The Free Market as a Double Lie

As social animals, humans live and die by the success of our groups. This raises a dilemma. What’s best for the group is often not what’s best for individuals within the group. If you’re surrounded by a group of trusting individuals, it’s best for you to lie and cheat. You’ll increase your relative fitness. And in evolutionary terms, that’s what matters.

Given that selfish behavior is often advantageous, why aren’t more of us liars and cheaters? One reason, paradoxically, is that we lie to ourselves. We tell ourselves that what’s best for groups is also what’s best for individuals within the group. I’ll call this the noble prosocial lie.

Propagating this noble lie, I believe, is one of the principle roles of ideologies. A good ideology convinces individuals that selfless behavior is in their self interest. This promotes prosocial behavior, making groups more cohesive. And since cohesive groups tend to beat out incohesive groups, the noble lie tends to spread.

Given the benefits of equating altruism with self interest, you’d think that all ideologies would do it. Yet some do the opposite. They promote selfish behavior as good for the group. I’ll call this the Machiavellian lie.

Now here’s the paradox. The Machiavellian lie should be caustic to social cohesion. So you’d expect that group selection would kill it off. But for one Machiavellian lie, that’s not what happened. Instead of dying out, this lie has thrived. In fact, it’s become the dominant ideology of our time. What is it?

The belief in the free market.

Free-market ideology claims that to help society, we must help ourselves. If we all act selfishly, the thinking goes, the invisible hand will make everyone better off. So here we have an ideology that promotes selfishness in the name of group benefit. It’s a Machiavellian lie that should be caustic to social cohesion. And yet free-market thinking has beat out many other ideologies. How can this be?

Here’s what I think is happening. Free-market ideology, I propose, is a double lie.

First, it’s a lie in the sense that its central claim is false. Acting selfishly does not maximize group well being. Modern evolutionary theory makes this clear. Second, and more subtly, free-market thinking is a lie in the sense that it does not lead to greater freedom and autonomy. Quite the opposite. The evidence suggests that free-market thinking actually leads to greater obedience and subordination. The spread of free-market thinking goes hand in hand with the growth of hierarchy.

So the free market, it appears, is not about freedom. It’s about power. Free market thinking is successful, I argue, because it uses the language of freedom to cloak the accumulation of power.

Group interest vs. self interest

We’ll begin our journey into free-market thinking by dispelling its central concept. The selfish behavior of individuals is not magically good for the group. Modern evolutionary theory makes this clear.

According to the theory of multilevel selection, there is always a disconnect between the interests of a group, and the interests of individuals within the group. This disconnect appears odd at first. After all, isn’t what’s good for a group also good for individuals within the group?

The answer is yes and no. Yes in the sense that when a group succeeds, that’s good for everyone in the group. But no, in the sense that evolution doesn’t care about absolute fitness. It cares about relative fitness. Sure, the best strategy may be for individuals to cooperate in groups. But in relative terms, it’s best for individuals within the group to act selfishly. They’ll increase their fitness relative to others in the group. And in terms of the spread of genes, this relative advantage is what matters.

So for groups to be successful, they must suppress the selfish behavior of individuals. There are many ways of doing this, but the most common is probably punishment. To encourage altruistic behavior, groups punish self-serving individuals. Human groups do this. Animal groups do this. Even cell groups do this. Right now your immune system is killing off deviant cells (nascent cancer) that would, if let alone, kill you.

But while punishing deviance is universal to all social organisms, humans have developed a method for suppressing selfishness that is unique. To promote prosocial behavior, we harness the power of ideas. We lie to ourselves.

Altruism through self deception

When it comes to promoting altruism, we don’t tell ourselves the truth, which is this: group-serving behavior involves sacrifice. To be selfless, you must lower your relative fitness from what it would be if you were selfish. Few ideologies acknowledge this truth. Those that do don’t last long.

