If we see the economy is a social system, then like other social systems, the economy does not have its own self-organizing principle—like some invisible hand—but is influenced by both positive and negative feedback loops that reinforce and resist specific trends. Once we understand the trends of our economic-social system, then it is possible to identify the persons, groups, and institutions located at different places in this system. If you are located in a bank in Basel, Switzerland, for example, you will have a larger possibility of controlling the economy than someone on the street in Oakland, California, even though both locations belong to the same global economy.
If you want to understand the foundation of libertarianism, there is no better place to look than Adam Smith’s view of property relations.
Sometimes a picture is worth a thousand words, or almost a thousand. As I demonstrate in Civilizing the Economy, Adam Smith knew that the slave-based tobacco trade was a major source of wealth in Scotland and especially in Glasgow, where he lived when collecting material for The Wealth of Nations. Instead of telling us this, he tells us about the invisible hand, a good illustration of what we can call the economics of dissociation: a process of splitting off the misery of the real providers of wealth and then feeling optimistic about market dynamics.
I appreciate David Korten’s call for a new vision of economic life (see New Economy Network). I also agree with him that many groups around the world are putting such a vision into practice. The question I have been asking is what is preventing us from moving in the right direction.
