The Economy in Mind

by Warren T. Brookes

Two Views of Wealth

Since economic thought first became formalized over two centuries ago, there have been
essentially two different views about wealth. One view, first defined by Adam Smith and Jean
Baptiste Say, is that wealth is primarily metaphysical [not material], the result of ideas,
imagination, innovation, and individual creativity, and is therefore, relatively speaking,
unlimited, susceptible to great growth and development. The other, espoused by Thomas
Malthus and Karl Marx, contends that wealth is essentially and primarily physical, and therefore
ultimately finite. The modern presentation of this view argues that since usable energy is
steadily diminishing into entropy, all wealth is really cost to be shared more equitably.
For the first group, it is only natural that their preoccupation is with the supply side of
economic activity and the creation and generation of new wealth and productivity. Thus, their
approach to economics tends to emphasize the individual, or "micro," aspects of economic policy
and favors maximum eco- nomic freedom. After all, if wealth truly is metaphysical, the result
more of mind than matter, "the wealth of nations" has to be seen as the direct result of the
creative activity of individuals and the degree to which that activity is either liberated or
restricted by governmental, trade, or societal structures and strictures.
For the second group, it is in- evitable that their preoccupation is with the demand or
distribution side of the economic process. If one believes that wealth is primarily a
function of material resources, and is therefore limited (or declining), it is only
natural that one would see the role of economic policy as the just and collective
conservation, distribution, and redistribution of these limited resources until the
end is reached. Marx's "From each according to his abilities, to each according to
his needs" was perhaps the first demand-side economic statement, the taxing of
supply for the fulfillment of demand, the transfer of physical wealth from one
group to another, the "just" reallocation of fixed substance in a "zero-sum"
economy. . .
The primary and essential character of wealth is metaphysical, not physical, and is the
direct result of the creativity of mind, not the availability of raw materials—the sum product of
individual efforts, not the manipulated static resources of collective nations or governments or
lands.
Ultimately, a human being is wealthy not because of what he has but
because of what he knows. What he has, he can lose through disaster, obsolescence,
taxation, or theft. What he knows, he can never lose unless he loses life itself. Thus, his real
wealth is a characteristic of his thinking, not a measured amount on a bank ledger. In fact, our
accounting systems are notoriously and increasingly inadequate in their measurement of the
real wealth (and potential) of our economy.
For example, when America was drawn into World War II, its economy was weak, its
unemployment was massively high at 17%, and its physical resources were immediately
endangered by the loss of access to tin, rubber, and a host of other physical materials essential to
a war machine.
Yet the nation built, in an incredibly short time, the most sophisticated and productive
economic apparatus in history to that point. Where it lacked material resources, it invented new
ones. Where it lacked equipment and plant, it quickly built them. Where it lacked experience
and understanding in warfare planning, it found them in the people's unified mental will to
resist.
America went into World War Il as one of the most depressed economies in the world and
came out of it as the dominant world economic force. It had found within its metaphysical
resources -namely its free people-the imagination, drive, talent, energies, ideas, and
determination to overcome, to build, and to strengthen. The thinking of its people provided the
capital it needed to win.
As we now move progressively into this so-called age of limits, and face the immense
challenge of reindustrialization, it is increasingly clear that the need is not nearly so much for
more physical plant but for more ideas, more invention, more mental energy, and more
creativity than ever before. The most obvious physical resources of our nation and our planet
seem to have been skimmed away, and we are now being asked to think that we have finally
arrived at the Malthusian limits of economic growth.
Fortunately, most of America's economic growth is no longer coming from traditional
sources, steel, autos, minerals, petroleum, or even chemicals (some of which are in serious
decline). It is coming increasingly from high technology, from significant breakthroughs in
cybernetics, genetics, life sciences, and a host of as yet only fractionally explored realms of
human imagination. We are now, in many parts of our national economy, generating rapid
growth and unaccounted new wealth, even as the actual use of raw materials and energy is
declining. The necessity of conservation is producing the inventions that fulfill it.
The nation's massive computer and data-processing industry has been built, quite literally,
on the creative use of previously useless silicon from sand. Biogenetics now promises plants that
fertilize themselves and grains that need no pesticides. Solar power development, still in its
infancy, offers renewable energy for the millenniums, while the potential of fusion seems as vast
as the oceans themselves, from which we have only begun to mine the rich resources of a new
"mind-based" economy.
We are proving, at an increasing rate, that our wealth is not a function of
the matter we can measure but of the ideas and inventions we cannot presently
imagine and our accounting systems cannot measure. Elaborate equations chalked up
on blackboards are each year becoming, new companies with payrolls and new products with
vast new markets.
Yet even in the face of this metaphysical explosion, much of the dominant economic
thought over the past two decades has been steadily more Malthusian and Marxist, centered on
the notion of the limited and even declining physical character of wealth, and preoccupied with
government manipulation of distribution and demand and the allocation of scarcity. While the
real economy has been growing daily more metaphysical, our economists and
our accounting systems, it seems, have grown steadily more materialistic in
their perspective.
 Out of this increasingly finite and material view of substance (it seems to me) have come so
many of the horrendous mistakes we have made in economic policy, from inflation (itself a
product of the fallacy that money is wealth instead of merely a medium of exchange) to taxation
and transfer as a means of redistributing wealth (as if real wealth could ever be found in
government fiat money) to the crushing burden of statism and regulation that have so stifled the
whole creative wealth-generating process....
It is time for a nation which has proved repeatedly the essentially metaphysical and
unlimited character of its real substance to give up those economic misconceptions and to trade
in an economy based on material limits for the potentially unlimited economy of mind. The
route to doing this lies, as it always has, in maximizing individual freedom and minimizing the
oppressive human domination, both organizational and governmental, that always arises from a
materialistic perspective. Adam Smith has more relevance to today's economy than he did to the
18th century.