Consider the failed ideology promoted by the French philosopher Auguste Comte. In the mid-19th century, Comte argued for a new ‘Religion of Humanity’. Its goal would be simple: to promote altruism. The religion would celebrate putting the needs of the group above self interest. Here’s how Thomas Dixon summarizes Comte’s thinking:

The “great problem of human life” for Comte was how to organize society so that egoism would be subordinated to altruism. The aim of the Religion of Humanity was to solve this problem through social organization and individual religious devotions. [1]

At first glance, Comte’s religion seems unremarkable. Just like most religions, it celebrates selflessness. Why, then, did it fail? A closer look reveals a key difference. Comte’s ‘Religion of Humanity’ portrayed altruism as a win loss — a win for the group and a loss for the individual. Successful religions, however, portray altruism as a win win. They claim that altruism is good for the group and for the self.

You can probably see why this noble lie is more potent than Comte’s truth. Few of us are completely selfless. So there’s no better way to motivate prosocial behavior than to appeal to our self interest.

Biologist David Sloan Wilson argues that this noble prosocial lie is part of most successful ideologies. It’s something that, in evolutionary terms, is unsurprising. Ideas that are successful need not respect the truth. Here’s Wilson:

Groups governed by belief systems that internalize social control can be much more successful than groups that must rely on external forms of social control. For all of these (and probably other) reasons, we can expect many belief systems to be massively fictional in their portrayal of the world. [David Sloan Wilson in Darwin’s Cathedral]

Most ideologies, it seems, have converged on the same ‘massive fiction’. They align altruism with self-interest.

In his book Does Altruism Exist?, Wilson further analyzes this deception using the example of the Hutterites. The Hutterites are a communal sect of protestants who live in Western Canada and the United States. As communal livers, the Hutterites prize group-serving behavior. But they don’t portray this behavior as loss for the individual. Instead, the Hutterites believe that what’s good for the group is also good for the individual.

Figure 1 shows Wilson’s analysis of Hutterite beliefs. Here he plots moral values on a two-dimensional scale. The horizontal scale ranks the benefits of a behavior to individuals. The vertical scale ranks the benefits to others (i.e. the group). According to the Hutterite worldview, actions that are good for the group are also good for individuals. Conversely, actions that are bad for the group are also bad for individuals.

Hutterite world view
Figure 1: The Hutterite worldview. This figure shows David Sloan Wilson’s analysis of Hutterite beliefs. [Source: Does Altruism Exist?]

The Hutterite worldview shows the noble prosocial lie in action. Hutterites encourage prosocial behavior by portraying it as best for the individual. It’s easy to see why they’ve adopted this worldview. Portraying altruism as a win for both the individual and the group is a powerful motivator for group cohesion.

In selfishness we trust

Although rigorous research has yet to be done, I suspect that most ideologies are similar to the Hutterite belief system. If we plotted them on Wilson’s 2D scale, we’d find that behaviors that are good for the group are portrayed as good for the individual.

Interestingly, free market thinking is no exception to this rule — at least at first glance. Using the beliefs of Ayn Rand as an example of free-market thought, David Sloan Wilson finds something surprising. Although rabidly anti-communal, Rand’s worldview appears similar to the Hutterites.

Figure 2 tells the tale. As with the Hutterites, Rand’s worldview contains no gray areas. All values are either good for both individuals and groups, or bad for both individuals and groups.

Ayn Rand’s world view
Figure 2: Ayn Rand’s worldview. This figure shows David Sloan Wilson’s analysis of Ayn Rand’s beliefs. [Source: Does Altruism Exist?]

A closer look at Figure 2, however, reveals a gaping difference between Rand’s libertarianism and Hutterite communalism. The Hutterites portray prosocial behavior (things like community and mutual help) as good for the individual. This is the noble prosocial lie. But Ayn Rand portrays antisocial behavior (things like egoism and selfishness) as good for the group. This is the Machiavellian lie.

According to evolutionary theory, Rand’s Machiavellian lie ought to be caustic to group cohesion. It promotes (rather than discourages) selfish behavior. That’s the opposite of what successful groups must do. So why, then, is this free-market lie so pervasive in modern society?

One possibility is that free-market thinking is caustic to group cohesion. This means that the spread of libertarian values is slowly undermining social bonds. If this is true, it’s only a matter of time before society either (a) finds a better ideology; or (b) collapses under the atomism of free-market thought.

