By the time we come to the end of this series we will have been swimming in the primordial soup of the seeds for alternative forms of traditional capitalism! As I have long said, there is bad capitalism, the kind we have, and good capitalism, the kind we need
Part 5 is an adaptation of my review of a book about six economies written by Riane Eisler. 1 She titled the book "The Real Wealth of Nations," which to me was a repartee to Adam Smith's magnum opus. Because she is absolutely one of my favorite authors I must begin by telling you about her.
Escaping with her parents from the Nazis in Germany led her eventually to ponder how there could be a world so cruel, insensitive, and destructive when humans, she believed, have a great capacity for caring, consciousness, and creativity (we should highlight "capacity" for she could not say "habit"). She ultimately concluded that "we have to change present economic systems" for the sake of ourselves, our children, and future generations. Being trained not in economics but in sociology, anthropology, and law was, I'm convinced, an asset for her, not a liability, in doing the research and writing for this book. And I certainly agree with her when she quotes Einstein as having said that solving problems can't be done with the same thinking that created them, even though I hardly think it takes a genius to know that. In any case, Eisler has done some very creative and constructive thinking.
She was selected as the only woman among twenty great thinkers including Hegel, Adam Smith, Marx, and Toynbee in recognition of the lasting importance of her work. 2 Her book, The Chalice and the Blade . recounting the transition from earliest egalitarian to later patriarchal societies, was an international best seller and acclaimed by Princeton anthropologist Ashley Montagu as "the most important book since Darwin's Origin of the Species." 3,4
Karl Marx once said about capitalists, "give them enough rope and they'll hang themselves" If only that would happen! Eisler isn't sympathetic to either Marx or Adam Smith. She contends that their theories and their application call for the control of natural resources and the means of production by a male dominated culture and as a consequence neither communism nor capitalism as we know it is capable of solving the chronic problems confronting society. Well, if you remember what I wrote about Marx in the previous part of this series, I would give him some slack here. 5
Her focus in her book is on explaining dysfunctional economic structures, rules, and practices, offering an alternative perspective for a new economics along with providing convincing evidence of its superiority, and proposing necessary reforms to change the present system. Whereas Adam Smith's Wealth of Nations focused on the market, she goes beyond it to reexamine economics from a larger perspective that includes the life-supporting activities of households, communities, and nature. "Ultimately," she says, "the real wealth of a nation lies in the quality of its human and natural capital" and the basic purpose of an economic system should thus be to "promote human welfare and human happiness," characteristics that are missing from our present economic system. She is obviously more in tune with Aristotle's thinking about economics than with Smith or Marx. 6
A central theme of her book is that since any economic system emerges out of a larger social, cultural, and technological context, a viable system can't be constructed without taking that broader context into account, and especially not without giving visibility and value to the socially and economically essential work of caring for people and nature. She defines care giving as "actions based on empathy, responsibility, and concern for human welfare and optimal human development."
Our economic system is dysfunctional she contends because it, like its larger context depends on what she calls the domination model. It has four core components; a rigid top-down social structure, much abuse and violence, a male superiority premise, and beliefs that perpetuate domination and violence. This system, where people are either dominating or being dominated rests on several erroneous assumptions such as people being inherently untrustworthy, that fear of pain (as a psychologist, I disagree with this as a source of motivation) and scarcity are the main motivators for work, and that caring and care giving are impediments to productivity or at best irrelevant to economics. For example, with regard to the last misassumption, she points out that care giving isn't, but should be, included as a positive value in economic indicators such as the GNP, which, manifesting a domination system as it does, misleadingly includes war-related expenditures as positive values. She cites a Swiss survey and a UN report, the first, showing that the value of unpaid, care giving work accounts for 70 percent of the reported Swiss GDP, and the second, estimating in 1985 that the value of women's unpaid work amount worldwide and annually to 11 trillion dollars. Those are amazing findings!
A functional economic system along with its larger context would be one she posits that depends on what she calls the partnership model of mutually respectful and caring relations. She leaves no stone unturned, no relevant field of inquiry unexplored in showing in various ways how this model is far superior to the other one. For example, she documents studies demonstrating that in business "it pays to care-in dollars and cents." Organizational psychologists like me would be familiar with the evidence presented that caring and empowering corporations do indeed give a positive return on investment in their human capital. She shows how the Nordic countries, the only ones coming close to her partnership model, are faring well economically and socially.
Having a national capacity and resources for providing optimal human development is clearly necessary for having a healthy economy, and she persuasively links the domination form of child rearing (and thus suboptimal human development) to adverse consequences later in life that show up in the kinds of leaders and followers our society has, in our belligerent relationships with other countries, and in our diminished capacity for a functional and healthy economy. She presents neuroscientific evidence of how care giving rather than selfishness produces the most powerful reactions in the brain circuitry associated with pleasurable sensations. Finally, she shows how disastrous it could be if the domination model is played out with new and risky technological developments on the horizon.
Her perspective and understanding are so broad that she conceptualizes not one but six economic sectors. The first sector, the core one, is the household economy from which the rest of the sectors spring because productivity depends so much on human activity, which starts at birth and is markedly shaped by what kinds of experiences there are throughout human upbringing. Her core economy is clearly reminiscent of Aristotle's thinking. 7 The second is the unpaid economy made up mostly of volunteers. The third is the conventional market economy. The fourth is the illegal economy like illegal arms trade (and I suppose she would include Karger's fringe economy summarized earlier in this series). 8 The fifth is the government economy that includes not just the large population of government workers but also the laws, rules, and policies that (should) govern the market economy. The sixth, the natural economy, is as basic as the first in that our environment produces natural resources used and misused by the market economy.
The sectors are inextricably intertwined, and all must be taken into account in order to transform our economic system, our institutions, and our culture from the domination into the partnership model. The greatest challenge, she contends, is to develop economic models, measures, and rules where the first, second, and sixth sectors are recognized and highly valued. Our beliefs about what we value are largely unconscious, she continues, having been inherited from earlier times when anything associated with the female half of humanity, such as caring and care giving was devalued. If you scoff at this, you should read her book because I can't do it real justice here other than to say I know of no other living scholar that has evolved a new theory of economics after having spent 30 years of research combing the data from over 20 thousand or more years of history collected by herself and others from myriad fields of inquiry.
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