Hi, I have been encouraged to post a link to my latest essay. Capitalism’s wealth is real, but so are deepening insecurity and inequality. Our focus on abstract metrics often obscures the shift in the system from creating value to extracting wealth, concentrating gains at the top. My essay explores how measurement shapes economic reality and what’s lost in the process. - Cheers. https://medium.com/@roy.casey986/when-the-map-replaces-the-territory-how-wealth-concentrates-in-modern-capitalism-d316dd7a9eb2
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First of all, I’m glad to see your economics thinking posted here!
By way of quick response, my sense is that wealth concentration is a very old game (see the works of Peter Turchin and Luke Kemp). Likewise, high-minded ideological justifications for self-interested wealth accumuling behavior are historically evidenced across many eras. As relatively recent example, the promises of the neo-liberal order of Reagan/Thatcher to be of general social benefit turned out to be more beneficial to some interests over others. What is somewhat refreshing about current geopolitics is that naked greed is more openly on display with fewer conceptual fig leaves. Maps will never fit territories when the maps themselves are designed to obscure the underlying territory of social power inequalities.
I’m in general agreement that GDP is a poor metric and that different models of accountancy will be needed to support any fundamental change. The challenge to all that is that any kind of economic metric can be bent out of shape to fit the needs of those who desire most of all political domination. For that reason, it strikes me the challenge of improved economic modeling cannot be abstracted very far from more fundamental questions about power relationships and control over planetary resources.
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Thank you for your thoughtful response. There’s a lot I agree with. Wealth concentration isn’t new. Power has always shaped economic systems, and metrics can be used to serve particular interests.
Where I would draw a distinction, and why my essay has a slightly different focus, is on how systems optimise for what is measured and rewarded, often producing outcomes that diverge from broader societal goals. Power and metrics are closely intertwined: power helps draw the “map,” but the map also shapes behaviour, sometimes reinforcing or obscuring those underlying dynamics. In that sense, we shape our systems, and our systems, in turn, shape the distribution and expression of power.
I emphasise metrics and structure as areas that may be more open to practical adjustment. If everything is reduced to power, it becomes difficult to see where change can realistically be made. Improving how we measure outcomes and how we define the boundaries of democratic oversight may be part of a more constructive path forward.
That includes reconsidering how we think about borders. We devote considerable attention to regulating the movement of people, yet financial flows often operate with far less oversight. It is not obvious why the latter should be treated as less significant.
“Ultimately, reconnecting the map and the territory requires more than refining our models; it requires reconsidering the assumptions and incentives that shape them.”
I’ve never liked the massively overused aphorism - “the map is not the territory”. Actually, it’s a model of a territory and that’s how we perceive the territory… Anyway. I don’t see how you can reconnect the map and the territory by tweaking the assumptions and incentives that shape them. None of those exist independent of people with their worldviews and mental frames. You can only ever propose another map - and you need to force it onto the world and defeat other competing ones.
There’s a lot of interesting observations in your essay and I share the frustration.
We have our own subjective reality but that’s not enough for collective decision making.
That creates an opening for “metrics” that claim to be the territory.
First of all I completely agree that maps are models of territory. New and improved maps will be new and improved models, but models nonetheless. Any map/model is going to abstract to some extent and leave quite a bit of detail out. This points to the sharper question of which details are most important for economic modeling going forward?
GDP is a poor (or at least incomplete) modeling tool, IMO for example because it counts cutting trees as wealth creation and leaving trees standing as lack of economic activity. A better economic metric would count standing forests and flourishing ecosystems as wealth. Letting natural stocks of fish, forests, soils, aquifers, etc. regenerate themselves should count as ROI. That would also incentivize active interventions - like permaculture or tree planting- to increase this ROI.
To sum up, scorekeeping does indeed influence behavior. We manage what we measure. But again, I doubt we will ever move beyond such abstractions entirely.
By way of historical perspective, modern capitalism emerged in late Medieval and early Modern Europe through networks of trade cities, family firms, guilds, and political tensions between kings, emperors, popes, and many lesser power centers. (For contrast, consider the political centralization of China in the same era). This led to “Capital” becoming its own power center alongside the State. (See the work of Kojin Karatani on this point). A monarch like Philip II for example needed to borrow money from bankers like the Fuggers to finance his mercenary armies. This was common practice through at least the Napoleonic era. Why not just seize the coin from the bankers and the merchants? That’s what any Ming emperor would have done. In Europe however, the direct seizure approach did not suffice, because finance houses like Fugger found political refuge in competing jurisdictions beyond Philip’s imperial control. Of course any given kingdom would have loved to control cross-border financial flows! The entire Mercantile era was essentially a massive competition to do exactly that! It’s very telling that in this, the heyday of European absolute monarchy, the tiny Dutch Republic rose to the top of the economic heap. It turns out that Capital favors efficient trade networks more than massive armies and state bureaucracies. The State needed its bankers to provision the armies and the bureaucracies. The events of 1789 essentially flowed from the French monarachy’s failure to juggle political hierarchy on the one hand and international finance on the other.
Fast forward to today. Donald Trump stylizes himself as a regal figure, building ugly versions of Versailles and the Arc de Triomphe for his capital to prove his nation is the greatest of them all. No one loves the idea of regulating cross-border capital flows more than Donald Trump! He idolizes autocracies like China, Russia, and North Korea whose economies are largely state controlled. He puts his face on everything and announces world-changing policies in the middle of the night on social media. Free movement of capital is about that last thing he is working towards. Yet how does the world at large react to all that? In a word, de-dollarization. Everyone is hedging. Everyone is diversifying. Gold is slowing being repatriated away from US vaults. Dollar debt is being drawn down. International capital does not flow towards dictators who can dispossess it on a whim. It always flows towards distributed networks. Prior versions of the US (post-WWII) understood the profit potential of being an honest broker. Currently, that position is looking more and more like a vacancy needing to be filled.
Thank you. There’s a lot in that I recognise, and I share some of the discomfort with the phrase as well.
I’m not using “the map is not the territory” to suggest there is some neutral or perfectly accurate representation we can or should recover. As you say, any map is constructed, shaped by perspective, assumptions, and ultimately by people. What we do at the moment is concentrate too much on the map itself, regardless of how well it represents anything.
Where I would draw a distinction is that, once a particular set of measures and narratives becomes embedded, systems begin to organise around them. At that point, the issue is not only which “map” is dominant, but how behaviour adapts to it, often in ways that are not fully intended or even visible. (second and third order effects)
So when I talk about “reconnecting,” I don’t mean resolving the gap in any absolute sense. I mean becoming more aware of it, and being willing to question the measures and incentives we treat as objective. That may still result in competing frameworks, as you suggest, but not all maps shape behaviour in the same way or to the same extent.
In that sense, the essay’s focus is less on replacing one map with another and more on how the maps we adopt shape the territory we experience.
- Cheers.