The Invisible Hand Theory In Leonard E. Read's I, Pencil

The invisible hand theory is key to maintaining a healthy government because it allows more freedom, less control, and runs more efficiently. The invisible hand is the competition and self interest that runs the free market. This is natures way of making the free market run efficiently without a central control system. The world around us circulates everyday with people making things and trading them. The invisible hand is all around us and can be connected to other important business philosophers that made similar accusations towards this idea of an invisible hand. One famous example made by Leonard E. Read is ‘I, Pencil’.

The invisible hand theory has a large emphasis on freedom in a market. Adam Smith, an economist in 1976, stressed the
Both competition and self-interest are what regulate the free market and is what comes naturally from the human species. Smith famously stated, “All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbors, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for” (Boardman 96). This quote is very evident in our society today. We see people all around us which also includes ourselves, who do things out of self greed. Success is advertised in a modern society which in the end everybody strives for. People carry out labor, whether that be an office job, farming, making food, or whatever, but all these people have at least one thing in common, they are all trying to earn a living so they can maintain a lifestyle of their likings. This boils down to this extremely effective system where a society will work together to gain a means of
Read is another famous author and economist who wrote about this idea of a market network. Read wrote a parable that talks in first person for a wooden pencil. A well known question that he raises in his work states, “Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn't it? Especially when it is realized that there are about one and one-half billion of my kind produced in the U.S.A. each year” (Boardman 98). Read gets creative in showing us how the production of a simple product requires a collection of people to build it yet this isn’t so obvious on a daily basis. This connects to the invisible hand because billions of people trade, create, build, invent, and carry out hard labor to earn a form of security. This is all performed out of the selfish intentions, out of the human nature to strive for some type of individual