This reasoning, I admit, is my default way of thinking about the free market. But I’ve convinced myself that it’s wrong. The problem is that it takes the claims of free-market ideology at face value. Free-market ideology claims to promote egoism and self interest. So you’d think that adopting these values would lead to an atomistic, antisocial society. This is logical, plausible and (I believe) wrong.

The problem is simple. If ideologies are ‘massive fictions’ (as David Sloan Wilson argues), we shouldn’t take their claims at face value. What an ideology claims to do will be different from what it actually does. This divergence of claims and actions, I believe, is why free-market thinking has been so successful. Free-market ideology claims to promote autonomy and independence. But in reality, it promotes obedience and subservience. So yes, free-market thinking is a lie. But it’s not the lie you think it is.

Altruism through power relations

On the face of it, free-market thinking appears to discourage altruism. But what if it actually motivates altruism?

To make sense of this latter claim, we need to rethink what we mean by ‘altruism’. We usually think of altruism in terms of acts of kindness. I’m altruistic, for instance, if I give money to the poor. But there are other forms of altruism that have little to do with kindness. In evolutionary terms, altruism is any behavior that benefits the group at a cost to the individual. Although we don’t usually think of them this way, power relations qualify as a type of altruism.

In a power relation, one person submits to the will of another. Bob submits to Alice. By doing so, Bob sacrifices his own fitness for the benefit of Alice. That’s altruism. But if Bob’s subservience only benefited Alice, it would be an evolutionary dead end. The Bobs of the world would die out, having given all their resources to the Alices. Since power relations have not died out, something more must be going on.

Although power relations are one sided, they can (under the right circumstances) benefit both the master and servant. This benefit happens when groups compete. By concentrating power in a single leader, a large group can act cohesively in a way that would otherwise be impossible. If this cohesive group beats its competitors, the altruism of subordinates is rewarded. For an in-depth discussion of this principle, see Peter Turchin’s book Ultrasociety. (The caveat here is that a despotic leader can use their power to hoard resources, wiping out any benefits to the rank and file. That’s something I discuss here and here.)

Justifying power

So power relations involve altruism. What’s that got to do with the free market? At face value, nothing. Free-market ideology claims to stand for autonomy and independence. These values are the opposite of what’s needed for power relations (submission and subservience).

We should not, however, take the claims of an ideology at face value. Yes, free-market thinking appears to promote autonomy. But what it actually does, I believe, is cloak the accumulation of power. Free-market thinking does covertly what other ideologies do openly. This covertness may be why free-market thinking is so potent.

Looking at ideologies of the past, you’ll find that they openly preach servility and subservience. In other words, they unabashedly promote power relations. The Hutterite religion, for instance, preaches ‘obedience’ and ‘surrender’ (Figure 1). Most other religions do the same thing. The Catholic church proclaims that the faithful must give obsequium religiosum — religious submission. Islam goes further still, having named itself after the act of submission. In Arabic, the word ‘Islam’ means ‘submission to God’.

While religions openly preach obedience, they still employ a thinly-veiled ruse. The obedience they preach is always to God. Fortunately (for the rulers), God doesn’t issue orders directly. Instead, he has a habit of speaking through the powerful. And so by preaching a heavenly order, religion inevitably justifies an Earthly one.

Unlike religion, however, free-market ideology doesn’t preach obedience or submission. Quite the opposite. It preaches freedom and autonomy. How, then, can free-market thinking promote power relations? It’s simple. The ‘freedom’ of the free market is actually a form of power.

Power as ‘freedom’ [2]

On the face of it, freedom and power seem to be opposites. But if we look closer at the two concepts, we find that they’re related. To see the similarity, let’s do some quick moral philosophy. Freedom, as I see it, has two types. There is freedom from, and there is freedom to.

‘Freedom from’ is about restrictions. Your ‘freedom from’ restricts what other people can do. If you are free from discrimination, for instance, then other people aren’t allowed to discriminate.

‘Freedom to’, in contrast, is about power. If I’m free to speak my mind, I have the power to say what I want. Admittedly, free speech is a meager form of power. But ‘freedom to’ can be expanded until it is unmistakably about power. The key is to use ‘freedom’ as a ruse to command people.

