Reading analysis of i,pencil

Leonard E. Read, in his famous work I, pencil, talked about the production of a pencil and many economic phenomena and economic theories behind the simple process of production. He metaphors himself as an ordinary pencil and then presented us the whole picture of the production of it, or him: the chain of the whole industry. From my perspective, what the author was trying to emphasize in the article is the amazement and wonder of the invisible hand of market and of the order of society.

After reading the article, the most interesting and impressive sentence for me is: millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding Notice the two words spontaneously and naturally. Where does that spontaneous trend come from? In his wealth of nation, Adam Smith mentioned that everybody in the market is making decisions out of their self-interest, and thus formed an order, which is considered the invisible hand of market. In the whole production process of a pencil, various people in divergent fields have participate in the production of that pencil, but almost no one of them, including miners, lumberjacks, those who put them abroad ships and so on, has ever awarded of what they are contributing to. What the miners or the lumberjacks are thinking about is more likely like: “God, when I finish this work, I’ll have enough money to raise my children or to pay for my car.” They don’t care for the pencil at all! But it was just their nonchalance that formed a social order governed by the invisible hand of market and finally made the pencil come to the world. That’s why I found it interesting: the production of this little, simple pencil, is a miracle of free trade market.

Question:

i.                     The author argues that a government should “let society's legal apparatus remove all obstacles the best it can” and “leave all creative energies uninhibited”. This argument definitely works well in most situations, but there are some circumstances we may find it hard to apply these principles, such as: the sale of drug and weapon, the selling of body. How do we response these dilemma? How could the idea of free trade be used to solve these problems?

ii.                   We’ve seen the effectiveness of the natural order of market in the article. But what if there’s a monopoly in the market, which controls the amount of raw materials like trees or graphite. How would the production of the pencil response to that change? Will the production still be “spontaneously” and “naturally”?

Annotation:

In my opinion, the main point of this article is that people act purposely and freely out of their own self-interest in the market and then unconsciously contribute to some achievement they’ve never thought about, and that government should leave the market running spontaneous since governmental interference thwarted the creative energy of society. These points of view are definitely related to our course that man acts purposely, that people response to incentives: the reason why miners and lumberjacks work is that the wages are incentives that push them to work, that we economize in daily life: the workers compare the expected benefit and expected cost of their work, thus decide whether they work as miners or others, and that people pursue interests.