Yin-Yang and Three Obediences

The ancient Chinese philosophers believed that the ultimate reality, which underlies and unifies the multiple phenomena we observe, is intrinsically dynamic. They called it Tao the way, or process, of the universe. For the Taoist sages all things, whether animate or inanimate, were embedded in the continuous flow and change of the Tao. The belief that everything in the universe is imbued with life has also been characteristic of indigenous spiritual traditions throughout the ages. In monotheistic religions, by contrast, the origin of life is associated with a divine creator.

(….) The association of manhood with the accumulation of possessions fits well with other values that are favored and rewarded in patriarchal culture expansion, competition, and an “object-centered” consciousness. In traditional Chinese culture, these were called yang values and were associated with the masculine side of human nature. They were not seen as being intrinsically good or bad. However, according to Chinese wisdom, the yang values need to be balanced by their yin, or feminine, counterparts expansion by conservation, competition by cooperation, and the focus on objects by a focus on relationships. As one of us (F.C.) has long argued, the movement toward such a balance is very consistent with the shift from mechanistic to systemic and ecological thinking that is characteristic of our time (Capra 1982, 1996).

Capra, Fritjof (2016) The Systems View of Life: A Unifying Vision (p. 1). Cambridge University Press. Kindle Edition.

(….) There are striking parallels between complex systems and the old wisdom of Taoism, which arose from close observation of nature and of human affairs. The Taoist world view is probably best known for its concepts of yin and yang. Yin and yang are often characterised as the female and male principles, but the Tao view is that all things in life have opposites, or polarities, that are also manifestations of yin and yang. Other examples are dark and light, yielding and resistance, intuition and rationality, contemplation and action. In the Tao view there are times for contemplation and times for action. When the world is stable it may not be a good use of energy to try to force change, but if the world is changing, particularly if it is in crisis, then small actions may have large consequences. (….) Taoism counsels that a life lived only at one polarity will be a restricted life. For a full realisation of potential we should not become stuck in an extreme, but should balance yin with yang. Taoism seems to have distilled an essence from the living world: healthy living systems do not depend on competition alone, nor on cooperation alone, but balance both in varying degrees. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics.World Economics Association Books Book 3. Kindle Locations 2109-2118).

(….) We can leave the question of what ‘reality’ is ‘behind’ our observations to the metaphysicians and theologians. Unfortunately many scientists became enamoured of the idea that science is in the business of ‘reading the mind of God’. It’s another distraction, unless God’s mind is very changeable and context-dependent. So too can we leave the question of ‘truth’ to others. It is apparently a shocking claim to many people that science is not in the business of revealing Truth. Rather, science is, to emphasise the difference, in the business of inventing useful stories, stories that may be rather loose or may be very precise. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics. World Economics Association Books Book 3. Kindle Locations 2402-2408).

— Geoff Davies (2019) Economy, Society, Nature.

[T]he external ki of women is rooted in yin, and so by their ki women are apt to be excitable, petty, narrow, and temperamental. As they live confined to their homes day in and day out, theirs is a very private life and their vision is limited. Therefore, among women compassionate and honest minds-and-hearts are rare indeed. That is why Buddhism says that women are profoundly sinful and have difficulty in achieving {buddhahood}.

Nakae Tōju (573) Learning.

My family tried to raise me as an obedient girl [according to the Three Obediences]: [my mother told me] obey your father, obey your husband, obey your son. And I asked her; if I keep obeying everyone, when does my life start?

A Young Courageous Women Breaking With Tradition

Let it be made clear that Japan has come a long way towards equality of the sexes since Fukuzawa Yukichi’s comments that follow. Progress still needs to be made. Women are too frequently relegated to subservient roles within Japanese corporate culture (e.g., serving tea, being secretaries, or both). Nevertheless, the popular Western appropriation of Eastern philosophy and religion frequently distorts it to such an extent it no longer resembles its factual meaning in historical context and is hardly recognizable. One would never recognize the original message of Lao Tzu or the meaning of the Tao by the sanitized and popularized misappropriation above as Sung-Hae Kim makes obvious:

The Taoists exchanged the metaphoric term “Heaven” (though they still used it occasionally) for a fuller term Tao 道 (literally, the way), and developed the most systematic metaphysics in ancient China. Tao is defined as the indescribable and unnameable origin of all things and the constant principle present in the phenomenal world. Because of their preoccupation with Tao and its ultimate standard that transcends all human relative values, the Taoists were the most radical critics in ancient China. What characterized them was their that man is only a tiny part of the whole transformation of Tao and man has to learn Tao from the phenomenal world. (Kim 1985, 13) (….) Traditionally Lao Tzu has been thought of as the first of the Taoists and senior contemporary of Confucius. The historicity of the person Lao Tzu is still controversial and can probably never be solved. What we have is the text of the 81 short chapters of the book Lao Tzu—now generally accepted to have been written in the fourth or third century B.C.E. (Kim 1985, 101) According to the traditional version, the first chapter of Lao Tzu begins with the indescribability of the Way (Tao 道) and the concluding chapter sums up the way of the sage (sheng-jen 聖人) who embodies the Way concretely in the world. (Kim 1985, 102) The most important term for the Ultimate in Lao Tzu is Tao. The clear definition of Tao as the indescribable ultimate source and origin of all that exists and the constant nurturing principle at the phenomenal level is the most important contribution of Lao Tzu made to the metaphysical thought of ancient China. The famous chapter 1 describes both the transcendent and the immanent character of this ultimate reality. (Kim 1985, 106) As the origin of all things, it is nameless because it is transcendent, but as the immanent principle principle of the phenomenal world, it is called the mother of the world. The concept of Tao that both transcends the phenomenal world as its source and also is present within it as the constant principle, is in fact the metaphysical elaboration of the traditional concept of Heaven. For Lao Tzu, the Tao was both the supreme principle and the absolute reality; it was the reality behind the origin of the universe. (Kim 1985, 107) Heaven (the Tao) is the ultimate reference at the beginning and the end. With its characteristically anthropocentric outlook, the Confucian sage ultimately stands before Heaven for the final judgment of his innocence and success. (Sung-Hae Kim 1985, 138)

— Sung-Hae Kim 1985, 138, The Righteous and the Sage: A Comparative Study on the Ideal Images of Man in Biblical Israel and Classical China. Sogang University.

Taoism was a religion, a metaphysics, and a philosophy that was no less concerned with “reading the mind of God” the Ultimate and Transcendent Reality which they defined as the Tao which the “sage” (sheng-jen 聖人) or “perfect man” (chih-jen) sought to live and rule according to the principles of the Way. Davies is projecting a distorted, shallow, and false Westernized view of Taoism apparently copying Capra and contrasting it with his stereotyped view of early Western ideas as exemplified in the ideas of Newton and others who saw themselves as discovering the laws of God in their scientific discoveries. When so-called scientists engage in facile story telling on topics they know little about and thereby misrepresent an entire religion or philosophy or history for mere rhetorical purposes they are unwittingly demeaning science by reducing it to scientismmyth making. In reality the Torah’s ideal of the righteous man and the Taoist ideal of the perfect man have more in common than Davies’s scientism does with real, sober, and careful science.

