Is the Garden of Eden about Socialism, Capitalism, or Just Economic Sin?

With so many different definitions of the economy, it is often difficult to understand what exactly we are trying to fix.

After studying the history business and economics for more than 40 years I have come to believe that the simplest answer is the best. Most people are familiar with the story of the Garden of Eden, found in the Book of Genesis, which was written around 600 BCE. I cannot help but think of the metaphoric connection to early human gatherers. Not surprisingly, I tend to like the idea that the economy is as old as humankind.

I also think the Garden of Eden is a story that is an important key to understanding how the economy works. In it, God creates a world that has everything that is good and fit for humankind. In fact, all our economic resources are limited to the planet. In other words, everything we need is here. If the economy is as old as humankind and designed to be a garden and not a wealth-generating machine, then the economy can be defined as the ability of the population to use the resources of the planet to meet the needs of the population.

The Garden of Eden story also tells that God decides to destroy his creation when humans corrupt it with the sin of knowledge. I really like this part of the story because throughout human history knowledge has been a corrupting force for those who had it, and then used it against those who did not have it. Very much like modern insider trading.

Which brings me to the philosophical battle of capitalism and socialism. From a historical perspective, I cannot help but think socialism and capitalism are really two sides of the same economic coin.

To explain the connection, we need to go back to the Garden of Eden. From what we know about thousands of years of our social evolution, all our systems associated with “work” evolved from an “ad hoc” method of economic activity known as “gathering”. Skill development was by discovery or trial and error. The currency of the earliest economic activity is all about calories. This is what I call a basic need-based economy.

Over time, as families grew, they became multi-generational clans and tribes. Rather than individuals repeating the discovery of skills and methods, we intentionally transferred skills in a quasi-apprenticeship role. By transferring basic knowledge and skill early, the new discovery would advance knowledge and skill. This system of learning and skill development would also evolve and become what is known as the guild system.

As the ability to feed more people with fewer effort increases, there is more time, energy, and resources to invent tools and discover other paths. Through the process of discovery and innovation, the economic activity would evolve, leading to hunting. The development of cultural ideas like property lead to herding, and later farming. This blended evolution adds layers to what I like to call the “economic onion”. Each transformational layer requires the development of technology, such as tools, weapons, utensils, pottery, etc. This includes technology that used the energy found in the forces of nature like fire and water to do more and more.

Need-based economies were local. Relationships were personal and collaborative. Economic growth was about sharing and trading excess production with neighbors and friends. This is the foundation for Socialism. Because the collective evolution of learning, process, technology, and energy drives the creation of more and more goods, we begin to see the formation of physical places where excess goods can be shared and traded – today they are called market places. The importance of this development is in economic terms is transformational. These social systems associated with a food-centered economy evolve thousands of years before the invention and use of money.

As markets grow larger, we begin to see trading between village markets. The ability to trade locally and the ability to trade regionally were quite different. Unlike a need-based economy, market-based economies were regional or larger. Relationships were transactional and competitive. Economic growth was about “investing excess” production as opposed to sharing it. This is the foundation for Capitalism. We begin to see the need for a system of value-based exchange, which eventually leads to the development of various forms of money. With it, the social systems of “work” would be influenced greatly. The “value” of tangible goods is re-defined from a need-based economy to a market-based economy.

The formation of concepts like property, exchange value, and market-based economies would eventually lead to extreme problems within and around England’s guild systems and would eventually lead to the development of the factory system which tends to dominate English speaker nations. Globally, this split between the guild system and factory system would lead to quite different perspectives of the economic onion.

Factory systems are designed to produce large quantities and optimize efficiency and reduce cost. To make a profit they must have access to larger markets. To reduce cost, they tend to be hardwired and locked down for controlled repetition. By design, they lock out variation, which also locks out innovation. An economic change can destroy significant capital investments. Large public institutions that have tried to manage costs by creating a market-based factory system suffer the same change-resistant fate as their business cousins.

All this time, the economic onion is growing, adding layer after layer of value-creating systems. At the very core of the economic onion are still all the original need-based economic layers. As a wealth-creating machine, the global market-based economy is volatile. Economic crisis events around the world are increasing in frequency. Whenever the market-based economy fails, the need-based economy is the safety net. During the Great Depression, these core layers represented the economic safety net for millions of people around the world. Neighbors formed local markets and traded or shared food. When the local need-based economic safety net fails, neighbors begin to turn on neighbors and civilization begins to fail.

Historically, local economic gardens that were healthy and fit and could survive the broader economic failures of an empire, those gardens would in time rise to become a city-state and in the case of Rome, sometimes for a short period of time – an empire.

The ideas around socialism and sharing excess to grow the economy are geared for local need-based relationship-centered economies. The ideas around capitalism and investing excess to grow the economy are geared for regional or national market-based transaction centered economies. When we learn to balance the two with knowledge, perhaps we will again see the promise of a new Garden of Eden.