Archives for posts with tag: Adam Smith

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.” Milton Friedman, 1970

Between 1776 and 1970 the world had leaped forward. Technologically, economically and socially. Not only that we’ve managed to learn so much about the world and to produce immense wealth but we’ve somehow managed to ‘spread around’ the results. The proportion of people who had improved their fortunes had grown constantly during the entire period.

The majority of Americans share in economic growth through the wages they receive for their labor, rather than through investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2% per year. In other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.” Jay Shambaugh, Ryan Nunn, HBR

Isaac Newton hadn’t invented gravitation. He only ‘noticed’ it. Put it in words.
Adam Smith hadn’t invented the free market. He had noticed how it used to work and opened our eyes about it.
For what ever reasons, enough of us had chosen to close those eyes back. And have reached the conclusion that ‘greed is good’.

Milton Friedman was both horribly wrong and exactly right.

He was right in the sense that he had gouged correctly what the ‘general public’ wanted/was ready to accept. “in accordance with their desires, which generally will be to make as much money as possible

He was horribly wrong in the sense that he had perpetuated Marx’s error. Karl’s, not Groucho’s.

Money isn’t everything. Life beats it to the post.
Profit is, indeed, essential. Only it is nothing but an indicator. About how efficient a corporation is.
Meanwhile the role of a corporation is to accomplish – as Friedman himself had dully noted, the will of the shareholders.

The problem arises from the fact that ‘near mindedness’ blinds.
If/when both shareholders and management have nothing but ‘money’ in their scopes the market actually looses its freedom.

Economic agents no longer converge towards the market to solve each-others problems – like Smith had noticed, but to ‘make money’.

Not the same thing. Not by a long shot.

One way to interpret Maslow’s pyramid of needs is to consider that an individual might become a full fledged human only after having climbed to the ‘fifth floor’.

The key word here being “might”!

Because nothing mandates that all those who have overcome the material constraints of this world and have successfully integrated themselves in the social milieu will ever become a ‘better version of themselves’.

Need examples? Have you ever heard about people like Bernie Madoff, Martin Shkreli or Myron Scholes?

‘But the last guy, Myron Scholes, was recognized by the Nobel committee as a world class economist!’
Exactly! What more could a person want? Money, fame, worldwide recognition… he was on the fast track to becoming whoever he wanted…
Yet he had chosen to associate himself with one of the deepest financial black-hole ever… Knowingly, unknowingly… doesn’t matter!

‘But what does it mean to become a full fledged human?’

To be free. To consider them-self a free person and to be recognized as such by their peers.

‘Scholes wasn’t a free person?!? Shkreli?!? Madoff?!?’

Nope. Neither was free from greed!
Greed for money, power, public recognition… or any combination thereof.

‘But “greed is good”!!! Isn’t this the current mantra? Aren’t we all driven by this sentiment?!?’

First of all, greed is not good. Read Adam Smith’s Theory of Moral Sentiment.
But yes, we are bombarded from all sides with this notion. That ‘greed is good. That greed is the engine of capitalism, which capitalism has brought us here. Where it is good.’

Yes, here it is indeed good. Only for fewer and fewer of us. It used to be better but since ‘greed has become good’ every ‘bump’ we encounter along the ‘free market’ road has proven to be quite a challenge. An insurmountable challenge for more and more of us.
An unsustainable arrangement. For us, as a community.
And yes, capitalism is the best economic paradigm to date. Only, as all paradigms, it has to be put in practice. By us, the people. In the right way. In the free market way.
Only we are no longer free! Those who cannot escape their sentiment may not consider themselves free. And too many of us have been enslaved by their greed!

‘But greed is written in our DNA!’

Indeed! So is the urge to have sex!
Only we’ve managed to teach ourselves, community wise, that while sex is good, rape is bad!
Not so long ago, rape was more or less condoned. ‘She must have enticed him’. ‘What was she doing there at that hour?’ And so on…
Nowadays, rape is shunned. By most of us.

Only we still live surrounded by rape culture. Seeped in greed.

Will we ever learn?
Will we, as a community, ‘actualize’ ourselves?

I’m sure you’ve already learned everything worth knowing about how to flatten the curve…

My post is about something else.
About the need to think with our own heads.
Individually. Each on their own.

More damages are caused by the manner in which we have chosen to react than by the pathogen itself.

‘Then what should we do?’

I don’t know. And I just told you to stop taking cues, blindly.

