In 1958, Leonard Read set out to distill some of Friedrich Hayek’s insights from “The Use of Knowledge in Society” into a format accessible to the masses, resulting in the publication of “I, Pencil.” While it doesn’t encapsulate every nuance of Hayek’s arguments, it effectively conveys the essence in a concise manner.
Economists frequently incorporate Read’s article into their curricula, finding it to be an effective teaching tool. Its popularity surged when Milton Friedman featured it in his PBS series, “Free to Choose,” bringing it into the limelight.
Interestingly, as Read outlines the diverse components of a pencil sourced from various countries, he notably omits any discussion of tariff rates. This absence is not indicative of an era of free trade; in fact, global tariffs were considerably high at the time of Read’s writing. As I noted in a recent article, the actions of the Trump administration have significantly reversed the advancements made in international trade since the mid-20th century. Thus, high tariff rates were indeed a characteristic of the landscape during Read’s era.
It’s worth reflecting on the current tariff implications for the four countries from which essential pencil components are derived, particularly under Trump’s recent tariff framework, which, while not reciprocal, still imposes notable economic barriers.
Below, I present the original passages along with their corresponding tariff rates. Yes, the talking pencil may come off as a gimmick, but it resonates well, especially with my students in the military who find it relatable.
“My ‘lead’ itself—it contains no lead at all—is complex. The graphite is mined in Ceylon [Sri Lanka].” Tariff rate: 44%.
“To enhance their strength and smoothness, the leads are treated with a hot mixture that includes candelilla wax from Mexico, paraffin wax, and hydrogenated natural fats.” Tariff rate: 25%.
“An ingredient called ‘factice’ is responsible for the erasing function. This rubber-like substance is produced by reacting rapeseed oil from the Dutch East Indies [Indonesia] with sulfur chloride.” Tariff rate: 32%.
“The pumice originates from Italy, and the pigment that gives ‘the plug’ its color is cadmium sulfide.” Tariff rate: unspecified. Interestingly, the Newsweek article cataloging Trump’s tariffs does not mention Italy at all.
