… toward a new (Meta)economic narrative that works for everyone
Note: The cartoon image puts the Me on the Right and the Us on the Left. Empirical behavioral science would also point to elements of Me on the Left and Us on the Right: It is just a different set of Me and Us characterizations. Yet, the cartoon image does point toward the main tendency, confirmed in behavioral science, for more focus on the Me, especially on economic issues, on the Right. Point is: How Me and Us plays on the political spectrum is an empirical question that needs to be, and can be, approached with solid behavioral science based research.
The Blog is presented at 3-levels. First, there is one paragraph talking to the Me&Us image. Then, the Blog does a brief overview, roughly 2-pages, going a bit deeper. Finally, the Post is finished out with about 30-pages, which draws on the 120o+ pages in the books behind the story in this Blog. So, choose your part, and, if the 30-pages intrigue, well, then it may be time to read the 3-4 books used herein to weave the story.
Extremely Brief (One Paragraph!) Overview
Think Classical Liberalism on the "Me" side of the image and Socialism on the "Us" side of the image. Noted political scientist C. B. Macpherson made the convincing case that not only could Me (Market) and Us (Government) be synthesized and integrated, made one ---but it was essential in order to save capitalism. It was essential to build a Me&Us system, with good balance. Me VS Us --- as well as Me OR Us -- could never work. And, it is not working, as the political chaos being experienced in many places makes clear. Importantly, it can be fixed, which is what the Blog is all about. Capitalism can be saved. How? The biggest change needed is to bringing Participatory Democracy back into the workplace, especially bringing offsets to power (e.g. unions) over pay scales (and other matters) back into play: The firm needs to be reimagined, to include decent wages and working conditions, bringing back loyalty and obligation to both employees and the company; attention to the community and identity within it; empathy with the customer; and, ensuring Spaceship Earth systems are sustained. Scandinavian economies are a good place to look, to see where to start the move toward a good capitalism, and, thus, to save it.
Brief (Couple of Pages!) Overview
Macpherson sought to synthesize (classical) liberalism and socialism, Mill and Marx, and confronted challenges from both camps (Hansen, 2015, p. 4).
(It is time to) reimagine what it would be like to build a democratic society in which all would be equally entitled to use and develop their distinctively human capacities (referring to Macpherson, comment by Hansen, 2015, p. 14).
(It is all about) “…saving capitalism by making it good (Commons, 1934, quoted in Whelen, 1993)."
As alluded to in the Image Paragraph, this Blog brings to light the resurgence of intrigue with the work of C. B. Macpherson, noted political scientist and political economist, especially prolific in the 1960-1980s period. The Blog also clarifies how Macpherson’s framework and theory overlaps with, and is supported by, Metaeconomics (which integrates across Institutional and Behavioral Economics). The Blog offers a better understanding of the reasons for the current political economic turmoil (indicator being tribal, nationalist, and anti-globalism frames, and, the rise of Authoritarianism), and, especially important, how to solve the problem.
So, here we go: In the mainstream (Micro)Economic Narrative, the classical liberalism that Hansen (2015) is referring to points toward every consumer maximizing an insatiable utility for mainly private goods (and a limited range of public goods), as an Econ (a Me) would do. It is about commodification of everything in life, including in the Government with consumers being supplied with public goods in payment with taxes. Nothing is priceless. Society is a Market-society: Only ego-based self-interest is the driver, as favored by the Econs. And, like the saying goes, “He who dies with the most toys, wins!” It is all about Econs, not Humans (who balance Me&Us). It leads to what Macpherson (1962) characterized as Possessive Individualism (of the Me): Life under it means being chained to our possessions (again, the Me), as Bromley (2019) makes clear. And, just maybe it is not the best way.
In fact, Econs (the Me-only) do not come out as winners, in that the entire economy and democracy, when dominated by the Econs, fails to be in the winning circle: Crisis, political chaos, anyone? To fix it, a bit of the socialism --- really, community is a better term, as the key feature of a Developmental Democracy --- that Hansen (2015, referring to Macpherson, 1973) is alluding to is needed. Said Community (the Us part of Me&Us) --- paying more attention to the empathy based shared (with others) interest in Community, which is what Humans do --- would work to temper the Market(Me), in which one currently has no choice but to be an Econ (the Me). It is not a new concern, as illustrated in the historical contest between the Friedman-Samuelson, and Hayek-Keynes frames of reference (for accessible, easy to read overviews, see Wapshott, 2011, 2021). Macpherson (1962, 1973) was about synthesizing Classical Liberalism & Developmental Democracy.
With the Econs driving the situation, ultimately, the consumer becomes a slave to possessions (again the Possessive Individualism of Macpherson, 1962) on the unwinnable path of accumulation (Bromley, 2019). And, businesses are out to ensure consumers become slaves, through buying as much as possible, as quickly as possible, as in the notion of “Phishing for Phools” (Akerlof and Shiller, 2015). Consumers (Phools) are often pushed with (unethical) deception (Phishing). The consumer as slave heads for unneeded debt, as landfills fill with “stuff” that really served little purpose, also causing untold environmental damage.
