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The Myth of ‘Homo Economicus’

Human beings are naturally cooperative. Recent research has discovered ‘genetic evidence’ supporting the ‘self-domestication’ hypothesis. According to Science Daily (15 February), ‘among the driving forces of human evolution, humans selected their companions depending on who had a more pro-social behaviour.’

This makes sense. Contrary to Thomas Hobbes’ depiction of early human existence as ‘solitary, poor, nasty, brutish and short’, human beings have always lived in social groups and have prospered by doing so. Indeed, language itself presupposes society; understanding each other presupposes the shared meanings we attach to our vocalisations. Hobbes’ mythical pre-social individual could hardly have forged a ‘social contract’ with others, vesting power in a single authority (according to him) to maintain the peace and establish a human society, had language not existed in the first place.

To live in a group entails not just benefits but also obligations – that is, the ‘moral duty’ to cooperate. This is why ‘free riders’ tend to be universally frowned upon, even despised. Of course, things are not always so straightforward. In a class-divided society like capitalism the exploitative function of a free-riding capitalist class is masked and mediated by a power structure that effectively inverts social reality. Workers are made to appear dependent upon the capitalists when, actually, the very opposite is the case.

Nevertheless, it remains broadly true that living in a group means your own wellbeing depends not just on what you get from the group but on what the group gets from you by way of what you contribute to its wellbeing. The more motivated individuals are to contribute to the group, the more robust the group and the more likely it is to survive and flourish. There is increasing recognition these days that evolution is a ‘multi-level selection process.’ It operates not just at the level of individuals but at the level of the group as well. A group of rampant egoists is more likely to go extinct than survive.

‘Morality’ being based on a concern for the wellbeing of others, is both the outcome and prerequisite of social existence. It implies altruism though it is not quite the same thing as altruism. The latter term was coined by the French philosopher, Auguste Comte, as an antonym for ‘egoism’. It derives from the Latin word alteri, meaning ‘other people’. An altruistic outlook is one that regards other people as having value in themselves and not just as a means to your own ends (egoism). Morality builds on this by being prescriptive in how we relate to them.

To clarify – saying a disposition towards moral thinking is fundamental to human society does not make this or that moral belief ‘natural’. Particular moral belief systems are the products of particular historical circumstances which can and do change. However, our capacity to think and behave ‘morally’ is part of what makes us human beings and, indeed, according to ethologists like Frans de Waal it is found to some extent also in other animals like the great apes. Social groups need norms to regulate the behaviour of their members.

Underlying this ‘natural’ capacity to see the world in moral terms is an ability to empathise with others. The discovery of ‘mirror neurons’ by Giacomo Rizzolati and his colleagues in the 1990s suggests this is something we may have acquired in our evolution as a species. A mirror neuron is a specialised kind of brain cell located in the premotor cortex which ‘fires’ in response to the observed actions of other individuals and causes the subject to involuntarily mimic or ‘mirror’ these actions to some extent. An example would be the twitching and tensing movements we make when watching, say, two boxers fighting in a ring. We put ourselves in their shoes, look at the world from their perspective.

Having the ability to empathise does not mean we necessarily always will. Much depends on our social environment and the particular social influences to which we have been subjected. In an article, intriguingly entitled ‘Capitalism Short Circuits Our Moral Hard-Wiring’, Gary Olson argues that capitalism has contrived to engender a ‘carefully manufactured narrative of market capitalist identity’, and a self-serving capitalist construct of human nature as fundamentally egoistic, via a relentless barrage of ‘elite propaganda’ that seeks to override what our mirror neuron system is telling us (Common Dreams, December 18, 2008). Nevertheless, suggests Olson, the ‘received wisdom about our socioeconomic system’, will always struggle to maintain its grip on our thinking since it is fundamentally at odds with what makes us human – our sociality and willingness to help each other.

Egoism or altruism?

However, we should be wary of pushing this argument too far. In every conceivable kind of society there is always going to be a mixture of motives driving individuals. We are not purely altruistic any more than we are purely egoistic.

What is distinctive about capitalism is the way in which these two qualities have been separated out and counterposed to each other by being consigned to, and compartmentalised within, quite different spheres of activity. Egoistic values pertain to the world of business, altruism to the world of charitable giving, the rearing of children and so on.

