Toward a Re-Conceptualization of Economic Humanity

This is an essay I wrote this past summer, enjoy. 

 “By far the best way of achieving anatta was compassion, the ability to feel with the other, which required that one dethrone the self from the center of one’s world and put another there.”[1]

“The global capitalist system is approaching an apocalyptic zero-point. Its ‘four riders of the apocalypse’ are comprised by the ecological crisis, the consequences of the biogenetic revolution, imbalances within the system itself..., and the explosive growth of social divisions and exclusions.”[2] Žižek’s dire description begs the question, how has humanity arrived in this situation, and is there a way out? These questions gain further complexity in a pluralized world, where globalized interactions function in the secularized sphere of global capitalism. Is there another way of conceiving economics, without alienating multiple religions and worldviews?

Central to economic theory, though commonly overlooked in popular discussion, is a conception of human nature. Yet the prevailing capitalist vs. socialist dichotomy does not delve deep enough into the nature of humanity to offer an adequate alternative. This paper will argue that at the heart of global capitalism is a misconceived understanding of humanity, which ought to be replaced. To investigate this claim, two – selective, though generally representative – conceptions of humanity are depicted. First, the development of an atomistic, self-interested economic human is sketched, followed by the contrasting vision of the relational, interdependent human. These divergent views of humanity assist in unveiling an internal contradiction in global capitalism, which once revealed necessarily calls for resolve.

Regarding religious plurality, this paper understands many faith traditions, as well as some strands of secular humanism, to affirm various relational conceptions of humanity. Therefore, relational humanity is posited as an alternative universal platform for economic interactions in a pluralised world. This paper, then, is not a specific call to the church for a specific social ethic, nor is it narrowly Christian in its conclusions. The discourse, however, will largely occur between mainstream economic thought and the protestant Christian tradition and scriptures, to depict contrasting visions.

            Within this paper, economics refers to mainstream economics, that being the western neoclassical tradition. The terms political economy and economics are used somewhat interchangeably; while recognizing the shift in terms, this paper refuses to grant a clear-cut moral/amoral distinction between them.

An Economic Self

“A basic sense of decency, sympathy and mutual aid lies at the core of human behaviour.”[3]

The origins of capitalism are difficult to pinpoint, as throughout the Middle Ages the groundwork was forming.[4] The industrialization of England, however, displays a recognizable capitalism as freedom of trade and property rights became dominant.[5] Therefore, it is with Adam Smith’s conception of human nature this survey of economic humanity begins.

Smith’s tome, The Wealth of Nations, progresses from his empiric work on the division of labour and the reality of exchange to evaluative judgements as to why humans act the way they do. During Smith’s evaluative rhetoric, he implants the propensity to trade into his economic anthropology. Exchange occurs, Smith argues, as a “consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.”[6] The rational for this propensity is self-love, as there are many occasions for altruism to expect such actions is vain, “He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them.”[7] Moreover, “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.”[8] Smith does not limit the motive of self-interest to the purchasing of items; it freely influences inter-personal relationships. Regarding the issue labour, Smith writes, one “would have no interest to employ [another], unless he was to share in the produce of his labour.”[9] Thus, revealing self-interest as a core dimension of Smith’s conception of humanity.

            Though sometimes caricatured by self-interest,[10] Smith’s conception of human nature is significantly more nuanced, as evident within The Theory of Moral Sentiments. Smith states, “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others.”[11] Interest in the other, Smith argues, arises from humanity’s mirroring ability, which leads to compassion.[12] “The compassion of the spectator must arise altogether from the consideration of what he himself would feel if he was reduced to the same unhappy situation.”[13] Thus, Smith’s view of humanity is not completely atomized individuality; rather he regards humans as having the capability to relate in non-transactionary ways. He further nuances humanity with traits of prudence, benevolence, and self-command (alongside justice), as a complementing narrative, “that traces the moral ascent of the individual in a manner analogous to his account of the material ascent of civilization."[14] Smith also creates a spectrum for the role of self-love, as a way of recognizing the diversity of motives within human nature, from the prudent to the magnanimous.[15] Thus, Smith’s conception of human nature attempted to balance the individual and interdependence. However, the kernel of self-love placed within the human propensity to trade began to grow like a weed in within subsequent economic thought.

