Tuesday, March 15, 2016

God, Socialism, Evolution and the invisible hand of the Market

I've been asking myself why altruistic people of good will, social and ecologic consciousness can't get together to design an economy which will meet their needs with minimal harm to everyone else. Or rather, why can people coordinate their lives in a romantic couple, coordinate a representative democracy which touches lightly on economic matters in market economies and more strongly in socialist economies, but are not even willing to try to coordinate an economy on a village scale?

Part of the issue is technological: a true local economy, meaning one that goes beyond local ownership into local production, consumption and planning, requires creation of a local technology infrastructure. It is a feature of our times that most people are not competent to create any infrastructure, communicate civilly and coordinate activities with anyone (unless they are forced to by their job or the government). Specialization and automation in work, technology which has gone beyond enhancing human potential to getting people addicted to crutches, an entertainment industry which has sapped people's creativity and initiative and an educational system which has dumbed them down are only partial causes. All of these have in common a global economic market. The market has been successful in optimizing production and cost efficiencies, but a failure in meeting most other human needs including the need for intimate, cooperative, altruistic community, edifying, creative work, ecological stewardship, stable commons and the ability for small groups to politically and economically self organize. Similar qualities can be ascribed to Evolution--it is good at optimizing reproductive fitness and whatever correlates with it in a specific environment, but not necessarily good at meeting human (or environmental) needs that go beyond reproductive fitness. Those would need to be explicitly put in to the optimization attempt and not left to God, the Holy Spirit, the Market or Evolution, unless we are part of those transcendent forces, instead of their helpless children. Not that any of these transcendent forces could not be involved too. For the record, I believe there is a benign and intelligent ground of being that we can tap into, that the Market can help coordinate economic activity and that evolutionary forces of mutation, selection, reproductive isolation and drift operate on levels equal to and higher than genes (such as organisms, groups, species and ecosystems), AND we are not helpless children, rational egotists or myopic selfish genes, having the potential to at least partially shape our destinies through collaboration, creativity, foresight, and compassion.

There are people who see not just the successes, but also the failures of the impersonal global market and the impersonal large scale state-run political systems which have gone by various names such as social democracies, socialism and communism. For example, there are homesteaders: people who are quite capable with basic material skills--growing food, building and maintaining houses, tending animals. They are not against trading with their neighbors or gifting with them. But even they seem to have a knee-jerk reaction to sitting down with neighbors and planning who will produce what, based on skill, affinity and need. They would rather supplement their own production by getting a job in town, selling goods to wealthy people they don't know through the internet, or services to wealthy  people they get to know who pass through leaving green energy behind (procured from the global economy by the usual means), and buying on the internet or through a food coop from far away producers they don't know who may have ecologically questionable practices and who can only survive by interacting with the global economy. This is all fine as an interim strategy for making ends meet, but not as a long term vision of creating an alternative to the global economy.

Part of it no doubt comes from not wanting to produce in large volumes, with the associated gas-guzzling machines, and realizing that small output, home craft production can't compete with industrial production which can supply many goods more cheaply with a small marginal cost. Part of it comes from fear of collaboration based on previous failures of intentional communities, and the rugged individualism characteristic of the US. But I think there is something deeper going on here, because both these problems have solutions. In the case of cost of production, it doesn't matter if the cost is higher because there are also higher benefits, i.e. addressing those human and environmental needs that the market is unable to address. And in the case of the problem of collaboration, there have been many communication and organizational tools developed to deal with it, as well as religious calls for humility and altruism. There are other problems intentional communities face such as the problem of freeloaders and the problem of the Tragedy of the Commons, both of which have been solved by groups that happen to follow the 8 principles Elinor Ostrom distilled in her empirical research. These principles are also followed to some extent by groups of cells that successfully form organisms or animals that form herds or superorganisms like hives--nature has solved these problems already.

To understand what might be at the root of the fear of village-scale economic coordination, we take some inspiration from Max Weber's Protestant Work Ethic. Weber realized that capitalism arose in protestant countries because the kind of work that merchants and factory workers did was consistent with the belief in the Chosen being chosen based on their economic success. Whereas in both the eastern and catholic church-controlled economies, humility and obedience were rewarded and work was correlated with the willingness to suffer (toil was punishment for eating that apple from the Tree of Knowledge), in the protestant cultures, self-promotion, initiative and enjoyment in work were prized and indicative of salvation. (Before Catholicism and the eastern church in Europe, and in other places even after Christianity, economic activity was coordinated by local markets and the political and military machinery of empires or local tribes).

