The free market adorns a hierarchical and unjust system
What if individualism, freedom and free market are all ideological justifications for a system that is built around opposite different principles?
In my book Garden Earth (2013) I wrote the following:
”The idea of a market that, without design or control, still regulates itself and allocates resources where they are best needed, through individuals working out of self-interest, has a lot of similarities with the natural selection process that drives evolution. In that way, capitalism could be seen as at least given by Nature, if not given by God. How strong this narrative is can be seen by how hard it is for us, after just a few generations, to think about labour outside the category of wage labour, and how natural it is for us to buy and sell land.”
Undoubtedly, natural selection on the individual level is a powerful driver of change and adaptation for species. But when looking at the development of human society the last 100 000 years it is quite obvious that other factors than genes have been at play to develop humanity. Now, some geneticist may complain and say that evolution is a process driven by random selection and natural selection and there is no evolution on other levels. I believe that such a narrow definition of evolution is pointless. Even if you accept this reductionist narrative it is obvious that by changing our habits of life and food we also have changed our genes. Those of us migrating out of Africa didn’t do that because we had a light skin and could not stand the sun, but we migrated and the skin colour changed afterwards (and yes, that can be explained by natural selection!). The same goes for lactose tolerance, just to mention a few very obvious cases.
But apart from pure genetic changes, humans have also developed a cultural layer and many technologies. This cultural and technical evolution of humans is the main cause for our success. I know that many question how much of a real success it is that we have eradicated other species and put the climate on route to a hothouse, but in a narrow sense you must admit that we have been extremely successful.
One very important aspect of this evolution is our ability to work in a group, first in smaller groups of say 20 people than perhaps a few hundred and now in enormous constellations such as nations, multinational companies or what not. Most of human success can be attributed to this ability. Even our technology and knowledge is a result of us pooling resources and dividing tasks. In a biological sense you can see humans as an eusocial or prosocial species, or even a superorganism. There is a lot of controversy around these terms and what they really mean, but I don’t want to get into that here but instead focus on some salient features of human society and culture which from what I can understand is existing in all human societies. The list is not exhaustive and they are just things on top of my mind and relevant for this particular discourse. if you can find one example of a group that doesn’t score on all points, I can assure you that it is a group that has not been very successful:
The group has some kind of world view or belief system.
There are rules for behaviour within the group (there will also normally be rules for the interaction with other groups). The rules can take many forms and be embedded in religion, formal laws or just common norms, often all of them at the same time.
There is a certain level of division of work/task among group members, formal or informal. This normally increases with group size.
There are some kinds of hierarchy or status within groups (this doesn’t have to imply bullying or dictatorship, even if that has also been far too common). This also normally increases with group size.
The group take care of weaker or sick members of the group.
The group take some responsibility for raising of off-spring e.g. by training youngsters, taking care of orphans.
Behaviours which are damaging for the group as a whole is suppressed and behaviours which strengthen group cohesion is encouraged.
There are of course many different conclusions one can draw from this, but let me focus on the relation between this and the notion that seeing to ones self-interest, individual freedom and a free and unregulated market gives the best result for human societies. This is the raision d’être of capitalism all the way back to Adam Smith’s “invisible hand”.
In the paper Economic development and the death of the free market (2021), heterodox economist Blair Fix (who has a very interesting blog that I can recommend), scrutinise this from an evolutionary (developmental) perspective. I pick up a few of his interesting points here, with my own interpretation and expansions.
Both Adam Smith and the neoclassic economists basic theories, treat each individual as an economic agent in the market. But the reality is that today almost all economic agents are firms, sometimes with more than 100 000 employees. Most value creation, innovation, transactions and development takes place within the firm and thus not by individuals working in their self- interests, which is the basic tenet of the free market discourse. Some companies have tried to impose a system of internal competition within the firm, with limited success (some internal competition is inevitable, especially around promotion, but a strong sense of cooperation and company culture is more important for a successful company). The activities within these firms are mostly strictly and hierarchically planned. This is of course a troubling fact for those that see market economy and planned economy as opposites.
With increasing energy use, bigger markets and globalisation the size of firms increases and the levels of hierarchy increases within firms. Blair Fix has developed indicators of hierarchy and how they change with firm size and energy use of societies (as a proxy for economic development). In addition, governments grow and with that regulations – after all that is what government is about, in addition to education, welfare and defence. Even whole countries portray themselves as economic agents when they say “we need to be more competitive”. In the next step they motivate all kinds of government interventions to become more competitive, e.g. by extending compulsory schooling for more years, or investing in some specific technology (flying to the moon) something decisively not in line with the free market approach.