Bastardization of the Self

“The clever combatant looks to the effect of combined energy, and does not require too much from individuals. Hence his ability to pick out the right men and utilize combined energy.”[16] – Sun Tzu

The tentative balance struck by Smith was deconstructed and atomized by utilitarianism. Jeremy Bentham’s conception of the good explicated in the "theory of utilitarianism, [is] the idea that all social actions should be evaluated by the axiom, ‘it is the greatest happiness of the greatest number that is the measure of right and wrong.’”[17] The evaluative core of utilitarianism necessarily reduced conceptions of humanity to numbers. Thus, Smith’s human with compassion and values was reduced to Bentham’s calculating agent. Unlike Smith, Bentham did not believe there were natural rights to interfere with such a conception of humanity, thus beginning and enabling reign of utility. [18]

            David Ricardo, like Bentham, also reduced humans into abstraction and principle, which inevitably denigrated value and choice elements of humanity. For Ricardo, “[People] are not, as we have said, people: they are prototypes. Nor do these prototypes, in the everyday sense of the word, live: they follow `laws of behaviour.’”[19] The force of Ricardo’s argument for the reduction of people to laws is its ability to increase the predictive power of economics. “By building a model world, Ricardo gave the powerful tool of abstraction to economics.”[20] For in a model world the human could be understood, which panders to the human desire for certainty, security, and predictability.   

            Mill, continuing the course set by Bentham expanded the prevalence of utilitarian consequentialist ethics, while further alienating deontological ethics in the realm of economics. The common good was defined by happiness, and the maximization of this happiness was understood to be the telos.[21] Though reducing the human to happiness, it “is not the agent’s own happiness, but that of all concerned.” [22] Thus, Mill’s utilitarianism could incorporate human actions of altruism, and self-sacrifice, even calling it “the highest virtue which can be found in man.”[23] However, utilitarianism could only value such actions for a potential outcome, and not for the act itself. Therefore, “[utilitarianism] only refuses to admit that the sacrifice is itself a good. A sacrifice which does not increase, or tend to increase, the sum total of happiness, it considers as wasted.”[24] The calculating nature of utilitarianism, therefore, is unable to account for the intangibility within human nature.

            Mill, defining the concept of man with which political economy dealt, stated in 1844, “[political economy] does not treat of the whole of man's nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end.”[25] This human rationality, narrowly defined by comparative efficiency, became known as homo economicus; a human dislodged from social conditioning and society, a rational being that creates wealth by comparative efficacy. In essence, a self completely bastardized from all relations. Though Mill’s writings are more nuanced, this conception of economic man prevailed. The influence of Mill’s thought and utilitarianism on subsequent economic conceptions of humanity is hard to overstate. Humanity narrowly conceived as a maximization agent continues to influence contemporary economic principles, such as the Parato principle and concepts of social welfare.[26]

In contrast to this socially divorced view of humanity, Marx and Engels in 1848 wrote the Manifesto of the Communist Party. Their scientific socialism argued the other extreme. Rooting their conception of humanity in dialectical materialism, human action was viewed as the inevitable result of social conditioning.[27] As such it correctly diagnosing the oversight that humans in fact act with each other, but makes a wrong turn as “[i]t only maintains that thoughts and ideas are the product of environment.”[28] Thus, the human leaves the bonds of the laws of maximization and enters the bonds of social conditioning. However, they offered the keen insight that capitalism contained an internal inconsistency, in that “the base of industrial production – the actual making of goods – was an ever more organized, integrated, interdependent process, whereas the superstructure of private property was the most individualistic of social systems.”[29] Thus, the wrestling match between individualistic and interdependent conceptions of humanity, identified by Smith, continued without resolve.

Alfred Marshall - on the heels of Francis Edgeworth’s conception of economic man as a pleasure machine reducible to mathematics - grappled with the inconsistencies he saw between economic humanity and real humanity.[30] Marshall highlighted that economics had tended to view itself as science and the predominant perception was that “the Laws of Economics are statements of tendencies expressed in the indicative mood, and not ethical precepts in the imperative.”[31]Yet, he also realized that these attempts to construct “an ‘economic man’ who is under no ethical influences and who pursues pecuniary gain...have not been successful.”[32] Instead, he claimed humanity is not perfectly selfish, he argued that family affections have always been assumed; therefore, it is inconsistent not to include other altruistic so long as they can be reduced to a general rule.[33] Thus, Marshall reconsidered including the relational and altruistic behaviours of humanity, with the caveat that only if such actions can be abstracted into a conceptual rule.