Here’s an example. In free-market America, Jeff Bezos is ‘free’ to run Amazon. But this use of the word ‘freedom’ is doublespeak. It’s code for Bezos’ power to command Amazon employees.

This doublespeak, I believe, is how free-market thinking promotes power relations. The language of freedom provides a cloak for the accumulation of power. Feudal kings wielded power. But modern capitalists wield ‘freedom’.

Free-market speak and the growth of hierarchy

If free-market ideology promotes the accumulation of power, then the spread of free-market thinking should go hand in hand with the growth of hierarchy. So has it?

In the United States, the answer appears to be yes. As free-market ideology spread, power became more concentrated. Figures 3 and 4 tell the story. Here I use the frequency of free-market speak in American English to measure the spread of free-market ideals. I compare this word frequency to two measures of hierarchy: (1) the relative size of government; and (2) the relative size of the management class.

Let’s dive into the data, starting with the growth of government. When it comes to government, we can all agree on two things. First, governments are the opposite of the free market. They are hierarchical institutions that are designed to command and control. Second, governments are free-marketeers’ proclaimed mortal enemy.

Given these two facts, you’d think that the spread of free-market ideology would limit the size of government. But in the United States, that’s not what happened. Instead, as free-market speak spread, the US government actually got larger (Figure 3).

Figure 3: Free-market speak and the growth of US government. The vertical axis shows the relative frequency of each free-market phrase. The horizontal axis shows the size of US government as a percentage of total employment. Both axes use logarithmic scales. For data sources, see [3].

What’s going on here? One possibility is that free-market ideology is simply ineffective. This means that free marketeers are, as they claim, opposed to concentrated power. But they are powerless to stop the growth of government. All the free marketeers can do is shout more loudly — to no avail — about the miracle of the market.

Peddlers of free-market ideology would probably like this story. But I find it unconvincing. The problem is that it focuses on the growth of public hierarchy (government). But it ignores an equally important form of power: private hierarchy.

Business firms, you may have noticed, don’t use the market to organize their internal activities. They use hierarchy. Firms have a chain of command that tells employees what to do. Given this fact, the growth of large firms is as much an assault on the free market as is the growth of government. So before we claim that free-market thinking as ineffective, we should see how it relates to the growth of private hierarchy.

To measure the growth of private hierarchy, I’ll use the size of the management class — the portion of people employed as ‘managers’. Here’s my reasoning. Managers work at the tops of hierarchies. So the growth of the management class is synonymous with the growth of hierarchy and the concentration of power. (Here’s a simple model showing so.)

Looking at the management data (Figure 4), we see the flaw in the story that free-market ideas are ineffective. Yes, US government grew as free-market thinking spread. But government wasn’t the only form of hierarchy to apparently buck free-market ideals. The whole US management class got larger. So it’s not just public hierarchy that spread with free-market thinking. It’s hierarchy in general.

Figure 4: Free-market speak and the growth of US managers. The vertical axis shows the relative frequency of each free-market phrase. The horizontal axis shows the size of the US management class, measured as a percentage of total employment. Both axes use logarithmic scales. For data sources, see [3].

Given this evidence, there are two possibilities:

  1. Free-market ideology is remarkably ineffective
  2. Free-market ideology does the opposite of what it claims

I think we should seriously consider the latter possibility. Doing so, however, requires breaking with most political-economic thought. While political economists have endlessly debated the merits of the free market, few have stopped to ask — does free-market thinking actually lead to a free market? The answer, paradoxically, seems to be no.

This makes little sense if we take free-market ideas at face value. But it makes perfect sense if we treat free-market ideology as a ‘massive fiction’ — a set of ideas that does something different than what it claims. Free-market thinking is effective, I believe, but not at promoting freedom and autonomy. Instead, it promotes the growth of hierarchy and the accumulation of power.

We can make sense of this apparent paradox by thinking about who promotes the free market. Is it small business owners? To some extent, probably yes. But over the last century, the number of self-employed people plummeted (see this paper). So either this shrinking group of people shouted louder and louder about the free market, or some other class championed these ideas.

