Beyond self-interest
from David Ruccio
What’s the alternative to an economy based on self-interest?
As it turns out, two different proposals to move beyond self-interest, both related to the Occupy Wall Street movement, crossed my desk at the same time.
The first, by Stephen Healy and Boone Shear [ht: gh], is based on the idea that economic relations based on self-interest are only one possibility among many. The problem is,
Ethical values and actions beyond self-interest are understood in our present society to be extra-economic; they are supposed to take place outside the formal economy. It is precisely for this reason that they are frequently dismissed as mere sentimentality. How then do we move ethical values and social commitment to the very core of our economic values? Is this even possible?
Their view is that Occupy Wall Street has given the gift of recognizing economic enterprises that encourage community rather than individualism, which already exist in the midst of an otherwise capitalist economy. They give the examples of the Alliance to Develop Power, Worcester Energy Barn Raisers, and the Valley Alliance of Worker Cooperatives—all in Massachusetts.
Coincidentally, the Pontifical Council for Justice and Peace has elaborated a similar critique of self-interest in the context of the current crises, although its proposals for an alternative economy tend in a more macroeconomic direction.*
The inequalities and distortions of capitalist development are often an expression not only of economic liberalism but also of utilitarian thinking: that is, theoretical and practical approaches according to which what is useful for the individual leads to the good of the community. This saying has a core of truth, but it cannot be ignored that individual utility – even where it is legitimate – does not always favour the common good. In many cases a spirit of solidarity is called for that transcends personal utility for the good of the community.
The Council focuses on reforming the international financial and monetary, based on the idea of creating “some form of global monetary management. . .as a first stage in a longer effort by the global community to steer its institutions towards achieving the common good.”
The criticisms of self-interest by Healy and Shear and by the Pontifical Council for Justice and Peace, while looking to the creation of alternative economic institutions at different levels—in the former case, at the level of individual enterprises; in the latter, at the international level—certainly share a commitment to community and the common good.
They also share a commitment, as expressed by the Council, to “the revolutionary power of ‘forward-looking imagination’ that can perceive the possibilities inscribed in the present and guide people towards a new future.”
* According to E. J. Dionne Jr. [ht: mkb], the Vatican denied that its report was a direct response to the Occupy Wall Street movement. But, as Dionne explains, it’s clear the report got more attention because of the issues raised by the worldwide movement.
“What’s the alternative to an economy based on self-interest?”
A recycling economy based on understanding of the cyclic processes of terrestrial Nature and loving mankind sufficiently to care about its future.
A sharing economy based on some people having more than they need of various things, and others less.
A reasonable economy based on none of us being entirely reasonable, so that decisions need to be made democratically, i.e. not by strength or weight of opinion but by groups making good each others’ deficiencies and putting mistakes right quickly.
All of these together. They form a cyclic group in which each explains the next and the last is the condition of the first.
The Pontifical position in fact goes back 2000 years to I Cor 12: St Paul’s analogy between communities and the human body, in which different parts perform different functions but all need to communicate with and nourish each other.
If yuo ever read the book ECONOMICS FOR A CIVILIZED SOCIETY by Greg Davidson and Paul Davidson –which has been printed in two editions–, you would find a proposal on how to make civic values (ethics) work with self interest to create a more civilized economic society.
Paul Davidson
You ask, How do we move ethical values and social-commitment to the very core of our economic values? By education, David, because it was through education that the Americans made self-interest the basis of the economy.
You know that the triumph of neoclassical economics and econometrics was based on the philosophy of self-interest. When they took over economics departments and business schools after WWII, they drove conceptions of ethical values and social commitment espoused by institutional economists like Thorsten Veblen out of the profession. You economists did it to yourselves first in the US and then abroad in a relentless drive to impose the US postwar version of neo-classical economics on the world, i.e., in Germany where historical economics (von Schmoller, Sombart) had strong roots. And the same sort of thing happened in philosophy departments where continental philosophy was driven out. With the exclusion of people like Habermas and Foucault from philosophy studies in US institutions of higher education, ethical values didn’t have a chance
So you have to reeducate people, starting in universities by instituting programs of study that deal with people as ethical beings. There are plenty of educational traditions to draw on. Confucianism, which does not leave man in some sort of Hobbesian jungle of self-interest conflict but deliberately cultivates civilization and commerce based on moral order. The Chinese turn to Confucius not to Milton Friedman for inspiration. Or German classical education, which influenced German business economists in their search to define “efficiency” in terms of community rather than profit maximization, and in their entity conceptions of the firm. Because the triumph of neoclassical economics and econometrics has been so thorough in the Anglo-American world, there is hardly a trace of the alternatives left in the education of students in departments of economics or business schools. One has to look abroad to find strong, alternative educational material. But in this world of globalization, why should all the globalization spread out from the Anglo-American world. Why shouldn’t the Anglo-Americans learn something about ethical values and social-commitment from other peoples, who are using them to best Americans in the marketplace.
Re-education indeed, Robert, but two generations after WWII and fifteen after Hobbes and Hume it has become necessary to re-educate Anglo-Americanised educators – and not just in alternative ethical traditions: in their paradigms and basic understanding of scientific method, mathematics, language, logic and ethics (as on-going logical control of errors – c.f. virus elimination – not subjective opinion).