Beyond the nature of work (and Max Weber's ideas), Protestantism also influenced the kind of associations that people would form to coordinate economic activity. Whereas the (mainstream Catholic and Eastern) Church was both the intercessor between God and Man and the coordinator of economic activity, with the rise of Protestantism there was no longer any need for an intermediate between God and Man, and in parallel for a human coordinator of an economy. God however was too lofty to concern himself with coordinating economic matters and people too greedy, selfish and sinful to do so. So a replacement for the Church had to be found, one who was as benign, all powerful and invisible (though not necessarily in his effects) as God.

In steps Adam Smith, offering us the Invisible Hand of the Market. To interpose any human organization would be acceptable to the secular descendants of mainstream catholic and eastern orthodox cultures, but not protestant. Also, mystical Christians (who are usually catholic, but sometimes protestant) would dislike any attempt to create a system of organization that interferes with the holy spirit, effectively barring any attempt at coordinated collective action beyond the simplest levels (such as meeting for worship or protest).

Another transcendent institution beyond human scale would arise to replace the Church and God in managing human economic affairs that would be acceptable to most catholic descendants and those protestant descendents who did not fully embrace the Market. That would be the nation-state government, adopted by the Scandinavian countries.

The rise of the Corporation can be understood in this view by considering that the Corporation is not meant as an intermediate between Man and the Market, but a facilitator of that relationship, just like protestant churches were and are facilitators of the relationship between God and Man. The corporation is not about coordinating economic activity unless it has a monopoly, which is blasphemous to the Market. It becomes another rational, selfish actor, competing with other such actors, which through the Invisible hand and despite all evidence to the contrary, magically ensures the greatest good. The Protestants and mystical Catholics who are willing to leave economic coordination to those transcendent powers above are sometimes willing to criticize corporations, but in the end are afraid to take over what the corporations produce, making their criticism ineffectual. I don't mean this in an individual way, but in a collective way, that through organizing a local economy, someone or some group in that economy can produce what the corporation formerly produced in the global market, but for the local market or the needs of the local people. This is obviously not possible with everything, but rather than copying the production patterns of the global market, a local socialist economy can decide what the individuals in it really need and produce accordingly.

It should be added that these classifications do not necessarily refer to religions, but to the cultural descendants of those religions, whether they keep the religious beliefs or just the cultural remnants of those beliefs. Jews, like mainstream Catholics, would not shy away from socialism at whatever level, though they would pragmatically also see the advantages of the Market (especially when they have a sub-monopoly like they did when usury was forbidden to everyone else). I don't know enough about other religions and cultures to comment on how they would perceive socialism on a local or global level. I suspect there is no conflict between socialism on the one hand and Buddhism, Islam, Hinduism and other polytheistic religions on the other.

Going beyond the religious roots of economic modes of organization, we can ask what are the psychological roots that lead people to wanting God or the Church (or the Market or the State or Evolution) to take care of them? There is something self-serving, and privileged about leaving economic coordination to God, the Market or the Holy Spirit. Most of those who resist economic organization beyond the family unit and invoke God, the Holy Spirit or the Market in doing so usually have money, land and other means of production. They are all too willing to engage in charity, but not to empower other people (and sometimes themselves) to produce what they need by sharing their money, land, tools or skills.

There is also something psychologically immature about leaving economic coordination to the transcendent powers in the title of this essay, just like with big government on a national or higher scale.  When one is psychologically immature, one's parents know better what one needs than oneself. But maturity requires us to take that burden from them and take it upon ourselves. It is interesting that this state of infantilism brought about by protestantism makes any but the most trivial collective action impossible, with the exception of creating other transcendent powers. When people are willing to engage in political (democratic) socialism a la Scandinavian socialism or Bernie Sanders (or really any mainstream politicians), whereby decisions concerning the welfare of most people are made by a few planners/legislators/politicians, it's similar to the other forms of immaturity (like leaving it up to an external God or the Market), leaving our welfare to a parental figure. Parents can take care of their kids, but how can such a large, impersonal political system satisfy the varying needs of most people? Only if people were like bees or ants it could, but even a bee or ant colony has a maximum viable size after which it splits into two colonies. The scale is totally wrong. The right scale is one where people personally know everybody in their economy, because only that way can they respond appropriately to everyone's needs. Even at the smaller scale of one of the small states in the US, it is too big. Indeed, economic needs would better be satisfied by global capitalism, but even better by local socialism or even local socialism with a free market component. But if we can't make local socialism work (beyond the family unit), what hope do we have in making it work on a national scale?

