Journalists and business writers have broadly heralded the end (or impending end) of the Industrial Era. Whether it has already ended or is still rattling to a close, there is value in examining our roots. With full knowledge and understanding of our origins, we can decide what to take forward and what to leave behind.

The two-hundred year Industrial period that began with the invention of the steam engine can actually be considered a continuation and culmination of a longer period in history called the Modern Era. This era is characterized by its recognition of and interest in division, linearity and mechanical process, which contrasted sharply with the previous era's focus on interconnectedness and cyclical continuity. The earliest known evidence of Modern Era consciousness can be found in Ancient Greece. Aristotle introduced the empirical method and inductive reasoning. The Sophists celebrated personal autonomy. Epicurus argued for freedom of the will. Each of these challenged the authority of the gods and of the institutions of society. The result was the world’s first democracy (evidence, by the way, that a new philosophy has the power to change how we live our lives).

But with the collapse of Ancient Greece and Rome, this worldview was pushed back to secondary importance for the next 1500 years. It continued to percolate beneath the surface, though. And by about 500 years ago, the divergent perspective had risen to clear dominance with several pivotal events, each of which nudged the popular perceptual framework markedly.

First, Copernicus revealed in the 1500s that people and the Earth were not at the center of the universe, shattering the belief that humans and our planet were special and significant. To worsen the moral blow, he also showed that the motions of the planets (including our own inconsequential one) could be mapped and predicted mathematically. Our understanding of our role within reality went from one of divine dominion and connection to one of insignificant parts spinning within a massive and impersonal mechanism.

In the early 17^th century, French mathematician, philosopher and physiologist Rene Descartes added to our disenchantment with his immortal words, “I think, therefore I am.” With this simple statement, he proposed an autonomous self, separate from the external physical world. The person became subject and all else object of his or her perception. In this way, not only did we come to understand ourselves as separate from the rest of reality, we came to understand the rest to be unthinking and automated.

Even our thinking selves were reduced by eighteenth-century British philosopher John Locke, who proposed that all true knowledge is learned from sensory experience.

Let us suppose the mind to be, as we say, a blank slate (tabula rasa) of white paper, void of all characteristics, without any ideas; how comes it to be furnished? …To this I answer on one word, from experience: in that all our knowledge is founded and from what it ultimately derives itself.

With this belief came our exclusive reliance on objective, empirical evidence – only those things that could be experienced and observed externally were considered true. “Subjective” views – originating from ourselves as subject – became suspect and unreliable. Again, our role in the universe ratcheted downward to mere catalog-keepers of external events within a mathematically predictable mechanism.

The 18th century saw the Age of Enlightenment, which continued to advocate reason and empiricism. This was exemplified in the late 1700s by Isaac Newton, who introduced the idea that the world could be understood by examining and controlling its smallest parts, each of which interacts only with its immediate neighbors in a linear progression. Every action has an equal and opposite reaction, Newton assured us. And all the world could be mapped and predicted according to a limited number of mathematical principles.

The worldview based on this collection of interpretations was marked by determinism and reductionism, the belief that “every act is determined by past events (we can predict the changes that will occur in the clock - likewise in the universe - and ultimately in the body). Since a clock could be disassembled to see how it operated, it was thought the universe and ultimately human nature could be reduced to its simplest parts.” And in all these external observations, we saw that there could be only one right answer to any question. Things could be observed to be in one state or another. Life was understood to be either black or white, but never both.

Only with this trend toward a philosophy of division and mechanical linearity – the combination of reductionist analysis and the belief in individual achievement and sovereignty – was this era’s vast human and technological progress enabled, with its advances in lifespan, comfort, and individual accomplishment.

And it was on the basis of this worldview that modern economics – what I call Mechanistic Economics – was born. The economy was believed to operate predictably and linearly – like clockwork. As the “scientific study of choices made in regard to the alternative uses of scarce resources,” economics mirrors the Newtonian concept of physical limits and direct cause-and-effect. Under this view, wealth is based on scarce resources – which have value because they are scarce. These resources are exploited until they inevitably wear out, or reach a point of diminishing return – a central and recurring rule of a paradigm based solely on the physical.

