The economic capture of the human

One way to think about ‘humanity under duress’ is to examine the ways in which ‘the human’ has been captured by economic principles from the early-20th Century onwards, and, beyond this, to address the acceleration of this process following the recent global financial crisis. As a starting point, we can consider the following ideas and positions:

1) Human action. This was the central idea of the Austrian economist Ludwig on Mises (1881-1973). Mises attacked Max Weber’s theory of social action and argued instead that a concept of human action should be put in its place; one that treats all human actions as instrumental and value-oriented in basis because ultimately they follow an economic principle. All actions, for Mises, are ‘economising’, and this is what makes them human. From here, Mises develops a new model of homo economicus that is based on a theory of catallatics: a theory that normalises the free market system by tracing economic value to the economic choices of individuals, and reducing all spheres of human life to a form of monetary calculation.

2) Human capital. This concept, which was pioneered by the Nobel Prize winning economist Gary Becker (1930-2014), understands humans not in terms of their capacity for self-conscious, collective, and creative labour (the early Marx), but as stocks of capital in themselves. The implication of this work is that human worth can be understood in economic terms, or more precisely in terms of the logic and properties of capital. As a form of capital our ‘stock’ can rise or fall according to the decisions we make (which often are deeply flawed, see below), so the governmental task becomes one of increasing our rate of return. In the Third Way, for example, Giddens adopts this approach in his argument for ‘positive welfare’, in which he encourages the poor to take more risks by becoming entrepreneurs of themselves. This idea of the entrepreneurial subject is explored in detail by Foucault in his biopolitics lectures, and more recently by Wendy Brown and Michel Feyer who address the emergence of financialised subjects that become subjects and objects of investment and speculation.

3) The market over the human. Friedrich Hayek (1899-1992), perhaps the most prominent of all neoliberal economists, disagreed with Mises on the question of human rationality. For Hayek, while individuals possess lay, contextual understandings of their immediate environments, they cannot know the world in its full complexity so need to look outside theirselves for guidance. Such guidance is not to come from collective bodies of human agency such as state or government, but to an impersonal, inhuman and thus impartial form: the price mechanism, or simply put ‘the market’. ‘The market’, for Hayek, co-ordinates all human wants, needs, and decisions, and ensures the most efficient allocation of goods and services through ‘free’ competition over price. It is said to be a meta-informational or cybernetic form that is independent of any class-based interest or government agency, and because of this it is seen to know best. For Foucault, this is the neoliberal moment as the market becomes the site for the production of truth; something that has become a matter of routine in the contemporary political world as governments look to financial markets for approval of policy decisions that they (may) take.

4) The need to nudge. A different answer to the fallibility of human subjects is provided by the behavioural theory of recent Nobel Prize-winning nudge economics. This form of economics sets the ‘free’ market and ‘freedom of choice’ as a political default, but, at the same time, asserts that humans do not always act rationally or in the interests of their own well-being and so need the assistance of ‘choice architects’ to point them in the right direction. Their answer is not to follow Hayek in looking to the market or to place trust in the ability of humans to pursue a rational course of cost-benefit analysis, but to ‘nudge’ them into becoming better market participants. While nudge theory characterises itself as a form of ‘libertarian paternalism’, in many ways it is neoliberal to the core: it treats human freedom as the same thing as consumer freedom; it passes power from state agencies to technocratic or commercial bodies that are designed to nudge individuals towards some choices rather than others; it pushes responsibility downwards to individuals who are empowered by nudge architects to make the ‘right’ choices; and the purpose of ‘nudge’ interventions is not simply to benefit the individuals involved but, in many cases, save the state money and potentially replace some of the functions of the social state (hence its deployment in the UK alongside a government programme of austerity).

In the face of these economic ideas that have grown in prominence and power in recent years, what should we do? The most pressing task is to reclaim the human as something that far exceeds the ‘economic’. In 1785, Kant wrote in The Groundwork of the Metaphysic of Morals that the human should be conceived in terms of dignity (worth in itself) rather than price (raw economic value). In a world in which price, or more broadly economic value, has become the measure of seemingly everything, this statement is more important than ever. To address the capture of the human by the economic, we might respond to the above positions in the following ways:

1) Human action: clearly human beings have the capacity to think and act economically, but this does not mean that their existence is or should be defined by these capacities. One answer from the history of sociological thought is that humans should be thought of as social not economic beings in the first instance, and that, because of this, the economic (and related notions such as ‘market’, ‘exchange’ and ‘competition’) then should be understood in terms of its underlying sociality – be this intersubjective and/or institutional in form. In this view, sociality is not reducible tout court to the pursuit of economic gain, for while routinely humans are market actors, they are also so much more: at the very least they can attach other forms of (non-economic) value and meaning to the world; they can empathise and act altruistically; and can they relate to each other and bond on grounds that are not instrumental and motivated simply by monetary gain.

2) Humans are not simply stocks of capital that are worthy (in some cases) of investment, either by the state or the market, if indeed there is still a separation between the two. The intention of divorcing capital from labour is to prioritise the economic over a key aspect of what makes human beings social: the ability to forge collective bonds through work, and to defend the interests of labour, class, and in many cases life itself, against the impersonal and often inhuman forces of ‘big’ capital. This is an intentional strategy, for in recasting the human in terms of capital, there is no attention to structural forms of power that produce acute social and economic inequalities of different types. The answer instead is not to conceive the human in terms of capital in the first place, as to do so is already to set the rules of a game in which the interests of capital will always win.

3) Hayek’s elevation of the market and accompanying price mechanism over all things social and human needs a robust rebuttal. Markets are themselves social institutions that in many cases amplify rather than rectify the irrationality beliefs and actions of individuals. As social institutions, they are sites of power and privilege and are not meritocratic but tend to reproduce and accentuate existing forms of inequality (forms that most neoliberal thinkers welcome). Moreover, markets should not be viewed as sites of human truth or valuation, and should not displace the democratic and deliberative powers of governments. For, in line with Popper, if humans are in many ways fallible, then this is why we need government, not the displacement its powers. For ceding power to markets, in practice, means only one thing: an attack on the human in the name of economic priorities, including human rights, and associated principles of morality and justice.

4) Finally, the answer to the current situation is not to ‘nudge’ people into becoming better consumers. Nudge economics, like many of the positions stated above does not tackle structural issues of power or inequality but instead identifies the problem as lying within the behavioural or psychological characteristics of individuals. The answer provided by nudge economics is to pass powers from traditional (welfare) state bodies to ‘experts’ in order to produce improved economic subjects, thereby leaving structural processes and dynamics of marginalisation intact. These processes and dynamics should be the starting point of our concerns. We might also ask whether freedom of choice is necessarily a good thing, or if the state (independent from commercial interests) should play a more active a role in limiting consumer choice for the well-being of all.

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