Based on the classic essay by Leonard Read, a beautiful production from the Competitive Enterprise Institute explaining how the market works to create a simple pencil:

The market is truly an amazing thing. Much of the time, as illustrated by the story of the pencil, it functions so well that we can get away with enjoying its fruits without ever noticing the tree. Its greatest strength is its downfall because it’s so easy for so many to take it for granted. But taking a look at the tree— the impossibly complex tangle of incentives that brings graphite, wood, metal, and rubber together— is the path to appreciation and humility. It’s harder to believe one central power can produce more prosperity once you’ve seen what the market creates without one.

As Read wrote: “There is a fact still more astounding: the absence of a mastermind, of anyone dictating or forcibly directing these countless actions which bring me into being.”

I’ve always thought this would make a great children’s book. The illustrations from this video would work perfectly. Get those kids started right!

Read the whole essay, here. CEI is doing a series on this subject, available at IPencilMovie.org.