According to Blair Fix, the ideal of the free market has grown in parallel with this development. This could have two explanations. The first is that the free market paradigm is a counter-reaction to the increasing consolidation in the economy. The second is that the free market jargon is an ideological cloak for a capitalism that is not really built on a free market or individualism but on a hierarchical system of exploitation. This would not be the first time a system has an ideology or an official cause for existence that is contrary to the actual workings of the system. That has rather been the rule during most of human history. Successful human groups must have belief systems that motivate group cohesion and they must always be based on that the system is “good”, even if it is a dictatorship.
the ideological effect of free-market thinking may be to facilitate the growth of hierarchy.
Blair Fix concludes that the free market is an ideology in the same way as the individualism that is an essential part of the free market paradigm:
While, in principle, they stand for the autonomy of the individual, in practice they stand for the autonomy of business firms. By promoting this autonomy, these ideas may implicitly legitimize the hierarchy within firms. The ‘freedom’ of the free market therefore translates into the power of firm owners to command. It is ‘power in the name of freedom’. This doublespeak may be why free-market thinking has spread at the very time that hierarchy appears to have increased. Contrary to the theory’s scientific claim, the ideological effect of free-market thinking may be to facilitate the growth of hierarchy.
In the paper, Blair Fix also makes a similar observation regarding ”freedom”, supposedly a fundament of modern liberal democracies (whatever that means) and often tied to the free market narrative. Freedom, in some kind of absolute sense, is contrary to the fundamentals of group cohesion, which in turn is a condition for most of human progress. A certain level of submission to group rules, norms and expectations is always necessary, not to speak about the fact that nature and material conditions also limits our ability to do whatever we want. There is a lot more to be said about freedom, but that is for another time.
Freedom is not achieved for all, if it depends on the unfreedom of anyone.
"But when looking at the development of human society the last 100 000 years it is quite obvious that other factors than genes have been at play to develop humanity. . . . But apart from pure genetic changes, humans have also developed a cultural layer and many technologies."
Here's a perspective from an anthropologist (me). 1) Genetic changes are slower than 2) long-term physiological adaptations, which are slower than 3) short-term physiological adaptations, which are slower than 4) cultural changes, which are slower than 5) individual changes. Or you could flip it around and say individual changes are faster than cultural changes, etc. These adaptations are on a continuum. Here is an example of oxygen uptake from my first book, which you have Gunnar, since you suggested we buy each other's books 10 years or so ago. I did so and I assume you did too. (If you remember, it was too difficult to send each other copies so I suggested we just buy them.)
Tibetans have a genetic ability to survive and thrive at high altitudes by being more efficient in oxygen uptake in the thin air at altitude. The genetic changes seem to take between 15-20,000 years. (I am willing to be corrected if someone has a more specific range.) The Peruvians have a long-term physiological adaptation for high altitudes in their pulmonary systems, such as barrel chests with larger lungs for their body size. When the Spaniards conquered the Incas, they were able to adapt similarly in their physiology within three generations. The short-term physiological adaptation is to increase red blood cells, which one can achieve in 10-14 days. I first experienced this when I was a ski bum in Vail, which is at 8000 feet. The cultural adaptation is to carry oxygen tanks.
Now, another point in focusing on speed of adaptation over time is that culture still moves too slowly to keep up with changing times. This explains why so many of us in the 1960s jumped off the train of the immoral and negative US economy pumped up by waging war on innocent villagers in Vietnam. In this case, the culture cannot move fast enough. It still can't. This puts the kibosh on the importance AND the preference for the group. If you are trying to get everyone on the same page in order to make change - like Bernie Sanders - you will fail. Oops.
One can do a deep dive into Durkheim, Weber and other famous sociologists who prioritize the group over the individual in human evolution. I take a dim view of this. What is my evidence for this contrasting view that many people hold on to? As Darwin said, "Natural selection acts upon the individual." Also, when the last surviving native speaker for any language dies, the culture dies too. Bummer. Therefore, culture prioritizes individual transmission, which makes sense since culture has been subject to natural selection for millions of years.
And yes, I know all about the controversy and have read all about it by other anthropologists who have lots more letters after their names than I do. But focusing on the group STILL seems too simplistic to me. AND you get nowhere if you depend on the GROUP to make change. Even in the big demonstrations I participated in fifty-five years ago that actually had some impact on the Draft and the War, there were individual gatekeepers and leaders who got things done. I challenge anyone to show me a group that makes group decisions. If you actually go to the meetings, you will find that individuals make the decisions and the other people sign off on them. Just like in the anitwar demonstrations. A few people organized the marches and the rest of us provided the bodies.
The false and phony emphasis on the individual in state-level society is another issue. (I am talking about something more basic that underpins the whole band-tribe-chiefdom-state schema.) I won't go into that now, although I have done so many times on social media and in my books.