Historical context counts; Taoism (along with Confucianism) was a religion and moral philosophy (metaphysical theory of the universe) that was more about maintaining harmony between heaven and earth, which translated into social context meant harmony between the ruling upper class and the ruled lower-classes aimed at maintaining social harmony and civil and political stability. The real interesting aspect of Taoism was its moral precepts that were meant to guide social and economic behavior so-as to maintain social harmony. The ethical precepts have more relevance to economics than some recent Western reinterpretation of what it means to modern science. The idea that the ruler’s behavior must accord to a moral code of conduct embodied in the Way provided a basis upon which the mandate of heaven could be either considered in operation (i.e., they ruled fairly, justly, and upheld moral standards)  or not in operation (i.e., they ruled unjustly, unethically, and for selfish gain and not for the benevolence of the people). These considerations were the ancient Chinese method of determining if the ruler needed to be removed or remain in place; at least that was the theory.

When scientists spoof religion they are doing no better than when creationists spoof science. Spotting the Spoof is a critical skill required for both religionists and scientists and is best served by a sound philosophy (which means ‘the love of wisdom’) that wisely discerns the difference between facts, meanings, and values. Science and religion can only be self-critical of their facts. The moment departure is made from the stage of facts, reason abdicates or else rapidly degenerates into a consort of false logic. Science as sober science is careful; science as story telling is not. Being able to spot the spoof allows one to “distinguish between good, sober, and restrained science on the one hand, and non-empirical metaphysics, fantasy, myth and ideology on the other.” When scientists engage in story telling with little or no regard for fact or truth they are espousing an ideology “transcending the category of provisional scientific theories … [and] constituting a world-view.'” (Alexander and Numbers 2010, Biology and Ideology: From Descartes to Dawkins, Kindle Locations 4215)

For serious, historically accurate, and relevant studies of economics and religion one can look to Michael Hudson (2018) … and forgive them their debts: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year or Robert H. Nelson (2001) Economics as Religion: From Samuelson to Chicago and Beyond. Or another classic is Tomas Sedlacek (2011) Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street. From a Buddhist perspective one can look to Clair Brown (2017) Buddhist Economics: An Enlightened Approach to the Dismal Science. From a Muslim perspective one could look to Ismael Hossein-zadeh (2014) Beyond Mainstream Explanations of the Financial Crisis: Parasitic Finance Capital. For a good analysis of the failures of so-called Compassionate Conservatism see Lew Daly (2009) God’s Economy: Faith-Based Initiatives & the Caring State. No doubt there are many more.

~ ~ ~

The equality of men and women Fukuzawa Yukichi 1885, 9–10, 45– 6 (11– 13, 39– 40)

Confucius said, “Whenever there is work to be done, the young will take on its burden; whenever there is wine and food, the old will be the first to enjoy it” [Analects ii. 8]. Borrowing this saying to describe men and women in Japan, “Whenever there is work to be done, women will take on its burden; whenever there is wine and food, men will be the first to enjoy it.”

Women of our country have no responsibility either inside or outside their homes, and their position is very low. Consequently, their sufferings and pleasures are very small in scale. It has been the custom for hundreds and even thousands of years to make them as feeble as they are, and it is not an easy matter now to lead both their minds and bodies to activity and to vigorous health. There are animated discussions on the education of women. No doubt education will be effective. When taught, women will acquire knowledge and the arts.

(….) I once compared the present efforts in schools for the education of women in Japan to caring for a dwarf pine in a pot and hoping it will grow into a big tree. Without doubt, fertilizer is important in a tree’s growth. When it is administered in proper measures and moisture and temperature are controlled, the pine will put out branches and leaves in profusion and their green luster will be beautiful. However, that beauty will be limited to the beauty of a potted plant. One can never hope for its growth into the sublimity of a hundred-foot giant. To rectify the sad state of women’s ignorance, the use of school instruction and such means will not be in vain. A woman may become well versed in science or in literature, even well informed in law. Such a woman may well compete with men in the classroom, but when she returns home from school, in what position does she find herself? (Heisig, James W.; Kasulis, Thomas P.; Maraldo, John C.. Japanese Philosophy: A Sourcebook (Nanzan Library of Asian Religion and Culture) (p. 601). University of Hawaii Press. Kindle Edition.)

At home, she owns no property of her own, and in society she cannot hope for a position of any consequence. The house she lives in is a man’s house and the children she brings up are her husband’s children. Where would such a person, without property, without authority of any sort, and with no claim on the children she bears, and herself a parasite in a man’s house, make use of the knowledge and learning she acquired? Science and literature will be of no use. Even less would her knowledge in law serve her. The normal reaction of the general public is to regard a woman who discusses law and economics as liable to bring misery upon herself. (Heisig, James W.; Kasulis, Thomas P.; Maraldo, John C.. Japanese Philosophy: A Sourcebook (Nanzan Library of Asian Religion and Culture) (pp. 601-602). University of Hawaii Press. Kindle Edition.)

(….) On top of all this, suppose that school education were Confucian or Buddhist, and taught such sayings to the effect that women and tools are irredeemable, or that it is a virtue for women to lack wisdom, or that the five faults that women are liable to and the three obediences[8] they must observe are proof that women are sinful by birth. Such education is less than useful, for it serves only to oppress women and to beat into them a kind of “modesty” and “reticence,” resulting in the deformation of even their physical organs—ears, eyes, nose, and tongue. Yet some educators never realize the results of their training. They have veritably been doing nothing but hindering the healthy development of women’s minds and bodies.

(….) Confucianism characterizes men as yang (positive) and women as yin (negative); that is, men are like the heavens and the sun, and women are like the earth and the moon. In other words, one is high and the other is humble. There are many men who take this idea as the absolute rule of nature, but this yin-yang theory is the fantasy of the Confucians and has no proof or logic. Its origins go back several thousand years to dark and illiterate ages when men looked around and whenever they thought they recognized pairs of something, one of which seemed to be stronger or more remarkable than the other, they called one yang and the other yin. For instance, the heavens and the earth looked very much like the ceiling and the floor of a room. One of them was low and trampled on with feet, but the other was high and beyond reach. One was classed yang and the other yin. The sun and the moon are both round and shining; one is very bright, even hot, while the other is less bright. Therefore, the sun is yang and the moon is yin. This is the level of the logic behind this theory and we today should regard it as no more than childish nonsense. (Heisig, James W.; Kasulis, Thomas P.; Maraldo, John C.. Japanese Philosophy: A Sourcebook (Nanzan Library of Asian Religion and Culture) (pp. 602-603). University of Hawaii Press. Kindle Edition. Bold Added.)

This theory simply attached itself to people’s minds with not much of a basis. On seeing a pair of similar objects, one somewhat superior to the other, they classified the first in the yang category and the other in the yin category. Then they would think up ideas to embellish their theories. That was all. Therefore, between men and women, there never existed any such distinctions as yin and yang. The idea itself being fictional to begin with, there could not have been any actual features to suggest such a theory. But some scholars of the Confucian trend must have felt like belittling women, and for no other reason than their own prejudice, classed women as yin. It was a great nuisance on the part of women to have been thus involved in an empty theory which extended to the sun and the moon and heavens and earth, and which had nothing to do with women’s relations to men. It was truly a misfortune for women to be thus made victims of the Confucian scholars’ ignorance of science. (Heisig, James W.; Kasulis, Thomas P.; Maraldo, John C.. Japanese Philosophy: A Sourcebook (Nanzan Library of Asian Religion and Culture) (p. 603). University of Hawaii Press. Kindle Edition. Bold Added.)

