Global Intentions

Before discussing the Invisible Hand, here is a brief summary of my top concerns. They come down to three main areas: Environment, Resources and Social Arrangements. I do not put any of these before any other, although many of the problems involve a properly functioning, just economy. They are all beyond urgent, probably all in crisis.

The most pressing Environmental problem is global climate change. None of the biggest sinners in this category are doing much about it. Who are they? The United States, China and, way behind, Europe, Japan and India. Europeans and Japanese are very concerned about this problem and willing to do something about it. India is not a major cause of trouble YET, probably because its energy use still hasn't reached the super-exponential stage, YET. (In other words, it could become a big problem.) That leaves two countries with the biggest problems, both of which are unwilling to do much about global climate change for different reasons. China's growth might be stalled, and the American economy depressed, if the use of carbon-based fuels is restricted. Whether the Invisible Hand should be allowed to operate on this problem is a major question.

Why is global climate change the most pressing problem? Because it is very likely irreversible: once started, it is beyond even our greatest powers to stop it. Steven Chu, Director of Lawrence Livermore Laboratory gave a lecture (UC-TV 2005: "Biology and Physics") that included a computer simulation of the effects of runaway global warming within the next century. Most of the United States West of the Appalachians and East of the Sierra turn into a desert hotter and drier than the Sahara. Central Canada's fertile plains in Alberta, Saskatchewan and Manitoba will also turn into deserts, as will most of California's Central Valley. In short - Christians note! - the Bible Belt and Red States will become uninhabitable. North America will not be able to grow sufficient food to support anything like its current population. In that scenario, the poor soils of Canada's Northwest Territory and U.S. southern Alaska will have to become the Bread Basket. All that within this century!

There is an interesting political consequence of the desertification of North America. A majority of U.S. States will become uninhabitable within the lifetimes of today's preschool children. If the present Federal structure is retained, a few sheiks who can afford to live in those deserts will select a majority of the Senate and Electoral College and a large minority of the House. The United States will be ruled as is Saudi Arabia. The only way to avoid such a fate is to amend the Constitution and make State boundaries and representation subject to change.

In addition to global climate change, there are serious problems of habitat destruction for thousands of species. Biologists have no idea just how tightly linked the world's species are to each other. This is a massive problem which requires intensive and extensive work to figure out. Conservatives mock environmentalists' preoccupation with snail darters and the like, ignoring the likelihood that the fate of those Tennessee fish may be indicative of their own future.

Closely related to the Environment are Resources which, I think everyone knows, come from the Environment. There is already a serious global shortage of potable water. In addition, in many countries people are stripping the woods for fuel. (Wood burning is one of the worst polluters, worse than "clean coal.") When the environment is seriously degraded, it is no longer fertile, thus reducing the food, fuel and fiber that can be grown, and all the animals that are supported by those plants. In order to provide everyone with clean water, a healthy diet, adequate clothing and housing and the other materials (furniture, crockery, utensils, transport etc) we use in our daily lives, natural resources have to be assiduously and carefully managed. In other words, taking care of the environment and meeting people's needs for resources are pretty much the same thing.

What remains are the proper Social Arrangements, which brings me to the Invisible Hand (or free markets, ultra-capitalism, Capitalism, etc).  Proper social arrangements would, I believe, distribute food, water, clothing, housing, medical care and education in an equitable manner to everyone. In a just society, there are few or no poor, but there may be some rich. Richesse is something to be allowed and tolerated, once everyone is provided for. In other words, societies that distribute goods and services in a sufficiently unequal manner, so as to create poverty and want, are not just. I don't think Capitalism can achieve a just society, so I oppose it.

Getting to the starting question, why is justice impossible or not likely when the Invisible Hand regulates? What's wrong with free markets?

Let me concede that, for species lacking intelligence, the free market - the law of the jungle - is all that is available. If there is little or no ability to foresee consequences, and no ability to plan beyond the moment, then the creatures of nature will do what comes naturally. While objection might be made that the jungle is not exactly what the phrase "free market" intends, the jungle is a close approximation. Natural processes have brought living organisms into a tense balance of terror with other living organisms and the inorganic environment. Darwinian evolution succeeds in nature because Earth's organic beings adapt. (It did not have to be so, but we are the result.) In the jungle, all problems are solved one way or another, within the finite limits of the local ecology in every case. ("Solutions" include starving to death, getting wiped out by an asteroid, getting eaten or living another day.)

I hope I do not have to argue this basic case too much farther, as I think it obvious that the jungle parallels the free market in letting things happen "naturally." The forces of nature or the gods determine outcomes. In the free market/jungle, no player has ultimate control (monopoly). Distribution of goods and services depend on skills (adaptation) and abundance (scarcity). In the free market/jungle, there are no humanistic values. It matters not that some die and others live. There is no allowance for disability or lack of skill. The free market/jungle is coldly Malthusian.

