Lessons from the lowly pencil.

Listen to the broadcast of You Tell Me on KTBB AM 600, Friday, May 10, 2013.

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Author Kevin Williamson has a new book that I’d like to recommend. It’s called, “The End is Near and It’s Going to be Awesome – How Going Broke Will Leave America Richer, Happier and More Secure.”

The premise of the book is that when behemoths such as Social Security, Medicare, the postal service and Amtrak at last collapse, we will not as a nation suddenly be unable to provide medical care and retirement for our seniors, we will not be without the means to deliver a letter or a parcel from place-to-place and we will not suddenly be frozen in situ by a lack of transportation.

Instead, the very collapse of these unsustainable politically-enabled programs will clear the way for their replacements to spontaneously emerge.

Among the things he uses to support his thesis, Williamson cites the 1958 essay “I, Pencil,” by Leonard Read. I was introduced to “I, Pencil,” years ago and was glad to be reminded of it. As politicians wrestle with the unsustainability of Social Security, Medicare and now, Obamacare, it’s worth revisiting I, Pencil.

In Read’s essay, he posits that no one knows how to make a pencil. Yet not only do pencils get made, they get made by the millions at a price that makes them disposable.

A pencil is simplicity itself. There is not a single moving part. Yet no single person – and no centrally-located group of persons – knows from start to finish how a pencil is made. There is simply no way to understand and control, from end-to-end, the forestry, mining, metallurgy, chemistry, tooling, transportation, logistics and other areas of expertise that go into pencil making.

The CEO of Faber-Castell, the largest manufacturer of the ubiquitous No. 2 pencil, cannot possibly corral under his direct control the diverse expertise necessary for the manufacture of his product, nor would he try.

He instead is able to rely on a concept called dispersed knowledge. As it pertains to pencil-making, the guy in the sawmill in Oregon where the cedar is cut has no knowledge of, let alone the expertise of, the guy in Ceylon, who is mining the graphite for the lead. But to succeed in their respective roles in the manufacture of pencils, neither needs to. Such is the magic of dispersed knowledge.

And such is the reason that grocery store shelves are always full and the things of daily life that we rely upon and take for granted are always at hand.

An understanding of dispersed knowledge brings us face-to-face with the futility of trying to centralize solutions to complex problems – such as those ostensibly addressed by Social Security, Medicare and now Obamacare.

Social Security and Medicare were each conceived by vote-seeking politicians as answers to the problems attendant to growing old. After decades of placing ever-increasing demands upon the taxpayers that are forced to support them, both programs are bankrupt. There is no way to make any plausible argument that the same won’t happen with Obamacare.

The very existence of these programs – and the fact that participation in them is enforced by the threat of imprisonment if one doesn’t – crowds out potentially better solutions to the very problems they are intended to address.

If you centralized pencil making on Capitol Hill, pencils would be of one-tenth the quality at ten times the price – and the only way people would buy them is if the government used its police powers to force them to.

That is precisely where we now find ourselves, not with something as simple as a pencil, but with the overwhelming complexities attendant to the health care and inevitable old age of more than 300 million people.

Thus, according to Kevin Williamson’s book, we await the coming collapse of these top-down institutions born of politics, to see them replaced by the innovative bottom-up forces born of opportunity – the same forces that gave us antibiotics, air conditioning, the personal computer and the iPhone.

That’s a hopeful future.