If the financial market and consumerism are capitalism’s legs, quantification and competition can be seen as its right hand (quality and cooperation being the inferior, left one – unless, of course, you are left-handed). There is no intention here to emulate the physiocrats and model capitalism on the human body, but it is tempting to see these imbalances in terms of the dominant arm: quality and cooperation were never completely excluded, but were always secondary. Quantity being prioritised over quality, and competition over cooperation had huge implications for society as well as for the system itself. To understand how and why these imbalances arose, we need to look at new ‘software’ that appeared at the same time: economics.

Natural philosophy or science made an enormous contribution to this period, primarily through new technologies but also through new ways of thinking. Suddenly, everybody, in every field, wanted to be scientific, and the economy was no exception. The physiocrats, and even much earlier, some Muslim scholars, had tried to make sense of the economy. However, as full-blown capitalism and industrialisation took root in the Anglo-Saxon world, a new figure emerged, the aforementioned Adam Smith, whom many later economists saw as economics’ equivalent of Isaac Newton. After all, Smith was greatly influenced by Newton. His invisible hand[1] is nothing more, nothing less than an attempt to discern a natural law of economy, akin to that of gravity. As already pointed out, Smith was not an apologist for capitalists, and would be dismayed if he knew how selectively his work would be sometimes used for ends he never intended. It is often ignored that embedding economics within his moral philosophy was even more important for him than providing a scientific foundation for this new discipline. Still, he did write:

By pursuing his own interests, he [every individual] 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. (Smith, 1776)

Sadly, in this, Smith was simply wrong. In fact, one of the most successful groups of entrepreneurs with banks in every major city in Britain at that time was the Quakers. And Quakers were very socially conscious, providing accommodation and education for their employees and their families, building roads and bridges, and so on. Much good was done in real terms, and this did not hinder their entrepreneurial success. There were many other socially conscious individuals and groups. So, why would a moral philosopher who was dedicated to the betterment of society ignore them and insist on self-interest only? One reason was that Smith lacked both data and first-hand experience (the bases of contemporary quantitative and qualitative research, respectively). He was, like any other intellectual at that time, enamoured with natural science. He desperately wanted to come up with a ‘scientific’ laws of economy. However, in his efforts to do so, he was actually not very scientific, relying on his own, quite subjective, ‘affectation’. ‘I have never known much good done…’ is evidence of his ignorance rather than the result of serious research of the matter.

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But there was another, more important, reason for Smith’s blind spot. If you want to create a universal law of economics, it has to be something stable and not open to the whims of individuals. So, he had to dismiss the public good as a motive because it is not universal: ‘it is not very common among merchants and very few words need be employed in dissuading them from it…’ In other words, it is unstable – it cannot be a part of a universal law. Self-interest, on the other hand, can be, because at least some degree of self-interest is always present – or we can always choose to plausibly interpret somebody’s actions in this way.

For all its flaws, a selective reading of Adam Smith became an orthodoxy, for two reasons. First, it suited capitalists, naturally, to think that by taking care of their own self-interest they were taking care of society. Second, as already mentioned, many people were attracted to the possibility of making economics reputable by establishing its own laws. Adam Smith’s work even influenced Charles Darwin, and Darwin in turn further influenced other economists. One (arguably unfortunate) consequence of this was that favouring competition over cooperation took hold. But this was not all. Economists, following other scientists, tried to quantify and mathematise the economy, effectively excluding humans and the quality of life in the name of science. All classical economists, with the possible exception of John Stuart Mill (1806–1873), shared that allure of science and subsequent reductionism.

In a nutshell, favouring quantity and competition was no accident. It is easy to see how quantification was a natural ally to fiat money and consumerism, and competition to individualism and the financial market. Such alliances led to the rapid rise and spread of the new social system. The train of capitalism was well fuelled and ran with unprecedented speed, but was not yet out of control.

[1] The market force that is supposed to spontaneously regulate the demand and supply of goods.

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