Living business people implicitly and frequently recognize my characterization of the free market, when they describe it as "Darwinian." They often point out that the purpose of business is to make money (survive), not to provide people's needs out of compassion. Business leaders have always resisted paying higher wages and providing benefits, as they believe those things are individual responsibilities. Business is only concerned to provide products and services to consumers (willing or not), thereby benefitting the operators (management) and investors (owners). There is not a natural, built-in connection between worker's allowances and business success, despite Henry Ford's famous assertion that workers should be paid enough to buy the product. If there were such a connection, it would have been manifest long before the 20^th Century. The key point in a competitive market is 'evey man for himself;' i.e., the raw will to survive. That has nothing whatever to do with any kind of justice, because, at root, justice is a value, not a fact.

So, to live under the conditions of a free market is to assume a value-free environment. Now, one might say that the will to live is a value, a good in itself. The difficulty with that assertion is that it makes values of the everyday acts of plants and animals, whereas it is generally thought that values are the result of choice. In other words, the will to live, to reproduce and other organic functions are built-in mechanisms. Business could as well hire chimpanzees or bees as people, if it meets its purposes. In fact, we have had a basic industry during the last 10,000 years that does just that: agriculture. We may love our plants and animals, but it is not usual to attribute to them the holding of values, such as a desire for social justice or the principle of equality.

The foregoing should sufficiently distinguish questions of value from what is decided by the free market, except for another common confusion. Isn't money valuable? Don't traders place values on what they exchange? Of course they do, but economic value is not the same thing as ethical or other values. An art lover might have strong feelings about a Picasso or Rembrandt painting, but that doesn't automatically translate into a monetary value. Art is often sold at auction to the highest bidder, who is presumably motivated by someone's love of art. If no one loved art, the work would have little or no monetary value, but the buyer need not love art. People often buy works of art for non-aesthetic reasons, such as investment, social display or trophy hunting. While money (or barter or other transaction media) expresses some sort of valuation, that valuation is at most relative in nature. The price reflects the value of one thing in terms of another thing. It does not reflect any intrinsic value. Economic value is entirely intentional; i.e., it depends on the whims or physical needs of buyers and sellers, not on what is transacted. The price of a meal depends on the hunger of the tiger.

Now, I suppose one might argue that social justice can be bought and sold in the same way as meat and potatoes. After all, people contribute to charities for immaterial reasons, without expectation of immediate reward. The difficulty with that argument is that History has few examples of social justice being bought. Genocide and enslavement of conquered peoples were the norm until very recent times. The Roman treatment of Spartacus' revolutionary followers was not unusual. The French aristocracy were treated to revenge at the Guillotine after the Revolution succeeded. The American Civil War is one of the few examples of a major effort being made on principle. The Welfare State arose in the late 19^th century either in spite of Capitalism or out of fear of socialist revolution. The American New Deal came about as a desperate effort to avoid total chaos and a possible Communist revolution. It is often said FDR saved Capitalism in America. These and many other examples suggest that value-driven policies are (at least) usually at odds with free markets and Capitalism. During my lifetime, that has been the commonly expressed view of Conservatives and Capitalists. Thus, empirically, investigating the possibility that social justice or other values can be bought doesn't seem to be a rewarding effort.

If there is a disconnect between ethical or "human" values and free markets, even allowing that there are economic values, that in itself suggests the opposition of these different enterprises. The facts seem to support conflicting mechanisms, because usually non-market forces have been used to achieve social benefits. We have unemployment insurance, Social Security, mandatory vacations, health care benefits, working hours, overtime pay, workplace standards and many more laws and institutions intended to deliver demanded social benefits. These benefits have only rarely been awarded to ordinary people without a threat or struggle. Many people have died in struggles to Unionize, mainly seeking to negotiate employment conditions.

Thus, History shows that free markets on their own don't benefit ordinary people. While it is possible that free markets could provide social justice, in fact they have not. To the extent that social justice is valued, markets have to be regulated by external mechanisms. Those mechanisms have included government, strikes, rebellion and revolution. Only rarely has goodwill operated in the absence of desperation. That is the very first reason the Invisible Hand cannot be left to its own, mysterious devices.

There is a second, and even more important reason for today's people, to abandon belief in, and reliance on, an Invisible Hand. That reason was already foreshadowed when I discussed global climate change. Free markets do not anticipate slow acting or random events. An asteroid destroyed the dinosaurs and a lot of other living things 65  million years ago (MYA). Had those creatures been sufficiently knowledgeable about asteroids, they might have avoided their fate. But nothing in the free market of an Earthly jungle gives warning of happenings elsewhere in the solar system. While a "free market" could be constructed to take account of such events, that would require intelligent non-free intervention. In other words, free markets depend on the actions of huge numbers of miniscule atoms to arrive at their usual results. The operation of free markets is always local, not global. That is why economists frequently model the stock market or other markets as a Brownian motion. Those same models usually fail to predict booms and busts.

What should be obvious is that markets don't work outside their scope. There is no Earthly economic market which takes account of chaotic global climate change, partly because the results are chaotic, not regular. Markets do not resolve problems of species extermination, bad water, polluted air, deforestation, peak oil, overpopulation and a huge number of other things now happening to us. Those problems are only resolved when, in the first instance, they are recognized as problems, which requires extra-market intelligence. The solution to problems like clean water requires purposeful  intervention in human activities; it doesn't happen all by itself. (Remember the burning Ohio River?)

The second, important and urgent reason for putting aside appeals to an Invisible Hand is simply that it doesn't work and the potential catastrophes are too great. We must take control of our lives and our destiny.