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Contextual economics

from Neva Goodwin

Starting in the early 1990s I have worked with a number of great colleagues to develop a full alternative that we call contextual economics. The name comes from our conviction that an economic system can only be understood when it is seen to operate within a social/psychological context that includes values, ethics, norms, motivations, culture, politics, institutions, and history; and a biophysical context that includes the natural world as well as the built environment.

The starting point for our contextual economics textbooks is an inquiry into goals: What are the appropriate goals for an economy? And, relatedly: What are the appropriate goals for the discipline of economics? Contextual economics emphasizes that most traditionally understood economic goals – efficiency, maximizing production or consumption, earning money – are best understood as intermediate goals, that is, means to other ends. The relevant final goals might include, for example, the satisfaction of basic physical needs (e.g., for food, water and temperature regulation; happiness (including a good balance of comfort and stimulation); self-respect and the respect of others; self-actualization and a sense of meaning; fairness in the distribution of life possibilities; freedom; democracy and participation; and a natural environment that supports healthy human life. These may be summarized as well-being. The scope of consideration is all humans, in the present and in the future, and regardless of the extent of their involvement in market transactions.

In defining the economy, contextual economics adds to the traditional trio of “production, consumption and exchange” a critical fourth function: resource maintenance. This includes upkeep of manufactured capital, maintenance and enhancement of a healthy stock of natural capital, and many of the kinds of work listed above as most essential for human survival and well-being. It may be that it was because this work is so often performed by women that resource maintenance has not previously been included in the list of essential economic functions; indeed, it was a leading feminist economist, Julie Nelson, who, as a collaborator on contextual economics textbooks, introduced this concept.

Post-Neoliberal Economics

  1. Meta Capitalism
    May 31, 2022 at 2:02 am

    Mainstream economic models have sacrificed too much realism at the altar of mathematical purity…. this has generated and ever greater focus on the mathematical gymnastics of optimizing models and too little focus on the everyday aerobics of how the economy functions. Accompanying this has been the neglect of disciplines that abut and illuminate economics: economic history, moral philosophy, money and banking, radical uncertainty, non-rational expectations. (Andrew Haldane, Chief Economist at the bank of England. In Foreword to The Econocracy: The Perils of Leaving Economic to the Experts. xiv-xv)
    .
    Neoclassical economics encourages a view of the economy that is characterised by the two main features and is intimately linked to the three prongs [Individualism, Optimisation, Equilibrium]. Firstly, it is based on a mechanical view of the world. Economies are composed of individual agents who interact in a way based on well-behaved predictable mathematical rules. This behaviour tends to produce a situation that, though not necessarily ideal, is stable, and this is known as equilibrium. (Earl et. al. 2017, 38)
    .
    (…) This view of the economy as characterized by knowable, predictable forces—underpinned by the certainty of optimisation and equilibrium—means that economic experts believe they can model a situation, often mathematically, to make a prediction of how some policy will affect the economy. This idea is reflected in econocracy in the assumption that there are fixed mechanical relationships between variables like, unemployment and inflation, or taxes and investment. (Earl et. al. 2017, 38)
    .
    (…) Secondly, neoclassical economics paints a picture of the economy as a stand-alone, abstract system that emerges naturally from the actions of individual agents. It remains largely silent on questions of how the modern economy came about, which institutions (accepted legal structures like property rights, as well as the social norms surrounding possession that go with them) and systems of governance are required for it to function. Neither is there a question of why agents behave as they do—agents simply take ‘optimal’ decisions which is not for the economist to question—or whether the economic goals embedded in its models are desirable. This results in a detached, technocratic vision of the economy. (Earl et. al. 2017, 38)
    .
    The view rests on the distinction economists make between ‘positive’ and ‘normative’ economics. They claim that much of economics is positive, which means it merely describes the world and is thus value free. Such a view was summarised by the writers of the popular book Freakonomics, Steven Levitt and Stephen Dubner, when they said that ‘the economic approach isn’t meant to describe the world as any of us might want it to be … but rather explain what it actually is’. On this logic, economic experts can take the objectives set by politicians through democratic mechanisms and work out the best way to achieve them within the boundaries of how their education taught them that the economy works. (Earl et. al. 2017, 38)
    .
    However, by taking certain goals as a given in their models and policy prescriptions, economists often make political decisions about how to define the economy. (….) [T]he emphasis on quantifiable aspects of economic well-being—what economists usually term ‘welfare’—leads to a neglect of other components of well-being. In principle economic agents can ‘optimise’ anything, but in practice the type of mathematics used by economists means that there is a focus on material sources of well-being such as income and consumption over less tangible issues such as human rights, job security and mental health. All of these things are clearly valued by humans, but neoclassical economics pushes the latter to one side. The choice of what models focus on represents an implicit judgement about what is important which is ultimately political in nature. (Earl et. al. 2017, 39-40)

