Plus... Breaking Up In The Digital Age... What's The Connection?
In which Adam Smith and Jane Austen both take their bows
The moment I heard about the Google/Verizon deal, I thought of Google's supposed ethic: "Don't be evil".
Ooops!
Such is virtually always the fate of marketplace enterprises. The market rewards virtue... up to a point. But it rewards vice far beyond the limits of virtue, though not indefinitely, as the recent financial crisis revealed. And when the market fails, that's when the libertarians duck out for a quick one.
Remember Net Zero? Remember when it was free? And they ran those ads where they pretended to be
defending freedom against Big Brother?
Then the business model failed.
Ooops!
Dating back several centuries, liberalism is is connected to the market, but surprisingly few people seem to realize why. It's not because the market is good, but because it holds the potential to turn even our more selfish desires toward more useful ends. This is Mandeville's Fable of the Bees:
The Fable of The Bees: or, Private Vices, Publick Benefits is a book by Bernard Mandeville, consisting of the poem The Grumbling Hive: or, Knaves turn'd Honest and prose discussion of it. The poem was published in 1705 and the book first appeared in 1714.[1] The poem elucidates many key principles of economic thought, including division of labor and the invisible hand, seventy years before Adam Smith (indeed, John Maynard Keynes argues Smith was probably referencing Mandeville[2]). It also describes the paradox of thrift centuries before Keynes, and may been seen as part of the school of underconsumption.
At the time, however, it was considered scandalous. Keynes reports in his General Theory of Employment, Interest, and Money, that it was "convicted as a nuisance by the grand jury of Middlesex in 1723, which stands out in the history of the moral sciences for its scandalous reputation. Only one man is recorded as having spoken a good word for it, namely Dr. Johnson, who declared that it did not puzzle him, but 'opened his eyes into real life very much'."[3]
In the Dictionary of National Biography, Leslie Stephen describes it as follows:
Mandeville gave great offense by this book, in which a cynical system of morality was made attractive by ingenious paradoxes. ... His doctrine that prosperity was increased by expenditure rather than by saving fell in with many current economic fallacies not yet extinct. Assuming with the ascetics that human desires were essentially evil and therefore produced "private vices" and assuming with the common view that wealth was a "public benefit", he easily showed that all civilization implied the development of vicious propensities....
Keynes observes that this is a precursor to his theory of effective demand. He notes that the book describes the paradox of thrift-showing that a community that forsakes luxury for savings achieves neither.
But, of course, the fact that the market can turn private vices into public virtues doesn't mean that it only and invariably does so. Nor does it mean that this obviates any need for straight up public virtue--as should be exceeding clear from Adam Smith's second most famous book, The Theory of Moral Sentiments, which develops the Scottish Enlightenment's theory of benevolence, pioneered by Francis Hutcheson, but which Smith put on a more empirical foundation (following the lead of the most famous Scottish Enlightenment philosopher, David Hume).
The Theory of Moral Sentiments begins with the following assertion:
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it. Of this kind is pity or compassion, the emotion we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrows of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous or the humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.
Smith departed from the "moral sense" tradition of Shaftesbury, Hutcheson, and Hume, as the principle of sympathy takes the place of that organ. "Sympathy" was the term Smith used for the feeling of these moral sentiments. It was the feeling with the passions of others. It operated through a logic of mirroring, in which a spectator imaginatively reconstructed the experience of the person he watches:
As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation. Though our brother is on the rack, as long as we ourselves are at our ease, our senses will never inform us of what he suffers. They never did, and never can, carry us beyond our own person, and it is by the imagination only that we can form any conception of what are his sensations. Neither can that faculty help us to this any other way, than by representing to us what would be our own, if we were in his case. It is the impressions of our own senses only, not those of his, which our imaginations copy. By the imagination, we place ourselves in his situation.
Sympathy arose from an innate desire to identify with the emotions of others. It could lead people to strive to maintain good relations with their fellow human beings and provide the basis both for specific benevolent acts and for the general social order. Thus was formed within the beast the psychological basis for the desire to obey natural laws.
This is not where things end, merely where they stood more than 200 years ago. It would be tragic if we had learned nothing since. Instead, we fall prey to a different tragedy: much has been learned, but is systematically ignored.
The simplest learning is that markets can be shaped and structured to make them more conducive to fullfilling virtuous ends, and less likely to lead to ruin. We must first disabuse ourselves of the notion that markets are magical or sacred things, totally immune to our understanding.
Here it may be useful to consider more recent history. The 1990s, before the dot-com bubble burst was an era of technolibertarian ecstasy. The Internet was going to make us all rich, liberate us from all tyranny, and make government obsolete.
Well, not exactly. While there was some very astute criticism of all this--most notably, Paulina Boorsook's amazingly insightful Cyberselfish: A Critical Romp Through the Terribly Libertarian Culture of High Tech (my review here)--we can now see irrefutable evidence of how wrong all this thinking was everywhere teenagers--or even college kids--can be found, as explained today in Salon, ""The Breakup 2.0": The new old dating etiquette":
For Jane Austen, the lives of ordinary men and women in provincial towns could be the stuff of great drama, because those lives were themselves dramatic -- they were lived largely in public, and involved a constant performance of roles. To be a woman, in particular, meant negotiating the boundaries of gentility and commonness, virtue and disgrace, with all eyes upon you. Make a mistake in the social script, and you could be damned to spinsterhood, or worse. Today, in our more liberated and anonymous society, there is only one phase of life when our romantic and sexual lives are so open to public scrutiny, when social status is totally determined by public opinion. That is in adolescence, in high school and college, where young people are packed together in an artificial society, and turn their fiercely judgmental gazes on one another. As the movie "Clueless" showed, Jane Austen in high school makes a profound dramatic sense.
"The Breakup 2.0," a limited but very intriguing new study by Ilana Gershon, suggests that for teenagers, the explosion of new social media over the last few years is making the 21st century even more like the 19th. Drawing on interviews with undergraduates at Indiana University, where she teaches, Gershon sketches a new social world that is mostly invisible to anyone who graduated college before, say, 2000.
Long story short, the 1990s techno-geek dreams of liberation have turned instead into a recreation of earlier, much more densely socially-networked worlds. This is both a good and bad thing, depending on what we do with and about it--which in turn depends on how wise we are, starting with our willingness to look at the data, as opposed to obsessing over ill-informed fantasies.
It was inevitable that Google would turn evil, sooner or later. That's the nature of markets. We should have seen it coming. Just as it was inevitable that the "freedom" of Internet technology would re-create the deeply-inspected, densely networked world of Jane Austen's country gentry.
We have no choice: either we must choose our future, or our future will choose us.
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