There is something I do know.
Nobody can get out of something like this on its own. Alone.
And another thing. If we get out of it as a herd, we’ll very soon end up in another trap.

‘Damned if you do, damned if you don’t… I really can’t figure out what you want to say….’

OK.
We, humans, are social animals.
We not only raise our young – all mammals do that, we raise them in a social context. We live in groups and we raise our children to belong there.

Living in a social context has consequences. From being prone to infestation to having adopted specific behaviors.
Humberto Maturana is actually convinced that our very conscience – ‘our ability to observe ourselves while observing‘, a paraphrase, is a product of us leading our lives in close community.

One of these specific behaviors is the herd instinct.
Whenever in a dire strait, the members of a group pay a lot more attention to the rest of the group than in the ‘peaceful moments’.
This has two bright sides and one huge drawback.

All members of a group paying close attention to the others makes it easier for those who need it to get attention. And help.
All members of a group paying close attention to the others makes it easier for the group to follow when one of them finds a way out.
All members of a group paying too close attention to the others makes it very likely that the entire group will dash out at the first opportunity. Without checking first where they’re going to land. Nor whether there are any other opportunities.

Another specific behavior is ‘opportunism’.
Some of us have figured out that by keeping their chill in a crises they are more likely to identify whatever opportunities might exist in that moment.
And the deeper the crises, the bigger the opportunities.

Theoretically, these two should work like a charm.
The opportunists keep their chill, look around, identify the best way out and the rest of the herd follows them to safety.
A win-win situation.

Yeah… but!

Wouldn’t it be a way lot better whether all (or, at least, ‘more’) of us would keep their chill? Wouldn’t we be able to identify even more ways out?
It would take a lot more time? We’d need to discuss things over, to negotiate… we’d have to exert a lot of discretion…
True enough. Hence we’d need to evaluate two things. First, how urgent the dangerous situation is and, then, whether a better alternative would be worth searching.

And something else. In a ‘follow me blindly’ situation there’s no going back. The consequences for a hasty choice might be tremendous.

We might end up with more people being hurt by our blunder-some reaction than by the cause which had spooked us.

Yet another specific behavior is responsibility.
Living in a social context means that, sooner rather than later, individuals are censored for their actions. By the rest of the community or, sometimes, by the stark reality.
Unfortunately, sometimes entire communities are censored, by the stark reality, for not behaving responsibly. For not imposing responsibility upon their members.

For not taking enough time before choosing between flight and fight.

Let me put things into perspective.
How many of you have chosen to continue smoking despite having been warned?
How many of you have emptied the shelves despite being told there’s enough for everybody? Or that there will be soon enough?
How many of you do not smoke in the presence of your children? Because you know it will hurt them?
How many of you have taken active measures to protect the elderly? For the very same reason…

As for the economy being the main casualty of the present scourge…
I’m afraid ‘the economy’, as we know it, has been dying for quite a while now. That’s why it is so susceptible to SARS CoV-2.

The Ancient Greeks had come up with the concept of ‘oeconomia’ as the art of making the ends meet. Adam Smith had described the free market as the place/environment where competing agents made it so that people – solvent demand, could satisfy their needs.
Nowadays, too many of us understand/accept ‘economy’ as the art of getting rich. ‘Free’ in ‘free market’ is understood as ‘free’ to do anything you want. Because very few are asked to answer for the long term consequences of their actions.

The economy, as the manner in which we cooperate towards fulfilling our needs, has fallen prey to our gluttony. And to our nearsightedness.
Greed is not good. And SARS CoV-2 is only an eye opener, not the cause for the current implosion.

We, but let me start with the beginning.

First of all, I find it very interesting that Adam Smith never used the expression.
He explained the intricacies of the market without describing it as being ‘free’. For him, the market had to be free in order to function properly…

But, perhaps, no country has ever yet arrived at this degree of opulence. China seems to have been long stationary, and had, probably, long ago acquired that full complement of riches which is consistent with the nature of its laws and institutions. But this complement may be much inferior to what, with other laws and institutions, the nature of its soil, climate, and situation, might admit of. A country which neglects or despises foreign commerce, and which admits the vessel of foreign nations into one or two of its ports only, cannot transact the same quantity of business which it might do with different laws and institutions. In a country, too, where, though the rich, or the owners of large capitals, enjoy a good deal of security, the poor, or the owners of small capitals, enjoy scarce any, but are liable, under the pretence of justice, to be pillaged and plundered at any time by the inferior mandarins, the quantity of stock employed in all the different branches of business transacted within it, can never be equal to what the nature and extent of that business might admit. In every different branch, the oppression of the poor must establish the monopoly of the rich, who, by engrossing the whole trade to themselves, will be able to make very large profits. Twelve per cent. accordingly, is said to be the common interest of money in China, and the ordinary profits of stock must be sufficient to afford this large interest.”