  2. Gerald+Holtham
    June 2, 2022 at 5:16 pm

    Since when were economists philosopher kings telling society what its values should be and how to achieve them? Keynes compared them with dentists, hunble functionaries who tell you how to look after one small part of the person. You don’t go to a dentist to cure your cancer or save your soul. Economists study those relationships where there is a commercial element, usually where money is involved. . They are not great at theorising even about those, though they know more facts about them than other people. What qualifies them to look at anything else? A general study of society and its purpose requires contributions from many disciplines. It is bizarre that people critical of economics and economists should want to extend their purview to all aspects of society.
    Resource maintenance has been studied by economists to the extent that people pay for it and ignored when they don’t. They will have to pay more for it in future and it will naturally figure more and more in economic studies

    • yoshinorishiozawa
      June 2, 2022 at 9:29 pm

      Very important remark! Since when were economists philosopher kings telling society what its values should be and how to achieve them?

      Let us see what Neva Goodwin wrote:

      What are the appropriate goals for an economy? And, relatedly: What are the appropriate goals for the discipline of economics? Contextual economics emphasizes that most traditionally understood economic goals – efficiency, maximizing production or consumption, earning money – are best understood as intermediate goals, that is, means to other ends.

      Goodwin seems to be considering that an economy has a goal. There are a kind of category mistakes in it. Efficiency, maximizing production or consumption, earning money: those are goals of individual participants in an economy and not the goal or aim of the economy. An economy is the large complex system that comprises various kind of agents such as firms, consumers, investors, entrepreneurs, law enforcement agents, etc. It goes with various kind of interactions such as exchange, production, choice of product designs, choice of production techniques, investment, introduction of new institutions and laws, etc. The economics studies how this complex system works (or how and why it does not work conveniently).

      Rather than being a dentist, an economist should be a mechanics who knows how this complex system works (although he or she rarely succeeds to repair it).

      • Meta Capitalism
        June 17, 2022 at 6:20 pm

        Goodwin seems to be considering that an economy has a goal. There are a kind of category mistakes in it. Efficiency, maximizing production or consumption, earning money: those are goals of individual participants in an economy and not the goal or aim of the economy. (Shiozawa, RWER, Hiding Implicit Moral Judgements Behind Obscurantist Conceit, 6/2/2022)

        .
        There are many ways to obscure the truth when we hide implicit moral and ethical value judgements behind ideology. It matters not whether that ideology is justified by the obscurantism of religious fundamentalism, or the obscurantist conceit of a secular materialism that as embodied in the scientism that obscures through the pretense of “standing aside” or being above the moral, ethical, and policy questions of our times because they are engaged in a ” dispassionate search for timeless truth.” These are useless economists who frequently hide behind the pretense of being objective or value free while all along preaching their own moral and ethical values in their ideology that hides within it implicit value judgements about human nature, society, and the nature of science itself.