Here’s my hunch. The most vocal proponents of free markets aren’t small business owners. They’re owners of large corporations. They’re people like the Koch brothers — wealthy capitalists who are seeking to augment their power. Sure, they promote ‘freedom’ … but they don’t actually want a free market. Instead, the ‘freedom’ that corporate leaders seek is the ‘freedom’ to command. That’s doublespeak for power.

Power in the name of freedom. [2]

The power of ideas

For much of the last century, evolutionary theory paid little attention to the power of ideas. Evolution, it was thought, was mostly about genes.

Fortunately (for those of us who care about ideas), modern research is showing that this is untrue. Anthropologists Carla Handley and Sarah Mathew recently found that cultural variation between human groups is far greater than genetic variation. Put simply, this means that ideas matter. What we think probably affects our behavior more than our genes.

Economists, for their part, have always recognized the power of ideas. But they’ve done so in a peculiar way. Among economists, ideas go by the name of ‘preferences’. Each individual, economists claim, is endowed with a set of preferences that completely determine their actions. Given your preferences (which are fixed), you act in a way that maximizes your utility. Human behavior explained.

Or not.

There are two big problems here. First, economists assumes that we know our preferences. But this isn’t always true. Evolution often produces what philosopher Daniel Dennett calls ‘competence without comprehension’. An organism can be competent at surviving without knowing what it’s doing. It’s called instinct, and it leaves no role for conscious ‘preferences’.

Second, economic theory leaves no role for self deception. A utility-maximizing agent can’t have preferences that are against its self interest. That would contradict the premise of the model. In contrast, modern evolutionary theory makes clear that our ideas can be delusional. In fact, we expect a disconnect between ideas and reality.

The reason is that human life is marked by a fundamental tension. We are social animals who compete as groups. For our group’s sake, it’s best if we act altruistically. But for our own sake, it’s better to be a selfish bastard. How to suppress this selfish behavior is the fundamental problem of social life. [4]

The solution that most cultures have hit upon is to lie. We convince ourselves that prosocial behavior is good for the self. Oddly, however, free-market ideology seems to buck this trend. Rather than preach the merits of community and brotherhood, it preaches the merits of selfishness and greed. How can that be good for the group?

It’s possible that it isn’t. Free-market ideas may well be toxic to groups. But there’s another possibility, one that I think we should take seriously. The alternative is that free-market ideas do promote altruism … just not the kind we’re used to thinking about. They promote altruism through power relations. And they do so through doublespeak. Free-market ideology uses the language of ‘freedom’ to promote the accumulation of power.

Thinking this way allows us to put human history in a different light. If group cohesion requires a noble prosocial lie, then cultural evolution means finding ever-more convincing ways of deceiving ourselves. The ‘free market’ may be the pinnacle deception so far.

Notes

[1] This passage by Thomas Dixon is from his book chapter called The invention of altruism: Auguste Comte’s positive polity and respectable unbelief in Victorian Britain. I’ve quoted it from David Sloan Wilson’s book Does Altruism Exist?.

[2] My thinking about power and freedom is inspired by a conversation I had with Jonathan Nitzan. When discussing the free-market dogma of economists like Milton Friedman, Jonathan noted that this ideology did the opposite of what it claimed. It promoted freedom. But by doing so, it actually legitimized capitalist power. So free-market ideology, Jonathan observed, was about ‘power in the name of freedom’.

[3] Data sources for Figures 3 and 4. Word frequency of free-market speak is from the Google Ngram corpus for American English. Data for the employment share of US managers comes from:

  • 1860 to 1990: Historical Statistics of the United States, Table Ba 1033-1046
  • 1990 to present: Bureau of Labor Statistics Current Population Survey series LNU02032453 (management employment) divided by Bureau of Economic Analysis series 6.8D (total persons engaged in production).

Date for the employment share of US government comes from:

  • 1890 to 1928: Historical Statistics of the United States, Table Ba 470-477
  • 1929 to present: Bureau of Economic Analysis series 6.8A-D (total persons engaged in production)

[4] ‘The fundamental problem of social life’. This is David Sloan Wilson and Edward O. Wilson’s phrase, used in their landmark paper Rethinking the Theoretical Foundation of Sociobiology.

