Friday, 12 October 2012

Mandeville and the fable of the Spanish hive

What we see is what we get. Isn’t it?
I’ve heard those days unusually frequently, speaking about economic business, that reality is stubborn, that things are the way they are because they can’t be other way, and that mathematics eventually puts things right. And I´ve heard that, precisely, from people who has accept with stoical and foolish resignation this kind of official version of the crisis according to which we are no longer new riches but we still being old poor. All that regardless of something―if reality was as stubborn as they say, we would be still painting bisons on the cellar’s cave; that admitting things can’t be other way is an indispensable tool to make them the way they are; and that arithmetic doesn’t explain why during so much time the benefits of a few were multiply whereas now the losses are divided among everybody.

Just thinking that things are the way they are, that is, to dissociate the economic process from human will and, therefore from any ethic consideration, it is not, from my point of view, a fair intellectual option born in the heat of common sense. I think it is just an unconditional surrender of the intellect to certain interpretation of reality, without considering if it is the only one and if is not so, at least if it the better. Because what we call reality is, basically, the result of projecting our previous experiences and our future longings on the present. So, the way we think on reality will determine reality itself and lead us to tolerate the way things are or try to change them, but the result is nothing determined by historical laws, a secret written in the stars or the fulfilment of an inexorable fate, because the human being plays and write at the same time his part.

The fable as the liberal epitome of freemarket ―A successful capital mistake
Maybe one of the earliest modern testimonies of this idea that things are the way they are because they couldn’t be any other way is The fable of the bees, written at the beginning of the 18th century by a Dutch alienist settled in England―Bernard Mandeville. There he holds the thesis (who knows if with satirically intention or honestly convinced) that virtue never made prosperous societies but the real wheel of progress was turned by vice, instead. 

To illustrate his idea he takes as an example a hive that lived in Luxury and ease. There the bees were “endeavouring to supply each other’s lust and Vanity”. In the hive “some with vast Stocks and little pains, jumped into business of great gains” while “some were damned to sythes and spades […] and wear out strength and limbs to eat”. The hive was also full of scoundrels who “cunningly convert to their own use the labor of their good-natured heedless neighbour”. However, apart from their name, they were exactly the same as the grave industrious since there were no trade, place or calling where cheat was unknown. No one escaped―Nor the lawyers, who succeeded in making “unlawful, that one’s own, without a law-suit, should be known”; nor the physicians, who “valued fame and wealth above the drooping patient’s health; nor priest or soldiers; and even Justice “her left hand, which the scales should hold, had often dropped them, bribed with gold”.
All in all, “thus every part was full of vice, yet the whole mass a paradise”. Vice and corruption were the greasy stuff that kept lubricate and working the engine of that hive. “Envy itself, and vanity, were ministers of industry”, writes Mandeville, and folly and fickleness in diet, furniture and dress “was made the very wheel that turned the trade”. “Thus vice nursed ingenuity” and spurred it towards prosperity, carrying life’s conveniences “to such height, [that] the very poor lived better than the rich before”

Nevertheless the hive was full of hypocrites that cried “damn the cheats, and would, though conscious of his own, in others barbarously bear none”. And one day, the god Jove, moved with indignation fill all their hearts with honesty. Then the price of meat fell sharply, the bars were empty, and honesty made redundant lawyer’s work and even smiths that earn a living with locks and grates were unemployed. Physicians had not illness among the virtuous bees…Ultimately, there were no business for so many people since where three people were employed before (one working, the other watching and a third one watching the watcher) now just one is enough. Like this, little by little, the bees were abandoning the hive.

Industry disappeared and so did manufactories since no one could be found paying for rarities and luxury. Finally the whole hive had to fly into a hollow tree. The poem concludes: “leave complaints: Fools only stirve to make a great and honest hive to enjoy the world´s conveniences, be famed in war, yet live in ease, without great vices, is a vain utopia seated in the brain”. And Mandeville notes: “A golden age, must be as free, for acorns, as for honesty”.

Some economist from the Austrian School (maybe the same that would have considered an interesting precedent of childhood development Swift’s humble proposal) consider, looking after number one, that The fable of the Bees was written quite seriously and traces to it a kind of starting point of the modern liberalism, since for them Mandeville is the first thinker who realizes that  the complex network of social relationship, including economic affairs, is not the result of a plan or has to do with moral considerations but merges from some spontaneous order related with the pursuit of  one's self-benefit. This spontaneous order (the market will be called lately) will become the philosophers stone which turns private vices into public virtues. Nevertheless, such interpretation of Mandeville’s fable is just a way of seeing things, but maybe not the only one nor the most appropriate.

Some empirical criticism
If we have a look on the hive, we can found a good deal of curious similarities with the situation just before crisis outbreaks in Spain, with our bubbling spring―While some landowners made huge profits with property speculation, some other people were employed in back-breaking works. Spain was full of rascals that convert to their own use other’s labour―from lawyers who squeeze immigrants willing to regularise their situation to doctor’s that manage to get an invalidity benefit to people who played paddle every weekend, not to mention public enterprises where tree people were three people did one’s work. Despite corruption could be found in every single part, as a whole the situation was seen as prosperous and easy. Envy and futility were ministries on industry, to such extent that car dealerships no longer kept up selling neither more and more powerful cars nor the real state agencies stopped selling bigger and bigger houses. As in Mandeville’s hive folly and fickleness were made the very wheel that turned the trade and there were no waste ground was a shopping centre wasn’t erect.
As we have seen, Spain matched Mandeville’s characteristics to became a long lasting prosperous hive, since no part of it was free from vice’s grease. How it is possible, then, that now the whole hive was about to move to a hollow tree? Could it be that a eager god, tired of claims for honesty, had cursed the bees and filled all their hearts with it?
The fable of the bees is just an allegory intended to convey a particular idea of the world, that is― prosperity had nothing to do with justice and bring ethic considerations to business just lead to ruin. However, Spanish crisis shows that things are the other way around: It is the lack of a single trace of decency and common sense which leads societies to ruin.  We have to keep in mind that the real invisible hand that rules society (at least that one mentioned by Adam Smith in his The Theory of Moral Sentiments and used later in The Wealth of Nations) is not and spontaneous order similar to the law of the jungle, but the order drove by commons sense and some common notions about justice that every single citizen has and that freely decides to follow or not.

From the fable of the bees to fable of the sheep
Now we are at risk that a fable leads to another. We are at risk because the same people who enjoyed greasy palms is talking about the virtues of austerity and to illustrate that they have made up the fable of the sheep. That fable talks about a flock which lives in a sheepfold was starving because the who had to share out the pasture hadn’t done it diligently and they had finished the year’s crop in a couple of months (nobody knows where it had really ended up, because they weren’t aware of having been eating much more than before). The sheep, uneasy, argued about how to deal with such situation and the more experienced in economy, apart from praise the kindness of fasting, propose to open the doors of the sheepfold, so the more powerful could find a place to graze and, at the same time, someone could come in and feed the rest (any resemblance with labour reform or privatization was a mere coincidence). And so they did. And according to the pack of mouth-watering wolves that were waiting at the door, they had never had seen such a joyful flock, because every one run madly and jumping in joy. All that regardless of what the wolves said is just an interpretation of what happened, maybe not the only one; maybe not the more plausible.