            Reflecting upon his work thirty years later, Marshall continued to view the incorporation of complexity into economic conceptions of humanity as the way forward. He looked to biological complexity, rather than mechanics, as a possible direction in which to head.[34] Even so, he was aware of the limitations of capturing the complexity of real humanity. Marshall describes these shortcomings as involving the isolation of the primary relations of supply, demand, and price, and then the reduction to inaction of all other forces by the phrase “other things being equal”; not supposing these forces are inert, but ignoring them for a time.[35] Marshall’s work slingshot mainstream economics into the twentieth century and with it an increasingly complex understanding of economic human nature. Nevertheless, a nature rooted on a foundation of self-interest and utility, though grappling with the relevance of altruism, organized in ever more complex matrixes of laws and abstractions.

God and Self

“Being lies in the fact that something is, and in its Being as it is; in Reality; in presence-at-hand; in subsistence; in validity; in Dasein; in the 'there is’”[36]

Contrasting economic humanity is a Christian vision of the relational nature of humanity. Søren Kierkegaard, writing in the first half of the 19^th century, significantly challenged the prevailing conception of humanity. Reigning was an atomized humanity built upon a Descartesian dualism of subject and object, which follows upon Descartes’ dualism between mind and matter; evident within his oft quoted “I think therefore I am.” David Hume, contemporary of Adam Smith, demonstrated the reliance on a priori reasoning when presuming object distinction, as no actual cause is evident only two subsequent events, thus “[e]very alteration of circumstance occasions a doubt concerning the event.”[37] This infinitely problematized the question of humanity as independent subjects that can be abstracted to follow laws, due to humanity’s dynamic nature. Into this melee, Kierkegaard posits his conception of humanity, as a relational being. He conceived of the self as being in relation to itself, a synthesis of the infinite and the finite, relating to itself through a “third term.”[38] Thus, Kierkegaard firmly plants a relational nature in to the human - relational as relating to others as well as relating to oneself and positing God as the proper “third term” through which to relate. Kierkegaard’s work functioned, in part, to de-objectify God in relation to humanity. As the self had been atomized in economic conceptions of humanity, so to God had been objectified as though he really were one of the things that existed provable by science.[39]

Two theologians in the first half of the twentieth century took on the gauntlet of de-objectifying God, returning to the historic paradoxical nature of a personalized God and a transpersonal divinity.[40] Paul Tillich and Karl Barth both worked to restore this dual conception of the divine, a conception that parallels the dilemma of the individual and the interrelated nature of humanity within economics. Tillich resolved this dilemma by speaking of God as the ground of being, and of God beyond God, while religion is the experience of depth in being that is ultimate concern.[41] The existential nature of Tillich’s conceptions of humanity could estrange the self, yet he places the human amongst God as the ground of being, as such, there is a permanent relational nature to humanity’s existence. Barth resolves the paradoxical nature of God by recovering the Trinity. Barth is thus able to speak of God’s humanity as “God’s relation to and turning toward man,” while only sentences later speaking of “the mystery comparable only to the impenetrable darkness of death, in which God veils Himself precisely when He unveils.”[42] Thus, both these theologians, in his own way, reconnect God and humanity thereby reinvigorating humanity with an essential relational nature derived from the divine-human relationship.

The biblical narrative supports the resurgence of relational conceptions of humanity. Significant to understanding humanity’s relational nature is Genesis 1:26-27,

Then God said, ‘Let us make humankind in our image, according to our likeness; and let them have dominion over the fish of the sea, and over the birds of the air, and over the cattle, and over all the wild animals of the earth, and over every creeping thing that creeps upon the earth.’ So God created humankind in his image, in the image of God he created them; male and female he created them.[43]

In this periscope, one finds the God-human relation, the relationship within the Godhead (exhibited by the use of the plural “our image”), between male and female, as well as human to the rest of the created order, setting a framework for the relational nature of humanity. Thus, as the narrative continues through creation, fall, and redemption, humanity’s relational nature precedes its later manifestations; a principle overlooked by reductionist economic conceptions of man that center on self-interest.

The concept of man herein proposed is a shift from homo sapiens/homo economicus to relātūs homo. Rather than the beings who know/are wise, or a being that is narrowly rational and self-interested, relātūs homo relates, retelling are relational narrative thereby deriving humanness (thus not homo relātūs, but relātūs homo). This conception of the relational human is then a platform from which alternate views of human interactions can be formed.