Further reading

Dennett, D. C. (1995). Darwin’s dangerous idea: Evolution and the meanings of life. London: Penguin Books.

Dixon, T. (2005). The invention of altruism: Auguste Comte’s positive polity and respectable unbelief in Victorian Britain (D. M. Knight & M. D. Eddy, Eds.). Ashgate.

Fix, B. (2017). Energy and institution size. PLOS ONE, 12(2), e0171823. https://doi.org/doi:10.1371/journal. pone.0171823

Fix, B. (2019). An evolutionary theory of resource distribution. Real-World Economics Review, (90), 65–97. http://www.paecon.net/PAEReview/issue90/Fix90.pdf

Handley, C., & Mathew, S. (2020). Human large-scale cooperation as a product of competition between cultural groups. Nature Communications, 11(1), 1–9.

Nitzan, J., & Bichler, S. (2009). Capital as power: A study of order and creorder. New York: Routledge.

Sober, E., & Wilson, D. S. (1999). Unto others: The evolution and psychology of unselfish behavior. Harvard University Press.

Turchin, P. (2016). Ultrasociety: How 10,000 years of war made humans the greatest cooperators on earth. Chaplin, Connecticut: Beresta Books.

Wilson, D. S. (2010). Darwin’s cathedral: Evolution, religion, and the nature of society. University of Chicago Press.

Wilson, D. S. (2015). Does altruism exist? Culture, genes, and the welfare of others. Yale University Press.

Wilson, D. S., & Wilson, E. O. (2007). Rethinking the theoretical foundation of sociobiology. The Quarterly Review of Biology, 82(4), 327–348.


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10 comments

  1. An interesting read, on a subject that has interested me for a while. For me, not via a critique of free-market ideology but instead the socio-biology of institutions. Your theory that power and hierarchy are significant aspects which should be a focus of real-world economics seems valid, but maybe not the complete story. Maybe I have few relevant observations.

    Complexity
    One aspect of modern society that is very relevant to hierarchy and power is its increasing complexity. It seems the only logical strategy for an individual to do-well is to specialize in a set of knowledge and/or skills, and then to find a place of employment within a large organisation (‘institution’) that can best leverage that individual capacity. How free is this?

    So yes, humans are evolved to be cooperative, yet this complexity and its need for a management hierarchy is a relatively modern phenomenon. If we accept that such hierarchy is a necessary aspect of modern life, then the challenge is to avoid the negative aspects of it. [Interest in this is not so new, thinking J.K. Galbraith’s book The New Industrial State].

    Unemployment
    One such negative is a political dynamic that I see now in democracies, where politicians essentially prey on peoples insecurity around employment. For a political party to portray itself as good economic managers, achieving “growth”, hence low unemployment, seems a winning strategy with electors. However, given the complexity theory above, surely the logical thing is to either make work for the unemployed so they can earn a living wage (to work 3 days a week is all required) or implement a Universal Basic Income. Free education or re-skilling is also sensible, the European social democracies do this.

    Competition and Monopolies
    The simple notion that it is competition that leads to the best outcomes in resource allocation still seems to me to have some validity, in particular that competition helps to stop abuse of monopoly power. That most market competition isn’t between selfish individuals but instead cooperating groups (of specialists) just needs to be acknowledged more widely. Economics has acknowledged this in a round-about way, through ‘economies of scale’ and the need to prevent monopolies.

    It seems to be that the most effective way to achieve economic power is to look for natural monopolies and these exist on a world-wide scale now. Human socio-biology, perhaps of the same kind that leads to religious belief (see below) creates such natural monopolies. My experience is with software, the dominance and profitability of Microsoft is a good example. One can get rich by climbing a hierarchy of power, but mega-rich seems to need this extra natural monopoly element. I hope behavioural economics looks closely at this.

