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The Invisible Fist

-- By JeffreySchatz - 26 Feb 2010

Introduction

It pleases us to celebrate the "developed world" as a testament to the success of human freedom. We like to think of ourselves as in a profoundly better and freer place than our fellow humans of the past and present who lived and live under oppressive, iron-fisted governments. However, this freedom is largely illusory. The establishment of the "free" market economy merely replaced the iron fist with an invisible one. Our governments are less actively oppressive not because the human desire to maintain stability has declined, but because this desire is sufficiently fulfilled by the Invisible Fist.

Humans are hostile to change

People are fundamentally hostile to change providing their current situation is tolerable. This sentiment has discernible biological roots. In the natural state, the individual's only real goal is survival. If their current strategy accomplishes this goal, it would be evolutionarily disadvantageous to change strategies and risk failure. In this way, evolution programmed people to be resistant to change.

In society, this hostility to change becomes directed at the actions of other individuals as well. In society, an individual is affected by the actions of others. One cannot hope to maintain the stability of one's own lifestyle in the face of changes by others. Thus, ever since societies were created, there have been systems (governments, rulers, etc.) in place to ensure this stability.

The Iron Fist: One way to ensure stability

From early societies until quite recently, rulers ensured conformity to the status quo with an iron fist. Rulers are naturally even more anti-change than the people as a whole because they are the ones deriving the greatest benefit from the current system. This is why governments in early societies had a fanatical obsession with deterring changes. The Spartan law criminalizing lyres with too many strings was less the exception than the rule. Nor did this anti-change obsession fade much with time. Adam Smith's Wealth of Nations was banned by his country (arguably one of the "freer" states of the time period) due to its criticism of the dominant theory of mercantilism. In retrospect, this was fairly ironic, as the Invisible Hand that Mr. Smith identified proved able to stabilize society just as well as the iron fist.

The Invisible Fist: A new way to do the same thing

In the last two centuries, a significant part of the world has undergone a transition towards less repressive governance. Notably, there is a strong correlation between a successful market economy and a less repressive government. This could lead one to draw the conclusion that a freer and more successful economy gives rise to a freer people. However, this freedom is largely illusory. A successful market economy creates an Invisible Fist that rewards those who maintain the status quo and punishes deviants. With the status quo guaranteed by the invisible fist, the iron fist simply becomes unnecessary.

The basic mechanism of the Invisible Fist is fairly simple. Markets are extraordinary at allocating resources efficiently and maximizing production (even Mr. Marx conceded this). One of these resources is human capital. Thus, in order to get the full benefits of capitalism, individuals must place themselves into a certain market-established niche. To reject this niche, the individual has to risk giving up the high income that market economies provide. However, the Invisible Fist's power extends further. The success of the capitalist economy leads to significant increases in living costs. Thus, the market economy does not merely give an opportunity that the individual is free to accept or reject. Rather, through cost increases, it also makes it more difficult to survive without accepting one's niche. Therefore, rejecting one's place leads to an impoverishing punch in the face by the Invisible Fist.

An illustration: The Invisible Fist in the legal profession

We can see the Invisible Fist at work in the legal profession. The efficiency of the market creates a large amount of high-paying, and perhaps miserable, legal jobs. This in turn causes an increase in law school tuition, forcing law students to take on more debt. The Invisible Fist discourages law students from breaking the mold because doing so would take away the guarantee of the high income needed to recoup their costs.

The Invisible Fist coerces Law Schools as well. The market has allocated them into the niche of producing the human capital for large law firms. If they chose to go a different route, they would need to lower tuition. However, the high tuition has increased professor salaries. Thus, opting out of the niche would dramatically reduce their ability to recruit and retain talented faculty.

Corroboration for the existence and role of the Invisible Fist: Communism and Fascism

The Invisible Fist explanation is corroborated by two interesting phenomena: the tendency of communist countries to be authoritarian and the tendency of collapsing market economies to embrace fascism. At first glance, it does not seem inevitable that a communist government is incompatible with political freedoms. However, from the Soviet Union to Cambodia, this seems to generally be the case, and it is quite logical. Society desires stability. With the Invisible Fist of the market gone, the iron fist must return. A similar process is seen in the rise of European fascism during the Great Depression and the resurgence of European Ultranationalists in the wake of the recent recession. When the market economy falters, the Invisible Fist is weakened and iron fists become an appealing option to a society that does not want change.

Conclusion

People like freedom, but they hate change more, and these two concepts are realistically inseparable. We like our system because it provides the stability we crave while facially appearing to be free. However, this freedom is not real. The fist is still here. It is just harder to see.

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