There are other people in other disciplines (notably information science and technology) as well as other ages and and cultures. Why shouldn’t Anglo-Americanised educators learn something from them?
Maybe i’m a skeptic or pessimist like Pareto, but to cite the Vatican on the issue of ‘beyond self interest’ reminds of something like a Doonsbury cartoon (eg ‘the energy crisis is over’ by presidential decree; or ‘good question, now next question’).
Id say the topic ‘beyond self interest’ is mostly used to advance the self-interests of the person (say Thomas Frank in economic darwinism) or group involved, or to at least protect their interests, priviledges and bank interest.
as has been said, get the nail out of your own eye before you start casting stones on others.
You make yourself sound like an ignorant skeptic, but people are people, outside the Vatican as well as in.
Let me first point out that the Vatican is the bureaucracy of what was intended to be a devolved, world-wide educational system for passing on the wisdom of Christ, so my comments on re-educating the educators apply to it. Like all bureaucracies it has its good and bad eggs, a tendency to take the easy way and for office-holders to equate their own worth with that of their office. But that’s bureaucracy, not specifically the Vatican.
Let me now summarise the readings appointed by the Vatican some years ago to be read in Catholic churches today. First Malachi prophesying in the Jewish spirit of justice: “And now, priests, this warning to you. … You have strayed from the way; you have cause many to stumble by your teaching. … And so I have made you contemptible and vile in the eyes of the whole people”.
Then St Paul, imprisoned as an early pupil and teacher in the school of Christ: “Like a mother feeding and looking after her own children, we … had come to love you so much that we were eager to hand over to you not only the Good News but out whole lives as well. Let me remind you, brothers, how hard we used to work, slaving day and night so as not to be a burden on any one of you while proclaiming God’s Good News to you”.
Finally Christ’s advice to his pupils: “The scribes and the Pharisees occupy the chair of Moses. You must therefore do what they tell you and listen to what they say, but do not be guided by what they do, since they do not practice what they preach”.
Christ’s advice on economics is just as sound. Like that to his equivalent of today’s bankers, building bigger and better barns in which to store their overflowing harvest: “Fools! Tonight you are going to die, and you can’t take it with you. … Sell your possessions and give to those in need”. And his praise of the steward, caught with his hand in the till, who made friends instead of enemies by writing down everybody’s debts.
Amen, Dave, there is nothing exclusive about reeducation. It just takes some time and a lot of effort. Don’t be a pessimist Ishi. What do you think of a management system that gives its employees a voice in management in a firm? The Germans do and they make the greatest cars in the world under this system. Nothing irrelevant about that.
Hey, Bob, isn’t that a rather biased opinion about the best cars?
Anyway, when the Pope was still Cardinal Ratzinger, in his essay on Economics and The Church, he presented a very well reasoned critique of what we now know as the Plutonomy. He eloquently made a case for restoring the ethical dimension of both economics and leadership. That would clearly require a systemic upgrade of academia, from K-12 on up. Yet, as we all know, the rules make the possibility structurally infeasible.
Hence, the importance and urgency of co-creating a transitional alternative to the End Game, and the eventually sustainable alternative that sustains a predominantly positive culturewith a greener future. I know how daunting that prospect must seem, because it seemed far too daunting to me for too long.
It seems to me we can best expedite an effective collaborative brainstorming & planning process after all parties have deeply considered the following:
1) the video series (now on DVD) of the BBC production of “I, Claudius”
2) the history of the Ceasars and/or the fall of the Roman Empire
3) the DVD archive of Deep Space Nine (Star Trek)
4) On Walden Pond, by H.D. Thoreau
5) The Esquimau Maiden’s Romance, by Mark Twain
Understanding the history of Rome’s power politics is essential to realistic analysis of the governing dynamics of macroeconomics in an advanced plutocracy. The Deep Space Nine series features some of the most extensive dramatizations of the nonmonetary economics of Star Trek. Thoreau’s pioneering writer’s retreat in a 10′ x 15′ cabin which he built by hand (for $28.125, yes, 28 dollars & 12 & 1/2 pennies), provides a bedrock benchmark with his truly rigorous five year experiment in green economics. Twain’s comprehensive little primer on economics is absolutely essential for understanding how, in his words, “the financial supremacy of $100, 000,000 in New York City equaled that of 22 steel fish hooks in a community near the arctic circle.” Twain also points out that the pleasingly plump protagonist (the chief’s daughter) and her peers thought little of the fortune in fine furs and artwork she wore daily. How big a fortune? Well, considering the inflation from Twain’s day, the estimated $35,000 value of the Esquimau Maiden’s daily garb might be worth from over $2.5 to $3.5 million of Club Fed’s bogus debt bucks.
Now, for some of you youngsters out there, if any, I know those numbers & facts may seem wildly implausible, but let meassure you that neither Mr. Twain nor Mr. Thoreau will disappoint you. I’m sure that Mr. Ruccio, agrees with me on that, at least, and I would not be surprised if several others among us do as well.