And despite the rational rejection of religion and spirituality, the Protestant (especially Calvinist) values of America’s early founders conveniently coincided with many Modern Era views. Within the Protestant work ethic, obedience to God's will demanded energetic and enterprising work in one's occupation. Profits were not only morally justified as the reward for this hard work, they were considered an indication of being chosen by God for salvation. Further, the Calvinist work ethic asserted an impersonal brotherly love, opening the way for the capitalist hallmark of self-interest. The guiding message, grossly simplified, was: work as the means to salvation, profit as the means of keeping score.

Carrying on the Protestant ethic of productive enterprise and impersonal brotherly love, Scottish economist and philosopher Adam Smith asserted that “by pursuing his own interest…[man] frequently promotes that of the society more effectively than when he intends to promote it.” Thus was born the inviolable belief in the virtue of self-interest and in the “invisible hand” of the market. Smith and his colleagues proposed a rational system of competitive acquisition of scarce resources, in which the core sources of competitive advantage were scarcity, scale and barriers to entry.

The company was considered a discrete, non-human (machine-like) entity that exists to make money by the most efficient means possible. This matched the guiding Protestant belief in profit as an indication of God’s blessing, and it coincided with the Modern Era's reverence for observable experience and quantification.

Consumption was considered to be the sole end and purpose of all economic activity, with the material factors of production -- land, labor, and capital -- as the means. According to the central tenets of this ideology, economic value revolved primarily around price and availability (scarcity) of goods and was dictated by the producer (supply-driven). Buyers were expected to act predictably: for example, as prices rose, demand was expected to decline in a directly responsive fashion. Labor was also expected to act predictably.

These are the founding premises of modern Mechanistic Economics.

What set the Industrial Era apart within the broader Modern Era was the application of mass-production methods to the basic linear, reductionist principles. The artifacts were factories and later cubicles, but the underlying ideology remained the same.

Thus, evolving value came to be achieved by increasing production efficiency -- building bigger factories with diminishing variance in the production line in order to achieve cheaper production costs per unit. Variance was the enemy. Henry Ford said famously of his Model T, “You can paint it any color, so long as it's black.” In this system, the physical was maximized. Quality was quantitative. If it couldn’t be measured, it didn’t exist (or, at least, it didn’t matter).

To these ends, in 1911 Frederick Taylor applied mechanistic theories to human endeavor with his Principles of Scientific Management. “In the past the man has been first,” he pronounced. “In the future the system must be first.” People were a factor of production to be employed, a cost to be reduced or eliminated. Inherently variable, they were seen as expendable, interchangeable, and, most of all, to be standardized as much as possible. People were organized into different departments with physical separation into tasks or cubicles. Tasks were further divided into standardized skills and competencies. And standardized education and testing were introduced across the population.

A small, intelligent body of leadership ruled over information and decision-making, while a mute labor force simply implemented. This was viewed as a maximally efficient distribution of tasks, particularly as the labor force was assumed not to have the capability to contribute otherwise.

By its nature, mechanistic economic analysis was concerned with material issues. The system existed to maximize consumption by the optimal pattern of productive effort. The "standard of living" of those within this system was measured by the amount of annual consumption, with the assumption that a person who consumes more has a higher standard of living than one who consumes less. Social, ethical, and spiritual issues were excluded, by definition.

Because of the ideology’s linear orientation, the past was presumed to be determinant of the future. Strategy had a short-term focus and was determined by breaking options into their smallest parts and prioritizing among them.

This, then, is the core of the Western business paradigm that we have inherited: maximize scale and minimize variance (and therefore production cost) in order to secure incremental growth in consumption and thereby growth of the enterprise. And above all else, it is profit which is to be maximized.

What is interesting (though not coincidental) is that science’s explanation of the origins and evolution of all life came to coincide with the Modern Era worldview. Charles Darwin introduced the concept of life as a random competition, in which only the strongest individual genes or species survive over time. The goal and activity of all life was the competitive struggle to pass on genes. Evolution was seen to be in direct cause-and-effect correspondence with chance changes to the environment. As environmental changes occurred, random genetic mutations proved more advantageous and so were naturally selected. Along this path, each individual was merely a “gene machine,” struggling to compete with others to pass on his or her genes, and achieving progress as an evolving means to this end. Adding to Darwin’s theories, Richard Dawkins coined the term “selfish gene” to represent the defining struggle for perpetuation. According to a BBC account:

Darwin showed that individual struggle will generate progress (or at least better adaptation). …[T]his idea of "progress through struggle" would be just what the middle classes were looking for in their search for an ideology stressing the benefits of effort and initiative.

