Sunday, December 14, 2014


In boardrooms, banks and governments the belief has taken root that the advance of capitalism is irreversible.
John Gray, "A Point Of View: Why capitalism hasn't triumphed"
In this case, it seems to me that boardrooms, banks and governments all misunderstand the fact that what we generally call capitalism, isn't and how societies work. Herbert Spencer understood capitalism to be the mark of "industrial societies[, where] the economy was based on contract and voluntary exchange." But that's actually a fairly rare circumstance. While the current economy of the United States isn't centrally planned, it's not laissez-faire by any stretch of the imagination.

And although I must admit to not being a particularly adept historian, it seems to me that Gray is right when he says that the formation of economies is driven by human decisions. And those decisions are often reactive, looking to correct perceived problems in what came before. Capitalism isn't free of perverse incentives, and those perverse incentives can, and have, created any number of problems that many people are keen to fix - especially when cronyism enters the picture, as it often does. Given that, it's fairly easy to imagine a situation in which societies move away from what we now understand to be capitalism, in an effort to solve those issues.

Spencer, coiner of the notorious "Survival of the fittest," tended to believe that a Darwinian evolutionary model could be applied to anything, including societies (hence, "social Darwinism"). But he tended to see evolution as a process that drove things in predictable directions, towards things that he considered superior. Boardrooms, banks and governments may follow him in that, but it is likely to end in the same disillusionment.

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