Self Certified

Anarchism in Interesting Times

On the Invisible Hand of Communism


The term ‘The Invisible Hand’ is most notably associated with Adam Smith, the father of Political Economy. Today it is often padded out with the words ‘of the market’. In the neo-liberal age it has become an article of faith and forms the basis of ‘trickle down economics’. Smith’s view can be summarised in this passage from The Theory of Moral Sentiments (1759):

The proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest … [Yet] the capacity of his stomach bears no proportion to the immensity of his desires … the rest he will be obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets which are employed in the economy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice…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…

In modern times, since the reaction against Keynesian economics, Smith’s invisible hand has been interpreted as meaning that any interference with ‘free competition’ is bad. Establishment figure tell us that the best way of distributing goods and services is through a free market, where each capitalist sells what they choose and each consumer buys what they choose.  In this way, so the theory goes, the pursuant by each individual of their own selfish interest, balances the productive forces in a way that is beneficial to society and the individual. Well, it’s a nice idea in theory, but it doesn’t really work in practice now, does it? Every person living on the street, every country where poverty exists despite being resource rich, is an indictment of the idea that the market, left to it’s own devices can equitably distribute wealth.

But the alternative that was put forward by socialists in the 20th century didn’t work either. Central planning also know as the command economy, was overburdened with bureaucracy. Under Stalinism the state decided what the people needed. Different ministries looked after different sectors of the economy, there was duplication there were shortages. Other socialists propose the alternative of democratic planning. This entails control of production by workers councils, in some models backed up by community or consumer councils. While council democracy should be a part of any socialist society, using this for production sounds cumbersome. For a start, if you go with the model of workers’ councils alone, you have a small number of people deciding what everyone needs. Include consumer/community councils in that process and you have a very slow process where production lags significantly behind demand. At any rate, a lot of what is produced these days is done with very little human labour, as technology has advanced to the point where many tasks have been automated.

I want to argue that the idea of an invisible hand (as a metaphor of course) isn’t as mad as it sounds, but that it just doesn’t work in a capitalist economy. The effects of people pursuing their own interests are skewed by private ownership of the means of production and money. The profit system entails that it is not what people want and need that drives production, but what expands the profit margins of the capitalist owners. Without all land and resources being held in common, it is the needs of the few that are satisfied, not the needs of the many. Money is an integral part of the process that warps the actions of ‘the invisible hand’.

Money is a social technology, it is a medium of exchange, a measure of wealth, an method of accounting for the goods and services in society and for the extension of credit. However, it is a social technology that most belongs to a specific kind of society, one that is based on private property. A new society based on communistic economic relations will need it’s own technology that will not allow wealth to be hoarded, can give a real time snapshot of the number and location of products, that will be able to predict what goods and services are needed by society and will regulate the general production without interference from planners, and creates “new values, behaviours and norms” with minimal effort. That technology already exists and is being used for a multitude of tasks.

Erik Brynjolfsson and Andrew McAfee write in The Second Machine Age: “Tweets were just as accurate as official reports when it came to tracking the spread of cholera after the 2010 earthquake in Haiti; they were also two weeks faster… social media expresses a collective wisdom which, when properly tapped, can yield an extremely powerful and accurate indicator of future outcomes.” Then there is Waze, an application that both gives you GPS driving directions and uses realtime traffic information provided by users to help you avoid traffic. Waze combines different kinds of information to do this. It receives your GPS location, it tracks your speed, and can also receive specific user input about traffic, for example you could say there was a police checkpoint or just tag a particular section of road as having particularly heavy traffic.

To see how we might allocate and account for goods and services on a communist basis, we just have to look at existing technology and join the dots. An application like Waze with a bar-code scanner that used GPS location could take a real-time snapshot of what was being taken from stores and consumed in a given location at a given time. You could take your weekly shop from the store, scan the bar-code as you unpacked it then scan again when the item is consumed – people already do similar things with health apps to track their diets. This, combined with ‘wish lists’ would give an accurate picture of peoples’ needs and desire and would be not skewed by price mechanisms. People would take the things from the store they actually want, not what they can afford. This data could be collated by algorithms like those that are currently used to direct financial markets  to regulate production  – not by the market, not by central or democratic planning, but by the sum total of decisions made by individuals in the pursuit of their own needs, wants and happiness – the invisible hand of communism.

If you want to see more of this sort of thing or my opinions on technology, dogs, anarchism, football and random nonsense, follow me on twitter.


2 comments on “On the Invisible Hand of Communism

  1. Pingback: On my use of the terms ‘Communism’ and ‘anarchist communism’ | Self Certified

  2. Pingback: The Robots are Coming, Look Busy! – Automation, Work and Class (Communism versus the commanding heights Part 3) | Self Certified

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This entry was posted on November 24, 2016 by in Uncategorized.
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