Economics is the study of the distribution of resources within and among societies. Resources do not distribute themselves, they are distributed by people. Economics is thus concerned with behaviour and is or should be a branch of behavioural science.
Behaviour, of whatever type it may be, is subject to constraints which accumulate as it evolves; as the primeval dust gives way to organisation or negative-entropy.
Perhaps the most sophisticated type of organisation is the human society, and not only are its parts subjected to the constraints imposed on its sub-parts and sub-sub-parts, but also to those constraints that will enable them to fulfil their differentiated tasks within the social system.
Thus to understand any aspect of human behaviour one must ask oneself how it contributes to the functioning of the specific society in which it occurs.
This is true of economic behaviour—that which ensures the distribution of resources within the system, for if the latter is to function properly, the resources must be made available where they are required. Only in this way can the delicate structure of the social system be maintained.
Thus, as one would expect, economic behaviour in a stable society is entirely geared to social ends. As Polanyi writes:
“. . . a man is not an economic, but a social being. He does not aim at safeguarding his individual interest in the acquisition of material possessions, but rather at ensuring social goodwill, social status, social assets. He values possessions primarily as a means to that end”.
As, with the development of the industrial state, social structures began to disintegrate, so did economic behaviour tend to disassociate itself from its normal ends. As Polanyi remarks:
“Man’s economy is, as a rule, submerged in his social relations. The change from this to a society which was, on the contrary, submerged in the economic system was an entirely novel development”.
Such a development meant a radical change in our attitude to what were previously regarded as inextricable parts of the social system and which now came to be regarded more and more as commodities, i.e. as mere components of a separate economic process. I refer in particular to labour and land.
As Polanyi points out, these are not commodities:
“Labour is only another name for a human activity that goes with life itself, which is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life, be stored or mobilised; land is only another name for nature”.
Neither are produced for sale and neither can be regarded, with impunity, as commodities.
Once they are, then that complex set of cultural constraints that normally governs man’s behaviour towards nature and towards other men must disintegrate. These now come to be treated in the way that will most accelerate the distributive process, regardless of the effect of such treatment on other processes, in particular on long-term social and ecological ones.
In such conditions, people are transferred from one society to another for purely economic reasons and nature is transformed into a factory catering for man’s short-term material requirements.
In such conditions, the only constraints on economic behaviour are economic ones. Things get done because they are economic, which means that there is a demand for them which can be satisfied in conditions that yield the financial surplus necessary for ensuring their further supply.
The demand for things, unfortunately, no longer corresponds to the individual’s let alone the society’s need for them, as would be the case if the former were living in the social and physical environment to which he had been adapted phylogenetically and ontogenetically. In such conditions, normal intuitive behaviour would, in all likelihood, be adaptive.
When, however, the environment undergoes too radical a transformation, it becomes counterintuitive, in the sense that intuition no longer provides a means of interpreting it, no more than it would enable a wart-hog to comprehend the functioning of an electric toothbrush factory in which it had been projected by some practical joker.
In this way responses based on intuitive interpretations are likely to be counterproductive. What is more, they will tend to give rise to an increasingly counterintuitive environment to which responses are likely to be correspondingly more counterproductive.
Needs, in such conditions would tend to accumulate by positive-feedback, the satisfaction of one serving but to create the need for another—each more outlandish and ever less designed to satisfy social and ecological requirements.
Thus only those already provided with drive-in shops and drive-in cinemas will genuinely feel that they require that ultimate blasphemy, the drive-in church, while only those accustomed to travel by jet plane are likely to crave for what must provide the final indictment of the consumer society: supersonic transport.
Each step in this process further reduces the systemic constraints to which economic behaviour is normally subjected. The latter is ever more out of control and society is increasingly unstable. Also the supply of things no longer coincides with the ecosystem’s productive capacity. Things are supplied economically only because their price does not reflect their true cost to society or to the ecosystem.
Environmental deterioration caused by pollution, the simplification of ecosystems, the replacement of self-regulating controls by externally regulated ones, resource depletion and social disruption are simply not taken into consideration in the accounting system we happen to have adopted. As a result, the productive process knows no long-term social and ecological constraints, and becomes but a means of transforming the delicate fabric of the ecosphere into random parts or waste products, as must be regarded the manufactured goods in terms of which we misguidedly measure the wealth of nations and the welfare of mankind.
If we are to develop a less destructive economy, we must cease trying to understand it in vacuo, but rather as a disassociable aspect of social and ecological behaviour. In this way we can console ourselves that homo economicus, monster that he appears to be, is but a fiction. It is homo domesticus industrialis that is causing all the problems.
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