Goodness and the GNP

Although liberty is the supreme end of a democratic society, and fundamental to eco-
nomic development, we must not naively think that more liberty and less government, alone,
will solve our economic ills and produce endless wealth, nor should we be beguiled by the more
extreme libertarian point of view that morality itself has nothing to do with common wealth. . .
At its roots, economics is a metaphysical rather than a mathematical science, in which
intangible spiritual values and attitudes are at least as important as physical assets and morale
more fundamental than the money supply. Products, after all, are the assembly of qualities, and
their value derives directly from the innate character and ideals of those who create them and
the workmanship of those who produce them. Things are, in their final analysis, the expression
of thoughts. Quality products derive from quality thoughts, shoddy products from
shoddy thoughts.
Plainly, then, a national economy, like an individual business or a specific product, is the
sum of the spiritual and mental qualities of its people, and its output of value will be only as
strong as the values of society. There are many examples of barbaric societies which practiced
the "free market" of the jungle and finally perished in the poverty of hedonism. Without the
civilizing force of universal moral standards, particularly honesty, trust, self-
respect, integrity, and loyalty, the marketplace quickly degenerates. A society
that has no values will not produce much value; a nation whose values are
declining should not be surprised at a declining economy. . .
In this present age of intense libertarianism, we can see that Epicureans and hedonists are
not given to work and savings; and in our urban ghettos the freest of Huns and vandals are
unlikely to produce many goods and services. It takes serious self-discipline to
contribute more than we take. Our national epidemic of crime in both offices and streets is
far more indicative of our economic ills than we care to admit—not merely for the direct damage
that is done to victims, but for what it says about the values and the morale of a nation. Can we
really expect economic revival without spiritual revival? Can economic
regeneration be spawned in the soil of moral degeneration?
 Take, for example, the appalling breakdown in the family over the past decade or so. Not
only is the family the basic social unit, it is the most fundamental economic force in society, the
key to work, consumption, savings, investment, and the whole future thrust of any nation. Yet it
is also the economic force most vulnerable to deteriorating moral and spiritual values. Marriage.
itself is after all a moral commitment. So, the continuing, ever-mounting assault on traditional
family values may well be more destructive to our economic well- being as a nation than any of
our faulty fiscal or monetary policies. . .
That was the theme of the 1981 Connecticut Mutual Life "Report on American Values in
the 80's," which found that more than half of all Americans now doubt that politics or economic
policies alone can solve our basic societal problems such as energy shortages, inflation, and
crime; and that, more than we have suspected, Americans are seeking a new level of spiritual
and religious commitment as the solution. "Bewildered by the confusion of the present, large
numbers of citizens now find solace in the firm conviction of their ancestors." The Report also
found that these firm convictions of religious commitment have a direct bearing on economic
values, particularly work and family:

