If roads created businesses, then there should be no stretch of asphalt in the country not festooned with stores, shops, or offices. Roads facilitate commerce; they do not necessarily cause it. If the government bears responsibility for all the commerce that flows over its roads, then the federal government smuggled all but the 370,000 pounds of drugs stopped at legal ports of entry last year – and the U.S. Post Office trafficked all but the 40,000 pounds of drugs seized in the mails in 2017. Clearly, this is a reductio ad absurdum whether applied to narcotics or number two pencils.
The creative process begins when an entrepreneur senses the underlying need for a product or service, which is confirmed by someone’s willingness to pay for it. One might call this – to coin a phrase – the “magic of the price system.”
Furthermore, just as no Pencil Czar directs the construction of pencils, no Transportation Czar tells the company whether to transport its cargo by truck, rail, ship, drone, or private courier. The firm chooses the method of shipment that best fits its needs based on price signals.
Patents: Friend or foe?
Finally, the BBC article raises the issue of intellectual property. When war interrupted France’s ability to import British graphite, Nicolas-Jacques Conté came up with a new composition for pencil lead, for which he obtained a patent. This, Harford argues, should cause us “to question whether Read's pencil is right to be so fiercely proud of its free-market ancestry. Would Monsieur Conté have put such effort into his experiments without the prospect of a state-backed patent?”
Libertarians have disagreed over intellectual property for more than a century. Murray Rothbard opposed patents (defined as a lifelong government monopoly) but supported copyrights (which he believed could be written into contract law). But Lysander Spooner wrote that “the right of property in intellectual wealth”is an outgrowth of property rights, and denying it amounted to a form of communism. And Ayn Rand held that patents acknowledge “the paramount role of mental effort in the production of material values.” Scholars associated with the Acton Institute have reached disparate conclusions on the efficacy and propriety of intellectual property rights.
Rather than solve this issue, the BBC’s objections can be resolved by dealing with two erroneous arguments embedded in Harford’s article.
The first is that the government’s secondary role of providing roads or patents is a primary driver of creativity. Necessity, not infrastructure, is the mother of invention. Ingenious people will always invent and build devices to improve their own lives. The government’s respect for property rights merely determines whether they will mass produce and sell them, so that others benefit from their discoveries.
The second fallacious assumption is that everyone who supports the free market is an anarchist. The Lockean conception of ordered liberty tasks government with defending the right to life, liberty, and property – a position that Leonard Read and Milton Friedman happened to share. Read wrote in his lesser-known work Government – An Ideal Concept that the State should be confined to “protecting the life and property of all citizens equally, and invoking a common justice under law.” Friedman believed the government had three primary functions: to “provide for military defense of the nation,” “enforce contracts between individuals,” and “protect citizens from crimes against themselves or their property.”
The point of “I, Pencil” is best captured by Read’s successor at the helm of FEE, Lawrence W. Reed. “None of the Robespierres of the world knew how to make a pencil, yet they wanted to remake entire societies,” he wrote. Ambitious bureaucrats, eager to impose their ignorance on economics or politics, lack the information and creativity generated spontaneously by free people. “Leave all creative energies uninhibited,” wrote Leonard Read. “Permit these creative know-hows freely to flow.”
Read’s essay is no brief for anarchy. “I, Pencil” is a plea for humility among economic central planners that is desperately needed by the utopian tinkerers of our day, and every era.
All of which leaves Harford without a point to make.
Thankfully, pencils have erasers.
(Photo credit: DaMong Man. This photo has been cropped. CC BY 2.0.)