Matter - Energy - Information - Consciousness
With (a.)scarcity replaced by creativity, (b.)hoarding replaced by the mutually beneficial exchange of know-how, and (c.)domination replaced by the invisible hand of our own evolution, we return to the mobster's question: what is economic reality? How we answer this question sets our goals.
Historically, the answer has developed through four stages, each accentuating a different level of economic exchange:
1. Matter
First, material goods (such as land and raw materials) dominate economic life. According to this view, the economic goal is to acquire and possess things, which is what has happened. For centuries, whoever owned the land or the physical resources controlled the economy. Since material goods are limited, it's no surprise that the scarcity-view of economics arose with this first level.
2. Energy
Land and natural resources are of little use to us, though, if we lack the power to do things with them. It's the second factor, energy (the ability to do work) that expands the uses of matter. Energy is squeezed from material resources (wood, coal, oil, gas, and now plutonium) or drawn from natural conditions (water, wind, sun). We also get energy from animal and human labor. Energy fueled the Industrial Revolution as well as the technological age. During these periods, economies shifted from matter to energy, so that whoever controlled the energy controlled the economy.
3. Information
But gradually a third, less material factor supplanted both matter and energy: know-how, skill, and expertise. Mind-power replaced muscle-power. The information age dawned, making us knowledge transmitters rather than matter-transporters. Information showed us how to create things with less matter and less energy.
In contrast to matter and energy, information multiplies its resources. Information already doubles every five years and may soon double every year. Scarcity of information isn't our problem. In fact, economies can't keep up with translating the wealth of knowledge into products and services. In the measure that they do, assets appear less as things and more as relationships within information structures. The power to produce assets lies less with what we own and more with what we know. Those businesses with the best information succeed, as do those persons with the best information skills.
As before, whoever controls the basic resource controls the economy. But with information, control is less clear-cut, less secure. Leaks and spies, independent and simultaneous discoveries, research networks, satellites and laser transmissions, make information harder to contain. The goal to possess and control information proves more elusive.
And for good reason. The earth and all life on it may turn out to be one dynamic information-structure, which each aspect reflects and on which all may draw. If that's so, then the world is less a mass of things and more a flow of information. In this flow, each part serves as a kind of receiver of the information of the whole.
Such was Leibniz's concept, for example. In his theory of monads, each monad reflects the whole. What happens in the whole, each monad feels, and what each monad does, the whole feels. More recently, James Lovelock's "Gaia Hypothesis" suggests a similar view of the earth as one interlocking, self-communicating information system.
Because information moves by its own dynamics, it's more democratic than matter or energy. Einstein's theories are public property. Because more of us have more access to more information, more of us have the opportunity to be creative with it. Equipped with know-how and a compelling image of how to use it, we can build a business, letting the economic information system supply the capital to make it go.
But the information age also brings new problems. Information opens heretofore unimagined possibilities, not all of which are wise to pursue. With the same chemical information, we can prevent or cause death. With the same stock information, we can increase or decrease market stability. With the same satellite information, we can unite or divide the world. With the same scientific knowledge, we can make the earth a living paradise or a lifeless dump.
The information stage isn't the end of economic development. What should we do with information? How can we best use it? These aren't questions of efficiency, which information can easily handle. They're questions of judgment and decision-making, which go beyond information's expertise.
4. Consciousness, Ideas, and Values
What we do and how we do it depends on consciousness. Consciousness is much more than an information storehouse. It's the power to arrange information into coherent forms
to see connections and structures. Whereas computers register information, consciousness turns it into knowledge. Consciousness sees the significance of information. It puts information into contexts that give it meaning, so that the information makes a difference in how we live.
How does consciousness digest information? Mainly through ideas. Ideas provide the link between us and reality by giving us an image of reality's order. They depict real and objective patternswhat Plato called "Forms" or "Essences." Ideas put us in touch with reality's workings. Thanks to their grids and filters, we see reality as something more than a jumble.
Because reality's order is more than what we think it is, ideas are more than just concepts in our heads. Not any notion depicts a real order. Our subjective realm can be in a state of confusion. What we call an idea may not tell us about the real nature of things at all. It may not put us in touch with reality but put us at odds with it. Spencer's "survival of the fittest" or Boesky's "greed is good," for instance, are often viewed as ideas, but at least according to Plato, aren't ideas at all. They're shadows of ideascrude graspings at the real order.
But even though our grasp of ideas may be imperfect, ideas still point us toward levels of reality that lie beyond the observable. We can't see relations, patterns, or orders, only their effects. We can't see love, integrity, or truth, for example, but we see how they're understood from how people behave. Even though ideas aren't measurable, they nonetheless shape our lives. Ideas guide how we interact with the realities around us.
So much for abstractions. The practical expressions of ideas are values. Values cash in ideas and show what it means to live by them. The idea of love, for instance, includes many valuesrespect, caring, commitment, sensitivity, and self-transcendence. The idea of truth includes values of honesty, openness, and devotion to discovering what's true, whether we like what we find or not.
Human actions are never value-free, since even the claim of value-free behavior reflects a value in itself, namely, that values are good not to have. Scientists, for example, once claimed that science operated without values: "Just the facts." Now, however, they argue that science developed precisely because of the values held by scientists, values such as precision in observation, skepticism about accepted beliefs, honesty in reporting findings, self-criticism in the quest for objectivity, and openness in sharing results.
In fact, values permeate human life. They give us practical guidance. Diligence, thoroughness, determination, and self-discipline are necessary for excellence in any endeavor. Faced with a challenge, we use these values to meet it.
Or, a value taught by virtually every world religionreciprocitydemonstrates the power of values. Reciprocity is simply the Golden Rule: we're good to others because that's how we'd like to be treated. Or the Silver Rule: we don't beat up others because we're not keen on the same treatment for ourselves.
