One of the most well-known myths about the origin of human languages has its roots in the ancient Abrahamic world. According to this narrative, after the Great Flood that destroyed the hubristic civilization, a new generation emerged to populate the renewed world. The new society, however, realized that it could achieve a better life if it did not scatter across the Earth, but stayed together. As soon as they perceived the possibility of achieving higher levels of development, they became blinded by their own splendor and began to see themselves as equals to their Creator. In response, God destroyed their plans so that they would have to recognize their humble condition. This story contains an implicit lesson in economics.
“Go to, let us go down, and there confound their language, that they may not understand one another’s speech. So the LORD scattered them abroad from thence upon the face of all the Earth: and they left off to build the city” (Genesis 11:7–8, KJV). The civilization of the land of Shinar suddenly disintegrates, and so does the division of labor among its people. Their social organization collapsed; they could no longer build their city. Everything came to a halt, and people began to disperse throughout the lands of the Earth speaking their new languages within their newly closed-off clans. Regardless of moral interpretations, we can observe a social fact already known to that population: cooperation increases quality of life, and isolation creates poverty.
By acknowledging division of labor as the “essence of society,” Ludwig von Mises observes in {Socialism: An Economic and Sociological Analysis}: “[I]t is the social spirit, the spirit of social co-operation, which forms, develops, and upholds societies. Once it is lost, the society falls apart again. The death of a nation is social retrogression, the decline from the division of labour to self-sufficiency. The social organism disintegrates into the cells from which it began. Man remains, but society dies.” This phenomenon is precisely what is described with respect to the Tower of Babel.
Both people and God, as portrayed in Scripture, understood this cause-and-effect. The population from Shinar had been able to raise their living standards through the division of labor, grounded in their capacity for communication and the physical closeness of their neighbors. When God decided to interrupt their plans, the choice of action was to dismantle their social relations—in other words, the possibility of having division of labor.
As Mises puts it: “[T]he extension of the division of labour is economic progress: it brings production nearer to its goal—the greatest possible satisfaction of wants, and this progress is sociological progress also, for it involves the intensification of the social relation.”
Nowadays, the progress of civilization is increased or decreased in many ways. Shaped by ideology, language, will, and coercion, the superior or inferior vector of development attacks the social ties among individuals. The “ordered organization of coercion,” also called the State, can erode the entire social structure needed for higher living standards, especially when fueled by isolationist or socialist ideologies and implemented through legislation and coercive power. “The nationalist theory calls itself organic, the socialist theory calls itself social, but in reality both are disorganizing and anti-social in their effect.”
Therefore, it becomes clear that the essential mechanism for development or retrogression is the division of labor and cooperation. The more extensive and intense the division of labor, as it expands to ever more people engaged in ever more specialized tasks, the richer civilization becomes in economic and social terms. The strengthening or weakening of social relations determines the welfare of the larger society.
Thus we can assess the current situation of our civilizations: Are we increasing the division of labor and advancing toward prosperity, or are we retreating into more primitive forms of life?
The post What the Tower of Babel Can Teach Us About Economics was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.
