New Culture Library

The top 400 people — individuals, 400 people, you could get them into this space if you squeezed them just a little bit — have more wealth now than the bottom 180 million Americans taken together. That’s a medieval number; I don’t mean that rhetorically. I mean that medieval society was structured with the ownership of wealth, in that case land, at that level of concentration, and giving it power relationships of that kind.

The pain levels are forcing people to do new things because they have to. In a crisis that isn’t what happens; you get explosions. But what we’re seeing, and this is the part that’a very interesting to me, what we’re seeing is an explosion of activity, both political, some social, but above all economic in a way I think could matter. Now let me say a bit about that. All systems run on the basis one way or another of property. And in this one, the property concentrations are, as I’ve said, extreme, and getting worse. …Simply as one element of one way to think about the possibilities of the next system, and what might be the way to build institutional power, and displacing, pushing back over time, the dominant power of the system, it would have to revolve around … some way to democratize the ownership of wealth. … If you want another system … what is it that you want? You don’t like this system? What do you want? …

The myth of the unbounded individual, the lone merchant with the devil-may-care attitude toward his fellow men allowed Smith to conceive of a society in which men might live without close ties to one another and yet a society which would not descend into barbarism. Emotional distance, a lack of love or compassion, need not descend into violence and murder, according to Smith, because of the principles of disinterested commerce and exchange which he thought that he had uncovered in Man.This is the legacy that Smith has left us today. Not just in the field of economics, but also as a sort of moral or mythic code by which we arrange our social intercourse in mass society. When we step into a shop and purchase a good or a service we are acting as Smithian individuals. We see ourselves as unbounded to those around us and free to make whatever decisions we please. And we believe that once the transaction is complete we can wash our hands of it.The problem is that this is not true and it probably never has been. Today, instead, we see all too clearly the importance of debt. Debt is what ties us together. We may be in the position of creditor or in the position of debtor – or we may even be in the position of neither – but debt affects all of us. Even those of us that balance our books perfectly and do not engage in any form of lending nevertheless rely on banking systems and systems of government founded on the simple and timeless principles of debt. And it is these principles that bind us together.

We are not, in any way, “men who owe no obligation to one another”. Our entire social system is founded on obligation and interconnectedness. This was likely true even in Smith’s time, but his genius was to have hidden it from view and in doing so to construct the founding myth of liberal individualism as it exists in modern times.Yet today the debt issue explodes once more. And because Smith’s mythology cannot contain it we see all around us anxiety together with its attendant primitive emotions such as envy, anger, spite and malice and, in countries such as Greece, a general collapse of the entire social economy. We see politicians obsessed over government debt sending their countries into ruin simply because they adhere to a redundant mythology. In short, we see the chaos that terrified Smith of a society in which, in his words, injustice prevails.

What Smith gave to humanity in his founding of economics was a great lie with which to structure our newly forming nation-states and mass societies. But it was a lie that was in many ways quite fragile. And it is this lie that we see cracking up all around us today. The question is whether we, as a species, will continue to live within this crumbling fiction or whether we can construct a different mythological system founded on principles that are a closer fit to our really existing circumstances.Almost every moral pillar of our contemporary societies – from the discipline of economics, to ideas that dominate about what constitutes good statesmanship – militates against the formation of such a new mythology. And, as psychopathology teaches us well, people are quite stubborn in their giving up of their mythologies, despite their possibly high degree of dysfunction. But given that the stakes are rather high and humans are a fairly adaptive species, we may surprise ourselves yet.