July 6, 2015: Mount Economics – It Wasn’t Always So Tall

This time we’ll look a bit closer at that catapult of individualism: economics. Not from the standpoint of supply and demand, efficient markets, or Wall Street gamblers, but the development of economics into an independent ideology. Using Louis Dumont as a starting place, we touch briefly on how modern economics was born, evolved, and became paramount to our definition of the world we made. [1]

Modern perspectives on economics are now fundamental to political philosophy. As Dumont puts it, “Modernity has witnessed the emergence of a new mode of consideration – a carving out of a separate domain evoked by the word ‘economics’ or ‘the economy’ – a separate compartment of the human mind, a paramount value of modernity.” The ancients dealt with economic matters too, but these matters were associated with the public good, not an individual’s self-interest as there was no such thing as “individuals” in the ancient world, only members. With the exception of modern individual rights, economics has since become the very expression of the individualist movement, and this evolution has been of keen interest to this blog.

Modern economics is, among other things, the implementation of practical science as technology, made useful through engineering, taken to the masses by markets. I wouldn’t be writing this blog were it not for every link in that chain. I might not even be alive. We now assume economics is a field all its own, a kind of science of production and consumption. But its liberation from politics and morality is historically recent. Before this transition the concept of wealth was immovable property. Rights were granted by land ownership, enmeshed in the social organization, conferring power over others. Once wealth became autonomous as mobile cash, ownership of property as a form of power over people declined. All the old hierarchies were in flux around the same time, lending greater freedom to the individual. As Dumont writes, “When the authority of holistic hierarchy disappears then authority degrades into power and power into influence.” We have seen the positive and negative effects of this.

The transformation from selfless Christian morality to selfish economic morality was mentioned here last time (May 4, 2015) when we considered definitions of the human being. In that entry we considered how different definitions result in different political philosophies that accord with that definition. These different political philosophies then give rise to different societies people live and die in. It was my contention that Enlightenment definitions (ca. 1700) of the human being, with Enlightenment’s emphasis on individualism, were for good reasons: in response to their times, and also wrong in their fundamentals. Wrong because they established the notion that each human is fully autonomous, free of prior connections – an ideal foundation for consumerism. But biology says otherwise, with the connection between mother and child as the fundamental social unit that expresses what we are: social creatures prior to autonomy, dependent and connected. I submit the success of economics born from Enlightenment, with all of its miraculous benefits, has also saved us the trouble of social interaction. The economic promise to make individuals independent was a resounding success. With abatement of social connections goes traditional morality as a characteristic of groups greater than one. This resulting loss of morality, ethics, virtues, traditions, all as victims of our independence serve to exacerbate our growing sense of disconnectedness, isolation, and emptiness. Compared to the past, we are materially rich, socially and spiritually impoverished. We’ve decided without knowing it to trade one domain for the other. As Michael J. Sandal puts it, “Liberated and dispossessed.” [2]

These mostly European philosophers responsible for acceleration of the individualist movement and economics to service it, stressed sovereignty of the individual to break free of arbitrary power of kings and Popes. By the time these philosophers began to ponder new social systems, the king had been demoted, and the Church was about to be. Almost five hundred years earlier the Magna Carta formally started this long process when King John of England (1167-1216) accepted limitations to his power demanded by the barons he was taxing to pay for lost wars. John had already capitulated to the Pope during an era when the Church had turned its pursuit for heaven into a pursuit for the world. As Dumont clarifies and many have noted, this was in violation to the teachings of Jesus: “Give to Caesar what is Caesar’s, and give to God what is God’s.” [2] An expression of indifference, which in context makes clear which is superior, thus dismissing Caesar. Or, more accurately, dismissing worldly things like possessions and wealth as distractions from matters of the soul.

But bigger things were evolving for the Church than papal-king jousting. Isaac Newton published his Principia Mathematica in 1687. It extended Johannes Kepler’s Cosmographic Mystery a hundred years earlier (1596), which validated Copernicus and his Revolutions of the Celestial Spheres fifty years before that (1543). What once belonged only to God, man was now in charge of. Some of the shine had been wiped off the mystery and it wouldn’t be the king that posed the greatest threat to Church authority. Even more than the Protestant Reformation itself (1524) that threat would be direct and indirect effects of science. Science is the force behind technology, technology is the power that drives modern economic expansion.

