From “I, Pencil” to “I, Smartphone”: The Moral Limits of the Market

From “I, Pencil” to “I, Smartphone”: The Moral Limits of the Market September 17, 2014

I’m pleased to feature a guest post by my friend and colleague Kevin Brown, an assistant professor of business and economics at Asbury University. This column is based in part on an article, “Capitalism and the Common Good,” that appears in the September 2014 issue of Christianity Today.

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i-pencilIn the late 1950s, the economist Leonard Read wrote an essay that continues to demand attention over half a century later. The subject? A pencil. Seeking to convey the multitude of economic forces, resources, and human industriousness pooled together in the production process, “I, Pencil” creatively illustrates Adam Smith’s “invisible hand” at work by demonstrating the complexity of making the simple yet ubiquitous pencil. Indeed, the activity and coordination required to create such a simple instrument is so multifaceted that Read described the process as “miraculous.”

We now live in a digital age, and the pencil has been taken over by other devices. But the miracle of the market has not, according to “I, Smartphone,” a short video created recently by the Institute for Faith, Work, and Economics (IFWE). Similar to “I, Pencil,” “I Smartphone” highlights the resources, ingenuity, and productive labor across the world coming together to create a smartphone device. Moreover, IFWE offers a spiritual dimension. Christians, they suggest, should care about production in a free market system “because God has given us the market process as the most powerful tool we have in a fallen world to serve each other by using our gifts. … We see Jesus in that.”

In many ways, paralleling Read’s example of a pencil to a modern-day smartphone is appropriate. Both products require resources, ingenuity, and productive forces from around the world in order to arrive upon the finished good. Further, the companies that produce these products must think carefully about a host of marketplace factors (price, differentiation, marketing, etc.) in order to attract and appease potential consumers. Finally, if these forces work correctly, a mutually beneficial exchange occurs within the marketplace benefiting both consumer and producer alike. Perhaps Read had it right: it all seems “miraculous.”

What historical lesson are we to learn from this process? The conclusion to a 2008 version of “I, Pencil” offers some direction:

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed.

In the case of the pencil, “creative energies” may rightly be applauded. Can we say the same for the more contemporary example of a smartphone? In Read’s original version, the resources mobilized to create a pencil include cedar, wax, graphite, labeling material, brass, zinc, copper, lacquer, black nickel, and factice (not to mention the thousands of resources that went into creating the machinery used to process and produce the pencil). Similar to the pencil, the smartphone contains an array of resources from across the globe.

One particular mineral that nearly all smartphones contain is columbite-tantalite, or what is commonly referred to as coltan. Coltan mining occurs all over the world. However, a large majority of it takes place in the Democratic Republic of Congo. The UN, as well as other advocacy groups, has documented the illegal smuggling of coltan from the Congo, which often involves violence, fighting, rape, and murder. In essence, violent militia groups help to facilitate the smuggling of imported minerals, all contributing to what has been described as the “Congolese War.” Like “blood diamonds,” the unethical mining of coltan has fueled violence, rape, and murder in a place that, as Enough Project founder John Prendergast writes, “most of us will never go, affecting people most of us will never meet.”

This is not to dismiss the creative energies sparked by the free market. But the story of coltan and smartphones shows how the market is apt to facilitate vice as well as virtue. This is different from the belief that markets consistently churn the input of vice into a virtuous output.

In the late 18th century, this seemingly counter-intuitive idea is evident in Adam Smith’s own “Wealth of Nations” where self-regarding market agents would, in satiating their own interests, somehow produce the greatest common good. There is an important distinction, however, to be made here. While many may charge Smith with promoting the “market alchemy” of vice to virtue in his famous treatise, Stanford Philosopher Debra Satz has emphasized that Smith—and other classical economists—was clear that markets work best when they are rooted in a framework of laws, regulations, and social standards of morality. In other words, markets do not necessarily produce these outcomes; they require them.

In “I, Pencil,” Read provided a noteworthy example of the market’s capacity to mobilize productive forces across the globe. However, the violence so closely correlated with the production of smartphones provide a sobering reminder that the invisible hand has the capacity to reflect the best, and worst, of our own hands.

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