When I hear people speak about human systems in terms of science or nature, I think “no.” Framing a topic in terms of ecology or natural law attempts to give it more credence, but every large system with deeply ingrained patterns is not science. The “social sciences” took their name as an homage to the real deal, a quaint way for, say, sociology to sneak in there next to the branches that de-code chromosomes and build rocket ships. Economics is the most aggressive social science. Capitalists claim the system is as natural as evolution and that the free-market is an intricate, self-perfecting coral reef. Hands off.
Evan Newmark of the Wall Street Journal sums up the dominant free-market language: “The laws of capitalism … are unyielding. The strongest companies survive. The weak and infirm die. And the economy moves forward.” Or, sections of the economy are already dead but pretend to be virile and flourishing. It’s like a possum in reverse. Good trick!
Economics is not science; it’s people and money, and the laws are flexible and theoretical. Science is what’s spanning the Rocky Mountains right now. Pine beetles are killing off millions of acres of lodgepoles. They bore through the tree’s bark, scratch a spot for their larvae and lay eggs. Young beetles eat the lodgepole’s nutrients and, to defend themselves from life-threatening sap flows, inject a fungus that stops the movement of liquid and kills the tree. The lodgepole’s lifesaving ally — cold winters — is gone, so eventually the brittle red trees will be swept away by conflagration. Then, LodgePole 2.0 will evolve with its competition in mind, outperform the pine beetle, take back its market share and send the beetles back to the boardroom with weak excuses for investors.
Metaphoric language doesn’t transform the lodgepole ecology into a business, and conceptualizing markets as “natural” isn’t a legitimate imposition. Economic competition is competition, not Darwinism — which doesn’t factor in human emotions, errors and speculation, Fed statements, holidays and last night’s binge. The notion that the market corrects itself is another mistaken ecological comparison that, as we just found out, applies only to certain sections of the market. Where the market connects with buyers, it is self-correcting. Constant consumer engagement allows products to thrive (iPod) or die (Reebok Pumps), and no matter how attractive the advertisements (Zune) and publicity (XFL), the buyers decide what they want. But, there are no innate guarantees to success — "American Idol" was not genetically engineered to flourish. No one is recommending federal intervention to prop up TV.
Government oversight is required, though, when economics don’t even act like markets. The “toxic” (“Well, gee, there ya go talkin’ about ecology again, Joe”) lending system has played out entirely disconnected from the Friedmanian trust bestowed on the aggregate of buyers. Technically, it’s up to internal regulators to figure out risk, but as Brian Calame told us during a visit to Mizzou last year, he got flack simply for fulfilling his role as New York Times ombudsman. Objectivity in the land of six-figure bonuses is not possible and shouldn’t be expected. The subprime gambling racked up $625 billion in bad loans by ’05. That’s not natural; it’s Chernobyl. “Credit is the air that financial markets breathe, and when the air is poisoned, there’s no place to hide,” writes Charles Morris.
Government regulators keep watch over retail banks, restaurants, bars, schools, streets, forests and just about anywhere else. Economic institutions don't have natural rights that free them from oversight. They'll adapt to operate successfully with the regulation; we can be confident about that. Right now, shipping companies are insisting a coalition of governments protect their coral. Business sharks can't deal with pirates on the high seas.
Greg T. Spielberg is a graduate student at the Missouri School of Journalism and a former assistant city editor for the Columbia Missourian. E-mail him at GregTSpielberg@gmail.com