    Free Trade or Competitive Advantage
    Outside of the USA obsession with free-market ideology, and individual freedom is generally much less. I see this thinking as having advocates in Australia politics, at least at election time. Yet the response to the current Covid-19 situation here is positively Keynesian. Instead of free-markets, I think a more dominant obsession here has been with international free trade. Not free in the pure free-market sense, but carefully managed via trade agreements for optimum benefit. Perhaps an acknowledgement that the economic law of competitive advantage of nation states (Ricardo) is real.

    Isn’t this just another level of complexity that we now manage? In Australia our competitive advantage has been agriculture, minerals and innovation, we have done very well, as a nation, out of the first two for a long while.

    Ideologies like Religion
    That ideologies can seize peoples minds is a very interesting thing to me. Religious belief now seems to me the most widespread example of this. An exemplar that I recently watched a documentary on is the Church of Scientology. There, progress to higher levels in a hierarchy of training (brain-washing) costs money and people pay much for it, despite that the knowledge gained gets increasingly bizarre and beyond belief. An interesting case study for you maybe? That there is a socio-biological aspect to this seems clear, once people belong to a group, they find it hard to leave. Yes there is coercion, but there is more to it than that. Someone I greatly admire is/was a member actually.

    Sociocracy
    I believe that there is a well-developed practice for managing hierarchy in organisations, without the risk of power abuse, called Sociocracy.

    Like

    • Hi Steve,

      Thanks for the comments.

      Complexity

      I agree that complexity is an important part of the growth of hierarchy and the concentration of power. The economist Herbert Simon wrote a good paper on this topic called The Architecture of Complexity.

      I’ve previously argued that hierarchy is an example of convergent evolution. All multicellular organisms, as they grow larger, develop centralized systems of control (the nervous system, etc). So humans are just doing what our cells accomplished billions of years ago. The big difference, though, is that we haven’t suppressed selfishness to the same degree as our cells. Brain cells don’t hoard resources, but human despots do.

      Unemployment

      You may be interested in the work of Nitzan and Bichler, who argue that employment results from ‘strategic sabotage’. Their paper on the topic is called Can capitalists afford a recovery?. They now have a video on the same topic that’s worth watching.

      Competition and Monopolies

      The simple notion that it is competition that leads to the best outcomes in resource allocation still seems to me to have some validity

      This all depends on how you define “best outcomes”. Competition will allocate resources according to the principle of ‘might makes right’. Is that good or bad? It obviously depends on your values.

      Within groups, the might-makes-right principle is corrosive. No multicellular organism, for instance, allocates resources this way. Organisms are highly regulated, basically following the communist ethos of ‘to each according to their need’. They suppress competition as much as possible.

      Suppressing competition, of course, just moves it to a higher level. When the cells of multicellular organisms suppress competition, they just move it to the level of the individual. Similarly, when human groups suppress competition within themselves, they just move competition to the between-group level (as you observe).

      To counter your point that competition stops abuses of power, Peter Turchin makes the opposite point in his book Ultrasociety. He argues that leaders can be at their most despotic when between-group competition is most intense. I’d argue that it’s not competition, but rather regulation that limits abuses of power.

      Comparative Advantage

      Regarding Ricardo and free trade, Steve Keen has a good article on the topic that may interest you: https://americanaffairsjournal.org/2017/08/ricardos-vice-virtues-industrial-diversity/

      I am personally skeptical of the concept of comparative advantage. I see no example of it in the biological world. Yes, ecosystems move resources around between organisms, but this process is tightly regulated. Organisms defend their resources vigorously. If there was ‘free trade’, it would look like this: organisms would have no borders around their bodies. They would freely exchange elements of their bodies with other organisms. Obviously this doesn’t happen because it would mean the end of the organism.

      That being said, I think that trade is a good thing. But nothing about it is ‘free’.

      Ideologies like Religion

      Scientology is an interesting example that I’d never thought to study. Thanks for pointing it out.

      Sociocracy

      This is interesting. The concept stems from Auguste Comte. I briefly reviewed the ‘design principles outlined on the Wikipedia page. It would be interesting to compare these principles to Elinor Ostrom’s design principles for avoiding the tragedy of the commons.