Debt piles up also due to businesses playing only to the shareholders, which result in minimizing pay to workers: Because of low pay, most people do not have enough money to be slaves to possessions, so they borrow it. The result: A crisis in capitalism (Bromley, 2019), involving both consumers and producers maximizing without regard, again, to the fact people are Humans, not Econs. As Bromley (2019) makes clear, businesses working to maximize stock prices cause a focus on cutting costs, at all costs, with the easiest way to do so being less attention paid to employees (cut pay, move factories and/or otherwise outsource to low wage countries), as well as having less concern for consumers (reduce service, even engage in deception to sell more goods), communities (it matters little if a factory is closed, even when cutting the core out of a community, the very identity of the community and the workers), and the environment (the systems on Spaceship Earth are treated as infinite, not sensitive to overuse and abuse, e.g. too much greenhouse gases released to the atmosphere).
Macpherson (1962; see the overviews in Cunningham, 2019; Hansen, 2015; and Bromley, 2019) referred to this reality as representing Possessive Individualism. It was about an individual person forced onto a kind of unbounded, free-for-all path that cannot lead to happiness, peace, and, as Metaeconomics makes clear, also cannot lead to economic efficiency.
The solution to Possessive Individualism? As alluded to, a bit of community framing could help, as represented in the other (shared with others, yet internalized within the own-self) - interest. In Metaeconomic terms, said shared interest is a key part of what C. B. Macpherson calls Developmental Democracy, the essential offset to Possessive Individualism. A Developmental Democracy is a participatory Democracy, with the focus on developing individual capabilities, and ensuring each person can express that inherent capability.
Each person would also be recognized for it, e.g. an elementary school teacher paid sufficiently to lead a decent life while using that person’s unique capabilities to stir a young mind into developing that young person’s capabilities, too. It would be about far more than the price P in the Market, now also involving value V in Other Forums, to ensure both elementary students and teachers can achieve at the highest level.
Bromley (2019) points --- building on Macpherson’s Possessive Individualism (and, overlapping a bit with Macpherson’s Developmental Democracy, although Bromley never uses that construct directly) --- especially to the essential need to build firms that work for real people. It is about bringing back their Personhood (be Human) as Bromley says it, which is to bring back decent working conditions (paying decent living wages, building pride, and community through work, all of which produces loyalty) in said firms. Macpherson saw such things as part of the construct of Developmental Democracy.
Metaeconomics, too, is about building Humane Firms (Lynne, 2021). The reimagined, more Humane Firm, would not be involved in the “… persistence of union-busting, desultory pay and fringe benefits, layoffs, plant closings, automation, and outsourced jobs to foreign countries… (Bromley, 2019, p. 207)” common in the last few decades, especially since the switch to the Economic Narrative that business has no social responsibility, and government can do no good, starting in the early 1970s to early-1980s period. People not paid enough, and having extreme working conditions (sometimes holding down 2-3 jobs to make it work) also do not have time to participate in a Developmental Democracy: Fix the pay, and Democracy also evolves.
In effect, Macpherson (1962; 1973), as made clear in Cunningham (2019), Hansen (2015), and Bromley (2019), and consistent with Lynne (2020), points to the essential need to bring Community and Government back into full play with the Market. It is the only way to bring happiness and peace, and, yes, economic efficiency back, and fix the current crisis in capitalism. It is about a new, alternative Metaeconomic Narrative that plays to Humans, not only to the Econs. It is the only way to save capitalism.
References
Akerlof, George A. and Shiller, Robert J. Phishing for Phools: The Economics of Manipulation and Deception. Princeton, NJ: Princeton University Press, 2015.
Bromley, D. W. Possessive Individualism: A Crisis of Capitalism. New York: Oxford University Press, Kindle ed., 2019.
Commons, John R., Institutional Economist, cited in Whalen, C.J. Saving Capitalism by Making it Good: The Monetary Economics of John R. Commons. Journal of Economic Issues 27,4 (1993): 1155-1179
Cunningham, Frank. The Political Thought of C. B. Macpherson: Contemporary Applications. Series in Critical Political Theory and Radical Practice, Edited by Stephen E. Bonner. New York: Palgrave Macmillan, Kindle ed., 2019.
Hansen, Phillip. Reconsidering C. B. Macpherson: From Possessive Individualism to Democratic Theory and Beyond. Toronto: University of Toronto Press, Kindle ed., 2015.
Lynne, G. D. Metaeconomics: Tempering Excessive Greed. New York: Palgrave Macmillan, Palgrave Advances in Behavioral Economics, Kindle ed., 2020.
Lynne, G. D. "Metaeconomic Sensibilities: Toward the Human Firm on a Sustainable Blue Spaceship." Journal of Behavioral Economics for Policy 5, John Tomer Memorial Issue (2021): 55-64.
