The market thereby aggregates self-interested preferences into an output that looks, on the face of it, selfless. As prices are set and as consumers make choices, this reveals underlying information about what people want, and it incentivises other people to meet those wants. Smith’s explanation for these outcomes is that the market acts as a coordinating mechanism. And yet bakers get up damned early, and work damned hard, and make a decent fist of judging the baguettes and the braids and the rounds. No-one tells bakers what to do, or helps them coordinate with their suppliers, or forecasts how many loaves of bread they should make. The phenomenon Smith had his eye on is the mysterious order that seems to emerge from free exchange in a market. Smith is, after all, one of history’s most misused economists, straw-manned by the left and worshipped by the right for saying things he didn’t say. We’ll be talking a lot about bakers, so let’s start by being clear about the significance of this image. What was it, precisely, that the bees and the baker were originally intended to signify? What is it about a digital economy that makes this way of thinking less valid or useful? And what could this mean for a conception of the state that rests so heavily on this intellectual foundation? With all this talk of the metaverse, I thought it might be interesting to explore these questions in a little more depth.

Does a market economy still foster prosperity when the bees are all on Facebook? And, if not, where would that leave us? Yet in the last few years, as the full scale of the digital revolution has made itself felt, this old mental model has begun to look shaky. Thanks in large part to Smith, this idea - that markets align the interests of producers of consumers - went on to become one of the most important in all of economics, framing how we conceive of the relationship between the market and the state. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. In Smith’s formulation, it was bakers, not bees, that provided the organising image: He incorporated the essence of the poem’s argument into his book, The Wealth of Nations.

M andeville’s idea might have faded into obscurity but for a young economist called Adam Smith. It turned out that a selfless society was, paradoxically, worse for social welfare than one in which free individuals chased their own visions of a good life. Without the drive of private ambition, the hive broke down. The poem told the story of a bee colony that underwent a conversion: all the bees became suddenly selfless, putting their vices and self-interest to one side to pursue the wider good of the hive. In 1714, the Anglo-Dutch social philosopher Bernard Mandeville published a poem called the Fable of the Bees.

Fable 3 books