The Invisible Fist

-- By JeffreySchatz - 26 Feb 2010

Work in Progress

Introduction

When I look back at my first attempt at this paper, I see a great deal of anxiety. I was really frightened by the prospect of a law firm career which would make me miserable and be a waste of my hard-earned law license. However, rather than try to address this fear, I tried to argue that the marketplace, through the invisible fist, was forcing me to choose between poverty and misery. I think it was easier to blame the world for causing my anxiety than it was to accept that I was the true source of it.

A little background

Growing up, there were several adults I was close to who did not enjoy their careers. They were relatively happy people, but their happiness was very much "in spite of" rather than "because of" their work. This was true despite the fact that at least one of them was fairly successful from an objective viewpoint. I knew I didn't want to be like that. I promised myself throughout high school that I would try not to fall into the trap of engaging in a career which, while lucrative and easy to break into, would result in me being someone who can only like their life despite their job. So I went to college as a Latin major because I found the subject interesting, and didn't care when people said it wouldn't be "useful." But things change, and during my junior year I started to get nervous about what I was going to do on the other side of graduation. So I decided to give my resume to some of the banks who were coming to campus to interview for summer positions. According to many of my friends, these institutions were the greatest things in the world. If you worked their for the summer and didn't screw up, you would be given an offer for full time employment after graduation. From there, a lifetime of making tons of money awaited you. So I went to some interviews even though I still had no idea what these institutions actually did, and got a summer job. It was by far the worst summer of my life. I don't think I'm a lazy person, but I just can't be happy working around the clock on things I neither care about nor understand. One night at 4:30AM, I promised myself that after my ten weeks was up, I was saying goodbye to the investment banking world. But things change, and once I was back on campus with a job offer in hand, this was an easy promise to break. I didn't have any ideas about what other kind of jobs to pursue and nothing seemed as if it would be so lucrative in the short term. Most importantly, I really liked being the "guy with the impressive job." I was worried about going back to something I hated, but felt it was too good of an opportunity to give up. That last sentence seems like a blatant contradiction, but it is literally the best description of my thought process at the time. But things change, and the bank found itself the victim of an impressive collapse while I was on Spring Break my senior year. I got a job at an anti-hunger organization, and

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.

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.

Really? How do you establish that?

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).

Would you mind showing you have read some Marx by pointing out where this statement supposedly occurs?

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.

This is nonsense. The whole point about the nature of the bourgeois economy, as seen by both its adherents and its critics, is its hospitality to change.

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.

This too. Neither secular price rises without capitalism nor price stability in market economies is unknown, and whatever the theoretical relationships are they cannot be successfully cimplified this way.

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.

Also nonsense. Every one of these supposed steps in logic contains an error. American capitalism was quite successful between 1900 and 1970, without any significant increase in the real wages of salaried lawyers, even the associates in elite firms. Debt levels are not related to law school tuition levels alone: they are also related to which students are admitted and choose to attend high-priced law schools. Debt financing of legal education has its own history, which is not captured by your account. There are much better ways to pay back debt than by working at large law firms. Etc.

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.

Wrong again. All these are conclusory statements, offered without evidence and either radically over-simplifying or directly missating the nature of the relations described.

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.

That's not the history of either the Soviet Union or Cambodia. Was there a noticeably less repressive government in Russia before state socialism? Is there a noticeably unrepressive government there now? Which is "Communist": Cambodia under the Khmer Rouge, or Cambodia under the rule of the Khmer Rouge's mortal enemies, the Vietnamese? Do you really think that Cuba is a more repressive state now than it was under Fulgencio Batista? Or than Nicaragua was under Anastasio Somoza? Where is the repression in Kerala, which has been ruled for two generations by Communists?

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.

When non-market economies falter, social instability rises too. You might want to consider the logical consequences of that readily-demonstrated fact.

Conclusion

People like freedom, but they hate change more, and these two concepts are realistically inseparable.

Two propositions that are undemonstrated, and probably wrong.

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.

This is a conclusion only in the sense that it's conclusory. No idea has been actually developed: if one wasn't convinced already after the first graf, nothing said later made any difference.

This essay needs hard, careful editing. What will be left after the subtraction of erroneous or misleading material will be disarticulated bones, pretty much, which will need to be rebuilt in a new frame.