OK, he was talking about the XVIII-th century China… but I’m sure you already know that.

Then what was it which lead Britain on what is currently known as the ‘free market path’ but blocked China, until very recently, from following suit?
After all, the participants to both markets were driven by the same self interest and their efforts were determined by the same division of work. Not to mention the fact that China’s was a many times bigger market than Britain’s. Initially, of course.

Both countries had a lot in common. Both populations were similarly stratified and class conscious, both monarchies had reached the same level of impotency, both states were run by specialized coteries … what was the difference?

“A country which neglects or despises foreign commerce…”

For a market to be truly free – as in ‘fully functional’, those who participate in it need to be free to do as they see fit and to go wherever they wish.
For this to happen the participants have to feel free – to be conscious of their freedom, and those who oversee the market need to act only as ‘arbiters’ and never as rulers.

This was the difference between the XVIII-th England and China. The British authorities were a lot more permissive than those ‘in charge of’ China and the British subjects felt a lot freer than the Chinese.
While the British authorities did nothing more than police the market, the Chinese Mandarins actually run the day to day activity.
The end result being that the British merchant men learned to deal with each-other and ask for help only when the law was broken, while the Chinese were conditioned to look up for directions at every corner of the road.
As a consequence, the free participants to the free market have learned to respect each-other, and to collectively defend their freedom, while the mainland Chinese have been conditioned to accept that bowing your head was safer.

But people learn fast.
Just look at what’s currently happening in Hong-Kong.

“Do you know why I hate capitalists?

1. All they care about is money

2. They have all the money”

This is a bi-partisan joke. Some of the haves use it to demonstrate that money is the essence of modern life while the ‘lefties’ use it to demonstrate the ‘malign’ nature of capitalism.

Both sides are wrong.

According to Adam Smith, the market consists of many specialized economic actors who sell their wares/services. Thus helping each-other lead a better/simpler life than if each of them had to ‘do everything’. Furthermore, a free market is better than a ‘cornered’ one, simply because competition keeps everybody on their toes.
In this sense, a capitalist is a guy who organizes a group of synergically skilled operators in such a manner as to increase their aggregated efficiency.
In order for the market to remain free, a.k.a. efficient, there must continue to exist a certain degree of competition between the said capitalists. And for the whole thing to remain a market, each of the capitalists must remain but an actor, not become a dictator. A.k.a a monopolist.
Differently put, for the market to remain functionally free, capitalists should remain/must be kept level with the other ‘merchant-men’. The bakers sell their bread-making skills, the brewers their beer-making skills, the butchers their ability to carve carcasses while capitalists sell their ability to organize people. Their entrepreneurial skills.
OK, there is difference. But only in our heads. While each of the others use specialized tools – ovens, vats, knives, etc., capitalists use money. Yet another tool but one which seems familiar to all of us. But very few of us see money as a tool and even fewer accept that using money, a lot of it, implies a huge responsibility.  Hence the enormous misunderstanding. No reasonable human being – except for a carpenter, of course, would dream to amass a huge number of, say, hammers, but a majority of people are convinced that having a lot of money would make them happy.

And why did I say “both sides are wrong”?

Because real capitalists are focused on the needs of their business partners – a.k.a. ‘consumers’, not on their pockets/paychecks. Because real capitalists understand that sellers would go hungry if there was no money to buy their wares.
Because free market capitalists are focused on making money go round – and getting handsomely paid for this, instead of constantly attempting to hoard all the money in their grasp.

It’s not me who says so.
Jamie Dimon, Alex Gorsky, Tim Cook, Ray Dalio….

 

“Profit is a natural by-product of voluntary commerce, exchanging value for value. Increasing profits come from better exchanges of value over time. Accepting a lower value of trade in order to benefit someone else believed to need the benefit is a myth. Self interest has always been a key component of human commerce.”

Paul Garner

The barons who had forced King John to sign the Magna Charta were interested in preserving their privileges, not in the deepening of their fellow citizens’ freedom… yet this was the ultimate consequence of their actions.