      • Meta Capitalism
        June 17, 2022 at 6:40 pm

        The answer, therefore, which the seventeenth century gave to the ancient question … “What is the world made of?” was that the world is a succession of instantaneous configurations of matter — or material, if you wish to include stuff more subtle than ordinary matter…. Thus the configurations determined there own changes, so that the circle of scientific thought was completely closed. This is the famous mechanistic theory of nature, which has reigned supreme ever since the seventeenth century. It is the orthodox creed of physical science…. There is an error; but it is merely the accidental error of mistaking the abstract for the concrete. It is an example of what I will call the ‘Fallacy of Misplaced Concreteness.’ This fallacy is the occasion of great confusion in philosophy. (Whitehead 1967: 50-51)

        (….) This conception of the universe is surely framed in terms of high abstractions, and the paradox only arises because we have mistaken our abstractions for concrete realities…. The seventeenth century had finally produced a scheme of scientific thought framed by mathematics, for the use of mathematics. The great characteristic of the mathematical mind is its capacity for dealing with abstractions; and for eliciting from them clear-cut demonstrative trains of reasoning, entirely satisfactory so long as it is those abstractions which you want to think about. The enormous success of the scientific abstractions, yielding on the one hand matter with its simple location in space and time, on the other hand mind, perceiving, suffering, reasoning, but not interfering, has foisted onto philosophy the task of accepting them as the most concrete rendering of fact. (Whitehead 1967: 54-55)

        Thereby, modern philosophy has been ruined. It has oscillated in a complex manner between three extremes. These are the dualists, who accept matter and mind as on an equal basis, and the two varieties of monists, those who put mind inside matter, and those who put matter inside mind. But this juggling with abstractions can never overcome the inherent confusion introduced by the ascription of misplaced concreteness to the scientific scheme of the seventeenth century. (Whitehead 1967: 55) (Whitehead, Alfred North. Science and the Modern World.: The Free Press; 1925; c1967 pp. 50-55.)

        .
        The only logical fallacy lies with Shiozawa’s mistaking the abstract for the concrete; the Fallacy of Misplaced Concreteness. Shiozawa’s unexamined implicit philosophical presuppositions blind him to the fact that there is no category error in Goodwin’s reasoning, but rather the error lies in Shiozawa’s obscurantist definition of science and economics which ultimately lie in his reification of reality; i.e., diverse economies, both local and global, that are the intentional creations of human beings in that they establish, based upon morals, ethics, and value judgements the social institutions and frameworks within which markets exist. The legal foundations are ultimately underpinned by moral, ethical, and philosophical assumptions. So to are our institutions. Shiozawa seeks to obscure all of this with the pretense of the abstraction of “complexity” and timeless search for the microfoundations of economics.

    • Meta Capitalism
      June 3, 2022 at 2:59 am

      Gerald’s meretricious pretense wants us to pretend that the field of economics and its Nobel Prize winning Oracles of Science have not played a significant role in shaping normative policy questions with life and death consequences. One can reasonably argue they shouldn’t have such influence over normative questions, and correct that normative questions require “contributions from many disciplines,” but a motivated misrepresentation if the evidence to pretend they haven’t in the past and don’t even now engage in such normative policy questions, frequently claiming to do so in the name of science, with consequences that determine who lives or dies. One needs to only look at Shiozawa’s frequent bogeyman of state intervention (i.e., antiquarian conservative parroting of Hayek) comments on RWER to see economic ideology (see Kwak on state intervention and economism) masquerading as science.

  3. yoshinorishiozawa
    June 4, 2022 at 2:31 pm

    The followings are two comments I made recently. Readers will easily see what I aim at.

    A comment to “Life expectancy vs. health expenditure” on May 24, 2022:

    May 27, 2022 at 2:22 am Reply
    This figure reminds me of a joke often told in 1980’s in Japan: If the health expenditure increases at the present rate, the total health expenditure will exceed the GNP.

    In my impression, the conspicuous lesson that this figure tells us must be how the lack of universal public health care insurance (the case of the USA) is expensive and ineffective. John and Charles seem to be missing the point. Accusing medical doctors and their greediness does not help to change the situation.

    A comment to “In economics value-neutrality is an illusion” on May, 18, 2022:

    yoshinorishiozawa
    May 18, 2022 at 8:50 pm Reply
    Let me repeat what I have written in a comment on Edward Fullbrook’s post on May 10, 2022.
    https://rwer.wordpress.com/2022/05/10/can-you-think-of-something-snappier-than-understanding-the-economy-a-learning-system/#comment-188364

    The most important thing for economics as science is to know correctly and rightly how the economy works. The main objective of economics, for all people, including young and old, novice and experienced, should be to understand how the economy works.