 "The 'most religious' Americans are more likely than the least religious'] to feel a sense
of dedication to their work" (97% vs. 66%).
 "The 'most religious' are more likely to feel that their work contributes to society" (91%
vs. 53%).
 "The 'most religious' are more likely to find their work interesting and rewarding"
(92% vs. 68%).
 The 'most religious' are more likely to believe financial security can be obtained by
hard work" (88% vs. 70%).
 "The 'most religious' are much more likely to say they would reconcile marital
problems at all costs rather than seek divorce" (60% vs. 33%).
In short, the study affirms a growing public recognition that the spiritual and metaphysical
are more basic to our economic progress and prosperity than the physical and political; that
spiritual values are fundamental to economic values; that goodness does have something to do
with the GNP.
Unfortunately, the study also found that on a whole range of specific moral issues.
"American leaders are substantially out of tune with the public they are supposed to represent."
The moral ethic of our culture, then, is being directed, particularly in the media,
by leaders of thought whose personal values are moving against the spiritual
and moral currents of the public at large.
The study found that "the reemergence of America's religious strain represents far more
than a recent response to national concern about Vietnam and Watergate. It symbolizes nothing
less than a determined effort to revitalize American self-confidence in the face of adversity"—
and, it would seem, in the face of determined opposition from the movers and shakers of
American public debate and consciousness.
During the 1980 election campaign, the distinguished Ameri- can political commentator
David Broder told a Public Television audience, "People have the feeling that the country has
lost its greatness," and he observed that "for many, the return to great- ness means a return to
traditional spiritual values."
More than 150 years before, another great observer of the American scene, Alexis de
Tocqueville, recognized the direct connection between this nation's economic strength and its
moral ethos, when he wrote in Democracy in America:
I searched for America's great-ness in her matchless constitution
and it was not there.
I searched for America's great ness in her halls of Congress and it
was not there.
I searched for America's great- ness in her rich and fertile fields
and teeming industrial potential and it was not there.
It was not until I went into the heartlands of America and into her churches and met the
American people that I discovered what it is that makes America great. America is great, because
America is good, and if America ever ceases to be good, America will cease to be great.
Following Tocqueville's hypothesis to its logical conclusion, the current decline in this
nation's economic as well as strategic strength ultimately may have more to do with a decline in
our "goodness" than with the failure of specific policies or leaders.
When Moses went up Mount Sinai in search of direction out of the
wilderness, he did not come back down with a road map but with a set of moral
laws. The central theme of the Old Testament is that when the Hebrew people, the Children of
Israel, were obedient to those Ten Commandments, they prospered and found their way. When
they departed from them and "worshipped other gods" they failed, and lost their freedom. A
clear moral code thus became the foundation of a great, though small, nation
and, in turn, the cradle of West- ern civilization itself. Spiritual values were
understood to be precedent to economic and social well-being.
But today most of these Ten Commandments have been regarded by an increasingly
permissive and corporate society (particularly its leadership) as slightly outmoded, or at least
irrelevant. Most of them are being violated more casually than ever before in our own nation's
history. We now seem as a nation far more preoccupied with private sensual fantasies than with
dreams of glory, far more prepared to defend the pornographers than to glorify the prophets.
Yet people ask, what do these personal moral and ethical standards have to do
with the Gross National Product and a failing economy? I would answer with a
number of rhetorical, metaphysical questions of my own:

 When we abandoned the gold standard in 1971, was this simply a faulty
economic decision or was it an outward expression of the wholesale abandonment
of traditional internal moral standards?
 Is it reasonable to expect a nation absorbed in existential self-gratification
to save for the future?
 Can young people routinely "spaced out" on dope really be expected to be
productive or to strive for excellence in academic or economic endeavor? Is our
productivity falling prey to more "pot" than to policies?
  Is there not some definite connection between moral pollution, the miasma
of white-collar crime and greed, and the physical pollution of hazardous wastes
and foul air?
 Can business executives who routinely cheat on their spouses be expected
not to cheat the consumer, the government, or their competitors?
 Can the 58% of minority children now born out of wedlock be expected to
grow up to lead productive and stable economic lives when 80% of child abuse and
teenage crime now can be traced to fatherless homes?
 Can a society where abortions have become a more and more routine
form of birth control (and outnumber live births in many major cities) be expected
not to throw away its natural resources, too?
 Can we expect people who "want something for nothing" in their private
affairs not to get the same thing from their government in the form of inflation?
 Is the steady devaluation of our currency merely the outward expression
of the steady devaluation of our lives?...
When we speak of our economic product, we call it “goods and services.” We do not call it
“bads and ripoffs!” Yet that is what it becomes if this product derives from a culture that has lost
its moral moorings and its innate sense of goodness. We look at Japan and marvel at its
productivity and examine its economic policies, but do we also examine the kind of strict
lifestyles, disciplined family values, and work ethic that dominate most Japanese lives?
These concerns are not being raised only by Christian fundamentalists. They are troubling
some of this nation's deepest non-Christian thinkers. Irving Kristol told an American Enterprise
Institute Conference on "Capitalism and Socialism: A Theological Inquiry":
Until 20 or 25 years ago, it was thought natural for liberal governments to
interfere in matters pertaining to individual morality, and it was thought to be
wrong for such governments to interfere too much in economic matters. We have
turned these two propositions around. We now think it right for government to
intervene in economic matters and wrong for government to intervene in matters
of individual morality. This is the great disaster of our age. Government can be
productive in interfering with morality, but it is likely to be counter- productive
when it interferes with economic affairs.
It is Kristol’s concern that capitalism and the free market- place, without the inspiration
and moral framework provided by Judeo-Christian values, will de- generate into ugliness and
repression and lose its dynamic character: “To the degree that organized religion has decayed
and the attachment to the Judeo-Christian tradition has become weaker, to that degree
capitalism has become uglier and less justifiable.”
Today it seems self-evident that because of our decline in values, our
economy is paying an enormous price in lost productivity and higher social
costs- shifting from the production of “goods and services” to the promotion of
“bads and ripoffs” in both our public and private sectors. Capitalism without the
moral underpinning of the Decalogue and the inspiration of the Beatitudes soon degenerates
into self-destructive greed.