That system – capitalism – is guided by the “Invisible Hand,” the metaphor for economic markets associated with the great Eighteenth Century Scottish philosopher Adam Smith. The hand guides people to serve others in the pursuit of their own interests, and produces a broader good that, as Smith put it, is “no part of their intention.” Critics however claim that the hand is tainted by greed and exploitation, leads to inequity and dangerous corporate power, and threatens not merely resource depletion but planetary disaster.
Foster, with Adam Smith as his constant reference point, probes misunderstanding, fear and dislike of capitalism – and political exploitation of those feelings -- from the dark satanic mills of the Industrial Revolution through to the murky concept of sustainable development.
His journey takes him from New Jersey in the wake of Superstorm Sandy, through Kirkcaldy, the town of Smith’s birth, Moscow McDonald’s, Karl Marx’s Manchester and Ayn Rand’s Hollywood.
His cast of characters includes the man who wrote the entry for “capitalism” in the
Great Soviet Encyclopaedia, a family of Kirkcaldy butchers, Charles Darwin, the father of evolutionary theory, numerous Nobel prizewinning economists, a colony of chimpanzees, and Bill Gates.
Foster suggests that the key to his conundrum – and why so few people even see it as a conundrum -- lies in the field of evolutionary psychology, which offers to help us understand both why some of what Adam Smith called our complex “moral sentiments” may be outdated, and why so many of our economic assumptions tend to be wrong.
Since commercial society has been evolving at light speed relative to our biological evolution, we are in many ways hunter gatherers with iPhones. The Invisible Hand is counterintuitive – and many of its processes and results morally objectionable -- to a human mind formed predominantly in a small close-knit tribal environment, where there were no extensive markets, no money, no technological advance and no economic growth.
Equally important, we don’t have to understand the rapidly evolving economic “natural order” to operate within it, and enjoy its benefits, any more than we need to understand our nervous or respiratory systems to stay alive. But that also makes us prone to support morally-appealing but counterproductive policies such as minimum wage legislation, which hurts the very people it is claimed to help.
Foster notes that politicians and bureaucrats throughout the political spectrum consciously or unconsciously exploit moral confusion and economic ignorance for their own ends. Ideological obsession with market imperfections, income gaps, corporate power, resource depletion and environmental destruction are useful justifications for those seeking to control our lives. For our own good, of course.
He refutes claims that capitalism’s validity depends on the system being “perfect” or economic actors “rational.” He also notes the key difference between capitalism and capitalists, who are inclined to misunderstand the system as much as anyone.
Corporations, he points out, can usually only become dangerous through government favour. Moreover, if big business is to be condemned, it should be not for flinty-eyed devotion to profit maximization, but for falling for subversive notions such as corporate social responsibility and sustainable development, and agreeing to beg for “social licence” from radical, unelected environmental non-governmental organizations, ENGOs, whose own political power has soared in the past two decades.
Related to the rise of the ENGOs, Foster deals with one of the biggest and most contentious issues of our time: projected catastrophic man-made climate change. He notes that while this theory is cited as the greatest example in history of “market failure,” it in fact demonstrates how both scientific analysis and economic policy can become perverted once something is framed as a “moral issue,” and thus beyond debate.
Foster’s book is not a paean to greed, selfishness or radical individualism. He believes that the greatest joys in life come from family, friendship and participation in community. What has long fascinated him is the relentless claim that capitalism destroys these aspects of humanity rather than promoting them.
Moreover, he concludes, when you bite the Invisible Hand… it always bites back.
Why We Bite the Invisible Hand: The Psychology of Anti-Capitalism
By Peter Foster
Pleasaunce Press. Toronto. 2014
Publishing date: May 1
For review copies or to interview Peter Foster, email pleasauncepress&rogers.com, or call 416-636-1886.
