How a questionable assumption of human nature has polarised humanity.
It’s quite amazing how the great debate about economic systems, interactions and policies, comes down to one simple yet significant assumption about what truly motivates the human spirit and individual endeavour.
It is on that assumption that we have constructed the world around us. To question the assumption means questioning that whole construct. And to conclude that that assumption may be wrong would mean that the whole construct could be wrong and inappropriate.
In short, are we by nature, instinctively and intuitively selfish or generous?
We have to answer that rigidly because in the end it distils all of our behaviour, systems, and the world as we know it into one simple question: “why?” And before we respond too quickly and simply, consider that the question has occupied the minds of great philosophers, prophets, mystics, scientists, humanists, psychologists and sociologists for centuries.
So it is puzzling to say the least that economists, politicians, analysts, policy makers, company boards and yes, journalists so readily interpret the world on one narrow view as if it’s the absolute truth – that all our actions are driven by self-interest – if not as an innate condition of being human, then as a condition of an economic being…creating a schizophrenic creature of a Mr Hyde in our working or transactional environment and a Dr Jekyll elsewhere.
Supporters of the self-interest assumption often point to Adam Smith’s Wealth of Nations, the founding work of modern day capitalism as indisputable testimony that inherent selfishness is the “invisible hand” that creates prosperity. This ignores his more profound observation in his Theory of Moral Sentiments that: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”
To compound matters, we have different interpretations of the concepts themselves: on the one hand there is self-interest, selfishness, self-gain, greed, egotism, inward looking, etc. On the other we have enlightened self-interest, generosity, charity, empathy, altruism, outward looking, etc.
Our understanding of the three economic estates of capital, labour and state, is based on the raw immediate material self-interest assumption – capital is profit driven; labour is wage driven; and government is tax and revenue driven. (The latter becomes more burdensome and ominous when it becomes increasingly re-distributive.) Because they all have to feed off the same carcass, they automatically become predatory and adversarial, their behaviour held in check mostly through rules and regulations which in turn are often biased towards one or other vested interest within the three estates.
There’s a very simple self-evident equation or logic in economics that says if people by and large are taking more than they are giving, they will create deficits. If they create deficits, they create poverty. Conversely, if people by and large are giving more than they are taking they will create surpluses. If they create surpluses they create prosperity. “Giving” in this equation is not about money, but about giving of the self: time, effort, innovation and creativity. Clearly, the “what’s-in-it-for-me” or self-interest filter will constrain willingness to look beyond getting and more likely create the first condition which leads to poverty, or, as we have seen, increasing imbalance between the three constituents.
Our facile and unquestioning accommodation of the material self-interest motive has institutionalised this behaviour, creating huge and burdensome collectives and collusions to wage war on each other, with government acting either as a benevolent or malevolent referee, depending on which side it blows the whistle, or often simply in its own interest. We have gone as far as to write the “profit” or “wage” motives into the fundamental tenets of ideology. In turn their measurements are used as indisputable proof of self-worth.
It’s no longer simply about behaviour but about a “system” as scenario planner Clem Sunter implied in a recent article on the death of the private sector. Yet, some years earlier in his book “Beyond reasonable greed” he urged companies to adopt “a more caring, holistic philosophy”. “Adopting” self-regulation and all it implies such as Triple Bottom lines, sustainability, governance, Mervyn King et al, have been around for decades and have done very little to contain greed on steroids. Indeed they have simply led to more regulation and government involvement.
The term “reasonable greed” is an intolerable oxymoron. At what point does reasonable become unreasonable and who defines that point? Greed is an addiction and one sniff of it sets the addict on a path of never having enough. Like drug abuse, not even laws will contain it. Attention will always follow intention. Vested interests simply become more adept at surpassing or breaking the rules, often even writing them.
It comes down to the one simple question I posed earlier: are we by nature malevolent or benevolent creatures? Adopting either one of these assumptions will have a profound impact on the world around us: the degree to which we reject or encourage certain behaviours; what we measure as important; what we tolerate as lawmakers, jurists, voters, consumers, customers, employees, employers or shareholders; what we teach in our schools and homes; our priorities and engagement at work and many more.
The real difficulty in answering the question is that ultimately there can be none other than “the self”. Everything we do affects the self so no action can be independent of self-interest. What lies at our deepest desire or intent will find expression in motives, purpose, goals, actions and interactions. One assumption that appears logical is that the deepest need for most of us is inner peace and contentment. It is the search for that state, so beautifully articulated in Viktor Frankl’s Man’s search for Meaning, that creates a world of great diversity in behaviour and structures which in themselves can be volatile and inconsistent.
In turn, that expression can be broadly condensed into two approaches in a specific moment – malevolent or benevolent, means or meaning. Our lives are made up of countless individual snapshots of choice leaning either towards malevolence or benevolence, feeding the evil or the good wolf, in an on-going subconscious experimentation to achieve an inner state of serenity and of meaning.
How on earth can we extrapolate an “average” of all of those trillions of moment to moment choices by 7 billion people to arrive at an absolute truth for all human behaviour? But I’m going to risk it and contend that on balance we are a benevolent lot – without which humanity would surely have disintegrated. Some believe it is already well on its way.
I have argued this case regularly in “The Human Touch” since I started writing this column and have cited volumes of research and experiences to support it. Of course, I still can’t propose the premise as if it were the absolute truth. Neither can those who argue the opposite, yet they have seemingly won the day in defining humanity in such gross terms and have constructed a world that encourages that behaviour.
Indeed, here’s a challenge: name me one great achiever, apart from an adventurous gold digger or oil discoverer, who has made a meaningful difference to mankind and where this was the result of a clear unambiguous stated intention to maximise profit. I’m not saying you won’t find one, or that gold diggers and oil discoverers have not made a difference – only that you may struggle in your search. One can, of course, name an infinite number whose focus on self-gain led to extreme suffering for many around them. I, on the other hand, have cited quite a few business and other heroes who were driven by something else than money. And recent Harvard research bears this out.
If our true value lies in our capacity to make a contribution to others, then we should be highly offended when people make assumptions about our malevolent intent. And if we define generosity as being not about hand outs, but about giving the best of oneself in a given moment, then generosity is the ultimate act of self-interest.
That is the invisible hand.