The objections to socialism that say it suppresses initiative and fails to satisfy the variability of human needs which happens with centralization and burocratization are spot on, but they do not apply to small scale organization among neighbors. Max Weber's objection that there is no universal method for a rational calculation of value is also inapplicable to small scale socialism. People can determine relative value based on rational and non-rational means which are not universal, but vary with both location and time. For example they might determine value based on hours of labor and material costs. Or they might decide in advance what they need and allocate production based on people's enthusiasm, skill and gifts, as well as time required for production. In fact, they might let the local market decide value, but still plan what they will produce in a coordinated fashion, working it out among themselves instead of through the intermediary of the market. 

If a group of people get together to plan their local economy, there are still market/evolutionary forces at work, but in addition to those there is the newest one which is our foresight.  For the fear of interposing human organization between God and Man present in protestant culture, there is a corresponding fear of interposing human organization between Evolution and Man. It is as though the other forces of evolution don't continue to exercise their effects in the face of planning and foresight. Both world views make any but the most trivial collective action futile to attempt.

Take Esperanto, for instance. Esperanto was the product of Reason and Foresight, but also subject to evolution. It just was selected against for reasons that are easy to understand in retrospect, and probably could have been predicted a priori (e.g. competition from other pre-existing languages). It doesn't mean that we shouldn't try anything new with economics, in fact we should try many experiments, and not be true believers in the outcomes of any one such, because like mutations in speciation, most will be selected against. Otherwise we are stuck with the status quo, which selects for sociopaths as business leaders, destroys community and ecosystems and desacralizes work. And yes, most people do not have the foresight, wisdom or means to try anything radically new, so it is up to those that have all 3. And sometimes instead of Esperanto, people  can produce American Sign Language (ASL).

There is a valid concern (encapsulated in the story of the tower of Babel) among both Catholics and Protestants that egotism (hubris) will ruin any attempt at collective action. This is why Quakers encourage getting in touch with the inner voice of divinity in their meetings. I invite them to extend that technique towards economic organization. Similarly, there might be a concern  among evolutionists and Market Fundamentalists about Reason and Foresight for the collective good being apart from Evolution or the Market and thus being doomed in organizing economics or other aspects of human culture. I invite them to view Reason and Foresight as part of evolution and the Market, while acknowledging their limitations. And I invite all supporters of big government
to learn about hubris from the Christians and to try organizing the economy on a village scale rather than the scale of the state.


  1. It sounds like we have been thinking alike lately. Maybe the current political atmosphere is lending itself to such thoughts. This: "The scale is totally wrong. The right scale is one where people personally know everybody in their economy, because only that way can they respond appropriately to everyone's needs."

    This all unavoidably makes me think about the Twin Oaks Community. Definitely successful. Definitely the right scale. You have the principle correct.

    1. Twin Oaks is a step in the right direction. It is still heavily dependent on the global economy though, with all the nastiness that implies. Also, it is not only socialist in its planning, but in the work that people do. Instead of 100 different industries with a few people participating in each, it has about 5 industries with most people participating. It stifles initiative and creativity.

  2. Hi Iuval Clejan,

    What an insightful essay! Your commentary on the psychological immaturity fostered by protestantism interested me. My father is Jewish, my mom is Unitarian of Danish stock. I identify as a Jew and have noticed that the majority of my close friends come from either Jewish or Catholic backgrounds. There is something I find profoundly other about the desire for an authority figure to define local conditions, and hence, I feel a large degree of remoteness from the entire framing of economic and political discussions. With Jews and Catholics I tend to find more of a shared understanding and perspective which is more focused on personal ethical action in the contexts of community.

    In the Decline of the West Oswald Spengler discusses 'Socialism,' which he defines broadly as any late Western Civiliaztion based philosophy that says "thou shalt." He notes that in this way Jesuits are identical to Marxists. Spengler considers this to be the ultra-materialist manifestation of the basic religious impulse of Western Christianity, analagous to Stoicism in Greek culture and Buddhism is classical India. It seems that westerners perhaps feel an intense impulsion to group themselves in terms of maximizing the thrust of a collective "thou shalt." Perhaps this is another of the features of the times which you so astutely enumerate in the beginning of your essay, and similarly to lack of skills, ability to communicate civilly and coordinate, it serves to block potential movements towards local planning towards self-sustainability.

    I wonder if the adaptive succesor cultures will have as one of their features an emphasis on the sort of commonsense planning that may elude the capacity of American culture

    1. Thanks Violet for your insights as well. Neither "Thou Shalt" on a grand scale, nor the rebellion to that mentality known as rugged individualism helps local collective planning. Do you find that you are able to plan economically (meaning exchange of goods and services) in a way that promotes more local community reliance and less dependence on the global economy with your Jewish or Catholic friends? Because if that is the case, maybe I need to find more jews and catholics too. The catholic worker couple neighbors are probably the most trustworthy people around here I know as far as being able to commit to a plan.