“No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement of his equals or by the law of the land. To no one will we sell, to no one deny or delay right or justice.

This clause gave all free men the right to justice and a fair trial. However, ‘free men’ comprised only a small proportion of the population in medieval England. The majority of the people were unfree peasants known as ‘villeins’, who could seek justice only through the courts of their own lords.”

The heirs of those barons had evicted their Scottish tenants in search of the higher profits yielded by raising sheep, not because they wished to improve the local food market. Yet exactly those ‘clearances’ had constituted the stepping stone for the economic blooming of Scotland. And for the advent of the ‘Scottish Economic Thought’, epitomized by Adam Smith.

Are we to understand that ‘self interest’ will, sooner or later, somehow morph into ‘the greater good’? By its own, according to a yet unknown ‘natural law’?

I’m afraid this is nothing but wishful thinking.

The barons who had rebelled against King John were following an already established tradition.
Being the nephews of the Norman – read Viking, invaders, they were familiar with the Scandinavian things. Their uprising against the king was nothing more than a defense of their fore-fathers’ way of life.

Of their fore-fathers’ free way of life!

The landlords who had evicted their tenants to make way for the more profitable sheep may have created the conditions for the development of a thriving free market… only it was exactly this free market which had represented the doom of the ‘landed aristocracy’…

So. Is freedom the most important aspect of the free market?

I’m afraid that would be an oversimplification.

The markets are free, period.
If anything impedes their (transversal) freedom in ‘space’ – a ruler, a dictator or even a natural set of events, markets will find their (longitudinal) freedom in ‘time’. All dictatorships have been toppled by ‘history’ and all ‘natural’ sets of events have been overcome. As yet, at least.

The most important ‘things’ in the market are the people who animate it.
Any market would be nothing but an empty intersection of roads if not for the people who gather there to trade their wares. To better solve their existential problems by exchanging the ‘fruits of their respective skills’.
And the freer those people are to hone their skills and to take the fruits of those skills to whatever intersection they choose, the better the solutions developed, by them, for their existential problems.

And what about the profit? Is it good?

Of course it’s good. But for only as long as it remains free!
For only as long as it doesn’t depend on external forces and for only as long as it doesn’t become an obsession.
Since most of you understand the perils of monopolistic ‘external forces’ being exerted to limit the freedom of the market, I’ll delve directly into my obsession about the hidden dangers of pursuing profit as an existential goal.

We describe ourselves as being conscious.

In Humberto Maturana’s terms, ‘we are able to catch ourselves red handed’.

As a human being I do what we human beings do, I operate as an observer observing. The observer is not a condition of being, it is not a transcendental entity that exists by itself, it is not a material entity, it is our experience of being aware of ourselves doing what we do as we human beings operating as observers observing. And what do we do as human beings operating as observers in observing? We make distinctions. We make distinctions of objects, of notions, of ideas, of concepts, …,of entities that we bring forth with our operations of distinction together with the domains of existence in which they arise.

When hungry, we not only feed ourselves. We also notice that we feel good once our bellies are full. And we strive to make provisions for the next meal. Thus increasing our chances to survive.

Some of us end up eating too much. They are so keen to reproduce ‘that’ good feeling that they end up morbidly fat. Thus diminishing their life span.

Still others try to make sure they’ll enjoy their next meal by appointing themselves ‘gatekeepers’ to ‘food’.
And, sooner rather than later, every time they succeed, this ‘arrangement’ ends up in abject failure. The most publicized recent example being the failure of the centrally planned ‘popular democracies’. Unfortunately, there had been countless other examples. In fact, in all instances where power had been concentrated in a too small number of hands, the societies which had allowed this to happen have eventually collapsed.

Another example is our addiction to drugs.
All of us enjoy feeling good. Which is an evolutionary device meant to show us we are on the right track. To prod us in the right direction.
Some of us have discovered ‘the short cut’. Instead of doing ‘the right thing’ first and expect the reward afterwards, they just imbibe the ‘right’ substance. Alcohol, sugar, nicotine, heroine, coke, THC

Now, can any of us pretend that a drug addict or a morbidly fat individual is a free person?

Returning to the freedom of the market, we can only say that a market is functionally free for only as long as a functional majority of the trading agents behave in a free manner. Do as they individually see fit.
Compare this to the situation when, for whatever reason, the majority of the trading agents feel compelled to follow a fad.
The Tulip Mania is the first example which springs into my mind every time I discuss this subject. Followed by all other bubbles which had ‘punctured’ our economic history ever since.

