It wasn’t clear at the time, but a couple of weeks ago I gave what is likely to be my last public talk for a while, reproduced below, at an event called Human Nature, organised by the Experimental Thought Co. Already it seems an age away, but even then our conversations were engulfed in apocalyptic talk variously of floods, Brexit, the climate emergency and, yes, the steadily spreading novel coronavirus, Covid-19.
My role was to talk about the story that mainstream economics has told about human nature. The tone was set in the early 1980s by Margaret Thatcher’s denial of society, and her revealing comment that, “Economics are the method: the object is to change the heart and soul.” Her preferred method of neoliberal economics, suggested that significantly we are, at heart, selfish, competitive and individualistic, and to ask if there was a different tale to tell. It was titled ‘The death of an economic myth’, which hints at the direction of argument.
There’s a niche in the economics literature that explores the question: does studying economics make you a bad person?
Stress and crises reveal a lot about a society. Whilst acknowledging some cases of panic buying triggered by Covid-19 in the UK (not repeated in other countries suggesting it is as much to do with poor government communication as anything else), the outbreaks of neighbourliness, mutual support and ‘random kindness’, feel far more significant. Few too will have missed the irony, that in the UK a government which only months ago won an election in which it derided the radical policies of its Labour opposition, has been compelled to ditch ideology and effectively nationalise most of the economy. Here is the talk which explores why human nature is more than the cipher of folk, mainstream economic theory, and why it gets nature and humans wrong. It is developed from a section in the book Cancel the Apocalypse – the New Path to Prosperity
The death of an economic myth
Not long ago, there was a perfume you could buy for £300 called Apocalypse. It was made from everything mentioned in the Book of Revelation that carries a smell. It’s reported chemical scent was of ‘bile and dread.’[i]
Now there’s clearly a lot going on in that department at the moment – but I want to explore the bad smell coming off mainstream economics – and how it rubs off on people – or perhaps rather how we get our noses rubbed in it.
There’s a niche in the economics literature that explores the question: does studying economics make you a bad person?[ii]
Professor Robert H. Frank was one of its early exponents, based at Cornell University in Ithaca, New York. He was struck by the insistence in economics on the essential selfishness of human nature – like the economist Gordon Tullock’s assertion that ‘the average human being is about 95 per cent selfish, in the narrow sense of the term’.[iii] Even the casual insertion of a baseless number to fix humanity’s essential character is a great example of the economists’ trick of ‘false precision’. Put a figure on it and people are more likely to believe it.
Frank and his colleagues chose to investigate whether the ‘self-interest’ model of the economy was a reflection of how people in essence were, or whether it was an artificially constructed model that attracted an unrepresentative, more selfish sample of society to its cause, and was actually making people selfish. His troubling conclusion was that the appeal, study and internalisation of neoliberal economic models did indeed select an unrepresentative, more selfish slice of society.
Nature – often – is riddled with strategies that contradict the market myth that life is a brutal, individual struggle of the survival of the fittest. There are evolutionary victories for symbiosis, collaboration, co-evolution, and then there is ‘reason’
A study at the dawn of the Reagan–Thatcher economic revolution noted that economics undergraduates were more likely to behave selfishly, and ‘free-ride’ off the more public-spirited behaviour of others. More recently, Yoram Bauman, an environmental economist at the University of Washington, looked at the impact of economics teaching on students majoring in other subjects. What he was able to show was that those who began as part of the more generous majority, not full-time students of economics, actually became more selfish as a result of exposure to studying the ‘dismal science’.
‘Dismal science’ is an old term with a complex history – it was coined by Thomas Carlyle – and commonly ascribed to his denunciation of Malthusian ideas about the inevitable misery and shortages that would result from population expansion. The truth is different, because Carlyle was a racist who believed that slavery was justified by there being subhuman races to whom equal rights did not apply. Early economics conversely did not provide support to the formal practice of slavery, because at some levels it made claims about an essential human nature which we all shared. Of course, a whole set of different arguments and evidence can point to the creation of de facto slavery in the reality of bonded labour and hopelessly unequal contracts as a result of the practice of market economics. As an early fellow traveller of neoliberal economics who became disillusioned – Karl Popper – author of the Open Society and its Enemies – came to believe, neo-liberalism wasn’t liberal at all. He concluded that “proponents of complete freedom are in actuality, whatever their intentions, enemies of freedom”. That this notion of freedom paradoxically would be, “not only self-destructive but bound to produce its opposite, for if all restraints were removed there would be nothing whatever to stop the strong enslaving the weak”.
