Acton Institute Powerblog

The power of story in the economic imagination

In his 1958 essay, “I, Pencil,” Leonard Read took up the voice of a self-reflective pencil to tell a fictional tale that illuminated the nonfictional marvels of mundane economic cooperation.

The essay went on to influence the hearts and minds of many, thanks in part to Read’s insightful mind, but also to his chosen medium: the story.

“You may wonder why I should write a genealogy,” the pencil says. “Well, to begin with, my story is interesting. And, next, I am a mystery—more so than a tree or a sunset or even a flash of lightning…I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove.”

By the end, our imaginations are indeed filled with wonder and awe—a feat that, lest we forget, is accomplished by a talking pencil.  This is the power of story.

In a recent essayfor the American Institute for Economic Research, economist Donald Boudreaux wonders how economists might continue in these footsteps: using stories to frame new ideas and arguments and pioneer new discoveries in what can often be a stoic science focused narrowly on charts, equations, and convoluted analysis.

“Different economists pursuing different investigations will find different methods most useful,” Boudreaux explains. “A paper filled with equations is sometimes appropriate—but not always… Although verbal stories have nothing of the appearance of Science, they are a legitimate and scientific method of gaining—and of sharing—understanding. In fact, for some purposes, verbal stories are by far the method that works best.”

Using Read’s essay as an example, Boudreaux notes how the traditional economist’s more typical tools would fail to communicate the basic themes with the same levels of color and clarity. But such tools wouldn’t just fall short in highlighting the economic realities; they’d also fall short in demonstrating the broader philosophical implications:

In unassuming prose, Read revealed the surprising though indisputable truth that the amount of knowledge necessary to make an ordinary commercial-grade pencil is inconceivably greater than is the amount of knowledge that can be comprehended by a single individual or by a committee of even the most genius of individuals. (In 1776, Adam Smith told a similar, although much shorter, story about an ordinary woolen coat.)

Try to imagine conveying this truth using mostly equations. It’s difficult – actually, for me it’s impossible. A mathematician, of course, could easily scribble a series of equations that conveys to other mathematicians the understanding that the number of bits of knowledge required to make a pencil is mind-bogglingly large as well as scattered across an almost equally large number of human beings.

This mathematician might also have the tools and skills to demonstrate mathematically that when these bits of knowledge are acted upon in just the right way – and in just the right temporal sequence – that one result will be that particular combination of inputs that we call “pencils.”

But even for that small handful of people who can understand these equations, any such mathematical demonstration would, by itself, convey nothing of the marvelousness of the market processes that daily supply humanity with pencils.

We’ve seen plenty of examples of such stories before and beyond Read’s famous essay, of course, from the earlier metaphors of Adam Smith and parables of Frederic Bastiat to the present-day poetry of Russ Roberts and graphic novelization of Amity Shlaes.

Here at Acton, we also embrace the power of story—whether seen in For the Life of the World, which reimagines economic exchange through lenses of wonder, hospitality, and creative exchange, The Good Society curriculum, which uses a range of creative devices and stories to communicate economic and moral lessons, or the countless tales recounted in Poverty, Inc. and the PovertyCure series.

Boudreaux is speaking more specifically to “formal” economists and the discoveries to be made in economics as a science. But the rest of us have plenty of our own opportunities as well.

As we embrace our own roles as everyday economic actors and thinkers with an everyday economic witness, we can explore new narratives and develop new stories that help illustrate God’s beautiful design for human creativity and economic exchange. As workers, producers, and consumers, we can leverage the power of story to re-engage our hearts and minds and re-imagine the meaning that’s bound up in our everyday economic lives.

In doing so, we will introduce culture to the mysteries of what’s actually true. “Economics, when done well, is the telling of such stories,” Boudreaux concludes. “The stories told are not fantasies or fictional. They are…plausible. And they are fascinating!”

Image: The Forgotten Man: Graphic Novel Edition, Amity Shlaes, Chuck Dixon

Joseph Sunde

is an associate editor and writer for the Acton Institute. His work has appeared in venues such as the Foundation for Economic Education, First Things, The Christian Post, The Stream, Intellectual Takeout, Patheos, LifeSiteNews, The City, Charisma News, The Green Room, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.