Reciprocity is good because it shows that we live in a web of relationships, in which whatever we do comes back to us. If we shake the web, we bounce too. If we tear it, our strand becomes weaker. Reciprocity takes a holistic approach to relationships. Societies work better, economies prosper, and relationships improve when we adhere to reciprocity.
Moreover, values don't work alone. One of Socrates' favorite exercises was to pound out the relations among ideas and values. The wise, to be wise, must also be just. The just, to be just, must also be devoted to Truth and the Good. To seek Truth and the Good, we must study Beauty and proportion. Ideas, he reasoned, work together in a consistent and mutually affirming system. They form an integral networka coat "without seam, woven from the top throughout." (John 19:23)
We usually talk about this network in terms of value systems. Value systems strengthen the guidance that ideas and values give us, especially since they work in the negative as well. If something isn't just, and if it isn't in accord with Truth and order, it most likely isn't good. If it isn't good, it isn't wise to do. The unity of ideas, which we apply through our value system, keeps us on the straight and narrow, or at least away from complete depravity.
For example, if we recognize only the values of diligence and discipline, we could use them destructively. We could apply them to bank robbing, for instance, or to extortion. Hitler had diligence and discipline. He wore only one cuff of the coat.
But if we wed diligence and discipline to reciprocity and compassion, we're much less likely to run amok. Networks of values put us in harmony with reality. Guided by the unity of ideas, we find it easier to be creative about how we work with reality's order, and we're less likely to act in ways that cause suffering.
But shaping consciousness according to ideas takes time and development. Ideas change how we live. They move us along the spectrum. According to Socrates, seeking reality's order through ideas and being transformed by them is the work of a lifetime. Just before he received the death penalty, he said, "I tell you that to let no day pass without discussing goodness and all the other subjects about which you hear me talking and examining both myself and others is really the best thing that a person can do, and that life without this sort of examination is not worth living."14
Which means that, two and a half millennia later, we and our economies face a new frontier. We've reached the limits of matter, energy, and even information. Not only is there more information available than we can digest, but we often use matter, energy, and information in ways that will do us in if we're not careful. The household management needs a mutation, which only a change of consciousness can bring.
Reductionism
Not that everyone agrees with Socrates, especially when it comes to economies. There's a school of thought which claims that the consciousness-factor isn't relevant to economies. According to this view, the way to solve economic problems is to reduce them to questions of matter, energy, and informationthings we can control. Values don't count among economic realities. Counting Monopoly squares is more exact, more masterable.
Economists of this persuasion drift away from Adam Smith philosophically and argue for a reductionist, value-free approach to their discipline. It sounds more "scientific." If we can reduce economies to observable facts and quantifiable forces, we can bypass the unpredictable human element, as well as the invisible, nonquantifiable stuff called ideas and values. We can control economies more efficiently.
This school of economic thought has dominated the Western world for well over a century. Not that all economists belonged to it. So-called value-free economics, the dissenters said, is simply a disguise for materialist economics. Values are still involved, but they're materialist values: that only material, quantifiable factors count.
Reducing economies this way defines them as closed systems of matter and energy. Knowledge and creativity, ideas and values are out. They're either not relevant or mere commodities to be traded.
But closed systems run down. Economic reductionism forces the scarcity model on economies, which makes the law of the jungle supreme. Business becomes a war, and the adversaries either aggressors or victims.
The result is precisely what's wrong with economies. From nine to five, we're expected to act like economic animals, out for the most. The rest of the time we're supposed to be caring, sensitive human beings. We're caught in contradictions, as Scrooge was: "There is nothing on which the world is so hard as poverty; and there is nothing it professes to condemn with such severity as the pursuit of wealth."15
As with scarcity, though, the contradictions don't come from reality; they come from a one-sided way of looking at reality. By excluding the dimensions of ideas and values, reductionism expects us to manage economies without the tools that make our management constructive. We're supposed to put away our religious and philosophical hats and make do in the jungle.
But, as we're finding out today, the method doesn't work. Materialist values trap us in more and more limits. No-value values shut out the development we need to master crises and to manage economies well.
Overcoming Limits
In fact, economic realities go far beyond trading a fixed number of things. They include all the dimensions that relate to us and our life's development. Ideas of justice, Truth, and the Good are as intrinsic to economies as they are to us, since economies are all of us in action. We can't ignore the higher values without discovering down the road that something is missing from how we manage our households.
This is more than an issue of morals; it's an issue of what works. Taking all dimensions into account works better than considering only the narrowest, because the higher dimensions expand our options for coping with limits. Specifically, each dimension has limits that the next higher dimension overcomes.
Matter has certain limits that energy overcomes: energy moves and restructures matter. Energy changes matter's forms.
Energy has certain limits that information overcomes. Information minimizes the loss of energy by devising more efficient methods. "As the genetic know-how structure develops and becomes increasingly complex," Boulding writes, "the increase of know-how itself tends to push back the energy and materials' limitations and frontiers."16
Yet information has limits that consciousness overcomes. Ideas develop values that guide the best use of information. We can use information to clean up the earth rather than to suffocate it, or to take care of our own world rather than to wreck someone else's.
By expanding the context beyond matter and energy to information and consciousness, we open our economies, so that they're not bound by material limits. We put economic life back into realitynot the sawed-off realities of the reductionists but the total reality in which both we and our economies live.
Notes
14. Plato, Apology, 38a. Tredennick, 7172.
15. Charles Dickens, A Christmas Carol, Charles Dickens' Best Stories, Morton Dauwen Zabel, ed. (Garden City, NY: Hanover House, 1959), 106.
16. Kenneth Boulding, Evolutionary Economics, 132.