The current fad being ‘profit’.
Which profit is essential for the long term well being – read ‘survival’, of any economic enterprise.
Only we need to remember that economic enterprises are meant to solve problems. To be of service to people. So useful to the consumer side of the market that the consumers are willing, on their own accord, to part with enough money to make those enterprises profitable.

If the market is warped so far that things go the other way – enterprises are managed to maximize profits at the expense of the services rendered to the clients and the ‘beneficiaries’ are not aware of what’s going on, or have no say in the process, the whole thing starts to resemble what used to happen inside an opium den.

We somehow managed to weather all economic crises that we, ourselves, have brought upon our heads. And to outgrow our obsession with opium.

I’m sure we’ll manage to free ourselves from our current obsession with profit.

Nota bene!
Under no circumstances we may allow capitalism itself to be left behind in our quest for liberty from the tyranny of ‘profit’.
Capitalism is something else than the unending and callous adoration of the ‘golden god’, just as profit is a very useful indicator but a horrible master.

 

“Capitalism has generated massive wealth for some, but it’s devastated the planet and has failed to improve human well-being at scale.”

Drew Hansen, Unless It Changes, Capitalism Will Starve Humanity by 2050,
Forbes, feb. 9, 2016.

I’m afraid we are dealing with a huge confusion.
Capitalism hasn’t generated anything and hasn’t starved, nor fed, anybody.
People did!

Capitalism is nothing more, nor less, than a particular manner in which we, ‘the people’, relate to property while ‘the free market’ is one of the manners in which economies are run.

And here’s the place where things become ‘murky’.

‘Oekonomia’ is Greek for ‘making ends meet’.

“The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

According therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion.

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776

The way I read it, Smith sees ‘wealth’ as people’s/nation’s ability to supply for their ‘necessaries and conveniencies’.
In other words, ‘to make ends meet’.

How we define our needs, the manner in which we choose to fulfill them and what we are disposed to ‘spend’ in the process… is our responsibility.

So.
What is it that we need/want?
A healthy planet? Clean air/water/soil and a fair opportunity for each of us to earn their keep?

Or a dog eats dog type of contest for ‘who has the biggest pile of money’?

Capitalism can encompass both.

Unfortunately, the second scenario has nothing to do with ‘making ends meet’.
On the contrary!

We, humans, pride ourselves on many things.

On being smart/intelligent. And on being the only animals able to brag about their achievements with their peers…

But what is it that qualifies us as humans?
That would, of course, depend on what a human really is…

OK, let me use another tack.
What are we really good at? What sets us apart from the rest of the animals?

Practical intelligence? Our ability to solve really complicated problems?

Then watch this wild New Caledonian Crow treating itself to a piece of meat.

new Caledonian crow

Our ability to figure new meaning and to overcome our natural impulses?

Then read about Sheba the Chimp using language to suppress her greed:

In a celebrated study that investigated impulse control, Sally Boysen of Ohio State University asked chimps to choose between two dishes of M&Ms®.

SALLY BOYSEN: Now, you watch real carefully. We’re going to put one, two, three, four down here. Are you watching, Miss Priss? Sheeby? And we’re going to put two in here.

Give those to Sarah. Okay.

Well, I have to give these to Sarah, and Sheeba gets two. So Sarah gets four and Sheba only gets two. Aw, too bad.

NARRATOR: The twist was that the chimp got the candy she didn’t point to. Could the chimp learn to resist her impulse to reach for the bigger pile?

SALLY BOYSEN: You want Sarah to have these? It’s okay, it’s okay. You get to have that one. Yeah, Sarah gets five, and Sheba gets one. Oh, that is such a shame.

NARRATOR: Amazingly, chimps never overcame their greedy urges. They always reached for more and, so, ended up with less.

SALLY BOYSEN: And Sheba gets two, so Sarah gets four. See?

NARRATOR: Impulse studies have also been run on humans. In a classic experiment from the 1970s, a researcher gave a four-year-old a simple choice.

RESEARCHER : So, if you wait for me to get back, I’ll give you this bowl with all of these gummy bears, okay? But if you can’t wait, you can push that button, like this, and then I’ll come back and you can have this bowl with just this one gummy bear, okay? Okay, I’ll be right back.

NARRATOR: According to an inconclusive but intriguing study, the longer children resisted temptation, the higher their S.A.T. scores were years later. In any case, the differences between people are small compared to the gap separating humans and apes.

