Homo Economicus vs. True Selfishness

Tibor R. Machan

For a year now much abuse has been heaped upon homo economicus or "economic man." The abuse got exacerbated when former Federal Reserve Bank Chief Alan Greenspan claimed that he had too much confidence in the idea. But what he said was very misleading despite the fact that he had been closely associated with Ayn Rand and her Objectivist philosophy, the ethical portion of which considers selfish conduct morally virtuous.

Greenspan's reference to "self-interest" is radically different from Ayn Rand's. The latter means by self-interest "whatever will enhance the objective well being of an agent." It calls to mind the exchange between Crito and Socrates in one of Plato's dialogues, the Phaedo, where Crito asks, "When you are gone, Socrates, how can we best act to please you?" and Socrates replies: "Just follow my old recipe, my friend: do yourselves concern yourselves with your own true self-interest; then you will oblige me, and mine and yourself too."

This is pretty much the substance of Ayn Rand's ethics of Objectivism: Do what in fact advances your best interest as the individual human being you are! In contrast, Greenspan was talking about the contemporary idea prominent in neo-classical economics, namely, homo economicus, according to which every free person always acts in his or her interest which is simply whatever anyone does if one is free to choose for oneself. The former idea of self-interest or selfishness requires of people to adhere to strict standards of conduct while the latter requires no standards for them to follow only to choose to do whatever they want to do.

Once again it is evident that the enemies of human liberty are desperately trying to stick it to the free market system by claiming that the empty homo economicus idea underlies it. In fact that idea underlies nearly all economics in our time, including that of John Maynard Keynes who is paraded around now as the great sage whose advices we did not follow and for which we are now paying with the current economic fiasco. Both Keyneseans and non-Keyneseans accept the "everyone is always selfish" view of market agents, the one Greenspan claims misled him.

That idea is in point of fact nearly useless since what it produces is vacuous claims, such as "Everyone will do whatever he or she will do if left alone, unregulated by the government." This is a wholly uninformative claim and that is, in fact, its main merit as far as many economist claim. Economists tend to stay away from morally or otherwise evaluating how people act in the free market. At least as economists they have no concern about that--as fathers, friends, citizens and so forth they may very well make such judgments but as economists all they care about is to explain what happens in markets. And they believe that assuming the truth of their idea of self-interested conduct, they can provide such explanations. This very, very broad "explanation" amounts, in essence, to the claim, "People do what they do in the free market because that is what they want to do."

The proper defense of the free market system is far more substantial than this. It states that if people aren't pushed around by governments and criminals, they will most likely do their best at figuring out what they should do, including how to earn and spend their resources. What the "best" is, however, cannot be told in general terms. But it can be told in particular cases, if one knows the agent well. And free men and women tend, in the main, to figure out what is best for them to do and pursue, objectively.

Whether the above is true is an important matter to determine but it isn't what Greenspan and other economists advance in defense of the free market place. (I think they should but that's another issue entirely.) Greenspan and most other prominent economists who favor markets tend to say simply that in free markets people are able to seek whatever they want. That is all they claim for freedom. But there is far more to it than this.