8. [The five faults are indocility, discontent, slander, jealousy, and silliness. The three obediences are obedience to one’s father while in his care, obedience to one’s husband when married, and obedience to one’s son after one’s husband’s death. Emphasis added.]

Phishing for Phools

Mainstream economics takes the particular features of capitalism a very recent form of economic organisation in human history as if they were universal, timeless and rational. It treats market exchange as if it’s the essential feature of economic behaviour and relegates production or work a necessity of all provisioning to an afterthought. It also focuses primarily on the relationship between people and goods (what determines how many oranges we buy?) and pays little attention to the relationships between people that this presupposes. It values mathematical models based on if-pigs-could-fly assumptions more than it values empirical research; so it pays little attention to real economies, having little to say about money and debt, for example! Predictably, the dismal science failed to predict the crisis. When the UK’s Queen Elizabeth asked why no one saw the crisis coming, the economists’ embarrassment was palpable. (Sayer 2015, 23-24)

Andrew Sayer (2015) Why We Can’t Afford the Rich

[M]any of our problems come from the nature of the economic system itself. If business people behave in the purely selfish and self-serving way that economic theory assumes, our free-market system tends to spawn manipulation and deception. The problem is not that there are a lot of evil people. Most people play by the rules and are just trying to make a good living. But, inevitably, the competitive pressures for businessmen to practice deception and manipulation in free markets lead us to buy, and to pay too much for, products that we do not need; to work at jobs that give us little sense of purpose; and to wonder why our lives have gone amiss. (…) The economic system is filled with trickery and everyone needs to know about it.” (Akerlof & Shiller, 2015, viii)

[F]ree markets do not just deliver this cornucopia that people want. They also create an economic equilibrium that is highly suitable for economic enterprises that manipulate or distort our judgment, using business practices that are analogous to biological cancers that make their home in the normal equilibrium of the human body. (Akerlof and Shiller 2015, x)

George A. Akerlof and Robert J. Shiller (2015) Phishing for Phools: The Economics of Manipulation & Deception

Many of the quotes above are from economists, experts in their field, some Nobel Prize-winning economists. One thing is clear; the Great Recession shook the very foundations of economics to its core. Only the blind leading the blind can pretend today that something isn’t amiss within the field of economics. The quotations above only represent a small sampling of the discontent rising to the surface within the field of economics today. There is actually a revolt underway in the younger generation of economic graduate students who lived through the Great Recession and the near melt down of the world’s economy yet witnessed their teachers being confounded by the Queen’s question. And if we value our children’s and our grandchildren’s economic future we can no longer afford to simply leave economics to the expertsthe Econocracy—for as these young graduate students tell us, we do so at our own peril. Amartya Sen in his essay Rational Fools: A Critique of the Behavioral Foundations of Economic Theory takes us on an intellectual journey back in time to the thoughts and reflections of one of the founders of the field of economics:

In his Mathematical Psychics, published in 1881, Edgeworth asserted that ‘the first principle of Economics is that every agent is actuated only by self-interest’. This view has been a persistent one in economic models, and the nature of economic theory seem to have been much influenced by this basic premise…. I should mention that Edgeworth himself was quite aware that this so-called first principle of Economics was not a particularly realistic one. Indeed, he felt that ‘the concrete nineteenth century man is for the most part an impure egoist, a mixed utilitarian’. This raises the interesting question as to why Edgeworth spent so much of his time and talent in developing a line of inquiry the first principle of which he believed to be false. The issue is not why abstractions should be employed in pursuing economic questionsthe nature of inquiry makes this inevitablebut why would one choose an assumption which he himself believed not merely inaccurate in detail but fundamentally mistaken? (Sen 1982, 84-85)

Amartya Sen (1982) Rational Fools

Free License of Creativity

Our discussion of the nature of physical concepts has shown that a main reason for formulating concepts is to use them in connection with mathematically stated laws. It is tempting to go one step further and to demand that practicing scientists deal only with ideas corresponding to strict measurables, that they formulate only concepts reducible to the least ambiguous of all data: numbers and measurements. The history of science would indeed furnish examples to show the great advances that followed from the formation of strictly quantitative concepts. (Holton and Brush 2001, 170)

(….) The nineteenth-century physicist Lord Kelvin commended this attitude in the famous statement:

I often say that when you can measure what you are speaking about and express it in numbers you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of meagre and unsatisfactory kind: it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of Science, whatever the matter may be. (“Electrical Units of Measurement”)

Useful though this trend is within its limits, there is an entirely different aspect to scientific concepts: indeed it is probable that science would stop if every scientist were to avoid anything other than strictly quantitative concepts. We shall find that a position like Lord Kelvin’s (which is similar to that held at present by some thinkers in the social sciences) does justice neither to the complexity and fertility of the human mind nor to the needs of contemporary physical science itself—not to scientists nor to science. Quite apart from the practical impossibility of demanding of one’s mind that at all times it identify such concepts as electron only with the measurable aspects of that construct, there are specifically two main objections: First, this position misunderstands how scientists as individuals do their work, and second, it misunderstands how science as a system grows out of the contribution of individuals. (Holton and Brush 2001, 170-171)

(….) While a scientist struggles with a problem, there can be little conscious limitation on his free and at times audacious constructions. Depending on his field, his problem, his training, and his temperament, he may allow himself to be guided by a logical sequence based on more or less provisional hypotheses, or equally likely by “feelings for things,” by likely analogy, by some promising guess, or he may follow a judicious trial-and-error procedure.

The well-planned experiment is, of course, by far the most frequent one in modern science and generally has the best chance of success; but some men and women in science have often not even mapped out a tentative plan of attack on the problems, but have instead let their enthusiasms, their hunches, and their sheer joy of discovery suggest the line of work. Sometimes, therefore, the discovery of a new effect or tool or technique is followed by a period of trying out one or the other applications in a manner that superficially almost seems playful. Even the philosophical orientation of scientists is far less rigidly prescribed than might be supposed. (Holton and Brush 2001, 170-171)

Gosse’s Dilemma and Adam’s Navel

‘Tis a dangerous thing to ingage the authority of Scripture in disputes about the Natural World, in opposition to Reason, lest Time, which brings all things to light, should discover that to be false which we had made Scripture to assert.

Thomas Burnet, Archaelogiae Philosophicae, 1692

In the late nineteenth century intellectuals assumed that truth had spiritual, moral, and cognitive dimensions. By 1930, however, intellectuals had abandoned this broad conception of truth. They embraced, instead, a view of knowledge that drew a sharp distinction between “facts” and “values.” They associated cognitive truth with empirically verified knowledge and maintained that by this standard, moral values could not be validated as “true.” In the nomenclature of the twentieth century, only “science” constituted true knowledge. Moral and spiritual values could be “true” in an emotional or nonliteral sense, but not in terms of cognitively verifiable knowledge. The term truth no longer comfortably encompassed factual knowledge and moral values.

Julie A. A. Reuben (1996) The Making of the Modern University: Intellectual Transformation and the Marginalization of Morality

Truth

Certain people have different standards for recognizing “truth.” Given access to the same facts, two individuals can look at an issued and reach utterly different conclusions, to the point where they believe those with a different opinion belong somewhere on a spectrum from stupid to perverse…. (Asher 2012: xiv)

(….) The creationist has something at stake, some worldview or allegiance, that makes a fair, honest view of the data behind Darwinian evolutionary biology impossible. Why?