    In this forum I read many posts which seem to misunderstand that economics is a system of policies. Right and just economic policies are important and they may be the raison-d’être of economics. However, those radical policy fighters should know how the economy works. If he or she does not correctly understand how the economy works, he or she have a great chance to prescribe and recommend a wrong policy from good will. The economy is a large and complex system which is hard to understand and which requires accumulation of experience and high learning or deep study.

    The most conspicuous error of this kind in the 20th century was the recommendation of planned economy. Do not forget that many progressive people were caught in this trap.

    • Meta Capitalism
      June 13, 2022 at 6:57 am

      Goodwin seems to be considering that an economy has a goal. There are a kind of category mistakes in it. Efficiency, maximizing production or consumption, earning money: those are goals of individual participants in an economy and not the goal or aim of the economy. An economy is the large complex system. (Shiozawa, RWER, Obscurantist Conception of Economics, 6/2/2022)
      .
      In this forum I read many posts which seem to misunderstand that economics is a system of policies. Right and just economic policies are important and they may be the raison-d’être of economics. However, those radical policy fighters should know how the economy works. (Shiozawa, RWER, Shiozawa Intellectually Parroting Shiozawa, 6/4/222)

      The worldview of the obscurantist conception of economics is one rooted the conceit of the false premise of being engaged in dispassionate search for timeless truth standing aloof from policy questions and human needs.

      Economics is a policy discipline. It is engaged with the problems, large and small, of social organization and the general good.[94] As such it co-evolves with circumstances. It is historically contingent. The application of economic ideas to specific problems under specific circumstances may succeed or fail, and in the latter case, people with different ideas normally rise to prominence.
      .
      Capitalism is an economic system whose characteristics and problems have preoccupied economists since the 18th century. It is not the only such system; there were economists before capitalism going back to Aristotle. And there have been economists under competing systems: socialism and communism had economists of their own. Today it is common to speak of “varieties of capitalism” (Hall and Soskice, 2001) these too foster economists of differing views and perspectives. Economists and economic theories are a by-product of the social order that spawns them. (Fullbrook, Edward ; Morgan, Jamie. Post-Neoliberal Economics (pp. 128-129). World Economics Association Books. Kindle Edition. https://a.co/1c4bkAP )
      .
      The world to which economic policies are ultimately addressed is a complex system. Yet economists seeking to develop appropriate policies are necessarily guided by simplifications and heuristics. The question before the discipline – and the challenge of this volume – is to decide what sort of simplification is best suited to the task. In the spirit of C.S. Peirce and of modern science, this paper argues that appropriate generalizations, simplifications, heuristics and principles are to be derived from a study of the actual world. While these may deploy mathematical tools and draw on insights from the behavior of mathematical systems, the latter by themselves are inadequate, especially where they start from the dead dogmas of the neoclassical mainstream: ex nihilo nihil fit (Fullbrook, Edward ; Morgan, Jamie. Post-Neoliberal Economics (p. 129). World Economics Association Books. Kindle Edition. https://a.co/7RMmC5f )
      .
      The useful economist
      .
      The common characteristic of almost all of this work, excepting a few who preoccupied themselves with logical skirmishes with the neoclassical orthodoxy – e.g., the Cambridge-Cambridge controversies over the theory of capital (Robinson, 1956; Sraffa, 1960; Harcourt, 1972), or in microeconomics (Keen, 2011) – is that the protagonists were concerned, in the first place, with the practical questions of policy facing their governments or the international community of which they were a part. Whether reformist or revolutionary, their economics was (and still is) the elucidation of problems and the means of dealing with them. The purpose of economic reasoning is to inform and buttress political and social choices. It is not merely to create a simulation that kinda-sorta emulates some run of economic data.