Free Markets vs. Pope Benedict XVI

Tibor R. Machan

It is of course the time now, with everyone pretty confused about just how much free market capitalism had to do with the economic mess for the enemies of economic liberty to rise up and seize the day! That way they may get some mileage out of it all for their ongoing mission, namely, to prepare people throughout the society for being ruled, managed, regimented, regulated by, you guessed it, them!
In his recent book, Caritas in Veritate: On Integral Human Develpment in Charity and Truth (Ignatius Press, 2009), we are implored by the Pope to love all instead of trade, as if this really were possible among billions of people. Such dreaming has done terrible damage to humanity for centuries, so why should the current Pope not buy into it? The kind of Christian love the Pope is promoting seems to him to be anathema to free markets. His reason? That the pursuit of profit precludes love among human beings.
As one reviewer of the Pope's book, Professor David Nirenberg of the University of Chicago's Committee of Social Thought, points out in The New Republic (9/23/09)--in an attempt to simplify the book's message, I assume--"In pursuit of profit, every individual attempts to extract the highest possible price, treating fellow citizens not as friends but as 'foemen,' thereby destroying the love of fellow citizens that is necessary for the common good of the polity." The reviewer brings in Socrates/Plato in support of his and the Pope's point against self-interest.
But in fact while Plato warned against crude self-interest, he also wrote, "Crito, 'When you are gone, Socrates, how can we best act to please you?' Socrates: 'Just follow my old recipe, my friend: do yourselves concern yourselves with your own true self-interest; then you will oblige me, and mine and yourself too.'" What the Pope and the reviewer of his book miss is that love cannot be spread thin across the world, not even across the market place. Trade does respect individual sovereignty and thus shows a certain sensible measure of love for others. But the deeper love that the Pope and so many others, among them most notably Karl Marx, demand of us all (in opposition to self-love and a measured respect we show other people in the course of trade) is impossible except among intimates--family, friends, maybe some comrades in arms and colleagues. That kind of love requires detailed knowledge of others and such knowledge is simply unavailable to us except about very few other people (not all of whom, moreover, will deserve our love).
The dreamers, like the Pope and his allies, would destroy genuine, realistically possible love of some few people for the sake of the shallow kind professed by politicians and celebrities. Interestingly enough, Socrates and Plato knew this when they sketched the ideal city in which love rules as against trade by quite arguably making it a utopia, something that cannot actually exist. The ideal city, like the ideal woman on the covers of Vogue or Elle, is a model imagined not a blueprint to be implemented. Yes it needs to be kept in mind but only a fool or fanatic would attempt to imitate it.
Socrates and Plato, when closely read, are clearly warning us against political idealism, against trying to transform the polity--or city or country--into an intimate group that's governed by principles of loving friendship. Trade, contrary to what is intimated by these idealists, by no means precludes genuine love among people. It doesn't insists, admittedly, that all who trade ought to love one another. The trade relationship is sensibly limited in scope--when you go shopping you need not get involved in the butcher's family life, the car dealers hobbies, or the dentist's personal problems. It is friends and relatives who do that, not those who populate the market place for the limited purpose of striking a good deal. And that purpose not only does not preclude pursuing friendship and other intimacies elsewhere but makes that pursuit economically possible, affordable, if you will.
As that saying I like so much states, "The perfect is the enemy of the good." Markets are not the highest of human institutions but they are excellent for the purpose for which most of us use them.

The Expanding Public Realm

Tibor R. Machan

Virtually every time someone promotes increasing the scope of government's involvement in our lives, the excuse is that the problem being tackled is a social or public type, not one of individuals. In some cases this is credible, as when a contagious disease surfaces. But in the cases now being dealt with by means of government intervention, such as smoking and even helping people to be happy, this is a phony excuse serving primarily to expand the reach of government into the life of everyone.

Both the Left and the Right resort to the tactic. When the Right advocates drug prohibition, the story goes that drug use spreads among people and is not the problem of individuals, nor can it be dealt with on an individual basis. Nearly all the victimless crimes, from prostitution to drug abuse, have been defended on the grounds that the conduct they involve spreads around the community and must be stopped in the name of protecting the community.

Of course, this is a plausible enough line in support of such laws because on and off people clearly take up vices because their neighbors engage in them. Bad conduct, as well as good, is often copied. It can be said of vices that they spread. But this is arguably a metaphor, not literally true. Choices are still the main determinants when people take up harmful drug use. The choices may not involve deliberation but they do involve intention, which is entirely sufficient for holding people responsible for what they do. (Just think of how criminal negligence rests on the presence of intention!)

The Left, in turn, invokes the collectivist ploy by claiming that other vices, such as greed and racism are fostered by way of peer pressure. Theorists of human conduct--they like to refer to it as behavior because that does not presuppose choice on the part of the agent--from both the Left and the Right effectively deny human volition when it comes to the kind of conduct they disapprove of and urge governments to ban. Since private conduct tends to be something both Left and Right accept as not government's business to meddle in, this theory of how the favorite vice spreads across the society is widely invoked by each.

Consider, also, how New York politicians and bureaucrats are now working to make smoking illegal even in wide open public parks, claiming that the smoke invades non-smokers' lungs even there. Never mind that non-smokers or anyone who wants to escape the smoke are very likely able to find a place free of it. But because sometimes the smoke travels to people who would rather avoid it, it is now a target for prohibition. It all becomes a matter of public policy which is the preferred way to organize society as these public administrators see it.

