In the physical world, the flow of water creates a stream gradient that erodes and nourishes the land into characteristic landscapes. In the same way, the flow of wealth through human society has the power to organize and shape many attributes of culture. One of the most important feature of this gradient of wealth is how moving up or down within it changes one’s experience. This change of experience is one of the main allures for acquiring wealth. However, the change happens in more ways than we are usually aware of. The most important change is that “moving up” brings us into contact with a new group of people – people associated with more money – and further away from many of those people we associated with before.
However, once things readjust after we’ve moved up, we will experience ourselves as still somewhere in the middle. This is unavoidable because wealth is a gradient. You will always be surrounded by people with more money and with less money. You will never get to the top. Any economic desire based on getting “to the top” will be insatiable. However, probability is that as you move up, you will meet more people for whom the possession of wealth is important to their self-image. This is because these people are more likely to invest more of their life energy to accumulating wealth and so they concentrate higher in the gradient.
There are many paths by which one can move up the gradient of wealth. Many of these paths aggressively seek wealth. I’ve encountered people on these paths only a few times but their aggression was so strong that within minutes I realized that for me, no amount of money could compensate for becoming like that. (To hear this mentality, watch Enron: Smartest Guys in the Room and listen to the voice recordings of some of their traders during the California energy “crisis”.) What happens to one as one moves up within that particular channel of the gradient of wealth? For them, the world is like a Monopoly game and they are trying to get control of as much of the property and money as possible. Pursuing this “game” brings them into association with others who see and behave in the same way so that this interactive game becomes their reality. Sustainable societies have created barriers to limit the damage from their greed. (Child labor laws, environmental regulations, truth in advertising laws) One strategy that emerges within the game is using your wealth to alter weaken these barriers in ways that steer more wealth to you. Like goats pushing against fences, these people will push with their money against regulations that limit their profits. For them, it’s a simple economic calculus quite independent of any philosophical intent. If a two million dollar investment in lobbying can alter money flows to create a three million dollar profit, then that is a 50% return on your money – a solid investment. As the gradient of wealth draws these people together, they will develop ever more ways to create more opportunities for profit. One of the things that emerges is reverential references to Adam Smith’s “invisible hand”.
I want to talk about that “invisible hand” by backing up first and talking about stream dynamics. If the stream is steep, the water speeds up, acquiring sufficient power to erode the streambed and make it less steep. If the stream is too “flat”, the water slows down and deposits its load, raising the streambed, making it steeper. Steep sections wear down; flat sections steepen until a mature equilibrium gradually develops that unites all the sections of the stream – from headwaters to the mouth – into one mathematical curve/shape. I remember the first time I read about this in a college geology textbook; I thought this was so cool – an internal feedback mechanism within water and slope that dance them to a certain predictable shape – stable and sustainable. I feel beauty and proportion within this dance – a rightness that lies beyond myself. Like God at his creation, I look upon stream dynamics and find it good. It’s one of the reasons I love playing with flowing water.
Adam Smith, the early economist, was one of our first “systems thinkers”. He contemplated supply and demand and discerned a marvelous wisdom within the market system. He used the image of “an invisible hand” to convey how a pricing system that was in alignment with reality could emerge from millions of individual transactions. Dynamic equilibrium within a constantly changing world is always a marvelous thing. It delights the mind and spirit whenever encountered with understanding. Others have found similar marvel in the balance between predator and prey or a governmental system of checks and balances or the way the body maintains homeostasis. I can easily empathize with someone for whom the free market was their first encounter with dynamic equilibrium. Just like I love going out in the rainy fields, so I can imagine them roaming about the fields of commerce altering flows and watching things accumulate in their favor.
In my book, I describe a helium balloon on a string coming to rest at that oscillating equilibrium point where the weight of the string balances the lift in the balloon. Push the balloon down and more of the string lies on the ground so that less string is pulling down on the balloon and the balloon will begin to rise. But as its momentum carries it past the equilibrium point, more string is lifted into the air than the balloon’s lift can counter and the balloon settles back down. The balloon is a simple example of dynamic equilibrium, of an invisible hand bringing the balloon to just the right height. I can understand Adam Smith’s delight in his “invisible hand”. However, the delight he discovered more than two hundred years ago must be augmented with the development of systems thinking since then. There is nothing sacrosanct about any particular height at which the balloon comes into equilibrium. If you come back the next day, the balloon might be only an inch above the table because some of the helium leaked out. Or if you replace the string with lightweight fishing line, the balloon will rise higher.