      The useful economist is one who engages in the quest for solutions. A truly useful economist does so in an open-minded, informed way, aware of underlying principles but not hypnotized by them, and independent of financial gain and personal ambitions, whether political or for status and celebrity among economists. The behavior of bankers and speculators, the emissions of factories and transport networks, the withdrawal of critical resources from a finite reserve in the crust of the earth, the level and distribution of wages, profits and rents, fair and effective taxation, how to achieve the willing cooperation of free citizens in pursuit of the common good – all these are part of what a useful economist may study. The person who stands outside and aloof from such questions, who purports merely to “model the system” is, for most purposes, an idler, not so much a scientist as a hobbyist. (James K. Galbraith. In Fullbrook, Edward ; Morgan, Jamie. Post-Neoliberal Economics (pp. 135-136). World Economics Association Books. Kindle Edition. https://a.co/ihEOGE2 )

      Thus: Adam Smith’s objective was to promote the interests and welfare of the trading community of which he was part, by expounding the virtues of large markets and the division of labor. David Ricardo sought to shift the burden of taxation from profits to rent, and Henry George sought to shift them from wages to rent, in both cases so that taxes would fall on the idle and unproductive landholding classes. Karl Marx wrote Capital as a theoretical foundation for the expropriation of capitalists. John Maynard Keynes sought to save and reform Britain and the bourgeois democratic order by advancing a practical cure for mass unemployment. John Kenneth Galbraith (1958, 1967) turned the attention of his readers to the economic problems of abundance: public squalor, pollution, residual poverty, the cultural and aesthetic wasteland, and corporate power. Hyman Minsky described the phase transitions of financial instability – hedge, speculative, Ponzi – and the need for Big Government and a Big Central Bank as stabilizing devices. Milton Friedman, an engaged conservative, co-wrote a monetary history to support a case for monetary rules (Friedman and Schwartz, 1963). In brief, the notion that any significant economist of any century has stood aside from the policy questions of their time is purest pretense. (Fullbrook, Edward ; Morgan, Jamie. Post-Neoliberal Economics (pp. 136-137). World Economics Association Books. Kindle Edition. https://a.co/5DhNyx9 )

  4. Ken Zimmerman
    June 5, 2022 at 10:36 am

    If economic history is the history of wealth and its distribution; if political history is the history of governments and state formation; if military history is the history of armies and war; if environmental history is the history of human interactions with nature; cultural history is, quite simply, the history of stories, their origins, transmission, and significance in time.

    Understanding your post for America requires we look into American cultural history. American anthropologist Franz Boas gives an objective and useful view of culture, which he describes as a way of life or “the ways people inhabiting a common geographic area … do things… the ways they think and feel about things.” Around the same time, in Germany, social scientists were developing similar ideas of culture as “the totality of ideas in a society, popular, as well as scholarly, low as well as a high culture.” Since then, various philosophers, anthropologists, linguists, and sociologists, both in Europe and in America, have qualified the term with notions of “high culture,” “folk culture,” “mass culture,” and “popular culture,” the latter two born with the advent of mechanical reproduction in the 19th century. We also have references to national cultures or regional cultures as well as more recent uses of the word that refer to various forms of human difference, like gay culture, Jewish culture, black culture, and diasporic and transnational cultures.

    Historians of culture rely upon surviving evidence to capture the less tangible, less quantifiable aspects of the human past, the expression of meaning, values, symbols, ideas, knowledge, and ideology, as packaged within cultural texts that are then preserved within archives curated by experts in classified realms of knowledge. These disparate materials are the stuff of cultural history, the “texts” through which culture is created and transmitted. The stories embedded within these texts are often fictional, but not always. Maps and newspapers, for example, tell stories, even though they purport to present factual representations of the world, either through the science of cartography or through journalistic standards of truth and objectivity. Yet the human propensity for bias, often unconscious, shapes newspaper content, either through editorial decisions to cover certain stories and not others or through a reporter’s choice of words that carry implicit values and assumptions. Like newspapers, maps can lie and distort. Cartography, as it took shape during the period that marked the thrust of European expansion, often diminished the size of other continents relative to Europe, or it demarcated imagined boundaries between rival nations and empires.