In a recent issue of The Sunday New York Times Magazine one article details how various benefits to people, such as being of a cheerful, happy disposition, can be enhanced by a process of osmosis, not by means of personal achievement and effort. Once gain, the idea is being reinforced that individual conduct is negligible in the shaping of one's life. Instead what works best is for groups to follow various practices. And from this it is but a skip and jump to the idea that such practices need to be imposed on people--if you want folks to be happy in their lives, make them get together with neighbors who enjoy themselves. That way, instead of by means of good personal judgment and conduct, happiness is spread around in the community. And how does that get accomplished? Well, naturally, by wise leadership, by instituting the Nanny State. (Books advocating "making people moral" and "making them just" have been produced over the decades by various academics--e.g., by Princeton University Professor Robert P. George and Notre Dame Professor James P. Sterba--who champion this kind of engineered society.)

As I noted earlier, of course osmosis can give support to people's well being and even happiness but could that be sufficient? And would appointing various wise leaders to engineer such an outcome not rob citizens of their sovereignty, their self-government? Of course it would but in the name of such projected consequences, why should one object?

More sensible is the idea that happiness, health and other good things come one's way by means of sound judgment and conduct and the role of osmosis is derivative, not primary. But this idea does not support the kind of petty tyrannies both the Left and the Right believe in.

Inventing Animal "Rights"

Tibor R. Machan

Among the truly bad guys in the Obama administration none can outdo Professor Cass Sunstein, now of Harvard Law School but earlier a colleague of Adjunct Professor Barack Obama at the University of Chicago School of Law. The really bad thing about Professor Sunstein is that he is championing one of the most reactionary and corrupt ideas in legal theory. This is that human rights are mere inventions of governments.

He and his co-author Stephen Holmes have argued, in The Cost of Rights, Why Liberty Depends on Taxes (1999), that, as they put it, “individual rights and freedoms depend fundamentally on vigorous state action” and “statelessness means rightlessness.” In other words, the idea here is exactly what the American Revolution was meant to refute, namely, that the government--king, czar, Caesar, or majority--grants citizens rights instead of securing the rights they have by virtue of their human nature. As Charter 08 of the Chinese (!) dissidents put it, "Human rights are not bestowed by a state. Every person is born with inherent rights to dignity and freedom. The government exists for the protection of the human rights of its citizens. The exercise of state power must be authorized by the people. The succession of political disasters in China’s recent history is a direct consequence of the ruling regime’s disregard for human rights." But Professor Sunstein rejects this and as a reward President Obama has appointed him, suitably, as the super administrator of all of the federal government's regulations.

Among the results of this development is that Professor Sunstein, who is apparently very fond of various animals, wants the government to grant animals rights, just the sort human beings have. And why not? After all, if rights depend on governments granting them, then whoever is the government is empowered to invent rights so long as the politicians and regulators will go along with this. There is really nothing very surprising about the idea since despite what the American Founders argued--having learned it from the English philosopher John Locke (who developed the theory of natural human rights)--American politicians, no less so than others around the globe, have been inventing "rights" all over the place.

Just now of course the most consequential of these inventions is the "right" to health care, health insurance, etc. The minimum wage was such a "right" invented earlier, as was the right to social security and to unemployment compensation. Indeed, this populist political idea has been around for quite a while and the U. S. Supreme Court has been declaring it constitutional despite the fact that it clearly is not. The entire edifice of entitlements that the American welfare state has concocted rests on this notion, that governments can simply cook up human rights and there need be no basis for them apart from that.

Of course, the cost of it all is enormous, which is one reason Professor Sunstein and his co-author were so eager to make the case for heavy taxation while denying that rights come from our human nature. Those rights, spoken of in the Declaration of Independence, are essentially negative--they spell out our sphere of liberty, not any entitlement to other people's labor and resources. That idea returns us to the time when people in a country were deemed to be subjects of the will of the monarch, essentially serfs, who can be forced to perform involuntary servitude never mind what they want to do with their lives.

And now come animal "rights," a phony notion of there ever was one. Animals are not moral agents and cannot have rights like human beings. One may have the responsibility to be humane to animals but not because of animal rights but because it would be cruel and mean to treat them badly without good reason. But for such reasons as medical research or feeding the hungry, animals may be used by people, just as may trees or fruits.

But if you don't like these niceties, sign up for the invented rights of the Obama team and see your freedom destroyed as a result in the name of what animals need from you, what they are entitled to.