Whenever I hear or read someone proclaim that “the market doesn’t work,” I try (if the situation permits) to ask him or her how is it that an ordinary pencil exists. Its production requires the cooperation of literally millions of people from around the world. Not one in one-thousand of these people know each other. Many of them, were they to meet, would positively hate each other. And yet, pencils exist in appropriate abundance, and can be acquired almost free of charge. (If you’re in the United States, go up to strangers on the street, in shopping malls, or at your school or workplace and ask for a pencil. You’ll not wait long before someone gives you one without expecting it to be returned. I do this experiment frequently; it works.)
It’s an amazing fact. An impersonal process directed largely by prices, with each step along the way created and operated by entrepreneurs and producers seeking chiefly their own betterment, results in incredibly complex coordination that very well satisfies consumer demands — and at a cost to consumers astonishingly low, when you consider the complexity of the process and the millions of persons whose creativity and efforts are necessary to make it a reality.
This, of course, is Leonard Read’s account of “I, Pencil .”