>One lesson of this tale is that capitalism doesn’t really work when it relies on the profit motive alone. If everybody is just chasing material self-interest, the invisible hand won’t lead to well-functioning markets. It will just lead to arrangements in which market insiders take advantage of everybody else. Capitalism requires the full range of motivation, including the intrinsic drive for knowledge and fairness.

Alternatively stated: 'Capitalism, as we understand it, requires that market actors are enabled to realize the full spectrum of net-benefit desires. That no (intrinsically good) class of human desire should be inherently privileged relative to others. That intrinsic market biases which select for certain classes of motivation place an "invisible tread" on those that market machinery is not aligned for; the antithesis of the "invisible hand".'

Under the assumption that capitalism is the best means of organizing and maximizing societal utility and productive output, people can look at the world through the "market bias/full spectrum motivation" filter and still walk away with remarkably disparate philosophical outlooks on capital market organization.

It's troubling (or exciting, depending on your outlook) that Economics is such a young field. The optimist would say that there is so much to be discovered. The pessimist would say that our entire meta-organizational mechanism for the human species is predicated on a precarious understanding of emergent systems; an understanding with a high intellectual center of gravity. That it's wrought by a legacy where positive and normative statements are considered, or at least perceived, to have the same scientific (or effective) impact within the field, and by extension, society. Not only are these types of understanding often traded pound for pound, but this legacy provides higher dimensional vectors of debate. A dimension that may (or may not) have any bearing in reality or analogue in effect. Often, these vectors are political, hardened by moral absolutism.

Statements like: "Capitalism requires the full range of motivation, including the intrinsic drive for knowledge and fairness." and "One lesson of this tale is that capitalism doesn’t really work when it relies on the profit motive alone." give us a skein of understanding of societal condition. On a surface level, they seem to be predicated on positive knowledge of market failures. However, by the vary nature of Economics in its current state, we cannot know how well founded these statements are. Market machinery, organizational dynamics, philosophical market doctrine have all evolved in a universe where positive and normative statements of understanding have historically had the same molecular weight.

The systems, taken whole, are inherently untestable. That is not to say Economics is doomed as a science. As a species, we are just barely figuring out how to remove our own biases from our understanding of emergent systems. There lies ahead a bright future for Economics. Perhaps some future Adam Smith will yield a Philosophiæ Naturalis Principia Mathematica of behavioral economics-unearthing the underlying axioms of rational and irrational action in markets. Or perhaps some future son or daughter of ours will discover some novel underlying geometry to (or approximation of) chaotic systems, allowing our species to further unveil one of our oddest creations. Perhaps further integration with high horsepower computational machines will enable us to develop more experimental means of validation and understanding.

I suspect one thing is certain, any framework of understanding which values normative understanding as equal to or above positive understanding will likely end up at an intellectual local maxima. To put it melodramatically: we may argue over the rations as the lifeboat sinks. Did I say local maxima?

Of course, I have normative beliefs. Normative outlooks are inherent to the human condition. They are our attempt to abstract, approximate, and process information from systems that we do not yet fully understand. But I worry that my normative beliefs will delude me into thinking that my philosophy will help those in need, those for whom the market has failed, when I am in fact harming them. This is also to say that all normative beliefs aren't necessarily bad. There are some that most people will agree with. If anything, this furthers the need to develop a positive understanding at the foundation of those beliefs. Imagine how much worse off we would be as a species if we dusted our hands and decided that there 'should' be four elements, a universal aether, lobotomy, and a moral stance against vaccination.

For what it's worth to this tangential rant, I really enjoyed this article. Thanks for submitting.