(….) [T]here is an obvious explanation for antipathy toward Charles Darwin among various anti-evolutionist groups of the last 150 years, groups that are often connected to one kind of intense religious creed or another: they think Darwin threatens their worldview. Contributing to this conviction are those biologists who portray evolution as tied to atheism, who help convince the devout that a natural connection of humanity with other organisms is incompatible with their religion. Compounding things further is the fact that adherence to many religious worldviews is not flexible, and any scientific theory or philosophy that seems to threaten certain beliefs must be wrong, whatever some scientist may say about evidence. (Asher 2012: xvi)

Coyne says there is one way to be rational, and any of this stuff about alternative “truth” is relativist nonsense not worth the flatscreen monitor on which it is written:

What, then, is the nature of “religious truth” that supposedly complements “scientific truth”?… Anything touted as a “truth” must come with a method for being disproved—a method that does not depend on personal revelation. … It would appear, then, that one cannot be coherently religious and scientific at the same time. That alleged synthesis requires that with one part of your brain you accept only those things that are tested and supported by agreed-upon evidence, logic, and reason, while with the other part of your brain you accept things that are unsupportable or even falsified.

I disagree, and would argue that there are many things in life that deserve the descriptor “truth” but are not amenable to rational disproof. Coyne is absolutely correct to say that coddling the irrational—those for whom “religious truth” means stoning adulterers or drinking poisoned Kool-Aid—is incompatible with science and, more generally, civil society. However, while science is a-religious, it is not anti-religious, at least in the important sense that it does not (indeed, cannot) concern itself with phenomena beyond what we rationally perceive. It is not only possible to portray science as lacking fatal consequences for those religious tenets that concern things we cannot empirically observe (such as purpose or agency in life), but it is precisely what scientists have got to do to make a compelling case to the public. Coyne tosses “religion” into the same dumpster as any passing superstition, and actively encourages the perception that science is corrosive to any religious sentiment. Yes, there are religious claims that are demonstrably wrong in an empirical sense. … However, such specific claims do not do justice to the religion integrally tied into the identity of many lay-people and scientists alike, an identity that by any meaningful definition is worthy of the name “truth.” (Asher 2012: xvii-xviii)

Asher, Robert J. Evolution and Belief [Confessions of a Religious Paleontologist]. Cambridge: Cambridge University Press; 2012; p. xiv.

When we reflect on scienceits aims, its values, its limitswe are doing philosophy, not science. This may be bad news for the high priests of scientism, who reject philosophy, but there is no escaping it.

(….) There is a general agreement that science concentrates on aspects of the world that can be studied through theories that can be tested by doing experiments. Those aspects relate to spatiotemporal patterns in nature, for this is what makes experiments possible. If other dimensions of reality exist, they simply cannot be studied using the methods of the empirical sciences.

(….) Modern science is an enormously wonderful and powerful achievement of our species, a culturally transcendent, universal method for studying the natural world. It should never be used as an ideological weapon. Scientific progress demands a respect for truth, rigor, and objectivity, three ethical values implied in the ethos of science. We can nevertheless draw different conclusions from our analyses of science, but we should always present them carefully, distinguishing what can be said in the name of science from personal interpretations that must be supported by independent reasons, or acknowledged simply as personal opinions. Our analysis shows that the Oracles differ in important points and are not consistently fighting for a common cause. When they go beyond their science, they use different arguments and arrive at different conclusions.

We conclude with one final insight. Science is compatible with a broad cross section of very different views on the deepest human problems. Weinberg, an agnostic Jew from New York, shared his Nobel Prize with Abdus Salam, a devout Muslim from Pakistan. They spoke different languages and had very different views on many important topics. But these differences were of no consequence when they came together to do science. Modern science can be embraced by any religion, any culture, any tribe, and brought to bear on whatever problems are considered most urgent, whether it be tracing their origins, curing their diseases, or cleaning up their water. Science should never be fashioned into a weapon for the promotion of an ideological agenda. Nevertheless, as history has shown, science is all too frequently enlisted in the service of propaganda; and, as we have argued in this book, we must be on guard against intellectual nonsense masquerading as science.

Karl Giberson and Mariano Artigas (2007) in Oracles of Science: Celebrity Scientists versus God and Religion.

Darwinism as an ideology

One of the most interesting developments of the twentieth century has been the growing trend to regard Darwinian theory as transcending the category of provisional scientific theories, and constituting a “world- view.” Darwinism is here regarded as establishing a coherent worldview through its evolutionary narrative, which embraces such issues as the fundamental nature of reality, the physical universe, human origins, human nature, society, psychology, values, and destinies. While being welcomed by some, others have expressed alarm at this apparent failure to distinguish between good, sober, and restrained science on the one hand, and non-empirical metaphysics, fantasy, myth and ideology on the other. In the view of some, this transition has led to Darwinism becoming a religion or atheist faith tradition in its own right.

Denis R. Alexander and Ronald L. Numbers (2010) in Biology and Ideology: From Descartes to Dawkins.

It is difficult to overestimate the importance of Darwinian thinking to American economic reform in the Gilded Age and Progressive Era. Evolutionary thought was American economic reform’s scientific touchstone and a vital source of ideas and conceptual support. The Wharton School’s Simon Nelson Patten, writing in 1894, observed that the century was closing with a bias for biological reasoning and analogy, just as the prior century had closed with a bias for the methods of physics and astronomy. The great scientific victories of the nineteenth century, Patten believed, were “in the field of biology.”

SOMETHING IN DARWIN FOR EVERYONE

To understand the influence of evolutionary thought on American economic reform, we must first appreciate that evolutionary thought in the Gilded Age and Progressive Era in no way dictated a conservative, pessimistic, Social Darwinist politics. On the contrary, evolutionary thought was protean, plural, and contested.

It could license, of course, arguments that explained and justified the economic status quo as survival of the fittest, so-called Social Darwinism. But evolutionary thought was no less useful to economic reformers, who found in it justification for optimism rather than pessimism, for intervention rather than fatalism, for vigorous rather than weak government, and for progress rather than drift. Evolution, as Irving Fisher insisted in National Vitality, did not teach a “fatalistic creed.” Evolution, rather, awakened the world to “the fact of its own improvability.”

In the thirty years bracketing 1900, there seems to have been something in Darwin for everyone. Karl Pearson, English eugenicist and founding father of modern statistical theory, found a case for socialism in Darwin, as did the co-discoverer of the theory of evolution by natural selection, Alfred Russel Wallace. Herbert Spencer, in contrast, famously used natural selection, which he called “survival of the fittest,” to defend limited government.

Warmongers borrowed the notion of survival of the fittest to justify imperial conquest, as when Josiah Strong asserted that the Anglo-Saxon race was “divinely commissioned” to conquer the backward races abroad. Opponents of war also found sustenance in evolutionary thought. Pyotr Kropotkin argued that the struggle for existence need not involve conflict, much less violence. Cooperation could well be the fittest strategy. David Starr Jordan, president of Stanford from 1891 to 1913 and a leader of the American Peace Movement during World War I, opposed war because it selected for the unfit. The fittest men died in battle, while the weaklings stayed home to reproduce.