Of the belief system that had become dominant in the past several hundred years, economist and historian John Kenneth Galbraith commented that, “Self-interest and freedom of enterprise were a secular faith in the old world. In the new world, they emerged as a religion.” Indeed, it might be called the Religion of Industry. The ROI.

The Religion of Industry’s all-seeing, all-knowing deity is The Market. Its bible is the economics textbook, supplying this faith’s “myths of origin, legends of the fall, and doctrines of sin and redemption.” Its gospel is efficiency. Its founding prophets and wise men are Adam Smith, David Ricardo and Isaac Newton. Investment analysts and stockbrokers are the priests of this religion, interpreting The Market’s moods and mysteries, passing judgment and meting out punishment – but rarely offering dispensation of sins. United States Federal Reserve Chairman Ben Bernanke is the high priest of our day, encouraging true faith in the wisdom and omnipotence of The Market. The book of the saved and the damned shifts and changes according to quarterly earnings. Consumption is our worship, and shopping malls our churches. According to the Word of the ROI, everything in creation operates according to a predictable path beyond our intellectual grasp. The world and all our actions within it could be graphed mathematically in linear equations, like clockwork, if only we could develop sufficiently sophisticated algorithms.

With this flight of fancy, we begin to appreciate that the impact of the prevailing mechanistic, material-focused economic theory extends far beyond the boardroom and the factory floor. As John Maynard Keynes put it: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than commonly understood. Indeed the world is ruled by little else.” Paul Hawken and the co-authors of Natural Capitalism observe that, “For all their power and vitality, markets are only tools. They make a good servant but a bad master and a worse religion.” And economic historian Richard Ronner further expands the point:

The spread of the capitalist world system has been accompanied by the creation of distinctive patterns of social relations, ways of viewing the world, patterns of food production, distinctive diets, patterns of health and disease, relationships to the environment, and so on.… The emergence of the culture of capitalism has left little in our lives untouched—it has affected our material, spiritual, and intellectual life; it has reshaped our values; and, as we shall see, it has largely dictated the direction that every institution in our society would take.

In this way, we see that these interpretations of reality have shaped our very consciousness – the way in which we perceive the world, the way we make decisions and choices, the way we relate to each other, the way we live our lives. They guide and determine every choice and decision – external and internal -- of our life experience:

• The way we are born – into an impersonal hospital in a production-line procedure that is maximally efficient and cost-effective.

• The way we manage our health and illness – separating care into rigid specializations, overlooking the individual’s role in health and trusting only observable phenomena.

• The way we are educated – in a setting replicating factory life, with emphasis on rote memorization of data and socialization into an obedient system that is standardized and focused on individual output.

• The things that we learn – practical, tangible skills and the natural laws of the physical world; things that can be applied directly in a factory setting; with only one right answer possible.

• Where and how we live – in cities where we can achieve the best jobs, in sprawling houses that demonstrate our economic wealth (defined by consumption); separate from each other.

• The words we use – subject-object, action orientation, reflecting linear thinking.

• Whether we believe ourselves to be happy or unhappy – according to our perception of our economic wealth in comparison to our neighbors’.

• The way we judge success and failure – according to external, material measures like wealth and title.

• How we work – in cubicles, according to segregated job descriptions, with supervisors judging our performance according to physical output.

• How we govern and are governed -- in a system of two opposing parties (in the US) in which the statistical majority of people is assumed to have the right view and the minority the wrong view.

• How we die – in a maximally efficient and cost-effective nursing home, with our bodies submitted into a corpse-processing system.

These are the choices and assumptions we make based on the perceptual filter through which most North and South Americans and many Europeans see the world. These are the origins and the underlying conceptual framework of the current Western worldview. Like the law of gravity, they are the laws and limits that we accept unchallenged as total and final – and for good reasons, for there is truth within each of these assumed borders and guidelines. And we’ve done well within them.

But, as the next chapter will highlight, fundamental cracks and inconsistencies are starting to appear in the socio-economic system based on these boundaries. There is increasing pressure to look for a way to transcend the heavy structure of Mechanistic Economics. And as later chapters will show, while we cannot deny these laws and principles, we can defy them, taking inspiration from Daniel Bernoulli.