University

03/31/2010

Civilizing the Economy: what we can do if the myths of capitalism don't add up to the facts

If you want to prove capitalism works, you might think back to 18th century Glasgow.  That’s where Adam Smith was when he created the theory of market capitalism – he looked around, saw open markets, saw competition, saw the industriousness and prosperity that resulted, and correctly concluded that a system of free markets based on competition benefits everyone.

Everyone, that is, except the slaves.

Because what Smith’s famous example leaves out is the fact that Scotland’s prosperity was the result not just of free markets, but of slaves in the Americas producing tobacco that could be shipped to Scotland for processing.  Without the slaves, the system wouldn’t have worked.

Smith knew it, too.  He roundly condemned slavery as an evil thing in his moral writings, but simply considered it part of doing business in his economic writings – prosperity trumped human rights, because economics has nothing to do with morality.

That’s the finding of Saybrook faculty member Marvin Brown’s provocative new book Civilizing the Economy: A New Economics of Provision. “When he’s talking about slavery in his economic works, slavery is an economic issue, and when he’s writing his moral treatises, it’s a moral issue, and he never connects the two,” Brown says. “And we’re still seeing that disconnect today.  We’re living it.  It’s at the very basis of our identity.”

The implications for capitalism are enormous.

“If he had written about this, of course, he would have had to abandon the notion of an invisible hand directing the economy,” Brown writes.  “It was not the invisible hand that coordinated the production and distribution of tobacco (among other goods), but the whip of the slave driver, the helping hand of the Scottish merchant, and the imperial hand of the British government that protected and maintained a very lucrative Atlantic commerce.  Without the invisible hand, Smith’s whole view of human progress would require a major review. The story he did tell us, in other words, was in large measure a fabrication." 

It gets worse for the fathers of free enterprise.  Brown has found that John Locke, the legendary moral philosopher whose defense of property rights puts them at the heart of democratic freedom – if you can’t own property you can’t be said to be free – was himself a major investor in the slave trade.  It was so shocking Brown had to check it twice.

“He not only invested in the slave trade, he served as the secretary of an organization that was monitoring plantations in the Caribbean,” Brown says.  “He was very much involved in this.  So what’s very amazing is that here, in his Second Treatise of Government, he talks about liberty and all these nice things, and when he was writing that, he was making money off the slave trade.  How do you deal with this contradiction?”

Once again, the need to make a profit was more important than a consistent – and humane – position on human good.

If that sounds suspiciously like global capitalism today – where major powerbrokers break all the rules and justify it with their bank accounts – it’s because these thinkers, Locke and Smith, developed the system we have today, a system that claims to lift all boats while leaving millions in abject poverty. 

In the end, Brown concluded, that’s because the focus of this system is on property rather than people.

“Ninety percent of labor law is based on property law,” Brown says. “They buy your labor, and you are a commodity:  the basic rights of citizenship don’t exist in economic institutions. That’s because in the current economic model the only things that count are the things you can treat as commodities.  So if you approach the biosphere, the environment, you’re asking ‘what is the price of clean water?  What is the price of clean air?’ These things can’t be good for their own sake, and rights aren’t commodities, so none of that counts.”

If the recent economic collapse, and the suffering of millions, proves anything, it’s that we should do better.  Hence Civilizing the Economy:  “we need to move from an economy founded on property relations to an economy founded on civic relations,” Brown says. “That’s what the book tries to argue.”

What would the new economy look like?  Much wouldn’t change:  there would still be capitalism, free markets, private property ... most of what makes the modern economy work.  But there would be no false separation between economics and morality.  “The hard division between economics and politics kind of evaporates,” Brown says. “Instead of strictly economic analyses, strictly political analyses, we’d have contextual analyses:  asking how the economic system fits in with society in order to preserve and encourage the goods we value.  The civic sphere becomes the platform for guiding the economy.”

The three basic activities of human communities, Brown suggests, “are to provide for one another, protect one another, and to find social meaning – and that appears throughout the book, eventually leading to the change of our systems of provision, like the food system or the health care system or the housing system, so that they meet these needs in a sustainable way.” 

He calls it the “economics of provision,” and perhaps the most important thing to recognize about it, he says, is that it’s not a government process at heart – it’s a civic process.  Much in the way that the health food movement finds its greatest success when it convinces people to change their eating habits for themselves, instead of relying on government incentives or coercion, the civic process at the heart of the economy of provision requires people to change the way they relate to the world ... deemphasizing property and reemphasizing people.  

“The best of these conversations happen in all kinds of associations:  neighborhoods, churches, non-profits ... I’m not advocating that government should control things,” Brown says.  “I’m saying that we as citizens need to be having civic conversations in a context where there are certain characteristics of the conversation that makes it civic:  we can tolerate disagreement, for example.  A lot of people are working on that, I’m not alone in saying ‘what does that look like?’  My website has a small list ... I hope it will grow ... of organizations involved in civic conversations.  There are a lot of organizations trying to do this.

Civilizing the Economy has been released in the UK, and will be available in American bookstores by the end of April.  Copies are available for order.  Click here to order, or visit the website at www.CivilizingTheEconomy.com

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