    Cultural historians do not presume easy distinctions between fact and fiction; they see the potential for human bias in all cultural texts (including their own scholarship), and they consider the ways in which such bias subverts or supports the status quo. While they rely upon factual (archival) evidence to support their claims, they are less interested in facts and more focused on their interpretation by diverse social groups. It is a fact of American history, for example, that 14 to 15 million Africans and their descendants were enslaved between 1609 and 1865, but the radically different interpretations of that fact, as embodied within a wide variety of cultural texts, from Sojourner Truth’s Ain’t I a Woman? (1851) to Hollywood’s rendition of Gone With the Wind (1939) to the silhouette cutouts of the twenty-first-century artist Kara Walker, fuel the very debates that animate cultural history.

    With this in mind, let us consider aspects of US culture that may help us understand better recent happenings.

    In the young nation several notions and ideas about America and Americans were common that continue to animate Americans today.

    America is considered a restless society by most Americans in 1840. All observers agreed that Americans worked harder, ate faster, moved around more, and relaxed less than Europeans. In America, Tocqueville wrote, … a man builds a house in which to spend his old age, and he sells it before the roof is on; he plants a garden, and lets it just as the trees’ are coming into bearing; he brings a field into tillage, and leaves other men to gather the crops; he embraces a profession and gives it up; he settles in a place, which he soon afterwards leaves, to carry his changeable longings elsewhere. Nothing seemed finished in this raw republic. “Improvement,” both personal and collective, was a national preoccupation. Americans were confirmed tinkerers, whether dealing with machines or institutions. They were on the move, in transit, going from somewhere to somewhere. They were obsessed with speed and impatient of delay. The symbol of the young republic might have been the locomotive that never ceased to move, or the steamboat that moved people and goods up and down the American rivers-and that frequently blew up.

    Also, in 1840 most considered America a commercial society. Twenty-five years after the War of 1812 ended America was primarily a business society, materialistic and practical. By the 1820’s the ‘businessman’ already occupied a key position in American society, and the trading spirit permeated American life. Every American was, declared the editor of Andrew Bradford’s American Magazine, in one sense a trader. The physician traded his “benevolent care,” the lawyer his “ingenious tongue,” the clergyman “his prayers.” One principle motivated the commercial classes, another explained, that enabled them to enrich the country as well as themselves: Whether it be called avarice or the love of money, or the desire of gain, or the lust of wealth, or whether it be softened to the ear under the more guarded terms, prudence, natural affection, diligence in business, or the conscientious improvement of time and talents – it is still money-making which constitutes the great business of our people – it is the use of money which controls and regulates everything. But even the severest critics of America usually agreed that there was nothing mean spirited or sordid in this ‘heroic pursuit of wealth.’ The prosperous men (and today women) who followed the success code laid down by Benjamin Franklin (who by this time had become a patron saint) assumed the honors and the responsibilities that went with wealth. Public opinion condoned the drive to be rich, but it also regarded money as an “engine” of benevolence rather than as a good in itself. Many of the merchants, like the public spirited Abbott Lawrence of Boston, actively supported humanitarian and cultural enterprises and were “even munificent in their donations.” One difference today is less effort at munificence.

    As a complex society America was also taken as idealist. In spite of their insistence on the practical and the useful and their almost universal contempt for the theoretical and the visionary, Americans were susceptible to every kind of evangelical appeal. They responded emotionally to causes. Temperance, world peace, national politics, the Greek Revolution, Hungarian independence, public schools, financial or even dietary panaceas, often distracted the solid citizen from their humdrum activities. “Causes” released dammed-up emotions. This was the time of missionary crusades to the Pacific Islands and Africa and Asia, of religious revivals in frontier canebrakes, of abolitionist martyrs, of new religions and cults, of pseudo-science and strange delusions. Remarking on the “fanatical and almost wild spiritualism” found in America Tocqueville surmised that religious enthusiasm naturally expressed itself in a society “exclusively bent upon the pursuit of material objects.” A people who made a virtue of common sense, he believed, were likely to display emotional excess whenever they switched abruptly from material preoccupations to spiritual yearnings. Then they were prone to “burst the bonds of matter by which they are restrained” and “soar impetuously towards Heaven.” Between 1820 and 1850, the American people attempted a number of such flights. The latest flights today are labeled Q-anon and MAGA.

