I’ve been reading an old book (one of those with a blank cover and the title embossed on the spine) on the history of economic thought. Interesting and boring at the same time – a perfect night cap.

In tribal times economics didn’t require a thought system. You fed and clothed the family and bartered any surplus. The writer saw the old testament prophets, and we can include the Maori prophets, arising when the tribal system was threatened by autocratic empires.

With feudalism, value was still attached primarily to the land, with the aristocracy wasting their surpluses on luxury items.

But with capitalism arriving on the scene, firstly in the form of bullionism (raping the Americas for gold and silver to add to the state coffers) and then mercantilism (trading companies appointed by the sovereign, holding a monopoly of trade over vast geographic areas), some explanations began to be required, with concepts of utility, value, currency exchange and rules of trade etc. entering the scene.

With the arrival of industrialism and the middle class, both the feudal aristocracy and the merchant class with their monopolies over land and trade had to be supplanted and this was justified by the doctrine of liberalism and free trade. The doctrine is simple and hasn’t changed, except in sophistication. If everyone pursues their self interest, an overall good is achieved. The state has no role to play other than to defend the realm and prevent monopolies arising. If there are no impediments to trade, the system will find an overall equilibrium. Competition will produce a base price for commodities, including labour.

Liberalism, while productive, produces vast inequalities in a society. Along came Marx and the socialist critique, analysing the thorny problem of where profit comes from. Profit comes from unpaid labour, they decided. The worker will work a certain number of hours in order to earn his subsistence, the rest of his hours generate profit for the capitalist, the owner of the means of production. It was an astute and powerful analysis , revolutionary news to the vast majority of the population and had to be countered.

It was dealt with in two ways, firstly by reluctantly accepting some worker representation and some government intervention to provide a welfare safety net, and secondly through an emotionalising of liberalism by seeing work and consumption as motivated by pain and pleasure. Work is painful, consuming is pleasurable. Saving is painful, but increased pleasure will result down the line. Buying a car is painful because it uses a lot of your money, but using the car brings pleasure. Ditto with the mortgage.

Out of this hedonism comes the modern theatre of markets feeling depressed or buoyant, of business and consumer confidence and the continuing castigating of government interference. There is greater sophistication: calculating the relationship of interest rate to investment (lower the interest rate increases investment), division of capital into productive use and investment, the ratio of consumption to savings – the stuff of the daily business report – all of it designed to keep at bay the socialist critique and to justify continuing inequality.

And of course, an ideology based on hedonism hasn’t a hope in hell of tackling the changes required to solve the climate crisis.