Zugzwang

“As idealistic as it may sound, altruism, not just competition and the desire for wealth, should be a driving force in business.”[44] – His Holiness the Dalai Lama

Despite the resurgence of relational humanity in theology, mainstream economics has not moved very far beyond a complexification of homo economicus. In economics, the atomized individual prevails: “they are consumers with rationally ordered preference principles.”[45] Evident within this conception is the retention of a utilitarian decision matrix of ordered preferences, an assumption of a self-interest principle within consumption, and abstractions of the human to an object dominated by principles. "The aim of [utilitarianism]” Charles Taylor says, “was precisely to reject all qualitative distinctions and to construe all human goals as on the same footing, susceptible therefore of common quantification and calculation according to some common 'currency'."[46] This utilitarianism thrives within “preference,” allowing for the calculability of individual human decisions, and the retention of an object-based view of humanity.

Anathema to atomized humanity is the reality of globalization driven by global capitalism. "Globalization can be described as the process by which market economies, governments and cultures are becoming increasingly interlinked and integrated across the globe."[47] Thus, a discrepancy emerges between the atomized individual and the increasing awareness of the interrelated nature of humanity. Therefore, in a Hegelian sense, what is being witnessed currently is the end of one manifestation of the idea. “The idea’s imperfect [or, rather, catastrophic] actualizations bear witness to an “inner contradiction” at the very heart of the idea.”[48] It is to this conclusion that this paper has argued. The imbalance or misconception of human nature by Smith, seen in the propensity to trade centered on self-love, is retained in economic humanity as atomized individuals. The subsequent variations of this economic system have modified and altered the dominant understanding of homo economicus, yet, ‘the greatest strength of capitalism lies in its ability to subvert revolutionary goals by the ideology of domination.”[49] Thus, homo economicus could not shake its subject/object dichotomy. Therefore, if real change is going to occur in current economic practice a shift in thought must first occur at the deep local of the nature of humanity. For, if global capitalism is truly nearing the zero point, as Žižek argues, due to the internal contradiction evident within mainstream economic thought, then humanity has reached its moment of zugzwang.

            The crises of ecology, biogenetics, imbalance, and social division are in part the offspring of a system rooted upon homo economicus. Thus proposing to mitigate the effects of these crises while retaining an atomized view of humanity fails to grasp the depth to which such conceptions haunt the systems and structure. No longer can humanity afford to function through “momentary exchange[s] between atomized individuals who, immediately afterwards, return to their solitude.”[50] Longevity must be considered. Yet altering the view of humanity will ultimately challenge notions of what it means to relate, as “[t]he atomized society, in which we have contact with others without entering into proper relations with them, is the presupposition of liberalism.”[51] Thus a relational conception of humanity offers the opportunity for significant change, though a risky change. Relational conceptions of humanity offer implicit value in the act of relating. As such, trade and exchange can be valued without a motive of self-interest. This opens up opportunities of social enterprise and re-localized economies, instead of actions dictated by comparative efficiency. Beyond trade, however, indwelling a relational conception of humanity opens the self up to change. Thus, much like the Trinity and its mutual interpenetration through perichoresis, a relational conception of humanity will inevitably involve being mutually transformed within the relation. A risk the bastardized self must welcome, knowing such relations will alter the self.

            The proposal to change from homo economicus to relātūs homo in economics is a bold one. Yet in humanity’s moment of zugzwang, it appears to be time for a necessary shift. The protestant tradition returned to a relational view of God and humanity, in the same way economics can alter its trajectory through a re-conceptualization of the nature of economic humanity. Such a turn may provide resolve to the crises that dominate the twenty-first century by providing a universal platform for pluralized interactions that is alternate to the self-interest driven sphere of secular global capitalism.

By Silas Krabbe

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[1] Karen Armstrong, The Case for God (New York: Knopf, 2009), 24.

[2] Slavoj Žižek, Living In The End Times (New York: Verso, 2011), x.

[3] Murray Bookchin, Post-Scarcity Anarchism, 3rd ed., Working Classics Series 3 (Oakland, CA: AK Press, 2004), 83.

[4] Rodney Stark, The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success (New York: Random House, 2005), 63ff.

[5] Ibid., 153, 157.

[6] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: Methuen & Co. Ltd, 1904), 1.2.1, Library of Economics and Liberty [Online] available from http://econlib.org/library/Smith/smWN.html; accessed 17 July 2013; Internet. (Emphasis added).

