Wednesday, January 30, 2013

The Culture of the Invisible Hand

The great contest of world-views is the battle between the Invisible Hand narrative and the Exploitation narrative.  It's simple really.  The Invisible Hand narrative says that in order to get ahead you have to serve other people.  The Exploitation narrative says that without the right politics to curb economic greed it is Katy bar the door.

Frankly, it is the Exploitation narrative that seems closest to common sense.  Hey, it's a brutal world out there: people are looking for the opportunity to screw you and yours.  How then is it possible that a sober-sides like Adam Smith ever proposed the Invisible Hand as the reality of economic exchange?

For that we turn to Max Weber.  After writing his Protestant Ethic and the Spirit of Capitalism Weber wasn't done with capitalism.  He had seen that the Puritans had developed the idea of work as a calling and had trained the minds of men to work for economic gain in an ascetic way, without wanting to end up in a life of luxury and power.  But he wanted to know more.

In his General Economic History he went back and mined the step-by-step development of the capitalist economy.  He found some remarkable nuggets.

For instance, Weber found that the Puritan sects separated themselves rigidly from society.  They were, in Rodney Stark's model of religions, very strict in controlling members' behavior.  You would expect that this rigid separation from society would legitimize an ethic of honest dealings with insiders and exploitation of outsiders.  But no.  Many sects prided themselves on acting in a trustworthy manner even towards the "sinful children of the world."

Here's another interesting nugget.  The Puritans so prized the "calling" in work that they preached that men should be "sober" in love for family and associates.  As Reinhard Bendix writes in Max Weber: An Intellectual Portrait,
This emotional detachment from the community also reduced the social distance between its members and the strangers beyond the "gate."  Hatred is as dangerous to the soul as love, and where the relation to one's kindred and associates is detached the rejection of the stranger becomes less imperative.(p70)
This goes back, according to Weber, to the "development of mutual trust among men as individual members of a Christian community."   Then Bendix retails Weber's history of the city, which begins with associations of people that still retained their primary identification with their kinship group and only later--in the west--developed into the "burgher [that] joined the citizenry and swore his civic oath as an individual." So the city eventually developed into
an association of local property owners whose goals were: the amicable settlement of disputes; an administration of justice and a monopolization of economic opportunities that would safeguard and enhance the interests of the town residents; a reliable allocation of the obligations due to the local lord in lieu of arbitrary taxation; and, finally, the institution of a military organisation that would enhance the political and economic power of the community.(p75)
The whole urban "package" involved several items:
  • "a single standard of ethics in all business transactions"
  • an "oath-bound fraternal association [as] an important precedent for the congregational form of church government.
  • the city as an association of individuals with weakened kinship ties and rituals
We can see how the rule of the educated class in our modern era attempts to turn back the clock on these developments.  It tries to create a distance between political ethics and business ethics, privileging political values over economic values.  It privileges group affinities in race, class, and gender, over the individualistic transactional exchange relationship of the city that even extends to family relationships.  And it tries to break up the congregational notion of, e.g., the New England town meeting, with the mobilized factions of modern democratic politics.

The problem for conservatives, who mostly follow the "urban package" of fair dealing, associational government, and individual responsibility, is that the working class didn't get socialized in the old ways of the Burgertum.  Instead the new educated ruling class took them into its government schools and taught them to be go-along-to-get-along clients of the regime.

How do we persuade the regime clients that they are getting royally screwed by their liberal political masters?

The answer is, of  course, that we don't.  We can only wait until the administrative welfare state crashes and burns.  Only then will the people be ready to listen to us and our radical notion of the Invisible Hand.  

Don't just sit there with your hand out.  Make something for others; do something for others.  Then worry about what you get in return.

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