THE BLOG

The Wealth of People

05/12/2015 07:36 pm ET | Updated May 12, 2016

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Caterpillar Inc. made headlines a while back when it attempted to freeze wages amidst windfall profits. Supply side economics which epitomizes free market capitalism basically holds that water will find its own level. But the most prominent and earliest theorizer of capitalism and the author of The Wealth of Nations also wrote The Theory of Moral Sentiments which begins thusly:

How selfish so ever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others...

Here Smith clearly looks at the agora as a human arrangement in which empathy plays a significant role. What for instance would happen if to quote Yeats "mere anarchy is loosed upon the world," with every individual giving into all his wishes and desires without any consideration for the path of destruction he or she was leaving in their wake. How free is the free market? In order to live in society we abide by a social contract through which many of our instincts are tamed or channeled into directions in which they help both ourselves and others.

Psychoanalysts employ the term "compromise formation," in reference intrapsychic attempts to mediate conflict. But this very concept can be applied macrocosmically in terms of considering how the market may regulate itself. One paradigm is the Spencerian Social Darwinist view in which the "survival of the fittest" governs both economic and social transactions. The countervailing position looks at altruism as naturally selective; mutually beneficial exchanges result from the nurture and care that one displays in showing consideration for the needs of others. Under this paradigm Caterpillar would have been more generous with its salaries.

{This was originally posted to The Screaming Pope, Francis Levy's blog of rants and reactions to contemporary politics, art and culture}