This series reflects on the implications of what societies choose to equate with wealth.
Evolution involves trial and error. Given a cold climate, and the ability of species to mutate, over time they will develop an insulation covering like fur and become more rounded. Other mutations might occur, such as becoming more elongated, but the organisms with those maladaptive traits for retaining heat are quickly weeded out. The process does not involve intent, at least from the scientist’s point of view, but the environmental conditions dictate what will and will not succeed.
Since Adam Smith wrote The Wealth of Nations economists have set an “environmental condition” for western society that trade is wealth. To give Smith his props he came about his ideas inductively, as a good empiricist. Stock, trading companies and colonialism were all in full swing to provide the experiences that led to Smith’s theory about economics. However, economists no longer treat “trade is wealth” as a theory. As they have done with so much of their discipline they have turned theory into dogma, forsaking the pursuit of the empiricist for that of the scholar.
Economics, business and finance have evolved in response to the “environmental condition” that trade is wealth. If trade is wealth then society accumulates more wealth by trading rather than producing to satisfy needs. Thus David Ricardo’s theory of comparative advantage becomes doctrine claiming that the global economy is better off with developing countries effectively playing the “secretary” to the “management” class of developed countries. Herbert Spencer’s survival of the fittest best applies to corporations, the main ambassadors of trade, who have become “individuals” by Supreme Court decisions.
When trade is wealth as an environmental condition then Nobel prizes are awarded to economists who explore the issue of trade in a global economy, or who guides the discipline on an empirical foundation of maximizing capital as profits. Something like the Dow Jones, NASDAQ, or other stock market indicator becomes the prime measuring stick for the pursuit and accumulation of wealth.
I’m starting to rush with this already. If I turn this series into a chapter for a future book I will have to elaborate further. However, before exploring other alternatives for wealth there are a few more adaptations for trade that deserve mention.
One crucial adaptation is a concept of private property that can be hoarded. If we could only trade for what we can use in the moment even the most gluttonous among us will reach a saturation level. Expanding trade as much as possible means being allowed to accumulate stuff with no current use. Greed then becomes an adaptive advantage for this type of accumulation. Recognizing the value of greed for expanding trade, greed will be promoted as natural by those natural ambassadors of trade, business corporations and their shills.
Another important adaptation is the contract. We can produce and consume without the need for contracts. We can even trade to some extent without contracts. Ah, but to expand trade to its fullest extent, involving anonymous entities over the entire reach of the globe, contracts are needed to bind agreements between parties who would not fully trust each other’s self-interest. Ironic that “liberty of contract” should have been turned into a catchy phrase, though not surprising given the originators were the Supreme Court justices known as the laissez faire court, and not surprising that the main supporters of contracts are also the main drivers of the message that greed is good.
If there are no alternatives to trade is wealth, then there are no real alternatives to “greed is good.” Fortunately there are alternatives, though you will not hear them discussed in your mainstream economic courses. Certainly there are alternatives as manifested in other societies in other ages, but some slight evidence for alternatives exist even in ours, which will be turned to next.
