Economics: The Sociological Foundation of Civilization

People often wonder about the origins of the civil world. Few, if any, have ever reached conclusions. Civilization begins in the imagination of gifted men. To make progress individuals must imagine the relationship between the physical world, the timing of events, and the control/influence they have of the world around them. It is in these subjective perspectives where value is created out of seemingly valueless items. It is in the mind of the individual where a unique perspective/insight gives rise to goods once considered useless into goods of value. Carl Menger the founder of the Austrian School of economics wrote, 

When a hunting people is passing over to sedentary agriculture, land and materials that were not previously used and are now employed for the first time for the satisfaction of human needs (lime, sand, timber, and stones for building, for example) usually maintain their non-economic character for some time after the transition has begun. It is therefore not the limited quantities of these goods that prevents economizing men in the first stages of civilization from making progress in the employment of goods of higher orders for the satisfaction of their needs.

The original limiting factor is the knowledge of the causal relationship and how it can satisfy human wants. In essence, civilization begins when men abandon the “accidental” economy and take advantage of the regularity of physics to produce long-term benefits and surpluses. The only way to achieve an increase in goods born of “natural processes” is to “investigate the ways in which things may be combined in a causal process for the production of consumption goods, take possession of things capable of being so combined, and treat them as goods of higher order.” Menger goes deeper into the subject regarding the difference between lower-order and higher-order goods. This takes away from the foundational impact economics has on sociology.

The way humans take economizing actions is unlike the natural processes of the physical sciences. Menger doesn’t give us a direct explanation of these natural processes, but he does state economizing men deliberately control the quantities and quality of consumption goods “will be determined by a process that is in the power of men and is regulated by human purposes within the limits set by natural laws.”

To our current knowledge the objective world does not have the free will to divert the course of events based on intellectual abilities like that of mortal men. Therefore, “It is a mistake to set up physics as a model and pattern for economic research.” In economics we search for the rational, intended ends of the individual and determine the likelihood of achieving these ends based on the actions taken.

In sociological terms, the intentions of the individuals who head large institutions in society must contend with the likelihood of their actions; to disrupt or develop the peaceful cooperation of people working together to produce long-term benefits for future generations. Ludwig von Mises—the scholastic successor to Carl Menger’s Austrian School—remarked: “Philosophers had long since been eager to ascertain the ends which God or Nature was trying to realize in the course of human history… [Though] They did not search for the laws of social cooperation because they thought that man could organize society as he pleased.” In other words, their causal understanding of the relationship between the social order and the goods produced under such conditions was and for many is incorrect.

Far too many still restrict economics to the narrow segment of the total field of human action, namely, to market phenomena: “In a society of free men the preservation of life and health are ends, not means. They do not enter into any process of accounting means.” Nevertheless, action plays a role at the individual level. One would have much trouble attempting to coerce someone to be healthy, in the same vein to be of honor, virtue, and/or glory. The moral and aesthetic values are still subjective, but there is no exchange price that comes along with it.

Having no exchange value does not mean that the heads of institutions can therefore just demand these types of actions from society without some cost. In either case the attempt to manipulate—by force or otherwise—a large group of people to act in a manner that is not as they perceive to be in their own self-interest leads to a loss of the fruits of social cooperation: 

Human society is an intellectual and spiritual phenomenon. It is the outcome of a purposeful utilization of a universal law determining cosmic becoming… As with every instance of action, the recognition of the laws of nature is put into the service of man’s efforts to improve his conditions.

One of the metrics of social cooperation is the number of individuals who decide it is better to go it alone than to cooperate within the system. Evidenced in the homesteading movements, voluntary expatriation, ex nihilo monetary units, amongst other social discord movements. When economics is the foundation of civilization, the disruption of the market is itself the destruction of the civil world. Men begin to see others as enemies and see resolution only in conflict especially when survival is not guaranteed to the wider populace. Starvation is a powerful motivator of anti-social behavior.