“The invisible hand” was just another way of describing what we now call emergence. It’s true that emergence is abstract: a flock of birds, a flower, a society

“The invisible hand” was just another way of describing what we now call emergence. It’s true that emergence is abstract: a flock of birds, a flower, a society. But the fundamental rules and components that are the building blocks of the emergent behavior are real. Capitalism, the free market, or society is an emergent behavior of fundamental, underlying (even biological?) human characteristics. Humans are focused on themselves and their own survival or the survival of their families. Loose social cooperation exists when the safety, security or autonomy of individuals comes into question. Trading between individuals is one of these loose cooperative behaviors. Barter can work, in certain applications, but at some point this is no longer practical. Currency was developed as a way to make trading “fair” to both sides of a transaction. A “free market” means that the individuals are free to trade with each other without interference or intervention. For large exchanges, additional parties are needed to help facilitate a transaction. This is where “capital” comes into play. One side does not have sufficient currency to facilitate the trade “right now,” so they borrow capital from a third party and then pay back the loan at a future date. The transaction happens fairly, and all sides are content with the fairness of the trade. When a transaction can happen on a regular basis with all parties satisfied with the situation, then there is a tendency (emergent) to expand this cooperation to more trades, more commodities, and more parties. The capital requirements to facilitate this expansion may come from a whole group of people, and this is the birth of an organization with rules about participation: a corporation. Just as people can be bad actors, corporations can be bad actors. But there is nothing inherently wrong with the cooperative trading mechanism that is capitalism or the freedom to trade that is the “free market.”