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The nature of money
The idea that capitalism is natural and inevitable, like death and taxes, is part of American folk-wisdom

 

Pantea Javidan
September 13, 2005
iranian.com

I can’t remember who the first person was that I ever... heard say that capitalism is the result of thousands of years of economic evolution, or, that capitalism is simply “nature.”  But I’ve definitely read it.  I’m sure that some partygoer somewhere has passionately harangued the point after a couple of Tequila shots.

(If you’re not already disappointed that this article is not about hip-hop, or a human-interest story on the secret life of an anonymous call girl, please read on. The rest may actually interest you.)

All good courses on the history of social theory begin with a study of Adam Smith, who affirms the merits of capitalism.  Though they certainly do not end with Smith.  So it might be that as a student of sociology, economic theory, and finally, law, the ghost of Smith echoes for me in the words of average American consumers who like to engage in weekend socio-political discussions.  They may have heard of Smith, but never made it down the road to reading other popular theorists like Marx, Durkheim or Gramsci. 

Whatever its source, the idea that capitalism is natural and inevitable, like death and taxes, is part of American folk-wisdom. 

Years of studying dead white men paid off for me.  I now work for a law firm in California that specializes in securities law, i.e. the law of stocks and bonds.  And yes, the history of social theory has common practical application! 

For instance, one of our attorneys observed, “This area of law is very heavily regulated.” Then I remembered something a professor of mine said about homosexuality.  (Bare with me, I’m going somewhere with this.)  The Professor said, “Opponents of homosexual lifestyles often claim that they are against homosexual behavior simply because it is unnatural.”  In other words, nature intends for only a man and woman to lie together, which is obvious because that’s how we make babies. 

The Professor implored, “If homosexuality is sounnatural, why do we need so many laws against it?”  Conversely, if heterosexuality is the natural state of human sexuality, then we shouldn’t need any laws to uphold it.  It will happen on its own.  Naturally.  Inevitably.

Arguing that man-made things are “just natural” is a tricky thing.  Picking fruit off a tree and eating it seems rather natural.  Even exchanging an apple for another person’s orange seems natural.  But converting the tree to paper, creating machines to imprint their value upon it, setting up government agencies to regulate what money does within the framework of a specific economic system that lays the ground rules for the purchase of fruit in exchange for that paper, takes some manipulation. 

I asked myself (before anyone hit the Independent Thought Alarm to have me dragged away), “If capitalism as we know it is so natural, why do we need so many laws to uphold it?”  In fact, early twentieth century capitalism was given several crutches (regulations) after the stock market crash of 1929, on what came to be called Black Tuesday.  Everyone but the elite needed stitches in the form of social programs like Works Progress Administration and Social Security. 

After Black Monday in 1987, where the Dow Jones Industrial Average dropped 22% in one day, the government instituted tax increases to bail out the market after its biggest drop in seventy-three years.  American taxpayers picked up the bill.  New restrictions on market activities were instituted to curb massive losses and panic, “the natural crashes of the market.”  By the way, there is also a Black Wednesday, a Black Thursday, and a Black Friday, which commemorate similar economic catastrophe.  One can have a really bad week.    

The irony I notice in my area of law is that capitalism needs a great deal of assistance to run “naturally.”  More bluntly: a lot of crutches to keep it from falling on its face; heavy regulation to prevent it from cannibalizing its own proponents.  And if government regulation is not enough to create growth and hedge self-destruction in the age of global capitalism, then more extreme guerilla tactics are needed.  (See Confessions of an Economic Hit Man by John Perkins, 2004. The author recounts his life as a paid government professional using “fraudulent financial reports, rigged elections, payoffs, extortion, sex and murder” to bring local economies down, and ensure that lucrative foreign infrastructure projects were contracted to American corporations afterwards.) 

This is not to say that a capitalist economy will not grow if left alone.  In fact, the cancer cell grows for the sake of growing and taking over, eventually killing its own host.  There’s a nature argument for you!

If it is nature that we rely on to vindicate our economic systems and their failures, it may be wise to ask, “Upon which aspect of nature do we wish to mold our behavior?”  Nature, with our help, produces crops as well as cancer.  With the depletion of our natural resources, which no classic economic theorist anticipated -- whether Smith or Marx -- we may want to make sure that whatever system we choose prioritizes the environment... to preserve the very nature we depend on to provide us with vivid analogies.

And if you’re still not satisfied because this article didn’t exactly deliver what its title suggested, let’s talk next time about the use of flashy advertisements to create a market for an unpopular product -- economic theory. 

We welcome your suggestions on making it New and Improved. pantea_javidan@yahoo.com  

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