But according to Dr Marc Arvan, an assistant professor of philosophy at the University of Tampa in the US, even calling economics a ‘dismal science’ could be an understatement. He conducted an experiment looking into the relationship between ‘moral judgements and three “dark” personality traits: Machiavellianism (i.e. tendencies to deceit), narcissism (over-inflated sense of self-worth), and psychopathy (lack of guilt and remorse)’.
To do so he looked at people’s beliefs concerning several issues including ‘economic libertarianism’ – the notion that the role of the state in relation to the market should be minimal, only intervening to prevent or punish the breaking of the law.
This is the ideal habitat in which economic man (the gender bias remains real) is supposed to prosper. But Arvan found that this view ‘correlated significantly . . . with all three dark personality traits.’ In other words, the projection of an economic system built on foundations of self-interest, individualism and self-regulation, which is supposed to be good for everyone, in fact describes the habitat for a dark triad of personality dysfunctions including psychopathy, Machiavellianism and narcissism.
The materialism relied on by neo-liberal markets displays similarly self-reinforcing and negative dynamics.
Merely being exposed to images of fancy consumer goods triggers materialistic concerns, which make us feel worse, and behave more anti-socially
It’s been shown in countless studies, summarised by American academic Prof Tim Kasser that holding more materialistic values is an indicator for having relatively lower levels of well-being.
Classic studies show that merely being exposed to images of fancy consumer goods triggers materialistic concerns, which make us feel worse, and behave more anti-socially.[iv]
Children, for example, exposed to advertising were seen to be less likely to interact socially. Other studies show how by simply referring to people as consumers rather than, say, citizens, triggers more competitive and selfish behaviour. When you can be exposed to anything from 500 – 3000 daily ‘cues’ to think in this way from exposure to media and advertising, it can have a huge cumulative effect – not just on our own well-being – but on others through how we behave toward them.[v]
Psychology Professor, Dacher Keltner, points to research that shows how image-conscious people who drive the highest social status cars, also exhibit the most anti-social behaviour on the roads.[vi]
To combat what they called the visual pollution of excessive advertising, in 2007 Brazil’s biggest city, São Paulo, led by the city’s conservative mayor, Gilberto Kassab[vii] introduced The Clean City Law. The result was a near-total ban effecting billboards, digital signs and advertising on buses. Several US states strongly control public advertising too, and in Paris, rules reduce advertising on the city’s streets by 30 per cent and cap the size of hoardings.[viii] No adverts are allowed within 50 metres of school gates. From Chennai in India to Grenoble in France similar bans have been introduced.
There’s been a deluge of findings from evolutionary biology, anthropology, psychology, ecology and neuroscience that contradict the reduction of humanity to competitive vessels of short-term, self-interested individualism
Yet, the fact that we might not fully be in the driving seat of our own lives can be felt as an affront. It can feel like a weakness, an insult to our sense of ourselves – ‘Of course I am not controlled by the world around me’. But not only is the evidence overwhelming that our choices are hugely influenced by cues in the environment and the behaviour of others – it seems that much of the time ‘rational economic man’ is often not making conscious rational choices at all in the way supposed by mainstream economics.
There is a debate about the degree to which this applies, but research in neuroscience[ix] indicates that many of our choices are made during pre-conscious brain activity – a mixture of highly subjective, conditioned and instinctive processes. If anything the brain can be that kind of friend who, whatever you do and for whatever reason, pats you on the back after the event and says ‘good call’ you took charge and did the right thing.
The doctrine of neoliberalism, it seems, pushes you towards becoming the kind of human being that it relies on. The study of this branch economics seems to behave like an intellectual version of Invasion of the Body Snatchers, turning the host mind to its own preset purpose. It is a kind of reality-by-assertion.