Darwin seems to have been pro-natalist, on the grounds that more births increased the variation available for natural selection. Margaret Sanger argued that restricting births was the best way to select the fittest. Darwin’s self-appointed “bulldog,” T. H. Huxley, thought natural selection justified agnosticism, whereas devout American interpreters, such as botanist Asa Gray, found room in Darwinism for a deity.

It is a tribute to the influence of Darwinism that Darwin inspired exegetes of nearly every ideology: capitalist and socialist, individualist and collectivist, pacifist and militarist, pro-natalist and birth-controlling, as well as agnostic and devout.

Darwinism was itself plural, and Progressive Era evolutionary thought was more plural still. The ideas of other prominent evolutionists (notably, Herbert Spencer and Alfred Russel Wallace) were also influential in the Progressive Era, both when they accorded with Darwin and when they didn’t.

— Thomas C. Leonard (2016) in Illiberal Reformers: Race, Eugenics, and American Economics in the Progressive Era.

[L]iberal theology reconceptualizes the meaning of Christianity in the light of modern knowledge and ethical values. It is reformist in spirit and substance, not revolutionary. Specifically it is defined by its openness to the verdicts of modern intellectual inquiry, especially historical criticism and the natural sciences; its commitment to the authority of individual reason and experience; its conception of Christianity as an ethical way of life; its advocacy of moral concepts of atonement or reconciliation; and its commitments to make Christianity credible and socially relevant to contemporary people. In the nineteenth century, liberal theologians denied that God created the world in six days, commanded the genocidal extermination of Israel’s ancient enemies, demanded the literal sacrifice of his Son as a substitutionary legal payment for sin [see Laughing Buddha], and verbally inspired the Bible. Most importantly, they denied that religious arguments should be settled by appeals to an infallible text or ecclesial authority. Putting it positively, nineteenth-century liberals accepted Darwinian evolution, biblical criticism, a moral influence view of the cross, an idea of God as the personal and eternal Spirit of love, and a view of Scripture as authoritative only within Christian experience. Nineteenth- teenth- and early-twentieth-century liberals expected these views to prevail in Christianity as a whole, but in the twenty-first century they remain contested beliefs.

Gary Dorrien. The Making of American Liberal Theology: Crisis, Irony, and Postmodernity: 1950-2005 (Kindle Locations 155-157). Kindle Edition.

Unless the moral insight and the spiritual attainment of mankind are proportionately augmented, the unlimited advancement of a purely materialistic culture may eventually become a menace to civilization. A purely materialistic science harbors within itself the potential seed of the destruction of all scientific striving, for this very attitude presages the ultimate collapse of a civilization which has abandoned its sense of moral values and has repudiated its spiritual goal of attainment.

The materialistic scientist and the extreme idealist are destined always to be at loggerheads. This is not true of those scientists and idealists who are in possession of a common standard of high moral values and spiritual test levels. In every age scientists and religionists must recognize that they are on trial before the bar of human need. They must eschew all warfare between themselves while they strive valiantly to justify their continued survival by enhanced devotion to the service of human progress. If the so-called science or religion of any age is false, then must it either purify its activities or pass away before the emergence of a material science or spiritual religion of a truer and more worthy order.

What both developing science and religion need is more searching and fearless self-criticism, a greater awareness of incompleteness in evolutionary status. The teachers of both science and religion are often altogether too self-confident and dogmatic. Science and religion can only be self-critical of their facts. The moment departure is made from the stage of facts, reason abdicates or else rapidly degenerates into a consort of false logic.

~ ~ ~

By the mid-nineteenth century, there were really only three ways in which natural theologians could deal with the growing evidence that the earth was very old, that it was recycling inexorably beneath their feet, and that life on earth had constantly changed over millions of years. They could ignore it, they could accommodate it to the biblical accounts of history by more or less denying the literal truth of Genesis, or they could explain it all away. The later natural theologians largely ignored it. The sacred theorists tried unsuccessfully to reconcile geology with the Bible. And one man above all others tried to explain it away. He was Philip Henry Gosse (1810-1888), a writer on natural history whose books caught the imagination of generations of Victorians and whose life became a tortured tale of religion contesting with science…. (Thomson 2007: 223)

Gosse’s dilemma was that of all natural theologians, especially after the publication in 1844 of an anonymously authored, thrillingly dangerous, and wildly successful book on evolution…. The book’s title, with an allusion to James Hutton that nobody could miss, was Vestiges of Creation. Chambers’ theory was largely derived from Lamarck’s which, like Erasmus Darwin’s, depended upon organisms being subject to change as a direct result of environmental pressures and exigencies [which today is know to be possible via epigentics]. Chambers probably set Charles Darwin back fifteen years — much to the benefit of all. In many ways he blazed the trail that Darwin could more cautiously follow with an even more convincing theory in hand. Darwin must have realized, with the example of Chambers in front of him (and approval of the political left and censure from both the religious and scientific right) that he would have to ensure his theory would have a better reception. (Thomson 2007: 224)

Gosse knew that various versions of what we now call evolution had been around for more than a hundred years. By the mid-1850s, most scientists in Britain knew which way the wind was blowing. Darwin had been hard at work in private since 1842, preparing the ground for his idea of natural selection, and knowing how popular a scientist Gosse was, he tried to enlist him to support his theory. Darwin’s self-designated ‘bull dogs’, including Thomas Huxley, were steadily persuading the sceptics Huxley had been lecturing formally on an evolutionary relationship between men and apes as early as 1858. This growing movement evolutionary movement offered a new way of explaining the evidence of organic changes, but only at the expense of much accepted religious belief. It threatened to change radically the whole frame of intellectual reference and to produce a new explanation of cause. For a huge number of theologians, clerics, philosophers and ordinary people, evolution was changing the metaphysical balance of power. Among those who felt this most keenly was Gosse. (Thomson 2007: 224)

One’s heart has to ache for Gosse, one of the most sympathetic characters of the evolutionary saga, a man weighed down by the burdens of fundamentalist Christianity and at the same time a brilliant naturalist…. He was the first to introduce to a popular audience the life of the seashore, the fragile world of exquisite beauty and strength that lies just a few inches beneath the surface of the sea and in the rocky pools of the coast. Before Gosse, all this was largely unseen. Gosse single-handedly created marine biology and home aquaria, and became one of the great chroniclers of the intricate worlds revealed by the microscope. (Thomson 2007: 225)

(….) Once Lamarck and Chambers had made it possible (even necessary) to take evolution seriously, and after his meeting with Charles Darwin had shown how powerful was the extent of the challenge to his fundamentalist beliefs, Gosse felt called to respond; as a Plymouth Brother and as a scientist, it was his responsibility, just as it had been Paley’s and before Paley John Ray’s or Thomas Burnet’s. Gosse’s dilemma was to try to find a way to reconcile his science and his faith. He chose to challenge the rapidly growing support for evolutionists from the geological record. (Thomson 2007: 226)

(….) Huxley had a favourite lecture a “Lay Sermon’ entitled Essay on a Piece of Chalk. He would stand before an eager crowd and take a piece of common chalk from his pocket, asking the audience what it could possibly tell them about the history of the cosmos and of life on earth. The answer is that chalk (in those days, before blackboard chalk was an artificial, hypo-allergenic substance) represents the accumulation on an ancient sea bottom of the skeletons of countless billions of microscopic planktonic organisms that once inhabited vast tropical oceans that extended across the earth, from Europe and the Middle East to Australia and North America. (Thomson 2007: 227)

