A BEYOND BORDERS column by David Krakauer, President of the Santa Fe Institute.
“All actions, and all things indeed, are good or bad by relation only. Nothing is so complex as relations when considered with regard to a society, and nothing is so difficult as to discover truth, when involved and blended with these relations.”
James Steuart, An Inquiry into the Principles
of Political Economy, Chapter 1 (1767)
James Steuart’s Inquiry Into the Principles of Political Economy — a founding monograph in the field — manages to capture many of the challenges that modern political and economic public dialogue seem to have lost — notably an appreciation for the inherent complexity of relational systems whose core — and perhaps even axiomatic — rules are ethical principles. As Steuart writes in relation to changing such a system in order to improve the collective conditions for life, “The great art of governing is to divest oneself of prejudices and attachments to particular opinions, particular classes, and above all to particular persons; to consult the spirit of the people, to give way to it in appearance, and in so doing to give it a turn capable of inspiring those sentiments which may induce them to relish the change, which an alteration of circumstances has rendered necessary.”
For Steuart the objective of society — that is, any social collective in which the parts become correlated towards synergistic positive outcomes — is to build a political economy that can “provide food, other necessaries, and employment to every one of the society.” The path Steuart favored was a mild mercantilism, a position that his more famous, and in several ways more enlightened successor, Adam Smith, made the just target of his criticism.
In An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Smith introduces a language that is more consonant with our own, placing a greater emphasis on technology and industry and reducing the focus on tax and trade favored by Steuart. Smith can often sound like a Pollyanna of the modern techno-savant variety: “It is the great multiplication of the productions of all the different arts, in consequence of the division of labor, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people.” Smith, however, fully recognized the human cost of excessive specialization and mechanization. He possessed a very sophisticated sense of human potential and ability, and advocated for extensive educational opportunities for all:
“The difference of natural talents in different men, is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labor. The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.”
Much of Wealth of Nations is dedicated to an analysis of the constraints and costs of technology, industry, and their respective markets as they bear on what Steuart described as the complexity of human relations. For Smith, the enterprise of political economy was the betterment of society as a whole, and while an unabashed advocate for free markets, advanced technology, and capitalism, he concluded his book by writing, “The expense of maintaining good roads and communications is, no doubt, beneficial to the whole society, and may, therefore, without any injustice, be defrayed by the general contributions of the whole society.” And “The expense of the institutions for education and religious instruction, is likewise, no doubt, beneficial to the whole society, and may, therefore, without injustice, be defrayed by the general contribution of the whole society.” Smith was able to hold what might strike many today as contrary opinions. He was, in other words, capable of complexity.
Along with our various partnering institutions, the Omidyar Network-supported theme at SFI on emergent political economies seeks to restore to our current historical moment the awareness of the complexity, trade-offs, and ultimate ethical objectives that were so clearly present and set out at length at the scholarly inception of this field. To grapple with the obvious fact that “Nothing is so complex as relations when considered with regard to a society.”
In our own time, issues relating to the uncertainty of work associated with growing mechanization, our awareness of the obvious ecological, geochemical, and global climate impacts of industry, the highly heterogeneous access of the growing planetary population to food, education, and employment, and problems of sustainable agriculture, add vastly scaled-up challenges to those discussed in the 18th and 19th centuries. These are not controversial observations. Yet they have generated divided scholarship and beliefs.
At SFI we think that complexity economics, and a variety of new models and theories that have grown out of the study of the complex domain — when added to the mix of modern economic theory and political science — will enrich and integrate this discussion. In time we hope to inform others with greater practical experience and wisdom to consider pluralistic ways of bringing these ideas to bear on novel policies in both private business and government. There has never been a doubt in my mind that most of us, in Smith’s words, seek practices “beneficial to the whole society.” It is, however, certainly the case that we have barely scraped the surface of what those practices might look like when taking into account all that we have learned in the last several decades.
— David Krakauer
President, Santa Fe Institute