The Rundown

I, Pencil - Leonard E. Read (Text, PDF, and audio)
I, Pencil: The Movie from Competitive Enterprise Institute

Reinforced Values

I, Pencil offers teachers the opportunity to reiterate many of the themes of the market and economics, but with a specific emphasis on the market process, the invisible hand, spontaneous order, and voluntary cooperation. The key text for this lesson is Leonard Read’s “I, Pencil” essay, which helps demonstrate how markets coordinate the actions of thousands of free individuals through market prices and incentives.


  • Ask students to click the link here to take a look at a #2 pencil or share your browser if using a virtual conferencing platform such as Zoom.
  • Ask the students if they think it is easy or difficult to make a #2 pencil? More than likely their response will be “easy” simply because in their eyes a pencil is a relatively “simple” product.
  • Tell your students that today they are going to spend some time thinking about what it takes to make one of these simple pencils and get it to them so they are able to do their school work.


  • Determine how you will share the activity with your students. 
  • Review the I, Pencil text and video and decide which is better suited for your students to understand Leonard E. Read’s message. Modify as needed. 
  • Decide how you would like students to respond to any of the debrief questions after they complete the activity and how they would do so. 
  • Post the activity to your classroom platform for students to access and complete or set up a Zoom session to walk through the activity with students.


NOTE: These directions are written for a collaborative session with students virtually – if not collaborating as a class virtually, you can post pieces of the directions online with the resources listed above.

  • With students able to view an image of a #2 pencil, ask students to list in a blank document or collaborative platform all the people involved in making that pencil and getting it into the hands of the consumer. Allow three minutes for students to brainstorm.
  • After three minutes have passed, ask students if you feel like they are missing anyone. Add anyone else students list.
  • Students should then either watch “I, Pencil: The Movie” from Competitive Enterprise Institute or read/listen to “I, Pencil” by Leonard E. Read (Text, PDF, and audio).
  • After students have learned more, again ask if there is anyone missing from their brainstormed list of people that are involved in making a pencil and getting it to the customer.
  • Through a class discussion or in breakouts, ask:
    • Did you realize how many people it took to make something as simple as a pencil?
    • If each step costs someone money, who is paying for each of these steps?
  • The goal is to get them to realize that eventually, the customer is the one who pays for all these steps because the increase in costs is handed down to the customer.
  • You want students to realize it is important for them to be able to identify all costs associated with bringing a product to market.


Students can complete the debrief on paper by answering the following questions or in a group setting via Zoom (either as a full class or in breakouts) to discuss their learnings.

  • According to the article, who can make a pencil? Why is this the case?
  • After considering the video or article, why should all creative energies be uninhibited? Do free markets produce good or bad outcomes? Why is this fair?
  • Explain the following: “bits of know-how” and “local knowledge.” G.K. Chesterton stated, “we are perishing for want of wonder, not want of wonders.” In your opinion, what does this have to do with the rest of the article? What “wonders” are we overlooking?
  • What conclusion would you come to after realizing how a pencil is made? What does this tell you about the use of knowledge in society or the incentives of all of the actors who make a pencil?
  • Which method of production will most likely lead to a better outcome (better product/ cheaper), the voluntary cooperation of individuals pursuing their own interests, or a small panel of experts?
  • How might self-interest and commerce help to foster peace and tolerance among diverse populations?
    • Hint: Is it good business to mistreat your customers or trading partners? Do you really care what religion, ethnicity, or gender the clerk at the store is?

Leave a comment

Video Tutorials

A library of videos that walk you through lessons, activities, and new tools for quick and easy help.

Expert Help

We're here to help teachers. Our education experts are on standby to get you answers.