BRIAN HARE: Maybe one of the first things that happened during our species evolution is we became much less emotionally reactive. And maybe that’s one of the big differences that may explain why we solve problems so differently. We sort of got control of our emotions.

NARRATOR: Can apes be given skills to help them master their emotions? Sally Boysen trained a chimp to understand numerals. Then she repeated her M&Ms experiment, but now offered different pairs of numerals rather than treats.

SALLY BOYSEN: You want to give two to Sarah? Okay. Two goes to Sarah, and you get six.

NARRATOR: Remarkably, chimps were now able to learn what they couldn’t before: point to the smaller number to get the bigger prize.

Symbols can make you free. They can help distance an ape from its impulses. But outside of the lab, apes don’t seem to use symbols. Still, ape minds seem to share many of the amazing features of the human mind.

There is a video which depicts all this. Click on this link and see if it’s available “in your area.” http://www.pbs.org/wgbh/nova/nature/ape-genius.html.

How about our consciousness? Our ability to ‘observe ourselves in the act of observing‘.
Well, that alone wouldn’t have made us any more special than an octopus…

self aware octopus

But what if our individuality resides in us having taken all three to ‘a different level’? One which hasn’t yet been attained by anybody else? Not necessarily higher, mind you!

I’ll deal with ‘trade’ now and I’m afraid you’ll have to come back for the rest.

‘Trade’ wasn’t even mentioned in those three examples?
What was the crow trying to do?
Feed itself? As in exchange matter with the ‘outside’?
What was Sheba trying to do?
Figure our what was going on? As in trading information with the surrounding world?

In this sense all living things are engaged in all forms of trading? And continue to do so for as long as they remain alive?
What did I tell you about us doing nothing really new? Only different?

OK, we had already figured out – long before Adam Smith described it as ‘division of labor’, that by dividing tasks amongst us we’ll be able to accomplish far more things than if we had attempted ‘individual autarky’. And then we had invented ‘trade’, as a manner of exchanging the different wares each of us was proficient in doing…
Wait! Even this is not really ‘new’!
Mother Nature had already invented sexual reproduction – a very extreme ‘division of labour’, a very long time ago…. but not before bacteria were already adept at ‘trading’ genetic information.

 

 

One of the oldest literary works, a poem written some 4 millennia ago, is about the prince of the land, Gilgamesh, helping his ‘commoner’ friend, Enkidu, to reach ‘full human-hood’. Along with the rest of the people under Gilgamesh’s stewardship.

Prometheus, the Titan who had given us “the gift of fire and the skill of metalwork“,  ended up chained to a pole and having his liver eaten out by an eagle.

The Jewish God had made Man in His own image. All men, and women, equal among themselves – since they had all been cast in the same mould, and all of them sharing a divine spark – since that mould had been made in God’s resemblance.

Some two and a half millennia ago, in India, Siddhartha Gautama – the highly pampered son of a local ruler, had figured out – and started to teach his followers, that the manner in which you lead your life is far more important than being celebrated as a winner.

About the same time, in China, Laozi had written a “handbook for the ruler. He should be a sage whose actions pass so unnoticed that his very existence remains unknown. He imposes no restrictions or prohibitions on his subjects; “so long as I love quietude, the people will of themselves go straight. So long as I act only by inactivity, the people will of themselves become prosperous.””.

Two millennia ago, in Jerusalem, a teacher had reminded us that God’s teachings have been meant to be followed in earnest, not ‘faked’ in a callous manner. And that we should respect each-other, regardless of our respective ranks.

Less than three short centuries ago, Adam Smith had figured out that human society has passed through a series of ‘stages’:  “the original “rude” state of hunters, a second stage of nomadic agriculture, a third stage of feudal, or manorial, “farming,” and a fourth and final stage of commercial interdependence.
‘Commercial interdependence’ meaning that each and every one of us depends on everybody else.

“We don’t expect our dinner from the benevolence of the butcher, brewer, or baker but from their regard for their own interest; we appeal not to their humanity but to their self-love, and talk to them not of our needs but of their advantages.”

Adam Smith,
An Inquiry into the Nature and Causes of the Wealth of Nations, 1776

In other words, Adam Smith reiterates the very same thing that has been already told so many times in so many ways.

