FUCK SMITH. UP WITH NASH.
U.S. economists keep referring to the American style of economics as “capitalism,” modeled after the theories of Adam Smith (even though he never mentioned the word “capitalist”). Smith’s scheme was regarded as the perfect economic guide for navigating a free, open market. He believed that people acting in their own private interests will eventually result in the greater good for the greatest number. For example, one person or company supplies “capital” – money, infrastructure, machines – toward a manufacturing operation, and she/he hires people to work it. Capitalists benefit because they make a profit; the workers benefit because they get paid.
In practice, this theory has proved disastrous. For one thing Smith lived over 200 years ago when a few free markets still existed. But for the last 80 years there hasn’t been a free market anywhere on Earth, except among the Amazonian Indians. Second, Smith underestimated human levels of insensitivity and greed. For “capitalists,” the natural trajectory is to minimize costs and maximize profits – over every other consideration, including human, plant and animal life.
Smith’s form of capitalism will lead exactly to where we are – massive imbalance of wealth, destruction of eco-systems, chronic poverty, endless warfare over scarce resources.
John Nash proved that Smith’s formula was wrong, or incomplete. Nash demonstrated that the greater good for the greatest number will only come about if everyone works in their own private interests plus the interests of the group.
This slight alteration requires a major shift in thinking. It means that all members of a group agree to occasional personal sacrifices to ensure that everyone has the same level of security, shelter and food.
I offer this idea as a possible model for future communities . . . after the shit hits the fan.