make up a sentence and several numbers can form an equation, each of which may eventually lead to an answer, a theory, or a new set of questions about the world.

It was an appropriate art-school response. At the base of the production line sits one pure object, a tool that cannot be further distilled without eliminating usefulness. It also unconsciously reflects the inherently productive nature of what we usually label “art.” You can’t take a course in looking at naked ladies in an art school, remember: you have to draw or write about them.


Read died in 1983, and I’ve found no evidence to suggest he felt slighted by Friedman’s use of his story. (Friedman has elsewhere acknowledged his mentor’s contribution, although it must be noted that the major theme of Friedman’s version, in both content and form, is that no single person deserves credit for either the story or the pencil.) Yet the difference between the two pencils is vast.

Comparatively, Read’s self-aware and somewhat self-important household writing implement is kind of small potatoes, limited as it is to U.S. soil. Read’s references are domestic, save for a wax from Mexico, a coffee bean from Brazil, and oil from the Persian Gulf—each carefully articulated as aids to American production. His late-1950s audience is clearly American, and his metaphor works because he assumes a homogeneity in his readers. “I am a lead pencil—the ordinary wooden pencil familiar to all boys and girls and adults who can read and write,” goes an early line. The literate population would have been 97.6% of the country by 1960, according to the U.S. Census.

Friedman’s version, however, contains direct references to three named continents, implied input of unnamable other countries, and a distinct, repeated address to “the world.” Read may have come up with the perfect metaphor for globalization, but Friedman made it global.

In fact, his PBS series Free to Choose reportedly attracted a larger audience than Masterpiece Theater, with 3 million domestic viewers per episode, and global audiences in several major countries (although not France). A book based on the transcripts, also called Free to Choose, was the top-selling non-fiction title in the U.S. for 1980, and translated (according to Friedman’s biography) into 17 languages. Although video, and later DVD, sales of the original remained healthy, PBS rebroadcast the series in 1990, with a slew of celebrity guest stars.

Free to Choose Media, the production company behind the series, has since expanded into an entire 501(c)(3) business that offers hundreds of programs, including both versions of Free to Choose, streaming for free online, and, described as “a not-for-profit providing more than 300,000 teachers with engaging educational videos and materials promoting critical-thinking and thoughtful discussion among students.” There you can order—pretty cheap, too—gems like The Price System, described thusly: “Friedman uses I, Pencil, a short story by Leonard Read, to explain how a free market economy operates … Milton concludes that in this way, millions of people are able to cooperate peacefully on a daily basis.” The blatant propaganda embedded in Sochea’s first writing assignment almost pales in comparison to what the kids watching these videos must be asked to write about.

On a national scope, the story of the pencil Friedman first broadcast on PBS has also begun to shift what we think of as “educational.” Free to Choose came about when an Erie, Pennsylvania, PBS station asked Friedman to tape a counterpoint to liberal economist John Kenneth Galbraith’s series then airing. It was financed privately by PepsiCo, General Motors, Bechtel, and others, offering “a clear starting point for the so-called Reagan revolution,” as Salon’s Andrew Leonard wrote when Milton Friedman died a few years ago. Political leaders in Estonia, Poland, and California at one point all credited the series with sparking foundational ideas in their political development.

Yet offscreen, in Chile, Milton Friedman and his associates had been advising on and helped put in place a rapid mode of privatization with military backing. “Literally killing off increasing numbers of the Chilean population and choking off increasing numbers of Chilean businesses,” wrote Friedman’s former student Andre Gunder Frank in “Economic Genocide in Chile: An Open Letter to Milton Friedman and Arnold Harberger,” published in Economic and Political Weekly in 1976. Naomi Klein’s Shock Doctrine roots Friedman’s economic policies in crises, but in that it overlooks something even more disturbing about the spread of global capitalism. These were not plans prepared in secret, behind closed doors, and unleashed upon an ill-prepared world. Free-market fundamentalism was all spelled out, right there on PBS, as educational programming.

As handy and common as pencils themselves.


Thirty years later, the pencil is not what is used to be. It’s been replaced by the calculator, the smartphone, the search engine—machines that hide labor from users, allowing them to presume vaster skills than they, in fact, possess. My students complain that forcing them to use a pencil makes them spell poorly. In fact they cannot spell regardless of the machine they use to write with; software steps in to spell for them on a computer. Elsewhere, students complained recently that hand-writing a statement in cursive, a prelude to the PSAT, was the most difficult part of the exam. Of course, they took to Twitter to voice their concerns. Others have claimed that using a pencil causes them to lose concentration, what with all the sharpening breaks and muscle strain. The pencil is a deep inconvenience. Electrical outlets are plentiful in school classrooms and coffee shops; pencil sharpeners have all been removed. (David Rees’s exploration of the artisanal art of pencil-sharpening only underscores nostalgia for the underused instrument.)

Using one is even considered dangerous. I tried to board a plane last month with a dull pencil, but the TSA agent scolded me for trying to sneak weapons onto my flight. I had no idea what he was referring to until he pulled the sharpener out of my bag and held it out accusatorily. It could easily be broken, the razor blade removed and wielded, the plane hijacked. He tilted his head, as if to say, “Come now, little missy. You know better than that.”