(….) Philip Gosse knew only too well what a piece of chalk looked like under a microscope and that the earth’s crust consisted of thousands of feet of different rocks, some bearing fossils, others the remains of ancient lava flows, dust storms, water-borne sediments, and even ancient coral reefs just like those he had seen in Jamaica…. How could Gosse explain away this all-too-solid evidence of the ancient history of the earth and its denizens? What did it have to say about the biblical account of creation in six days? (Thomson 2007: 228)

(….) Gosse’s answer cost him dearly. The dilemma figuratively tore him scientist and fundamentalist Christian in half. In a classic example of ad hoc reasoning, he explained away all this appearance of change in a book entitled Omphalos, the Greek for ‘navel’, and in that one word is contained the core of Gosse’s argument. It is the old conundrum: did Adam have a navel? If God created Adam as the first man out of nothing, Adam would have no need for a navel, since he had never been connected by an umbilical cord to a mother. Nor indeed had Eve, of whose origin Genesis gives two accounts. Nor indeed (remembering that the Bible tells us that God made man in his own image) would God physiologically have needed navel. (Thomson 2007: 229)

Gosse simply asserted that at the moment of creation, just as God made Adam with a navel, he also made the earth with all its complex layers, its faults, every one of its fossils, volcanoes in mid-eruption and rivers in full spate carrying a load of sediment that had never been eroded from mountains that had never been uplifted. Similarly, at that instant, every tree that had never grown nevertheless had internal growth rings; every mammal already had partially worn teeth. He created rotting logs on the forest floor, the rain in mid-fall, the light from distant stars in mid-stream, the planets part-way around their orbits … the whole universe up and running at the moment of creation no further assembly required. (Thomson 2007: 229)

Such an argument, of course, can never be beaten. It says that God has created all the evidence that supports his existence and (shades of Hume) all the evidence that appears to cast doubt on it. Equally, of course, a theory that explains everything explains nothing. Omphalos is untestable and therefore one cannot concur rationally with its argument; you must simply close your eyes and believe. Or smile. (Thomson 2007: 229-230)

Over the years, Gosse’s argument has been bowdlerised to the slightly unworthy proposition that God set out the geological record, with all its evidence of change, in order to test man’s faith. It was, therefore, the ultimate celestial jest and cruel hoax. This was about as far from Gosse’s pious intention as Darwin’s impious theory. As for what Paley would have made of Omphalos I like to think he would have rejected it, but kindly, for he was a kind man. Victorian England not only rejected it, they laughed at it cruelly. Gosse became overnight a broken man, his reputation as a scientist in shatters. (Thomson 2007: 230)

But nothing is as simple as it ought to be. A community that mocked Omphalos and had no problem in coming to terms with the even more difficult issue of cosmology, still could not come to terms with geology. In fact, whether in Paley’s time or in Darwin’s, or indeed our own, one of the oddities in the history of interplay between science and religion is that cosmology never seems to have become as serious a threat to revealed religion as natural science. When pressed, people often revert to believing two things at once. The evidence that the universe is huge and ancient can be assimilated seemingly without shaking the conviction that the earth itself is 6,000 years old and that all living creatures were created over a two-day period. For example: ‘The school books of the present day, while they teach the child that the earth moves, yet assure him that that it is a little less than six thousand years old, and that it was made in six days. On the other hand, geologists of all religious creeds are agreed that the earth has existed for an immense series of years.’ These last words were written in 1860 and appear in a work that arguably presented a greater threat to the Established Church than the evolutionism of Erasmus Darwin, Lamarck, Robert Chambers or even Charles Darwin. Essays and Reviews was an example of the enemy within, a compilation of extremely liberal theological views by noted churchman and academics. Among their targets was the unnecessary and outmoded belief in miracles and the biblical account of the days of creation. The battle is still being fought. (Thomson 2007: 230-231)

Imaginary Empty Balls

The answer, therefore, which the seventeenth century gave to the ancient question … “What is the world made of?” was that the world is a succession of instantaneous configurations of matter — or material, if you wish to include stuff more subtle than ordinary matter…. Thus the configurations determined there own changes, so that the circle of scientific thought was completely closed. This is the famous mechanistic theory of nature, which has reigned supreme ever since the seventeenth century. It is the orthodox creed of physical science…. There is an error; but it is merely the accidental error of mistaking the abstract for the concrete. It is an example of what I will call the ‘Fallacy of Misplaced Concreteness.’ This fallacy is the occasion of great confusion in philosophy. (Whitehead 1967: 50-51)

(….) This conception of the universe is surely framed in terms of high abstractions, and the paradox only arises because we have mistaken our abstractions for concrete realities…. The seventeenth century had finally produced a scheme of scientific thought framed by mathematics, for the use of mathematics. The great characteristic of the mathematical mind is its capacity for dealing with abstractions; and for eliciting from them clear-cut demonstrative trains of reasoning, entirely satisfactory so long as it is those abstractions which you want to think about. The enormous success of the scientific abstractions, yielding on the one hand matter with its simple location in space and time, on the other hand mind, perceiving, suffering, reasoning, but not interfering, has foisted onto philosophy the task of accepting them as the most concrete rendering of fact. (Whitehead 1967: 54-55)

Thereby, modern philosophy has been ruined. It has oscillated in a complex manner between three extremes. These are the dualists, who accept matter and mind as on an equal basis, and the two varieties of monists, those who put mind inside matter, and those who put matter inside mind. But this juggling with abstractions can never overcome the inherent confusion introduced by the ascription of misplaced concreteness to the scientific scheme of the seventeenth century. (Whitehead 1967: 55)

Alfred North Whitehead in Science and the Modern World

In the UK, for example, 97 percent of money is created by commercial banks and its character takes the form of debt-based, interest-bearing loans. As for its intended use? In the 10 years running up to the 2008 financial crash, over 75 percent of those loans were granted for buying stocks or houses—so fuelling the house-price bubble—while a mere 13 percent went to small businesses engaged in productive enterprise.47 When such debt increases, a growing share of a nation’s income is siphoned off as payments to those with interest-earning investments and as profit for the banking sector, leaving less income available for spending on products and services made by people working in the productive economy. ‘Just as landlords were the archetypal rentiers of their agricultural societies,’ writes economist Michael Hudson, ‘so investors, financiers and bankers are in the largest rentier sector of today’s financialized economies.’ (Raworth 2017, 155)

Once the current design of money is spelled out this way—its creation, its character and its use—it becomes clear that there are many options for redesigning it, involving the state and the commons along with the market. What’s more, many different kinds of money can coexist, with the potential to turn a monetary monoculture into a financial ecosystem. (Raworth 2017, 155)

Imagine, for starters, if central banks were to take back the power to create money and then issue it to commercial banks, while simultaneously requiring them to hold 100 percent reserves for the loans that they make—meaning that every loan would be backed by someone else’s savings, or the bank’s own capital. It would certainly separate the role of providing money from the role of providing credit, so helping to prevent the build-up of debt-fuelled credit bubbles that burst with such deep social costs. That idea may sound outlandish, but it is neither a new nor a fringe suggestion. First proposed during the 1930s Great Depression by influential economists of the day such as Irving Fisher and Milton Friedman, it gained renewed support after the 2008 crash, gaining the backing of mainstream financial experts at the International Monetary Fund and Martin Wolf of the UK’s Financial Times. (Raworth 2017, 155-156)

Kate Raworth in Doughnut Economics

Suggestions are anchored in neoclassical theory

Despite growing diversity in research, the theory flow of economics, often referred to as neoclassical, continues to dominate teaching and politics. It developed in the 19th century as an attempt to apply the methods of the natural sciences and especially physics to social phenomena, In the search for an “exact” social science, social relationships are abstracted to such an extent that calculations are possible. The neoclassical economics department primarily asks one question: How do rational actors optimize under certain circumstances? This approach is nothing bad in and of itself. However, in view of the ecological crisis, we have to ask ourselves completely different questions in society: How can the planetary collapse be prevented? What can an economic system look like that is social, fair and ecological?

