Saturday, November 8, 2014

Let them eat red herrings?

In the past and up to the present day, there have always been food shortages in one part or another of this world. However, it is only in modern times that we can say with some certainty that there is absolutely no need for any human being on this planet to face death by starvation or malnutrition. There is no good reason why that should occur. Hence, I view most of the ballyhoo about population growth as a red herring. Instead of focusing on the fear that human population is expanding at a rapid rate, we should focus on the fact that for the first time in human history we can eradicate hunger. For the first time in human history, we can and therefore we must free humanity from that affliction.

Wednesday, November 5, 2014

Invisible hands

The notion of an invisible hand benevolently guiding economics comes packed with some unstated assumptions.

The first unstated assumption is that all economic activity is homogeneous. That is to say, regardless of whether we are talking about macro-economics or microeconomics, regardless of the product that is produced and distributed, regardless of how much scope there is for profit, regardless of how many people are impacted, and regardless of how essential a product is for survival or for developing the potential of human beings – regardless of any or all that – each aspect of the economy can only be handled in the same way as the rest of the economy. It can only be planned or unplanned, command or laissez-faire. This assumption is not logical.

The second unstated assumption is that an unplanned economy is good, and a planned economy is bad. Of course, even Adam Smith did not go quite that far. He recognized the dangers of monopolies. The problem is that, in practice for people who promote the notion of an invisible hand,  planning an economy is treated as bad and therefore to be avoided as far as possible. This point of view might also be a corollary of the first assumption that I mention above. If only one approach is possible for an entire economy, then that approach would be good on the whole, whereas any other approach would be bad on the whole.

Most people imagine that Adam Smith's concept of an invisible hand is somehow akin to some natural process. More accurately, it would be a supernatural process, because Adam Smith was talking about an invisible hand of Providence, not Nature. Providence (with a capital P) is just another name for God, specifically God in the role of "sustaining and guiding human destiny"(Merriam Webster's 11th Collegiate Dictionary). Hence we have a largely anthropomorphic God with a "hand" that is "invisible".

For reference, Adam Smith introduced his concept of the invisible hand in 1759, in Paragraph 10 of Part IV Chapter 1 of the book, The Theory of Moral Sentiments. Below, I reproduce that paragraph:
And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth. The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants. It is to no purpose, that the proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them. The homely and vulgar proverb, that the eye is larger than the belly, never was more fully verified than with regard to him. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets, which are employed in the oeconomy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice. The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.
In the above paragraph, Adam Smith is quite clear that greed is the main factor at work on the human level. His assertion is that despite the greed, there is an "invisible hand" (of God) that transforms rampant greed ("natural selfishness and rapacity") into social welfare. ("They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species... In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.")

Smith's later - and more often quoted – use of the term, invisible hand, in his 1776 book, The Wealth of Nations, is not any different in its thrust. Smith again talks about humankind's selfish greed and states that somehow that greed gets converted by an invisible hand into social welfare. Here is the relevant paragraph, Paragraph 9 from Book IV Chapter 2 of The Wealth of Nations:
But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
Of course, in the above paragraph there is no direct reference to Providence, but there is also no suggestion that the invisible hand belongs to anyone or anything other than Providence. Indeed, because Smith includes the phrase, "as in many other cases", in the sentence where he mentions the concept of an invisible hand, it is highly unlikely that Smith was talking about market forces, which pertains only to a specific case (commercial economy).

So what may we conclude from the above?

First, there are market forces. Those market forces – essentially supply and demand – can be studied and understood. Indeed, that has been a major – and perhaps the major – focus of the fledgling science of economics over the last 200 years. In that context, it is somewhat absurd to describe market forces as an invisible hand. Market forces are not at all invisible (unlike God or God's hand).

Second, and for what it's worth, we should be clear that the concept of market forces is really not what Adam Smith was talking about when he used the term, invisible hand. Adam Smith was promoting a laissez-faire economy (and ultimately British imperialism) by arguing – albeit unconvincingly – that the invisible hand is the most effective mechanism for achieving an equitable or just distribution of wealth.