What the stories of the pencil we’ve looked at leave out are any of the voices of the humans that actually had hands in its creation. Noninvisible hands.

Several such folks used to work not too far away from my house in Chicago, on the other side of the city from where Friedman shot much of Free to Choose. In 1988, an old pencil factory was parceled into condominiums now known as the Pencil Factory Lofts. Terra cotta pencil-tips now decorate the facade, but the building was once the Eversharp Pencil Factory, later the Wahl-Eversharp Pencil Factory, a 240,000 square-foot facility that employed 1,800 workers in two shifts at the company’s peak. A Chicago Tribune article covered the conversion, and briefly, a remarkable event in the building’s past: In 1937 it held one of the first industrial sit-down strikes—in which workers cease labor but stay on site—in U.S. history.

It wasn’t the first: Sit-down strikes had been held domestically and known under that name since at least 1933. They make sense: workers are protected from violence by management’s own desire to keep equipment safe from harm. A sit-down strike’s Achilles’ heel is chiefly that people get hungry and bored, so unions’ primary responsibility is to organize food and entertainment to keep morale up and commitment strong. In his pamphlet on the practice Sit-Down, published shortly after the pencil factory strike, Joel Seidman notes that most strikes didn’t last more than a day or so. They are efficient and effective.

Details on the Wahl-Eversharp strike in the 1988 Trib story are thin, but a 1937 article in the same paper explains that, on Valentine’s Day eve, “75 girls and young married women and 50 men” sat down on the job to demand the right to negotiate for a wage increase. Female employees had been earning 27 cents an hour and male employees 33 cents; respectively, they wanted raises to 35 and 43 cents per hour. The tone of the 1937 Trib was as dismissive as the Friedman-era one. Contemporary stories complain workers danced, sang, and gambled into the night while friends and family members brought food and blankets. When liquor was discovered under the blankets, deliveries were no longer allowed.

Of course management gave a dispersal order, and of course strikers refused to budge. The management plan may have been to starve the strikers out by ceasing deliveries, but that failed: While a bastion of lady strikers flirted with cops the next morning, the menfolk jerry-rigged a breakfast delivery from the roof of the bakery next door. By noon that day, management caved, and reading between the lines of the Trib it becomes clear: The strikers had won.

My students and I went to visit the Pencil Factory Lofts, but like the strikers’ liquor-laden pals, weren’t able to gain entry into the building. A sweet professional young woman with a giant dog approached the entryway, and we asked if she could let us in to the lobby to check out the historic site. “We’re really into pencils,” I told her, which was not untrue.

"No,” she said. “I can’t do that. For security reasons. You understand. These are people’s private homes.” She had no idea anything historic had happened there at all, but she didn’t particularly care.

The Pencil Factory Lofts, as they stand, have scrubbed away all traces of the Wahl-Eversharp Factory workers and their historic victory, replaced with picture windows, high-speed Internet, and an exercise room. It’s a pencil story written by Friedman himself, devoid of everyone except the consumer: this woman and her massive dog.


What is the takeaway, then, the final thing to remember about the squirreled-away but damaging truths Milton Friedman failed to account for when constructing his beloved, Read-inspired, and oft-repeated metaphor for the power of unregulated markets (the same one on which this new film series from the Competitive Enterprise Institute was launched last month)? In other words: Why, really, the pencil?

Well, one of my students made one. A thoughtful undergrad with an intuitive sense, he proposed to make a pencil for his final project. Then, a couple weeks before it was due, he brought in a prototype. School-provided clay, with a store-purchased graphite “lead”, it’s actually quite comfortable to write with. Finding clay will take a bit more doing, as will properly compressing the charcoal into a workable form. We can work out the eraser later. Breadcrumbs have been used in years past. And it’s a tad fragile. (Pencil fragility is actually a big issue in public education debates, which largely hinge on shoddy, Chinese-made no. 2s that are imported under enormous tax breaks and in mass quantities in a situation known as “pencil dumping.” In addition to disrupting the classroom with breakage, U.S. pencil manufacturers claim these imports cut their business in half between 2004 and 2008.)

My student is not the first to attempt to make a pencil. Others have tried such projects, or publicly proclaimed themselves to be trying, like this guy. He appears to have given up without even having put, as they say, pencil to paper. Die-hard free-market fundamentalists tend toward a slightly more aggressive stance on such endeavors, arguing that Doing It Yourself instead of purchasing the cheapest available product is unethical and, by occasionally unstated extension, a crime against God. Many may claim that a pencil is, by definition, wood-encased, and perhaps also mass-produced, a tautology that seems perfectly in keeping with an argument that seems to run: “You all own pencils. Now, what if I told you the Good Lord himself created them? Unregulate the markets!” And then the arguer runs screaming from the room.

Still, my student’s hand-made pencil works. “Check this out!!!” I wrote when I tested it, and then a smiley face, sadly bypassing the chance to write, “Suck it, Milton Friedman” with a homemade pencil. But it does write. And any video, allegory, news article, film, or metaphor for economics you come across founded on the idea that a single person can’t make a pencil, can’t go to college, or can’t strike for better pay, is wrong.