    In our government [declared an orator in 1840], we recognize only individuals, at least among whites; and in social life, the constant effort to do away with the castes produced by difference of fortune, education, and taste. The motto upon the flag of America should be ‘Every man for himself.’ Such is the spirit of our land, as seen in our institutions, in our literature, in our religious condition, in our political contests. Democracy meant (to many, if not to all) not only political but social equality. To paraphrase Tocqueville again, men pounced “upon equality as booty” and clung to it “as some precious treasure” they feared to lose. They shunned menial occupations, however well paid, and stoutly resisted any idea or action that might tend to decrease their social prestige. Yet even as patriots gave lip-service to equality, some Americans saw in the rush to the professions and the declining status of the laboring classes the evidences of a caste spirit. The increase in the number of factory workers, as the industrial revolution got under way, and the growth of an urban population weakened republican simplicity and intensified social distinctions. By the late 1830’s, a flexible yet well-defined social hierarchy had developed in the commercial Northeast and Northwest, as well as in the more class-conscious South.

    Distinctions in this socially fluid period depended pretty much on wealth. Although it is impossible to chart the fine distinctions of rank and reputability, successful business leaders and lawyers with good reason occupied the top rungs of society. Clergy, physicians, and teachers, too, if they were accepted and patronized by the influential, might claim similar status. But below this privileged group stood the bulk of the population, ranging from the moderately well-to-do down to the lowest-paid. Class lines, to be sure, were flexible. No insuperable barriers prevented the mechanic or the clerk or the farmer – referred to in the press as the “bone and sinew” of the republic – from rising into the elite. Each white citizen remained equal before the law, no class demanded special respect from another, and people of all degrees mingled indiscriminately in business. In spite of artificial distinctions, there was little servility among whites. Almost everyone had some stake in the society, and despite the fears of conservatives the American people embarked on no wildly revolutionary course. Events since the Revolution had only confirmed their faith in material prosperity, religion, private property, and the home. Wrapped up in their daily affairs, and schooled to accept the ideas and prejudices of the majority, the citizen usually abided by the “empty phantom of public opinion,” which was “strong enough to chill innovators and to keep them silent and at a respectful distance.”

    Although the pre-Civil War era has been popularly regarded as the heyday of rampant individualism, and although the triumphant and self-propelled hero was held up as a model by contemporary writers and too many historians, the period was also a time of cooperation or of “association.” The achievements of the single man have come to overshadow the accomplishments of the group in our folklore, but when Tocqueville visited America he was immensely impressed by the fact that “the most democratic country on the face of the earth … carried to the highest perfection the art of pursuing in common the object of their common desires.” For the American to pool resources, both material and intellectual, and to throw in their lot with the community in which they worked and lived, simply seemed the most sensible thing to do at the time. A society of “lone wolves” would not have survived. Businessmen joined together to organize banks and insurance companies, or to protect themselves against the competition of foreign merchants. Poor people in the cities sometimes pooled their money to buy up fuel supplies when prices were low. Citizens, hungry for culture, set up mutual improvement clubs, and immigrants formed aid organizations with their own countrymen. Charitable, reform, fraternal, and benefit organizations sprang up naturally in a democracy where there was no fixed ruling class with a tradition of social responsibility to supervise civic undertakings. Associations like these not only satisfied the need for fellowship, but they also gave the individual a sense of belonging to something.

    Although some people came together to make frank protests against selfish individualism, most Americans saw no contradiction between their personal ambitions and community welfare. As a newspaper correspondent pointed out in 1834: In a republic, the prosperity of the country is so intimately blended with that of each individual citizen … a citizen may pursue their individual benefit in connection with high consideration of their country’s good, without laying themselves under any imputation of a want of patriotism, or acting under purely selfish motives.

    Another defended associations by pointing out that “Many can accomplish what one cannot.” But they added this qualification: “We mean to receive as much as we give, and we ask others to join us on that principle.”

  5. yoshinorishiozawa
    June 6, 2022 at 6:56 am

    Dear Ken Zimmerman,

    is this the very place you wanted to post this long comment? I cannot find how it is related to Neva Goodwin’s article or any of comments here.

    • Ken Zimmerman
      June 12, 2022 at 4:41 am

      Just doing my bit to help economists get past economics and their usual backup, psychologism.

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