Third, and finally, while it is true that market forces do exist, it is absolutely primitive and even inhumane to paint every dimension of economics with the same brush. Economics is not unidimensional. People and their various needs should not – and ultimately cannot – all be addressed in terms of the marketplace. Commercial economy is just one dimension of a multidimensional – I would argue quadridimensional – science of economics. Unless we take into account all of those dimensions – unless we limit commercial economy to just one of those dimensions and impose appropriate restraints on and within that dimension – there is no way other than a fully planned economy (and possibly a fully commanded economy) to hold in check the type of  rapacious greed recognized by Adam Smith. The notion that an invisible hand (an agency of Providence) or the workings of supply and demand (market forces) will provide the distributive justice that humanity requires – or even the amount of distributive justice that Adam Smith falsely or foolishly alleged that humanity already receives – is a dogma that must be rejected and exposed by all rational and well-meaning persons.

Tuesday, November 4, 2014

Is sustainability a myth?

No matter how vast they may be, all resources are limited. And all resources are interconnected. So, when talking about resources, it is better to speak in terms of utilization rather than consumption. Consumption is largely a concept of economics, and it therefore tends to limit our thinking on the subject. In other words, consumption may not accurately reflect the possible range of uses and methods of using a resource.

Any type of developmental activity – or even mere survival activity – is bound to strain multiple resources in multiple ways, both directly and indirectly. So, the goal of utilization (be it sustainability or anything else) cannot and does not exist in a vacuum. That goal is invariably connected with political, social, economic, and legal factors. With such a range of variables, it is inconceivable that sustainability can be attained in any meaningful, long-term sense. In other words, sustainability is simply not sustainable. The notion of sustainability goes against the very laws of nature. There is no such thing as physical immortality. Nothing and no one lives forever.

As the way in which attempts to achieve sustainability are implemented would inevitably depend on political, social, economic, and legal factors, so the notion of sustainability comes packed with various unstated assumptions, a hidden (or perhaps just unclear or obscured) agenda. Prominent among the unstated assumptions is the sacrosanct belief in Adam Smith's invisible hand, nowadays interpreted to mean market forces rather than Providence (as Adam Smith originally conceived it), although both are equally and conveniently vague. (Under capitalism, both "invisible hand" and "market forces" are utopic rationales for greed.)

Sustainability is a cowardly, unworthy goal for human beings. In theory, it is largely retrogressive and reactionary. In practice, it tends to be inhumane and ultimately self-defeating (regardless of any clever marketing slogans or good intentions). In short, from an ideological perspective, sustainability is a very poor choice, almost a non-starter. The only reason it has gained traction in the world is that it currently serves the interests of wealthy capitalists by exploiting common fears and sentiments among people in the developed world. The moment that advocates of sustainability start to point out that the biggest obstacle to sustainability (other than nature itself) is the unbalanced distribution of wealth – the over-accumulation of unutilized, under-utilized, or poorly utilized resources by a relative few – the irrational notion of sustainability will lose favor with capitalists and quickly be replaced by another popular dogma.

What is our ecological niche?

Some people argue that human beings don't just require food. Rather, they need a sustainable ecological niche. Here we find yet another capitalist dogma. Yes, people – and indeed every living creature – requires a congenial (beneficial) environment (ecological niche). But do people need a sustainable environment? Obviously not. For better or worse, the vast majority of people never even think about what type of environment they are passing on to their children and their children's children. If there is no air to breathe today, people feel need. If there may not be air to breathe twenty years from now, people might feel a slight twinge of fear, but they won't feel need.

Let's say that 100 years from now - all things being equal (which is, of course, never the case) – there will not be enough food for the projected population at that time. Would the human race commit collective suicide for that reason? Would the human race become extinct because of a hypothetical future condition?

The simple fact is that sustainability is largely a fiction... especially nowadays when much of what is consumed comes with planned or inevitable rapid obsolescence. It's comforting to know that when a product one relies on is no longer available, a replacement product – possibly improved – will be available in its stead. But the transition often requires a more expanded vision. For example, today we mostly conceive of the surface of planet Earth as humanity's ecological niche. Tomorrow, we may expand our vision and our lifestyle to include the floor of the oceans and the whole of Earth's atmosphere in our ecological niche. And soon thereafter, we may embrace the solar system or even the cosmos as our ecological niche.

Can they all be fed?

Some people wonder whether we can feed the projected population of planet earth. The answer to that question depends largely on political, social, economic, and legal factors. Clearly, under capitalism, with its legal dogma regarding private property, economic dogma regarding distribution of wealth based on an invisible hand, social dogma regarding upper and lower classes based on income and education, and political dogma regarding democracy - in other words, what we have now – the answer is No. Even our current global population cannot be fed under capitalism. Nor can many, many species of fauna and flora be fed. However, I don't see any reason why human population size would be an insurmountable obstacle for society – or why so many species of fauna and flora should die out – under PROUT.