Similarly, there is nothing sacrosanct about supply and demand. The marvelous thing about dynamic equilibrium is that it responds to all aspects of reality. In stream equilibrium, the hardness of bedrock, the vegetative cover, the rate of tectonic uplift all influence the dynamic equilibrium. So with supply and demand. If a significant group of people boycott a product, that is part of supply and demand. If the California Supreme Court declares hydraulic mining a public nuisance and shuts the industry down, that is part of the dynamic equilibrium. The French mob guillotining the king and queen is part of the dynamic equilibrium. A revolutionary government nationalizing an industry is part of the dynamic equilibrium.
Adam Smith’s invisible hand has been used to duck all ethical concerns and moral responsibility. The invisible hand frees me from being my brother’s keeper. I best serve the common good by aggressively pursuing my self-interest. The invisible hand provides the cultural cover to smother moral outrage as plunderers rise up that particular channel of the gradient of wealth. Why was there no outcry at the predatory sub-prime mortgage lending practices? Because people saw a way to get wealthy at other’s expense and the “invisible hand” provided a way to draw an ethical curtain around the whole operation.
It’s amazing how entrenched this misinterpretation is because history is full of examples where (a) plunderers use the “free market” to crash a system, causing systemic damage far, far greater than their short-term personal profit and (b) the moment one of these plunderers get caught in the crash, they will run to the government (which is theoretically supposed to keep its hands off and let the free market do whatever it is going to do) and ask for some form of intervention that will protect them from their personal loss. We’ve got to laugh/protest this greed-based interpretation of Adam Smith out of our culture’s assumptions. A wide chasm exists between clever plundering and sustainable wisdom.
An example of the tension between the two is the function of money. From a societal and governmental point of view, the function of money is to create a simple, reliable medium of exchange so resources and new ideas can flow easily throughout the society. But from another point of view, money is like Monopoly money; winning it all is the goal of the game. However, as money gets concentrated, its social function of providing a medium of exchange breaks down. If someone “wins” the game by getting all the money, the money becomes devalued because the society will have to come up with some other medium of exchange. Society and the govenment have a strong interest in keeping the money spread out enough to serve in this capacity.
So one thing that emerges from the gradient of wealth is a dynamic equilibrium between a concentration of people with little ethical ballast who are extremely aggressive financially on one side and a variety of institutions on the other side that keep their greed in check. But the dynamic equilibrium is changeable; no particular position is sacrosanct. What I see currently is concentrated wealth warping our government to create more concentrated wealth that gives it even more power to warp the government. One example of this is the conflict of interest I see inherent in our corporate media.
The way a candidate comes across in the media is usually a very significant factor in that candidate’s success. A candidate has two ways to get his/her message through the media to the public, advertising and news. In a media company’s balance sheet, the advertising part is revenue and the news part is an expense. This creates a massive conflict of interest, tempting the media’s news departments to portray more favorably those candidates that can supply more advertising revenue. A frequent way this plays out is for the media to label as the “major candidates” those candidates who raise more money – independent of the source. The “minor” candidates are relegated to less news air time and questions like “why do you bother staying in the race? Aren’t you just being a spoiler?” This borders on extortion.
During these months before the first primaries, I feel a concerted media effort to declare front-runners based largely on access to money. This creates a system in which money has first chance to select who the candidates should be. As access to money becomes more critical to success, candidates must do more of the bidding of those with the money.
One of the consequences of these feedback loops involving money, media, and a politics catering to greed is that more and more money is being “invested” in creating what I call “trances” – a skewing of our sense of reality so that we see illusions and accept conditions we would never tolerate if we were awake. (The purported morality of the “invisible hand” is used in this way.)
One example of generating a trance is the carton of matches we bought off the supermarket shelves in 2004. It was packaged with an American Presidents theme with a drawing of Abraham Lincoln. Each book had a predominantly red cover with blue and white lettering announcing the presidential theme on the back and on the front was a drawing of a different American president with his name below. Eventually we realized that the carton contained only a few presidents: Lincoln, McKinley, Theodore Roosevelt, Eisenhower, and George W. Bush. Half the matchbooks were of Bush. The others were all Republican presidents who were known for victorious military leadership. We bought the carton in 2004, during the presidential campaign. Associating Iraq-invading Bush’s face and name with victorious Republicans is invisible genius. Nothing is overtly stated so no resistance is generated. The user just subconsciously keeps seeing Bush’s face associated with Lincoln and Teddy Roosevelt. No campaign contribution was required or recorded. The supermarkets carrying the matches were probably unaware they were carrying campaign propaganda. That’s one small example of the intentional efforts to lull us into trances. Though I acknowledge the genius behind those match covers, I also grieve at the waste of talent, of life energy going into the spinning of trances, whether it be matches or editing global warming out of government documents. We make the best decisions when we are awake.
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