Seventeenth century accentuation of individual autonomy accompanied an often unstated religious and moral sense. Many, though not all (e.g. Voltaire), wanted religion maintained to balance the obvious dangers of individualism: selfishness, greed, hedonism. These men assumed such guidance would always be present. They were wrong, as some did fear and expressed at the time. Individualism and the rights created to sustain it would eventually reach a point where the law would determine one individual able to freely choose to end the life of another incapable of choice. Regardless of one’s political stance on abortion, it serves as a supreme example of modernity when something that has taken place since humans started reproducing, would now become philosophically justified as an individual right. (The reader might recall, this author is agnostic – not atheistic as some are found of confusing.) Such a right, like all rights, sanction the ascendancy of the individual, while simultaneously distancing them from the belonging, reference, and burden of true community.

With Mandeville [4] and Smith’s [5] dissociation of economics from traditional moral restrictions, individuals would be invited to determine their own morality, able to claim that their pursuits of self-interest were distanced from communal judgement as it served the new morality of private vice as public good. As Ernst Troeltsch noted, “Claims are no more proof of validity than needs are guarantees of satisfaction…” [6] And as Dumont points out, “Something that remains opaque in this transition in mental perspective is that the new morality regulates social relationships whether or not goods are involved.”

Economics is individualism in material practice. Economics is the jet engine under the wings of individualism that make individualism palpably sovereign and clearly visible, not merely philosophically held to be true in a political arena. Economic practice is now so refined we require no human interaction as our transactions can be done electronically with delivery to our door by unseen strangers. We’ve come to prefer this lack of interaction. This economic ideology would quite logically commercialize agriculture into the number one planet-wide selective pressure under which complete species now disappear. Often these species and their habitats are an obstacle to efficiency. Such effects are said not to be the proper purview of economics as they are irrelevant to “maximum utility of efficient markets.” All of this, from our growing isolation without moral tradition, to planet-wide modification by just one species was not created by economic perspectives, but accentuated by it, more even than the original philosophy of individualism itself. Economics is not merely a tool of analysis to tell us what happened or attempt predictions; it sets public policy to structure the very society we live in. [7] Are we the masters of our ideas, or do they master us?

But is this the final status for economics? There may be room for more realistic economic models. By “more realistic,” I mean models that take into consideration community responsibilities a bit closer to that home the ancients realized, one closer to a truer definition of the human, with the recognition that every economic decision has a traditional moral element. University of Chicago economist Richard Thaler’s recent book admits that capitalist economics has been overconfident of unrealistic theories. [8] (Incidentally, the University of Chicago has 29 Noble Prize winners in economics, called the Chicago School, which Thaler opposes.) Thaler shows that humans are not rational agents in economic transactions but frequently quite the opposite. The robotic “free agent” may be in for a common sense replacement by people as they really are. Perhaps not far behind is the realization that all economic transactions have a moral component demanding due consideration, and with that a return to a traditional morality of empathy that rejects greed as good.

Until next time: the first Monday in September, the 7th, 2015.

[1] Louis Dumont, From Mandeville to Marx: The Genesis and Triumph of Economic Ideology, University of Chicago Press, 1977
[2] Michael J. Sandal, “Democracy’s Discontent: America in Search of a Public Philosophy,” Belknap Press, 1998
[3] Mathew 22:21
[4] Bernard Mandeville, The Fable of the Bees, 1705
[5] Adam Smith, Wealth of Nations, 1776
[6] Ernst Troeltsch, Religion in History, Fortress Press, 1991.
[7] Stephen Marglin, “The Dismal Science: Why Thinking Like an Economist Undermines Community”, Harvard, 2010
[8] Richard H. Thaler, “Misbehaving: The Making of Behavioral Economics,” Norton, 2015
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Published on July 06, 2015 08:48
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