Taken from a speech by Dr. Jeremy Renclain, PHD in biology, Nobel Laureate in Medicine. Original language English, dated May 23, 2007
I would first like to start by thanking the people who have aided me so much in getting the word out on the myths and legends economists have been perpetrating on us for some time. There are too many to mention without fear of excluding someone essential in this movement, but they are all responsible for the honor of granting me this talk.
I am, of course, here to discuss the large myth of capitalism as a theory and the harm caused by pushing capitalism towards our students as guaranteed fact. When you look at it, you'd think the theory was patently ridiculous: random self interest managing not only to cause societal benefit but actually adapt in an ordered way to changing market and environmental conditions. However, neo Smithian thinkers have attempted to thrust this idea upon us, despite the numerous holes in logic and factual bits of information that show how obviously false the theory is.
There are many bits of evidence that show the glaring faults in this theory, but in the past your average Smithian economist will have random facts he will lob back in an attempt to gloss over the flaws of his argument. So it is best to start with a more general case. As a scientist, I am very familiar with the laws of thermodynamics, the second law primarily. For those of you less familiar, the second law says that the amount of entropy in a closed system is always increasing, or more basically, you cannot get order from disorder, things always become less organized.
To take an example, if you have a box full of gas, each of the individual gas molecules will fly around through the box. Each of them has individual trajectories. The second law shows us the particles will become less and less ordered until they equally fill the entire box, getting a base density that's roughly uniform. You would never ever see all the gas molecules spontaneously flow to one end of the box or the other, their actions all even out. However, a capitalist would wish you to believe that this is exactly what happens, that if the molecules were people or markets, that they would all inevitably shift to one side and leave the other alone.
It just simply doesn't hold together. You would never see this happen, the odds of it are so astronomical we'd likely see the heat death of the universe before this phenomena presented itself. But this is what capitalism is, random actors all spontaneously flowing together of their own accord. You can imagine the sides of a box representing different economic situations. With capitalism, individual people, businesses, and governments would all have widely varying policies, creating random chaos resulting in a loss of prosperity. But we see this isn't the case, why not? The other main principle of the second law of thermodynamics is that entropy increases for a closed system. However, in an open system, where the outside environment can effect the system, entropy can be reduced by an appropriate investment of energy.
A Smithian would argue this is the guiding hand, but this theory has such horrible circular logic it's boggles the mind. The guiding hand is supposedly derived from the individual actors, but energy can't be spontaneously created as such. The only rational explanation is external forces push the economy in different directions. We can't be sure exactly what these forces are, but it is obvious to all rational observers there is a sort of Intelligent Control over the Economy. A Smithian will say such an assertion is merely an article of faith, but I would say to believe all those random gas molecules would suddenly flow to one end of the box takes a whole lot more faith than what I am presenting here.
Before I go further into the specific holes and flaws of capitalism, I think we should take what we've learned so far and apply it to our markets. If there is an external, intelligent agent guiding out economy, what does it mean for our actions? With capitalism, you would have no guiding principles, it would be anything and everything goes, leading to chaos. But with are knowledge of an intelligent agent, our view can turn to a far more equitable and just perspective....