In a sense, capitalism needs to maintain this dichotomy. What business could survive in a dog-eat-dog world of capitalist competition if it looked upon the needs of its workforce as a charitable concern? On the contrary, it must regard the wages that it pays its workforce as a cost to be ruthlessly minimised. There is no room for sentiment in such a world.

That does not mean businesses will not strive to foster the impression of having the interests of their workforce at heart. Of course they will. Commanding the loyalty, even the affection, of their workforce will tend to raise productivity. However, such sentiments are rooted in the shifting sands of class struggle. By their very nature they are liable to be transient, superficial and, in the end, two-faced.

This superficial crossover of sentiments from the domain of altruism to the domain of egoism is evident too in the case of ‘ethical investment’. The tokenistic nature of such investment, as critics have noted, may be a good selling point but has often served as a fig leaf to conceal some pretty dubious practices or questionable products. To the extent that ethical investment does indeed live up to its name, the result is a generally poorer return on one’s investment. Trying to run together altruistic and egoistic values in a capitalist business is like trying to mix oil and water. As one commentator noted with regard to the Coca-Cola Company:

‘Investing in Coke because they’re actively trying to make a difference is sort of confusing two separate goals. The goal of investing is to make money (for yourself), while the goal of social good / social responsibility is to make life better (for other people). It is mathematically impossible to maximize for two variables at once… At best, socially responsible investing is an ineffective half-measure that is both costly to the investor and the causes they care about.’ (

Naturalising Capitalism                                                                                            

This fragmented way of looking at things which counterposes the ‘economy’ as the domain of pure self-interest to other domains of social reality where altruistic values prevail is a uniquely capitalist development. In traditional pre-capitalist societies it would have made no sense at all. There was no such thing as a distinct and separate domain of reality called ‘the economy’. Everything was jumbled up and intermixed. What might appear on the surface from the vantage point of modern capitalism to be an example of purely self-interested economic behaviour would be laden with multiple significations – cultural, political and religious.

The journey from traditional ‘holistic’ societies to modern capitalism involved precisely the disaggregation or breaking up of social reality as a unified ‘total’ experience into a number of separate domains. In his Essays on Individualism (1986), Louis Dumont traces this development culminating in the first clear exposition of the ‘economy’ as a self-contained and distinctive domain, subject to its own inner laws, in the writings of Adam Smith (misleadingly dubbed the ‘Founding Father’ of capitalism).

Smith, whose first book was on moral philosophy, was later influenced by Bernard de Mandeville’s scandalous tract The Fable of Bees (1714) which talked of how ‘private vices’ could be converted into ‘public benefits’. This gave him the core meme that he developed in The Wealth of Nations (1776). As he put it:

‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages’.

Thus, the ‘invisible hand of the market’ would guide individuals motivated by nothing more than their own self-interest to paradoxically promote the interests of others.

This mechanistic conception of the economy went hand in hand with a thoroughgoing individualistic view of individuals as atomised decision-makers linked to others via an impersonal ‘cash nexus’. The decisions these individuals made were essentially egoistic, reflecting our very bedrock nature as a species. According to Smith, the propensity to ‘truck, barter, and exchange’ in pursuit of one’s own interests is something integral to human nature. Out of that emerged the division of labour as a ‘very slow and gradual consequence’ of this ‘natural’ propensity.

What Smith was doing, and what many apologists for market capitalism have done ever since, was to retrospectively ‘universalise’ such capitalist categories as ‘market exchange’ and treat these as embedded aspects of all human societies, past and future. Earlier societies were said to differ from capitalism chiefly in the comparatively limited extent to which the division of labour had developed within them. But in the basically egoistic motives driving individuals, there was essentially no difference; given time, these motives would eventually deliver a capitalist society as the predestined expression of our human nature.

Smith was writing at a time when the discipline of anthropology was undeveloped and largely speculative in nature. Sweeping conclusions were derived from the opinionated evidence supplied by explorers, missionaries and colonisers moving into the Non-European world (looked upon as providing a window on Europe’s own past). Ascendant capitalism needed to ‘naturalise its own arbitrariness’, as Pierre Bourdieu once aptly put it, and what better way to do that than through a historical reconstruction of the past that emphasises an essential continuity with the present?

However, the subsequent development of anthropology as a discipline, particularly since the introduction of intensive fieldwork as a methodology in the early 20th century, has effectively blown apart such speculative theories.