Kevin Carson‘s “I Pencil, Revisited”

My dear friend Kevin Carson has provided us with a highly provocative critique of Leonard Read’s classic essay, “I, Pencil”. I commented on it on another thread, but thought it useful to post on my timeline.

I was always impressed with Read’s illustration of the ways in which countless market actors make use of dispersed knowledge in globally interconnected ways — all in the production of the simple Pencil.

Kevin states very clearly in his paper that he agrees, “as far as it goes”, with the “superiority of coordination by a price system over central planning”. He states further that Leonard “Read is entirely correct — so far as he goes — both in touting the importance of distributed knowledge under any economic system, and in celebrating the usefulness of allowing the formation of market-clearing prices as a tool for coordination.”

But, and it’s a BIG Butt … Kevin is focused here on the larger historical and systemic context within which current market processes operate. And on that count, I think he’s offered highly valuable insights into the centuries of “coercion at a systemic level” that created “the background against which the entire process took place.”

I don’t want to say too much about the essay, because it offers lots of rich history behind both the Read essay and the actual systems at work in the production of the Pencil.

I will say, however, that Kevin had me at “The Stations of the Pencil” (that’s one classic subtitle). His comment, early on, about the massive state involvement in railroad transportation (“Of course we all know what an exemplary product of the Invisible Hand the national railroad system was”) is indicative of just how, throughout virtually every step of the Pencil’s production, the influence of political economy is key to the entire process.

Terrific piece, Kevin. Highly dialectical! Bravo!

Check it out at the Center for a Stateless Society here.

Postscript: There’s a nice Facebook discussion on these topics. Check it out here. In that discussion, I wrote further:

I purposely opened my commentary on Kevin’s piece with my observation that “I was always impressed with Read’s illustration of the ways in which countless market actors make use of dispersed knowledge in globally interconnected ways — all in the production of the simple Pencil.” Nothing in Kevin’s essay has diminished my appreciation, not only of Read’s elegant way of expressing the coordinating capacity of markets, but also of Hayek’s profoundly important discussions of “The Use of Knowledge in Society”. Like Steve Horwitz, I am on record (in three books and too many articles to count) as being a champion of that Hayekian epistemic insight and of the benefits of the division of labor and knowledge.

That said, a few points in response—and here, I don’t presume to speak for Kevin, only for myself:

1. I don’t think it’s off topic to situate Read’s essay in the socio-economic-cultural context in which it was published. Sometimes even the best arguments for markets can—and have been—used by others as an apologia for the system as it exists.

2. I think there is much to be gained by making transparent the nature of “capitalism: the known reality”, that is, the real conditions under which capitalism evolved, all of which were deeply embedded in processes that were as much political as they were economic. I don’t think that bringing attention to that reality diminishes the lessons learned from Read’s essay; but I do think it’s certainly worth noting that so many of the resources and processes that Read highlights have been historically tainted by political/state intervention.

3. For me, the “right” and “left” libertarian distinctions are ultimately about values, and each is an umbrella term for much variety therein. On these value distinctions, I would certainly place Steve, Kevin, and myself within the “left” end of the libertarian continuum.

In another comment, I made the following points:

Since Steve Horwitz has been mentioned in this thread, I thought it would be best to have Steve speak for himself (on the question of ‘left’ and ‘right’, not to mention ‘capitalism’ vs. ‘socialism’).

Back in 2005, when Steve and I were both writing for the Liberty & Power Group Blog, I wrote a piece called “Capitalism: The Known Reality“, with which Steve wholeheartedly agreed. Steve wrote in response (“Thoughts on Sciabarra“):

1. I tend to call myself a “radical libertarian” as well. I prefer that to “anarchist” or “market anarchist” or even “anarcho-capitalist” for two reasons. One has to do with the rhetorical problems the anarchist label raises, but the other is that whether or not I’m an anarchist depends upon my mood that day. More seriously, I don’t think the case for anarchism is completely convincing. My disposition is to accept it but I’m not completely convinced enough to use that label (rhetorical problems aside). Understand, of course, that I think the set of issues where government might be justified is pretty small, hence my comfort with “radical libertarian.” The fact that I see myself as a person of the left who happens to believe that markets and other voluntary institutions are the best means to the left’s ends also makes me comfortable with the “radical” label. (Having been called a “PC libertarian” and a “neo-conservative,” not to mention a fraud and a liar, in the last 48 hours, labels are kind of fun these days.)

2. In my “Comparative Economic Institutions” course, I spend part of a very early class day explaining why I will NOT use the terms “capitalism” and “socialism” in that class (a promise I keep to a large degree). My reasoning is Hayek’s – the terms were both invented by those sympathetic to socialism. Moreover, the very terms bias the debate. To add some more meat to Chris’s argument, look at the words themselves. “Capitalism” suggests a “belief in capital” and it puts capital as the central organizing principle around which the system is built, or at least around which “the goods are delivered.” By contrast, “socialism” suggest a “belief in society as a whole” and puts society as the central organizing principle or recipient of the benefits in that system. I would suggest that both implications are incorrect (i.e., capitalism [truly free markets] doesn’t primarily benefit capitalists, and socialism benefits the few at the expense of the many).

More important, though, is that neither term speaks to the institutional arrangements that each system requires. Thus, I prefer the language of “markets” and “planning” to “capitalism” and “socialism.” Although these are not without their problems, they have the advantage of allowing us to talk about how social coordination will take place in each system and what varieties of arrangements those fundamental coordination processes might produce. For example, we can talk about markets in which there is worker ownership or not. And with planning, we can talk about the differences between, and challenges facing, democratic planning institutions versus more centralized, autocratic ones. This dichotomy forces us to ask questions about how social coordination takes place and what sorts of institutions forward it. It should lead us to ask “how do/would markets work?” and “how does/would planning work?”

It also gives us room to talk about real world systems as being neither purely markets nor purely planning, and to explore whether the coordination processes can be combined, or whether one will tend to crowd out the other (or at least cause unintended undesirable consequences) when they are significantly mixed. It provides an institutional analytic framework for doing applied work, including exploring economic history.

In any case, Chris’s post is right on, both as a question of how to talk to the Left and as a really serious question of how libertarians understand our own worldview.