[7] Ibid., 1.2.2.

[8] Ibid.

[9] Ibid., 1.8.7.

[10] Robert L. Heilbroner, The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers, Rev. 7th ed (New York: Simon & Schuster, 1999), 55.

[11] Adam Smith, The Theory of Moral Sentiments (London: A. Millar, 1790), 1.1.1, Library of Economics and Liberty [Online] available from http://www.econlib.org/library/Smith/smMS.html; accessed 17 July 2013; Internet.

[12] Ibid., 1.1.3.

[13] Ibid., 1.1.11.

[14] Ryan Patrick Hanley, Adam Smith and the Character of Virtue (Cambridge: Cambridge University Press, 2011), 93–94.

[15] Ibid., 94.

[16] Sun Tzu, The Art of War (Enderby: Arcturus, 2008), 51.

[17] The Concise Encyclopedia of Economics (Indianapolis, IN: Liberty Fund, 2008), 525.

[18] Ibid.

[19] Heilbroner, The Worldly Philosophers, 94–95.

[20] Ibid., 103.

[21] John Stuart Mill, Utilitarianism (Kitchener, ON: Batoche Books, 1863), 10, McMaster [Online], available from http://socserv.mcmaster.ca/econ/ugcm/3ll3/mill/utilitarianism.pdf; accessed July 19 2013; Internet.

[22] Ibid., 14.

[23] Ibid., 19–20.

[24] Ibid., 19.

[25] John Stuart Mill, Essays on Some Unsettled Questions of Political Economy. (London: Longmans, Green, Reader, and Dyer, 1874), v.38, Library of Economics and Liberty [Online] available from http://www.econlib.org/library/Mill/mlUQP5.html; accessed 19 July 2013; Internet.

[26] Donald A Hay, Economics Today: A Christian Critique (Vancouver: Regent College Pub, 2004), 126.

[27] Karl Marx and Frederick Engels, “Manifesto of the Communist Party,” in Marx/Engels Selected Works, vol. 1 (Moscow: Progress Publishers, 1969), 21,22, Marxist Internet Archive [Online] available from http://www.marxists.org/archive/marx/works/download/pdf/Manifesto.pdf; accessed 20 July 2013; Internet.

[28] Heilbroner, The Worldly Philosophers, 145.

[29] Ibid., 147.

[30] Ibid., 173.

[31] Alfred Marshall, Principles of Economics: An Introductory Volume (London: Macmillan, 1994), v.

[32] Ibid.

[33] Ibid., vi.

[34] Ibid., xii.

[35] Ibid., xiii.

[36] Martin Heidegger, Being and Time (Oxford: Blackwell, 1962), 26.

[37] David Hume, Dialogues Concerning Natural Religion, Dover Philosophical Classics (Mineola, NY: Dover Publications, 2006), 18.

[38] Søren Kierkegaard, The Sickness Unto Death (London: Penguin, 2008), 9.

[39] Karen Armstrong, A History of God: The 4000-Year Quest of Judaism, Christianity, and Islam (New York: A.A. Knopf, 1993), 345.

[40] Ibid., 383.

[41] Paul Tillich, Theology of Culture (London: Oxford University Press, 1964), 4–9.

[42] Karl Barth, The Humanity of God (Richmond: John Knox Press, 1960), 37.

[43] Holy Bible New Revised Standard Version. (Abingdon Pr, 2010).

[44] Tenzin Gyatso, In My Own Words: An Introduction to My Teachings and Philosophy, ed. Rajiv Mehrotra, 1st ed. (Carlsbad, CA: Hay House, 2008), 171.

[45] Kent Van Til, “Human Nature and Human Needs in Recent Economic Theory,” in Global Neighbors: Christian Faith and Moral Obligation in Today’s Economy, ed. Douglas A Hicks and Mark Valeri (Grand Rapids, MI: Eerdmans, 2008), 65.

[46] As quoted in: Paul Spencer Williams, “Globalization and the Logic of Capitalism,” in The Gospel and Globalization: Exploring the Religious Roots of a Globalized World, ed. Michael W. Goheen and Erin G Glanville (Vancouver: Regent College Pub, 2009), 129.

[47] Ibid., 126.

[48] Žižek, Living In The End Times, 23.

[49] Bookchin, Post-Scarcity Anarchism, v.

[50] Žižek, Living In The End Times, 41.

[51] Ibid.