In fact, there has been a deluge of findings recently from evolutionary biology, anthropology, psychology, ecology and neuroscience that contradict the reduction of humanity to competitive vessels of short-term, self-interested individualism.
Neo-conservatives draw invisibly on early misinterpretations of Darwin’s theories and their application to the world of business.
From our primal beginnings, biology reveals that the emergence on Earth of life itself owes as much to processes of symbiosis and association as to competition.[x] This appears to be the case with early-evolving bacteria, engaged in a kind of giant social networking exercise in which micro-biological forms evolved the tricks that still lie at the heart of life.
Nature – often – is riddled with strategies that contradict the market myth that life is a brutal individual struggle of the survival of the fittest. There are evolutionary victories for symbiosis, for example in the bacteria that fix nitrogen in plant roots and which consequently makes life continuingly possible. And, for collaboration, as was the case with the primeval slime mould which got life going. There is also the co-evolution that gave us the pollinating honey bee responsible for those one in three mouthfuls of the food we eat. And then there is ‘reason’ itself, another advantage for problem-solving animals like elephants, dogs, cats, rats, sperm whales and, apparently, sometimes, also humans.
In a world witnessing the unhealthy concentration of economic power and cultural homogenisation, optimal diversity too is a key condition, nature’s insurance policy against disaster.
Yet we regulate the economy in favour of one-sided, competitive individualism and, ironically, in the process, through the failure to control emerging monopoly and oligopoly, allow the spread of monocultures and clone towns that are increasingly vulnerable to a wide range of external shocks.
Interestingly companies with more progressive governance structures, cooperatives like John Lewis and mutuals like the Nationwide, proved more resilient and successful after the financial crisis.
In fact, what seems to make humanity fairly special is our prodigious and skilful capacity for empathy and cooperation. In this broader view we are in fact ‘super-co-operators’ who are living in an ‘age of empathy’.
Professor of biology and maths at Harvard University, Martin Nowak, notes that contrary to the pseudo-Darwinian caricature of animals caught in a death struggle, mechanisms of cooperation including direct and indirect reciprocity are fundamental. In fact, from David Hume to Darwin himself, and Kropotkin writing in Mutual Aid, the power of cooperation as opposed to competition appears as the forgotten story of ourselves.
Science now shares a lot with the truths stumbled on by the world’s great religions that value unselfish action. Nowak writes that, ‘they have come to the conclusion that love, hope and forgiveness are essential components of what is needed to solve the biggest problems.’ And that he is ‘struck – perhaps awestruck – by the extent to which humans cooperate . . . no animal species can draw on the mechanisms (of cooperation) to the same extent as seen in human society’.
Empathy is the antithesis of market-sociopathy and the biologist and primatologist, Frans de Waal, sees this as the great, under-recognised human quality. The fact that we are ‘hard-wired’ for altruism, the expression of our ability for empathy, has kept society as a whole from falling apart. ‘Feeling’ for each other, in such a way that it shapes mutually supportive, rather than competitive behaviour, is designed-in.
So, to flourish, we need an economics that plays to these extraordinary strengths, rather than contradicting and suppressing them.
De Waal sees amusing contradictions in the highly selective co-option by mainstream economics of evolutionary theory. Just as a rejection of real Darwinism, or refusal to endorse it, washes over the religious, conservative branch of the Republican movement, the very same political persuasion promotes a Social Darwinism that depicts ‘life as a struggle in which those who make it shouldn’t be dragged down by those who don’t’.
Hence, neo-conservatives draw invisibly on early misinterpretations of Darwin’s theories and their application to the world of business. It was the philosopher Herbert Spencer, for example, in the nineteenth century who coined the phrase ‘survival of the fittest’. He thought equality was a bad idea, and that it was counterproductive ‘for the “fit” to feel any obligation toward the “unfit”’.
Yet, quite the opposite is true in practice. Not only is inequality associated with economic disasters – it tends to peak before collapse – it also raises costs to society as a whole across the board – as we see in the work of Kate Pickett and Richard Wilkinson. Equality, on the other hand, is very productive indeed. Calling on our inborn capacity for empathy, writes De Waal, ‘can only be to any society’s advantage’.
