The Matrix: An Exploration of the Dangerous Paradoxical Interactions
Between War, the Economy, and Economic Theory
Brief Introduction to the Introduction: The Paradox of the Matrix
What follows the introductory material is a chapter entitled:
Chapter 5: Vietnam: Invitation to a Morass.
(Read the chapter at this link)
The Matrix is an exploration of the intricate relationships between war, the economy, and economic thinking. Because of the complexity of our subject, we have tried to make our exploration more manageable by organizing our analysis around a simplified matrix, consisting of the natural world upon which life depends, together with the and three man-made subjects mentioned in the title, treated as separate pillars. Throughout history, the interrelations between these relationships have proved to be extremely dangerous, largely because of their paradoxical nature in which seemingly people in power confidently take actions that set off unexpected chain reactions with tragic consequences. The Matrix will explore that history in order to throw light upon the present.
Although people had already thought about economic matters in ancient times, the idea of an economy as a separate sphere of society had not yet developed. Instead, economic thinking was largely the domain of philosophers, such as Adam Smith, who was a professor of moral philosophy. Only later did economics become a separate subject of study. By the late 19th century, a few economists were beginning to frame their work as the science of economics ‑‑ a name intended to indicate an affinity with physics. Soon thereafter, supposedly scientific economic thinking acquired increasing authority, so much so that people often became convinced that they could disregard economic analysis at their own peril. Their fear may not have been well‑placed considering how often well‑regarded economic theories helped to create disasters.
The three pillars are intimately connected with one another. While the connections between war and the economy are more or less obvious, economists serve a peculiar role in linking the pillars of war and the economy by influencing the conduct of both war and management of the economy. At the same time, war, as well as economic activity, has influenced economic thinking.
In their effort to present their ideas as a science, economists often label their theories as laws to implicitly identify their theories with sciences, such as physics. Of all the so‑called laws of economics, the law of unintended consequences, which originates in philosophy rather than economics, might be the most consequential. For good reason, economists do not treat the law of unintended consequences as one of their technical laws, such as the law of supply and demand. After all, the law itself is an admission of ignorance, which conflicts with the certainty of economic propositions.
Instead, the law of unintended consequences is generally selectively invoked as a warning to those who might be tempted by policies that might interfere with the rational workings of markets that conventional economics presumes to be natural. In contrast, the law of unintended consequences is rarely, if ever, invoked regarding the free play of unchecked markets. Nonetheless, the combined effects of war, the economy, and economic thinking have had unintended consequences of catastrophic proportions.
Samuel Taylor Coleridge, writing just after the French Revolution began, chastised Robespierre, the revolutionary leader who initiated The Terror. What Coleridge writes about Robespierre is applicable to many people who exercise power and authority:
What that end was, is not known; that it was a wicked one, has by no means been proved. I rather think, that the distant prospect, to which he was travelling, appeared to him grand and beautiful; but that he fixed his eye on it with such intense eagerness as to neglect the foulness of the road. If however his first intentions were pure, his subsequent enormities yield us a melancholy proof, that it is not the character of the possessor which directs the power, but the power which shapes and depraves the character of the possessor [Coleridge 1794‑95, p. 476]
Coleridge recognized a deeper phenomenon than the usual application of the law of unintended consequences, which suggests limits of rational calculation. In suggesting that “power shapes and depraves the character of the possessor,” he is suggesting a delusional dimension associated with power. Such delusion makes the exercise of power within the Matrix both more paradoxical and more dangerous.
This broader interpretation of the law of unintended consequences points to the paradoxical nature of the Matrix, which, in turn, reflects the ancient concept of the unity of opposites, a notion often identified with the ancient Greek philosopher, Heraclitus, who hinted at such unities, writing about bows: “Thy name is life, thy work is death.” (In Greek, both the bow, an important weapon at the time, and life were synonymously called bios.). Two millennia later, the technology for casting church bells found a new use for what had been known as the “bell metal” in the production of cannons. The historian, John U. Nef, beautifully recaptured this new instance of Heraclitus’ irony: “The early founders, whose task had been to fashion bells that tolled the message of eternal peace contributed unintentionally to the discovery of one of man’s most terrible weapons” (Nef 1963, pp. 28).