That it is in the interest of each and everyone of us for the free market to remain free. If we allow any of the ‘butcher’, ‘brewer’ or ‘baker’ to take any kind of precedence over any of the other – or over any one of us, then we are all doomed. Including those who had enjoyed, for a while, the spoils of ‘precedence’.

I’m not making much sense here?

Let’s take a short glimpse back.

Not many of Gilgamesh’s ‘nephews’ have followed his example.
During their rule, the area had been a quagmire of internecine warfare. It still is, unfortunately.

Prometheus’ is a very interesting story.
His very gallant exploit was punished dearly.
What if there is some hidden meaning to it? Related to that of the ‘original sin’?

“You will not certainly die,” the serpent said to the woman. “For God knows that when you eat from it your eyes will be opened, and you will be like God, knowing good and evil.”

When the woman saw that the fruit of the tree was good for food and pleasing to the eye, and also desirable for gaining wisdom, she took some and ate it. She also gave some to her husband, who was with her, and he ate it. Then the eyes of both of them were opened, and they realized they were naked; so they sewed fig leaves together and made coverings for themselves.

Then the man and his wife heard the sound of the Lord God as he was walking in the garden in the cool of the day, and they hid from the Lord God among the trees of the garden. But the Lord God called to the man, “Where are you?”

10 He answered, “I heard you in the garden, and I was afraid because I was naked; so I hid.”

11 And he said, “Who told you that you were naked? Have you eaten from the tree that I commanded you not to eat from?”

12 The man said, “The woman you put here with me—she gave me some fruit from the tree, and I ate it.”

13 Then the Lord God said to the woman, “What is this you have done?”

The woman said, “The serpent deceived me, and I ate.”

So what do we have here?
The serpent gives Eve an advice – which comes to be true, Adam and Eve haven’t died from eating ‘the apple’.
Adam and Eve ‘realize they were naked’ and dress themselves.
God finds out and chastises Adam: ‘what have you done? Haven’t I told you not to eat from that tree?’.
Adam snitches on his woman, the one made from his own rib, at his own request:  “The woman you put here with me—she gave me some fruit from the tree, and I ate it.” And Eve passed the blame along to her teacher…

Well, maybe there is a sort of an ‘original sin’… and not one necessarily based on our tendency to disobey orders… after all, ‘disobeying’ is the only way to learn anything…

Let’s go back to the Bible.

22 And the Lord God said, “The man has now become like one of us, knowing good and evil. He must not be allowed to reach out his hand and take also from the tree of life and eat, and live forever.”

What if God was not as much mad at Adam and Eve for acceding to self awareness as he was afraid of what they will do with their newly acquired skill? Specially if they would have been allowed to hone it for any considerable amount of time?
Specially when considering what each of them had done after they had learned about their individual oneness? Tried to blame others for what each of them had done?
Each of them had tried to use whatever difference there was between their individual beings and all the rest to their exclusive advantage? As a way to invent and win a competition instead of a reason to start and engage in a cooperative effort?

Would it be farfetched to interpret this episode as ‘God, in his immense wisdom, knew that allowing an imperfect ‘knowledgeable person’ to ‘hold on to power’ for too long would transform that person into a tyrant?’.
For we are, all of us, ‘imperfect knowledgeable persons’… regardless of what we think about ourselves…

Going back to Prometheus, ‘fire’ and ‘metalwork’ are powerful ‘competitive advantages’. Societies which control these ‘skills’ can very easily subdue those who don’t. And they have done it, several times in history.
With ‘mixed’ results, to put it mildly.
Could it be that Prometheus’ punishment is a metaphor meant to teach us about the perils of inducing extreme disparities among various groups of people?

The Jewish people have demonstrated an uncanny ability to survive. As a people, I mean. Against incredible odds.
I don’t know whether this has anything to do with any help from God but I’m convinced it has everything to do with the manner in which they treat each-other. More precisely, with the manner in which they help and respect each-other.

Only three countries in Asia have not been completely overrun by the Europeans during the XIX century. China, Japan and Thailand. The common thread among them is that all three follow the teachings of Buddha and Laozi. Which are very similar, in their essence.

Christian Europe, the land inhabited by people supposed to love each-other, has somehow reached a world dominant position during the XVIIIth and  XIXth centuries, process which has been furthered by the rise of the equally Christian US of America.
Unfortunately, during the same three centuries, the same Euro-Atlantic space has been the theater and origin of the bloodiest conflicts in the history of humankind.