I think it is time for a paradigm shift in which the colossally erroneous notion of ‘economic man’ is removed from the centre of our theoretical solar system, much as the Earth once had to be replaced by the Sun to correct a similarly mistaken belief.
It turns out that one of the greatest barriers to that shift might just be our reluctance to believe in its possibility – a reluctance that itself appears to be based on misunderstandings about how the world actually is, and wrongly second guessing what other people are truly like.
To begin with, New Scientist magazine described how:[xi]
“Many theories … begin with the idea that inequality is somehow a beneficial cultural trait that imparts efficiencies, motivates innovation and increases the likelihood of survival.
(nb: I suspect that these are ideas held to some degree by at least some of our current Old Etonian ruling elite)
But … rather than imparting advantages to the group, unequal access to resources is inherently destabilising and greatly raises the chance of group extinction.”
The behavioural economist, Dan Ariely, conducted a survey in the US based on a classic thought experiment by the political philosopher John Rawls. First people were asked to estimate how wealth was actually distributed in the country. Respondents were broken down according to voter persuasion, Republicans and Democrats, men and women, and high-, medium- and low-paid. All groups, with very little variation among them, substantially overestimated how equal their society actually was.
They were then told to imagine that they are going to be randomly inserted into an income group in the society – it could be richest, poorest or somewhere in the middle – and asked what they think would be the ideal distribution of wealth in that society. Of course, this isn’t just hypothetical, random insertion to an income group is precisely what happens to us when we are born. In the answer to this question a fascinating thing happens – all the groups, with only minor variation, opted for a very substantially more equal distribution of wealth.[xii]
Perceptions and misperceptions are fundamental to believing in the possibility of change. In a groundbreaking – and now widely quoted – survey by the Common Cause foundation people were asked to talk about their own values and what they thought were the values of others. Regardless of age, geography, wealth and voting behaviour – people attached more importance to compassionate values – embracing justice, tolerance and responsibility – than to wealth, image and ambition – so called selfish values. Seventy-four percent of us prioritise in this way. But – when asked about the values we think others hold – 77 percent of us think others hold dominantly selfish values.
From the point of view of how human nature smells – we seem to think the odour from each other is worse than it is – which might partly explain the lack of political enthusiasm for more shared, common, collective solutions to our problems.
We want and need more than the impoverishing view of human nature offered to us by the economic mainstream – and I believe we ARE more than this. There are sweeter scents rising all around us…
So my message on this embattled morning – is that if we can wake up and smell the human orange blossom – many more and greater things become possible.
[ii] Tim Harford, ‘Selfish, dishonest, mean . . . who are you calling an economist?’, Financial Times, 13 February 2010.
[iii] Frank, Robert H., Gilovich, T., Regan, D. T. (1993), ‘Does Studying Economics Inhibit Cooperation?’, Journal of Economic Perspectives 7:2.
[iv] Bauer MA1, Wilkie JE, Kim JK, Bodenhausen GV., Cuing Consumerism: Situational Materialism Undermines Personal and Social Well-Being Psychological Science May 2012 23: 517-523, first published on March 16, 2012
[v] Bauer MA1, Wilkie JE, Kim JK, Bodenhausen GV; Cuing consumerism: situational materialism undermines personal and social well-being. Psychol Sci. 2012 May 1;23(5):517-23. doi: 10.1177/0956797611429579. Epub 2012 Mar 16.
[vii] São Paulo: A City Without Ads (3 August 2007) Adbusters.org
[viii] ‘Paris to cut amount of advertising on streets by 30%’, Guardian, 22 June 2011.
[x] Lynn Margulis and Dorian Sagan (1986, revised 1997), Microcosmos: Four Billion Years of Microbial Evolution (Berkeley CA, University of California Press).
[xi] Deborah Rogers (2012), ‘Inequality: Why egalitarian societies died out’, New Scientist, issue 2875. http://www.newscientist.com/article/dn22071-inequality-why-egalitarian-societies-died-out.html
[xii] Norton, M. and Ariely, D. (2011), ‘Building a Better America – One Wealth Quintile at a Time’, Perspectives on Psychological Science 2011 6: 9.