The Central Message
The central message behind the I Pencil story is the comprehension of the free market and the manner in which it operates (Read 1). If everyone would have the knowledge and understanding behind the theories that were presented in the story, the world would not have been facing most of the problems which it is constantly encountering. The story critically analyses all the aspects of the free market and the parties who are involved in the operations of the market. According to Reed (2008), free markets can only be sustainable if all the parties who are involved benefit from the transaction and that there is no form of greed or discrimination exercised.
We will write a custom Essay on Free Market in “I, Pencil” Story by Leonard Read specifically for you
301 certified writers online
A lot of people lack the humility that is required to understand and sustain the economy. These are mostly politicians and the other influential figures in society. Since they have power on their side, they tend to assume that they have the knowledge, skills, and expertise to control the market. They set the prices of goods and services, determine the industries that will prevail, and those that will fall, determine which fuel should be used, the educations system that should be followed, and so on.
Despite all these, these individuals do not have the basic principles and humility to even understand the simplest concepts of life. A good example that was put forward by Reading is the concept behind a pencil. These individuals pretend to know about the most complicated issues about the free market and yet they do not know what it takes to produce a pencil Read used a pencil due to its simplicity. Pencils are very cheap, a notion which makes a lot of people to assume that they are easily produced.
However, an effort that has been put together to make a pencil to be a complete product is remarkable. It is manufactured using lead, brass, rubber, and wood which are found in different localities and produced by different people. These people work together to source these raw materials to make an end product which is a pencil. Every individual involved in the process put the maximum effort to ensure that the final product is of high quality.
These people put this much effort since they work by free will and will benefit from the venture in the end. These people also work together as a team. In the end, when a pencil is sold in the market each party will get a fair share of the revenue earned and be satisfied. Due to the satisfaction, he/she will continue to work even harder, a move that will make the pencil industry to be sustainable in the long run.
Relation of the Story to the Course
These are the same principles that apply to the free market. The prices of goods and services should not be set by individuals. They should be determined by the market forces which are demand and supply. For the market to be effective, efficient, and sustainable, all the parties involved should have a fair share of the revenue earned, the customer also included. This will create satisfaction and motivation for all these parties. Therefore before the leaders, politicians and other influential figures formulate policies, rules, and guidelines that govern the free market, they should have a clear understanding of how the pencil is produced and apply these concepts into the free market.
Read, Lawrence. My family tree as told to Leonard E. Read. New York: Foundation for Economic Education, 2008.