The free-market capitalism envisioned by Adam Smith worked wonders.
Well, not the capitalism itself. The people cooperating according to Smith’s division of labour in the realm of the free market.
The entire world is currently living in way better conditions than, say, one hundred years ago.

Yet, there are some ominous clouds rising their ugly heads over the horizon.

In Europe – which had wised up after WWII, at least temporarily, ‘differentialism’ is on the rise again.
The Cold War had ended but those who won it didn’t apply the lesson that had become evident after WWI and WWII. That the victor has to help the vanquished out of its war induced relative misery if things are to be settled for good.

For many, capitalism has become synonymous to greed.
Which is both absolutely wrong and very descriptive of the current situation.

How about us making better use of the comprehension skills for which Adam and Eve had been banished from the Paradise?
And revert to more modest manners? More helpful for our longer term survival?

Would it make any difference if I reminded you that Rome had fallen while Byzantium had survived for another millennium?
What was the difference between these two?
The people in Byzantium had converted en masse to the religion which considered people as being ‘Equal Children of the Loving God’ while the Roman emperors had continued to bribe their ‘constituents’ with ‘panem et circenses’.

“He would rather govern rich men than be rich himself; since for one man to abound in wealth and pleasure when all about him are mourning and groaning, is to be a gaoler and not a king.”

Thomas More, The Utopia.

“Between 1970 and 2010, the number of administrators in health care grew more than 3000%, while the number of physicians grew about 200%, according to the Bureau of Labor Statistics. During that same 40 years, U.S. health-care spending rose 2300%. Doctors’ fees account for only 8 cents of the health care dollar. Where do you think the other 92 cents are going?”  (Marni Jameson Carey, Focus on Health Coverage Misses the Point, Forbes.com, Oct 24, 2017)

A few years ago I was arguing that profit was overrated.
It seems that Forbes, a magazine which cannot be accused of any socialist tendencies, has reached a somewhat similar conclusion.

Even more interesting is the solution proposed by Forbes to the health care problem.

A return to the free market!

Free from what? Who says the American health care market is not free?
Well, click on the quote above and see what Forbes has to say about this…

But what happened? How did we get here?

Well, the free market described by Adam Smith was an environment where people used to fulfill their needs by selling their wares.
The butcher sold meat and bought everything else he needed, the brewer sold beer and bought everything else he needed, the baker… and so on!
OK, there  was a certain kind of competition which kept the things in check. The butchers competed against other butchers, the brewers…
And because of this competition, all traders – those who wanted to survive, anyway – streamlined their operations and became more and more efficient. Hence profitable.

I mentioned the link between the survival of a commercial enterprise and its ability to generate profit.
Apparently, it doesn’t make much sense to elaborate on this. Bear with me, please.

The whole point of the free market is the division of labor. Besides its freedom, of course.
Each of us does what he knows better and then we trade our respective wares. This way all of us fare better than if each of us would have had to produce everything each of us needs to survive.
In this scenario, competition – between ‘bakers’, for example – is actually a tool which makes it so that the market, as a whole, doesn’t waste resources. When the less efficient bakers are ‘encouraged’ to find something else to do, the entire market is better off. And so on.
In this sense, profit is only one indicator – and a very good one – of how able to survive is a certain commercial venture. But not the only goal of the entrepreneur who started/runs the enterprise. What he wants is to make an as good as possible living by doing what he knows best, in close collaboration with the other participants to the free market.

Adam Smith had written his books some two and a half centuries ago.
And the free market had served us well, for a while.
Just look at what we’ve accomplished in these two and a half centuries.

But, just as Forbes points out, things are no longer going in the right direction.

Why?

Simply because the market is no longer free!

Not only because some of the participants have become ‘heavy’ enough to crush all competition. This is only the lesser part of the problem.
The really big one, and so well hidden that it’s almost invisible, is that too many of us have become obsessed with the same thing. Money!

Life-of-modern-people

Profit has become THE absolute goal of everything we do. Too many of those who participate in the free market no longer want to collaborate with the others but simply want to get rich. By any (legal) means.

Some say this is a good thing.
They invoke Adam Smith’s words as a justification for their beliefs.

I beg to differ.

The simple existence of our current obsession has profoundly altered the very nature of the market. Which is no longer free.

Because WE are no longer free. When too many of us are obsessively concentrated on the same thing, they will necessarily disregard all other options. And the rest have no other option but to follow.

This is not freedom!

Mesmerized people can not be described, by outside observers, as being free.
Regardless of how they consider themselves.

 

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