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      • Thanks Blair, plenty of good reading suggestions and feedback! A few last comments about competition and resource allocation. I am thinking of the price-signal argument, that supply and demand come into alignment via price signals which are the result of lots of individual choices of how to spend limited money to best advantage. I agree that often the individual choices aren’t nearly as logical as people imagine, the advertising industry and human-nature see to that. Perhaps ‘might’ is having the financial resources to make good use of such manipulation means (I think of incessant car ads on TV). Never-the-less this feedback system exists, which leads to my point about natural monopolies, finding something to sell that has limited competitors by its nature (a concept I learned of reading about Warren Buffet’s investment strategies). Software is exemplary in this, its somewhat like a spoken language, once one ‘system’ becomes dominant its very hard for another to replace it. It also have very, very low marginal costs (no factory needed).

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      • Good Morning Blair,

        I enjoyed the content of this article as it goes to a theory that I hatched many years ago that I refer to as “Maximum Sustainable Employment.” I would love to say that the idea was totally mine, but, it wasn’t. I have long been a student of the late American Geophysicist, M. King Hubbert who started me well on my way to understanding both earth sciences and our system of fiat money. Hubbert explained that these two most important underpinnings of our society were incompatible as money’s growth is infinite and the science of matter/energy is finite.

        In the simplest and broadest form, viable employment is limited by earth’s resources. While non-renewable resources shrink annually from relentless consumption, human population growth, and thus the need for ever greater employment, grows exponentially. The eventual outcome is clear. “When” was not so clear.

        For a debt capitalist nation to continue, we require the impossible element of exponential growth. To a point in fact, that government has for years been charged with “Creating Jobs,” to match our growing population. The problem here is that faux jobs may in fact be created by government; but resources cannot be.

        Blair, the statement that you made earlier in regard to shedding jobs during this pandemic as “an involuntary experiment to determine which jobs are necessary and which are not,” was in my opinion, spot on!

        It remains my long studied opinion that the world will never again recover a significant percentage of the jobs that have recently been lost. We have arrived at the apex of Maximum Sustainable Employment. A new system of accounting (such as NOT accounting) will be necessary to continue.

        In 1971, we jettisoned the gold standard which was a brilliant accounting of physical resources which in turn limited the the printing of “fiat capital” or more commonly referred to as just plain money. It was a balancing system.

        In 2020, 50 long years after our last truly balanced budget, it will be necessary to jettison standardized accounting methods as the Federal Government will be need to make the hard choice between unlimited debt and Great Depression 2.0.

        Modern Monetary Theory has already been deployed without due notice of the same.

        I enjoy your content! Keep on thinking, it’s a rare commodity.

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      • Thanks for the comments. I too have been inspired by Hubbert. I remain convinced that peak oil (and peak resources in general) will dominate our lives over the next century.

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  2. I had a look at the video about Nitzan and Bichler work and was reminded of the “right-wing rachet” idea of Richard Denniss https://youtu.be/-yVPQJpmXtM.

    I am intrigued by Marx’s idea that eventually capitalism will end as the number of opportunities for profitable investment just won’t be sufficient for the amount of financial capital that is chasing such opportunities.

    Maybe this is what we are seeing now, very low interest rates and an increasing identification by workers fearing unemployment with the ‘growth is good’ mantra, and politicians capitalizing on that (the right-wing ratchet) to advantage the capitalists over the workers.

    Various economists have forecast an end to growth, such as the ‘Stationary State’ of JS Mill https://www.econlib.org/library/Mill/mlP.html?chapter_num=64#book-reader. I have always found that chapter of great interest, both for its economic and ecology reflections.

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  3. Nice article, Blair. Your analysis seems to be quite similar to that of theorists of Power such as C. A. Bond and Curtis Yarvin, both of whom see the modern ideas of ‘Liberty’ and ‘Freedom’ to be mechanisms for Power centralization, though they reach the conclusion through a different model of ‘human centrality’.

    I think you’d certainly find their writings interesting and helpful to your own work, so I heavily recommend you check them if you haven’t, specially Bond’s book ‘Nemesis: The Jouvenelian vs. the Liberal Model of Human Orders’.

    Keep up the good work!

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