Katharina Keil and Max Wilken

~ ~ ~

The dematerialization of the value concept boded ill for the tangible world of stable time and concrete motion (Kern 1983). Again, the writer Jorge Luis Borges (1962, p. 159) captured the mood of the metaphor: (Mirowski 1989, 134. Kindle Location 2875-2877)

I reflected there is nothing less material than money, since any coin whatsoever (let us say a coin worth twenty centavos) is, strictly speaking, a repertory of possible futures. Money is abstract, I repeated; money is the future tense. It can be an evening in the suburbs, or music by Brahms; it can be maps, or chess, or coffee; it can be the words of Epictetus teaching us to despise gold; it is a Proteus more versatile than the one on the isle of Pharos. It is unforeseeable time, Bergsonian time . . . (Mirowski 1989, 134-135. Kindle Location 2877-2881)

It was not solely in art that the reconceptualization of value gripped the imagination. Because the energy concept depended upon the value metaphor in part for its credibility, physics was prodded to reinterpret the meaning of its conservation principles. In an earlier, simpler era Clerk Maxwell could say that conservation principles gave the physical molecules “the stamp of the manufactured article” (Barrow and Tipler 1986, p. 88), but as manufacture gave way to finance, seeing conservation principles in nature gave way to seeing them more as contingencies, imposed by our accountants in order to keep confusion at bay. Nowhere is this more evident than in the popular writings of the physicist Arthur Eddington, the Stephen Jay Gould of early twentieth century physics: (Mirowski 1989, 135. Kindle Location 2881-2887)

The famous laws of conservation and energy . . . are mathematical identities. Violation of them is unthinkable. Perhaps I can best indicate their nature by an analogy. An aged college Bursar once dwelt secluded in his rooms devoting himself entirely to accounts. He realised the intellectual and other activities of the college only as they presented themselves in the bills. He vaguely conjectured an objective reality at the back of it all some sort of parallel to the real college though he could only picture it in terms of the pounds, shillings and pence which made up what he would call “the commonsense college of everyday experience.” The method of account-keeping had become inveterate habit handed down from generations of hermit-like bursars; he accepted the form of the accounts as being part of the nature of things. But he was of a scientific turn and he wanted to learn more about the college. One day in looking over the books he discovered a remarkable law. For every item on the credit side an equal item appeared somewhere else on the debit side. “Ha!” said the Bursar, “I have discovered one of the great laws controlling the college. It is a perfect and exact law of the real world. Credit must be called plus and debit minus; and so we have the law of conservation of £. s. d. This is the true way to find out things, and there is no limit to what may ultimately be discovered by this scientific method . . .” (Mirowski 1989, 135. Kindle Location 2887-2898)

I have no quarrel with the Bursar for believing that scientific investigation of the accounts is a road to exact (though necessarily partial) knowledge of the reality behind them . . . But I would point out to him that a discovery of the overlapping of the different aspects in which the realities of the college present themselves in the world of accounts, is not a discovery of the laws controlling the college; that he has not even begun to find the controlling laws. The college may totter but the Bursar’s accounts still balance . . . (Mirowski 1989, 135-136. Kindle Location 2898-2902)

Perhaps a better way of expressing this selective influence of the mind on the laws of Nature is to say that values are created by the mind [Eddington 1930, pp. 237–8, 243]. (Mirowski 1989, 136. Kindle Location 2903-2904)

Once physicists had become inured to entertaining the idea that value is not natural, then it was a foregone conclusion that the stable Laplacean dreamworld of a fixed and conserved energy and a single super-variational principle was doomed. Again, Eddington stated it better than I could hope to: (Mirowski 1989, 136. Kindle Location 2904-2907)

[Classical determinism] was the gold standard in the vaults; [statistical laws were] the paper currency actually used. But everyone still adhered to the traditional view that paper currency needs to be backed by gold. As physics progressed the occasions when the gold was actually produced became career until they ceased altogether. Then it occurred to some of us to question whether there still was a hoard of gold in the vaults or whether its existence was a mythical tradition. The dramatic ending of the story would be that the vaults were opened and found to be empty. The actual ending is not quite so simple. It turns out that the key has been lost, and no one can say for certain whether there is any gold in the vaults or not. But I think it is clear that, with either termination, present-day physics is off the gold standard [Eddington 1935, p. 81]. (Mirowski 1989, 136. Kindle Location 2907-2913)

The denaturalization of value presaged the dissolution of the energy concept into a mere set of accounts, which, like national currencies, were not convertable at any naturally fixed rates of exchange. Quantum mechanical energy was not exactly the same thing as relativistic energy or thermodynamic energy. Yet this did not mean that physics had regressed to a state of fragmented autarkies. Trade was still conducted between nations; mathematical structure could bridge subdisciplines of physics. It was just that everyone was coming to acknowledge that money was provisional, and that symmetries expressed by conservatiori principles were contingent upon the purposes of the theory in which they were embedded. (Mirowski 1989, 136. Kindle Location 2913-2918)

Increasingly, this contingent status was expressed by recourse to economic metaphors. The variability of metrics of space-time in general relativity were compared to the habit of describing inflation in such torturous language as: “The pound is now only worth seven and sixpence” (Eddington 1930, p. 26). The fundamentally stochastic character of the energy quantum was said to allow nuclear particles to “borrow” sufficient energy so that they could “tunnel” their way out of the nucleus. And, inevitably, if we live with a banking system wherein money is created by means of loans granted on the basis of near-zero fractional reserves, then this process of borrowing energy could cascade, building upon itself until the entire universe is conceptualized as a “free lunch.” The nineteenth century would have recoiled in horror from this idea, they who believed that banks merely ratified the underlying real transactions with their loans. (Mirowski 1989, 136-137. Kindle Location 2918-2925)

