Since it seems that we are perfectly willing to subject ourselves to the rigid application of economy for the rest of time, let’s at least get the fucker right.

The race we are currently running has been a marathon. Quick question: which developed first in the Western world - written language or economy? If you answered language you answered incorrectly. The concept of writing, written communication, developed as a bureaucratic tool. This surely sickens anyone who has spent time at the Department of Motor Vehicles. The nauseating truth is that all our poetry is derived from a bookkeeping mechanism devised about 10,000 years ago. This is probably why Edgar Allen Poe is so overrated.

The earliest documented Western writing was simple tally marks and numbers -- symbols used to keep track of supplies, debts, costs, supplies and demands. These early tax returns were unearthed in Syria and modern Israel, allowing for a distasteful stereotypical observation about the origin of Jewish thrift.

On the Eastern extremity of the Eurasian landmass, Oracle Bones were the first form of writing to be discovered in China. These animal and human bones were engraved upon by oracles to make divinations about the tides of man. Perhaps we could learn something from the more romantic genesis of writing in the East as applicable to our present economic pothole.

The road from the ox-trade of yesterday to the multi-national conglomeropolis of tomorrow has been long, but the basic principle of compensation for services rendered remains the same. The cause and effect of supply and demand have been remarkably resilient in fending off all attempts at their sovereignty.

We must then ask ourselves, ‘if 10,000 years of controlled experimentation has borne out the same result, does this officially constitute a universal law?’ Moore’s Law is given as much credence and it’s only been observed in the past sixty years.

Perceptive scientists will tell you that Moore’s Law is heading for a dead end. And drunk perception is telling you that so is the traditional economic model built on capital, supply and demand. This is not an ambitious paper, all it wants to do is debunk 10,000 years of observable fact in the following 3,000 words.

(HISTORY)

Surely countless businesses and empires rose and fell between the aforementioned primitive origins of accounting and the birth of the Dutch Indian Trading monopoly in 1602, but they don’t really matter anymore. The sad anomalies of commerce that dotted the time-line prior to the dawn of modernity are as irrelevant as oil companies will be in a thousand years. The Dutch East Indian Trading Company and its sequel, the Dutch West Indian Trading Company, was the first non-sovereign empirical entity to grace the face of the planet. This is to say that the company was the first non-state-run global undertaking bent on securing spheres of influence in which to profit from with its commerce. The Crusades bore striking resemblances to this pattern of proliferating influence that persists today, fyi. The Dutch Trading Company was granted a government monopoly from the forward-thinking people in Amsterdam that allowed them to control the import and export of goods around the world for one hundred years.

The birth of the Dutch Trading Company was not the birth of capitalism. The idea of capitalism, and it is a simple idea, had been around for centuries prior. The impediment to capitalism’s widespread flourishing had been monarchial tyranny. Capitalism is not necessarily friendly to governing interests. It puts the power of production and exchange value in the hands of the people. This is the most corrosive force imaginable for a despot, tyrant or ambivalent king.

Only with the enlightenment, toppling of empire, and liberation of man has the possibility of capitalism become feasible. With the death of God and the birth of self-determination, our ancestors took it upon themselves to imagine a more egalitarian world. Throughout the history of life on this planet one unflinching trend has been our inclination toward liberation. From the first asexual cell to the gay rights movement, eerily similar, the biological constructions on this planet have been continually freeing themselves from one constraint or another. We’ll return to this.

In light of the above primer on man, money and liberty, an appropriate time to begin the story of capitalism’s rise and fall would be the galactic turning point of 1776. Not only does that familiar year mark the birth of the United States of America, but it was also the year that Adam Smith published his seminal work The Wealth of Nations. Adam Smith’s book was the first widely read book to detail the efficiency and worth of a laissez-fare capitalism. At the time, Smith was living in the mercantilist British Empire. It would be the revolutionary governments of the Americans and French that would be the first to embrace Adam Smith’s ideas whole-heartedly. Led by Alexander Hamilton, America built a nation on the principles of free trade and open commerce. French financial minister Jacques Necker, had the unfortunate task of rectifying the crumbling French infrastructure before bloodthirsty masses toppled the monarchy. He failed.

Smith was a philosopher first and economist distantly second. His previous works dealt with the concerns of morality and justice as opposed to those of commerce. The basic thrust of Smith’s ideas in Wealth of Nations revolve around the idea of the invisible hand that maintains balance in the tug of war between supply and demand. Smith claimed any government intrusion into trade via the form of tariffs interfered with the natural course of the invisible hand. He strictly opposed such measures. His moralistic ideology has been questioned in relation to the fatalistic ideas put forth in The Wealth of Nations.

This idea had been posited before but perhaps not as insightfully or relatably. That invisible hand concept must have been captivating at the time. The real breakthrough in Smith’s work was the notion of the equalizing benefits of self-interest. He proposed that individual self-interests will always act as natural checks and balances in the arena of trade and commerce. If businesses and consumers act according to their own best interests, without interference from governments or tidal waves or tornadoes, supply and demand will always reach their optimum graphical representation. This is in fact the foundation upon which modern economic theory is built.

