Sunday, June 10, 2012

An Inquiry into Human Nature and the Cost of the Wealth of Nations

Adam Smith would be far less popular today were it not for his indolent generalizations about the march of progress in America and his contempt for Asia.  Nearly 240 years later, as we watch as the economies built on his perfunctory musings crumble despite the most impassioned interventions, it is ironic that we still blindly follow our Hobbesian Narcissism to his Echo.  Wealth is Power, we hear in the romantic distance and gaze longingly into the pool of our reflection puzzling over the beauty of our own projection.  Like the woodland nymphs of antiquity, European leaders intervene in Spain this weekend while the U.S. Congress and the sparring presidential campaigns blissfully ignore the 'fiscal cliff' looming at year's end.

In his Wealth of Nations, Adam Smith writes:

Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man's own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour therefore, is the real measure of the exchangeable value of all commodities.

It is ironic that this Spring and Summer of European discontent is emanating from economies that have long shunned the very labor celebrated by their economic demigod.  Far more insidious is the abject failure with which U.S. economists and their operators adequately price the cost of our economic dependency built on our militarized extreme of the "command" of labor.  Our "fiscal cliff" is looming larger than all estimates given the fruit borne of our unconsidered resolution to violent control of commodities which, having yet again lurched into military campaigns in Iraq and Afghanistan from which we will have no quantifiable gain, we will seek to repatriate our soldiers and repurpose our industrial complex only to find that we've built nothing of transferrable value.  While at the end of the Great Wars we were able to forge a civilian manufacturing base, exactly how do you repurpose unwitting mercenaries and nation-building consultants who failed to build what they were handsomely paid to build?  Bringing our soldiers home to unemployment and having austerity hit our defense budget in January leaves the U.S. in the unenviable position of adding violence to austerity.  And we thought that with our wealth came power.  Hobbes didn't see that with violent power comes moral poverty

The fallacy of historicism so richly imbued in Smith's view and so warmly embraced by his protégés is built upon a linear regression that suggests that:

Free Natural Resources + Commanded Labor = Colonial Wealth.

Now we clearly don't wish to think of ourselves as still living in the bigotry of colonialist models.  However, as I pointed out in last week's post, the shareholders of Rio Tinto's Bougainville Copper Limited celebrate surrogated cannibalism when they turn a blind eye towards the death of 20,000 people so their company can enforce a mining concession granted by the U.N.-sanctioned colonial administration of Bougainville by Australia!  When Smith's 'command of labor' is taken to the militarized extreme, we find ourselves building an entirely unsustainable order of affairs which is sure to collapse - most probably in the most inelegant of ways.

In my presentation tomorrow (the manuscript will be published in the Proceedings and is available upon request), I will be suggesting that wealth needs to be redefined and liberated from its dominion-based, colonial empowered moral bankruptcy.  In an argument suggesting that sustainability is a function of the ability to enjoy non-destructive utility of matter and energy while preserving as much essential optionality as possible, I propose that:

wealth = utility x retained optionality

where ∞ = ∫ of all users across all value dimensions

When one considers this formula, one can readily see that the greatest wealth is experienced when the maximum benefit can be derived (in number of participants) from the least phase and state alteration (for more on this, take a look at my previous postings on Phase and State Coherence).  And the more value (in terms of integral accounting) dimensions can be simultaneously appreciated by the more participants, the greater the momentary and residual wealth.

In future posts, we will broaden the inquiry into this expansion of Buckminister Fuller's view of wealth which he described as the, "organized capability to cope effectively with the environment in sustaining our healthy regeneration and decreasing both the physical and metaphysical restrictions of the forward days of our lives."  By liberating this definition from its linearity, one can see that a Common Wealth can emerge, be characterized, and, in application, be the basis for a More Perfect Union.


  1. bravo, David - is it me, or does your voice become more clear with each new post?

    good luck tomorrow and I would definitely like to have access to the manuscript of your presentation. I especially look forward to sharing Buckminster Fuller inspirations. I keep running into more and more references to his work, happily so.

  2. David,

    Last night I began to write about coherence and dissonance in a discussion of money in politics. I like that I was also considering human futures when we ‘don’t know from Adam’ Smith, addressing Phase, via incrementalism, imagining recovery from collective tailspins induced by too long at stall speeds, hidden by artificial momentums.

    From late last night:

    “Once it is realized, from within the current structures, that the long term lucrative depends on integrating multiple bottom lines [on integral accounting], in opening the processes of influence to the relevance of greater common good(s), we may actually begin to see transitions to forms of political responsibility which tend inherently to be more unifying than divisive.”

    “The accommodation of effectively inclusive interests will need to be shown to also hold greater fiscal promise than goals defined by mere market-state profitability. In other words, the deadlock of the stranglehold of money on politics requires an aikido in terms of radically accepting the state of affairs and turning it into what else it can become. Otherwise, further divisions, and their polarizing/centralizing of power, remain the norm.”

    “…I look for alternative and intermediary steps to undo undue influence. …corporations, being one of our main institutional forms, are entitled to a certain voice in policy in accord with their responsibility toward the whole of the nested societies which they're embedded in. A reciprocity of endorsement isn't necessarily unhealthy either. When sectors refrain from locking interests into narrow reciprocity, and commit to non-privileging strategies (something we haven't seen yet) the legislation of separations [church/state, public/private] may no longer apply. True separations seem to depend on that differentiation of motivation and of behavior. Until then, as Senator Dick Lugar told me in '91, 'we can no longer rely on morality. So we need the rule of law'. Today I'm positing a Second Morality, one coming after the parental interventions of legislation.”

  3. (trusting this pertains more directly…)

    In light of one of Bucky’s more succinct definitions of wealth, “Wealth is know-how”, we could read ‘wealth’ where ‘power’ is written in Hannah Arendt‘s lecture, Reflections on Violence:

    “…it is not enough to say that power and violence are not the same. Power and violence are opposites; where the one rules absolutely, the other is absent. Violence appears where power is in jeopardy, but left to its own course its end is the disappearance of power. This implies that it is not correct to say that the opposite of violence is nonviolence: to speak of nonviolent power is actually redundant. Violence can destroy power; it is utterly incapable of creating it.”

    Recourse to violence results where ‘know-how’, or optionality, is insufficient to achieve an assumed end without it. The longer an adopted ‘internal logic’ operates, such as in Smith’s adherents, the greater the incidence of external disconfirmations. Long views still indicate that self defeat is predicated on other defeat. Whereas (to paraphrase Fuller) ultimate private success depends on universal success.


Thank you for your comment. I look forward to considering this in the expanding dialogue. Dave