Goldman Sachs and Flash Boys

I suppose this book started when I first heard the story of Sergey Aleynikov, the Russian computer programmer who had worked for Goldman Sachs and then, in the summer of 2009, after he’d quit his job, was arrested by the FBI and charged by the United States government with stealing Goldman Sachs’s computer code. I’d thought it strange, after the financial crisis, in which Goldman had played such an important role, that the only Goldman Sachs employee who had been charged with any sort of crime was the employee who had taken something from Goldman Sachs. I’d thought it even stranger that government prosecutors had argued that the Russian shouldn’t be freed on bail because the Goldman Sachs computer code, in the wrong hands, could be used to “manipulate markets in unfair ways.” (Goldman’s were the right hands? If Goldman Sachs was able to manipulate markets, could other banks do it, too?) But maybe the strangest aspect of the case was how difficult it appeared to be—for the few who attempted—to explain what the Russian had done. I don’t mean only what he had done wrong: I mean what he had done. His job. He was usually described as a “high-frequency trading programmer,” but that wasn’t an explanation. That was a term of art that, in the summer of 2009, most people, even on Wall Street, had never before heard. What was high-frequency trading? Why was the code that enabled Goldman Sachs to do it so important that, when it was discovered to have been copied by some employee, Goldman Sachs needed to call the FBI? If this code was at once so incredibly valuable and so dangerous to financial markets, how did a Russian who had worked for Goldman Sachs for a mere two years get his hands on it? (Lewis 2014, 40-53)

[I]n a room looking out at the World Trade Center site, at One Liberty Plaza … gathered a small army of shockingly well-informed people from every corner of Wall Street—big banks, the major stock exchanges, and high-frequency trading firms. Many of them had left high-paying jobs to declare war on Wall Street, which meant, among other things, attacking the very problem that the Russian computer programmer had been hired by Goldman Sachs to create. (Lewis 2014, 53-56)

(….) One moment all is well; the next, the value of the entire U.S. stock market has fallen 22.61 percent, and no one knows why. During the crash, some Wall Street brokers, to avoid the orders their customers wanted to place to sell stocks, simply declined to pick up their phones. It wasn’t the first time that Wall Street people had discredited themselves, but this time the authorities responded by changing the rules—making it easier for computers to do the jobs done by those imperfect people. The 1987 stock market crash set in motion a process—weak at first, stronger over the years—that has ended with computers entirely replacing the people. (Lewis 2014, 62-67)

Over the past decade, the financial markets have changed too rapidly for our mental picture of them to remain true to life. (Lewis 2014, 67)

(….) The U.S. stock market now trades inside black boxes, in heavily guarded buildings in New Jersey and Chicago. What goes on inside those black boxes is hard to say—the ticker tape that runs across the bottom of cable TV screens captures only the tiniest fraction of what occurs in the stock markets. The public reports of what happens inside the black boxes are fuzzy and unreliable—even an expert cannot say what exactly happens inside them, or when it happens, or why. The average investor has no hope of knowing, of course, even the little he needs to know. He logs onto his TD Ameritrade or E*Trade or Schwab account, enters a ticker symbol of some stock, and clicks an icon that says “Buy”: Then what? He may think he knows what happens after he presses the key on his computer keyboard, but, trust me, he does not. If he did, he’d think twice before he pressed it. (Lewis 2014, 72-78)

The world clings to its old mental picture of the stock market because it’s comforting; because it’s so hard to draw a picture of what has replaced it; and because the few people able to draw it for you have no [economic] interest in doing so. (Lewis 2014, 78-80)

Anti-Human Economics

Emily Northrop (2000) questions whether the fundamental cause of scarcity unlimited wants is really innate, and argues that it may be merely constructed [see Diamonds are Bullshit]. She notes that some people manage to resist consumerism and choose different lifestyles embodying simplicity, balance or connection (to the earth and to others). The fact that some are able to do this suggests unlimited wants aren’t innate. In arguing that our wants are constructed, she emphasizes the power of social norms and the power of advertising: some of society’s cleverest people and billions of dollars a year are spent creating and maintaining our wants. (Hill and Myatt 2010, 16)

Northrop also points out that the notion of unlimited wants puts all wants on an equal footing: one person’s want for a subsistence diet is no more important than a millionaire’s want for precious jewellery. This equality of wants reflects the market value system that no goods are intrinsically more worthy than others just as no preferences are more worthy than others. This is clearly a value judgement and one that many people reject. Yet economics, which unquestioningly adopts this approach, claims to be an objective social science that avoids making value judgements! (Hill and Myatt 2010, 16)

It is noteworthy that Keynes disagreed that ‘all wants have equal merit’. Rather than identify the economic problem with scarcity, he identified it with the satisfaction of what he called absolute needs: food, clothing, shelter and healthcare (Keynes 1963 [1931]: 365). This definition of the economic problem puts equity and the distribution of income front and centre. It contrasts with the textbook approach of treating equity as a political issue outside the scope of economic analysis. (Hill and Myatt 2010, 16)

Another economist who rejects the ‘innate unlimited wants’ idea is Stephen Marglin (2008). Unlike Northrop, he doesn’t blame advertising or social norms. Rather, he sees the fundamental cause to be the destruction of community ties, which creates an existential vacuum: all that’s left is stuff. Goods and services substitute for meaningful relationships with family, friends and community. His conclusion: as long as goods are a primary means of solving existential problems, we will always want more. But what or who is responsible for undermining community ties and bonds? Marglin argues that the assumptions of textbook economics, and the resulting policy recommendations of economists, undermine community…. (Hill and Myatt 2010, 16-17)

According to Marglin, the textbook focus on individuals makes the community invisible to economists’ eyes. But it is our friendships and deep connections with others which give our lives meaning. So community ties, built on mutual trust and common purpose, have a value a value that economists ignore when recommending policy.

Furthermore, Marglin argues that rational choice theory emphasized in the mainstream textbooks reduces ethical judgements and values to mere preferences. Are you working for the benefit of your community? That’s your preference. Are you cooking the books to get rich quick and devil take the hindmost? That’s your preference. Being selfish is no worse than being altruistic, they are just different preferences. (Hill and Myatt 2010, 16)

Indeed, according to mainstream textbook economics it is smart to be selfish. It not only maximizes your own material well-being, but through the invisible hand of the market it also produces the greatest good for the greatest possible number. This view influences the cultural norms of society and indirectly erodes community. This influence of economics on attitudes isn’t mere speculation. Marwell and Ames (1981) document that exposure to economics generates less cooperative, less other-regarding, behaviour. Frank et al. (1993) show that uncooperative behaviour increases the more individuals are exposed to economics. (Hill and Myatt 2010, 17-18)

(….) Marglin argues that the textbook focus on individuals is problematic. John Kenneth Galbraith went farther. He thought the textbook focus on individuals was a source of grave error and bias because in the real world the individual is not the agent that matters most. The corporation is. By having the wrong focus, economics is able to deny the importance of power and political interests. (Hill and Myatt 2010, 18)

Further, textbooks assume that the state is subordinate to individuals through the ballot box. At the very least, government is assumed to be neutral, intervening to correct market failure as best it can, and to redistribute income so as to make market outcomes more equitable. (Hill and Myatt 2010, 18-19)

But this idealized world is so far removed from the real world that it is little more than a myth, or ‘perhaps even a fraud’ (John K. Galbraith 2004). The power of the largest corporations rivals that of the state; indeed, they often hijack the state’s power for their own purposes. In reality, we see the management of the consumer by corporations; and we see the subordination of the state to corporate interest. (Hill and Myatt 2010, 19)

(….) Galbraith argues that the biggest corporations have power over markets, power in the community, power over the state, and power over belief. As such, the corporation is a political instrument, different in form and degree but not in kind from the state itself. Textbook economics, in denying that power, is part of the problem. It stops us from seeing how we are governed. As such it becomes an ‘ally of those whose exercise of power depends on an acquiescent public’ (John K. Galbraith 1973a: 11). (Hill and Myatt 2010, 19-20)