Hamilton and others involved in the America-building business read the works of Adam Smith. They championed his capitalist ideas of a laissez-fare world without government interference. This was a notable departure from the world that had been dominated by monarchial interests for the last 3,000 years. Adam’s free approach was as revolutionary as the revolutions that adopted it.

The openness and transparency implicit in a laissez-fare system was as radical as the communist sentiment that escaped from Marx and Engels, also well-versed in The Wealth of Nations. Unfortunately, the same fate that befell Communism - corruption of its virtues by tyranny - also polluted the infant capitalism of America. Maybe that’s too drastic. The corrupting forces of American capitalism have not been tyrannical, they have been short-sighted and self-serving. As it happens, the planet has yet to see a faithful adaption of unbridled laissez-fare capitalism. Perhaps the very concept is like infinity - it can be approached but never reached.

If it is the case that complete freedom of trade, free from any stitch of government interference, is impossible, then we need to consider a new approach to either the economy or the government. It seems that democracy, idealistically, is more virtuous than capitalism, so let’s try to fix the economy.

A further look at the origins of capitalism will help illuminate its current unrelenting hegemonic explosion to every corner of the globe. Smith was raised by a moderate Scotish Christian. Great Britain decision makers, from their position on top of the world, saw no need to implement the ideas of their countryman. The British Empire continued to control the majority of the planet Earth on the backs of their naval force and fiercely guarded trade monopolies. Britain’s military proficiency eventually trumped the commercial proficiency of the Dutch Trading Company.

The responsibility for the modern shape of American power and politics belongs to Alexander Hamilton more than any other single American. This, in turn, means that Alexander Hamilton carries the burden for the current political and economic construction of the world. It is endlessly debatable whether Hamilton’s creation has been for the better or the worse. It is quite clear that his system was extremely beneficial to American medium-term financial interests.

Hamilton is the architect of the current American economy. As the first Secretary of the Treasury, Hamilton created the first federal bank, the sport of speculation and the federal debt among other things. The strength of the executive branch of government can largely be attributed to him – his initial impulse to install a liberal monarch instead of an elected president is well-documented. Through his federalist papers, his actions as Secretary and his intimate influence over George Washington, Hamilton secured the preeminent position of the president in the standing of American government.

For all of these questionably beneficial items on Hamilton’s resume, he single-handedly righted the sinking American ship. After America won its independence it couldn’t even afford to pay the soldiers and officers that had won it for her, not to mention the extensive foreign debts accumulated to France, Spain and The Netherlands. Hamilton’s plan for financial rehabilitation called for the creation of a federal public debt to be financed by speculation. This is pretty much the extent of my technical grasp of financial system Hamilton installed, but the meat of it is that this federal bank of his issued/sold bonds and treasury notes to pay off its debts. Hamilton turned a dead fish into the most powerful economy the planet has ever known.

Hamilton also oversaw the collection of federal taxes, quelling such hiccups as the whiskey rebellion along the way. While Hamilton advocated open seas, open ports and universal free trade, the government still legislated tariffs to regulate domestic prices and production. This practice continues today. Steel and bananas are two commodities particularly prone to the heavy hand of legislation.

To reconcile Smith’s conception of capitalism with the breed conceived in America is no easy task. First off, we should use the term capitalism to describe the system adopted by America and currently in place today. Smith’s ideas should be referred to as Smith’s ideas. Smith was an advocate for free, uninhibited trade. There are many international organizations in existence today to see to the enforcement of free trade, the WTO namely. Unfortunately, the free trade that the WTO seems to think it is enforcing is far from the open system proposed by Smith.

Subsidies reign in the sources of greatest material wealth on this planet. The sources of greatest material wealth on this planet drew up the plans and control the functionality of the WTO. Naturally the fairness and competitiveness of the WTO is tipped in the favor of its engineers. America among others is crippling competition everyday. Of course this is in America’s self-interest and the self-interest of its citizens. Thus we arrive at the great flaw in Adam Smith Capitalism - when a single ideological influence becomes strong enough it can corrupt the balance of competing self-interests. When international laws prohibit equal expression of self-interest from Namibian farmers as Texas consumers, the invisible hand has been cut off.

It is not the intention of this paper to denigrate the WTO. The WTO is a well-intentioned body acting on the best interests of a system that it believes in. But as we completely fade from the nationalist era, it’s echoes remain amplified today in every corner of the world, international and borderless concerns will become more prominent. At this imminent point it will become clear that capitalism is not a functional system.

Every era seems, almost naturally, to evolve an economy suited to the socio-politics of the day. Of course this isn’t a natural or biological growth. The evolution of different economies stems from ideas and problems and the problem with ideas. In the 1930's socialism was poised to dethrone the failing capitalism. Force intervened in the form of warbombs, it was not meant to be. The era was not ready to shift its favored vehicle of trade. Time will deconstruct capitalism, it is inevitable.

Part two to follow....