Adam Smith first talked about the invisible hand in 1759. He was looking at the divide between the rich and the poor and said, in essence, that “greed is good.”
Here is the exact wording:
“They (the rich) are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society.”
The effect of “the hand” is most clearly seen in the wide-open market that emerges after established players collapse and make way for new competitors riding a wave of technical breakthroughs. Essentially, it is a cycle.
But something is happening that may never have happened before. For the past 300 years of our history, the one constant has been the trend of consumerism. Economic cycles have rolled through, but all have been in the service of us having more things to buy.
Indeed, Adam Smith’s entire theory depends on greed:
“The rich … consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements.”
It’s the trickle-down theory of gluttony: Greed is a tide that raises all boats.
The Theory of The Invisible Hand assumes there are infinite resources available. Waste is necessarily built into the equation. But we have now gotten to the point where consumerism has been driven past the planet’s ability to sustain our greedy grasping for more.
Nobel-Prize-winning economist Joseph Stiglitz, for one, recognized that environmental impact is not accounted for with this theory. Also, if the market alone drives things like research, it will inevitably become biased towards benefits for the individual and not the common good.
There needs to be a more communal counterweight to balance the effects of individual greed. Given this, the new age of consumerism might look significantly different.
There is one outcome of market driven-economics that is undeniable: All the power lies in the connection between producers and consumers. Because the world has been built on the predictable truth of our always wanting more, we have been given the ability to disrupt that foundation simply by changing our value equation: buying for the greater good rather than our own self-interest.
I’m skeptical that this is even possible.
It’s a little daunting to think that our future survival relies on our choices as consumers. But this is the world we have made. Consumption is the single greatest driver of our society. Everything else is subservient to it.
Government, science, education, healthcare, media, environmentalism: All the various planks of our societal platform rest on the cross-braces of consumerism. It is the one behavior that rules all the others.
This becomes important to think about because this shit is getting real — so much faster than we thought possible.
I write this from my home, which is about 100 miles from the village of Lytton, British Columbia. You might have heard it mentioned recently. On June 29, Lytton reported the highest temperature ever recorded in Canada a scorching 121.3 degrees Fahrenheit (49.6 degrees C for my Canadian readers). That’s higher than the hottest temperature ever recorded in Las Vegas. Lytton is 1,000 miles north of Las Vegas.
As I said, that was how Lytton made the news on June 29. But it also made the news again on June 30. That was when a wildfire burned almost the entire town to the ground.
In one week of an unprecedented heat wave, hundreds of sudden deaths occurred in my province. It’s believed the majority of them were caused by the heat.
We are now at the point where we have to shift the mental algorithms we use when we buy stuff. Our consumer value equation has always been self-centered, based on the calculus of “what’s in it for me?” It was this calculation that made Smith’s Invisible Hand possible.
But we now have to change that behavior and make choices that embrace individual sacrifice. We have to start buying based on “What’s best for us?”
In a recent interview, a climate-change expert said he hoped we would soon see carbon-footprint stickers on consumer products. Given a choice between two pairs of shoes, one that was made with zero environmental impact and one that was made with a total disregard for the planet, he hoped we would choose the former, even if it was more expensive.
I’d like to think that’s true. But I have my doubts. Ethical marketing has been around for some time now, and at best it’s a niche play. According to the Canadian Coalition for Farm Animals, the vast majority of egg buyers in Canada — 98% — buy caged eggs even though we’re aware that the practice is hideously cruel. We do this because those eggs are cheaper.
The sad fact is that consumers really don’t seem to care about anything other than their own self-interest. We don’t make ethical choices unless we’re forced to by government legislation. And then we bitch like hell about our rights as consumers. “We should be given the choice,” we chant. “We should have the freedom to decide for ourselves.”
Maybe I’m wrong. I sure hope so. I would like to think — despite recent examples to the contrary of people refusing to wear face masks or get vaccinated despite a global pandemic that took millions of lives — that we can listen to the better angels of our nature and make choices that extend our ability to care beyond our circle of one.
But let’s look at our track record on this. From where I’m sitting, 300 years of continually making bad choices have now brought us to the place where we no longer have the right to make those choices. This is what The Invisible Hand has wrought. We can bitch all we want, but that won’t stop more towns like Lytton B.C. from burning to the ground.