Let's forget the pencils. Let's focus on my example of LCDs for computers, CPUs and Netbooks.
Is the computer geek an endangered species in a socialist world?. I hope not.
Competition and diversity of goods should be encouraged, even if done by cooperatives and if goals and broad objectives are centrally planned... innovation should and product diversity should be encouraged on the small scale.
The "market" has already proved that this works really well, for instance with geeks taking existing hardware (with open source / GPL firmware like the Linksys wi-fi routers) and modding it at will and creating new uses/features for the device (mesh networks, embedded servers, etc).
In other words, what I envision in a socialist world is the large scale innovation (semiconductors etc) done by the governments (just as happens today but the research not tied to the Pentagon contractors, and arriving faster to the common man), and low-scale innovation (the packaging of those chips into useable goods) done by smaller cooperatives. which would take the place of the current Dells, ASUS, etc
In other words, we already have hardware with open source software (embedded Linux). What is needed is things to go one step further, towards open source hardware (the chip blueprints, the circuit board designs, etc).
In that sense the OLPC project has done that recently... hoping that giving out the design royalty free, Chinese or other Asian manufacturers might produce units for use in their countries
If I'm writing gibberish just say so. ;) FC