Lynne, G. D. and Saarinen, P. P. "Metaeconomic Solutions to Dysfunctional Water Markets." In Constructing a More Scientific Economics: John Tomer’s Pluralistic and Humanistic Economics, edited by M. Altman. New York: Palgrave Macmillan, 2022.
Macpherson, C. B. Democratic Theory: Essays in Retrieval. Oxford: Oxford University Press, 1973.
Macpherson, C. B. The Political Theory of Possessive Individualism. Oxford: Oxford University Press, 1962.
Wapshott, N. Keynes Hayek: The Clash That Defined Modern Economics. New York: W. W. Norton and Company, Kindle ed., 2011.
Wapshott, N. Samuelson Friedman: The Battle over the Free Market. New York: W. W. Norton and Company, Kindle ed., 2021.
Deeper (Patience Needed: Couple Dozen Pages!) Overview
The following draws first on Political Scientists Hansen (2015) and Cunningham (2019), both of whom are working to bring the work of Macpherson (1962; 1973) back into view. The Macpherson plan was to synthesize and otherwise integrate Classical Liberalism, and, the Macpherson version of Socialism called Developmental Democracy (something more akin to what is ongoing now in the Scandinavian Economies). Second, the overview turns to Institutional Economist Bromley (2019), who focuses specifically on Macpherson (1962), and the notion of Possessive Individualism, and also points to the Scandinavian Economies. Third, the overview turns to the framing and theory from Metaeconomics, as detailed in Lynne (2020). It works to bring the dual interest theory of Metaeconomics to play in making analytical sense of the ideas in Hansen (2015); Cunningham (2019) and Bromley (2019). It also points to the Scandinavian (Nordic) Economies. It is all brought together in four Figures, in the last section of this page.
And, as an aside: the four books used as the backgrounding for the Blog on Synthesizing Classical Liberalism and Socialism number over 1200 pages in total! So, sorry for the couple dozen plus pages, here, but it takes at least that many to treat each of the authors fairly. And, feel free to skip around, a bit, too: Economists may wish to skip the Hansen (2015) and Cunningham (2019) reviews, and go directly to the overview of Bromley (2019). And, if you are curious only about how to bring the Synthesis into an analytical system --- both with tight analysis in figures and in mathematics --- well, then go directly to the last section, where everything is brought together under Metaeconomics framing and dual interest theory, after Lynne (2020).
And, please let me know how all this resonates with you. It would be great to have some more conversation about it all… a conversation about how to save capitalism from itself.
Political Science Framing: From Possessive Individualism to Developmental Democracy (after Hansen, 2015)
What I have been trying to do all along (and am still trying to do) [is] to work out a revision of liberal democratic theory, a revision which clearly owes a good deal to Marx, in the hope of making that theory more democratic while rescuing that valuable part of the liberal tradition which is submerged when liberalism is identified with capitalist market relations (statement by C. B. Macpherson, in 1976, in response to two critiques of his lifetime work, quoted in Hansen, 2015, p. 4)
As Hansen (2015, p. 15) points out, the “…political theory of possessive individualism is a signal accomplishment and the centrepiece of C.B. Macpherson’s work…. (it is a) critical theory of bourgeois values, institutions, and practices… (and) provided the immanent foundation of Macpherson’s democratic theory.” Macpherson’s democratic theory --- Developmental Democracy --- was all about tempering the excesses of Possessive Individualism. It in effect about bringing Community, and the Government that represents it, back into more prominent position. It moves away from relegating all decisions to the Market Forum and/or using the Market-way in Government. The Market-way requires commodification and privatization --- mainly if not all private property and little public property --- selling public goods provided by Government for a payment of taxes. People became consumers of Government services and products rather than citizens participating in what Government is doing and providing.
In this sense, Macpherson’s frame is very consistent with Metaeconomics framing, which, too, is all about tempering the excesses inherent in the primal drivers of a Market-society: The ego based self-interest leading to excessive greed needs to be tempered (Lynne, 2020). And, it needs to be tempered in both Market and the Government. As argued in Metaeconomics, Macpherson believed there was a need to temper the tendency in a Market-society to economize (see Hansen, 2015, p. 16) everything (i.e., in Metaeconomics framing, temper the presumption that all value can be and is represented in the prices P evolved in a market, and/or Market-like forum in government. In Metaeconomic framing there are incommensurables, as everything cannot be monetized and expressed in price P. The moral and ethical system can only in part be reflected in price P, with value V essential to reflect most of it. The larger part represented in value V cannot just, at best, be relegated to a background role, perhaps even ignored entirely, with the market context entirely replacing the social context.
So, how do we deal with the problem of losing the social context in a flurry of market-only exchange? The problem is: The system may just naturally move toward an Authoritarian state. Hansen (2015, p. 17) points to how “Hobbes is justly renowned as the philosopher of the overwhelming power of the authoritarian state – his (in)famous Leviathan – that is required in the face of the threat posed by human passions for gain and glory that always threaten to trigger a war of all against all.” The “war of all against all” is what the Market and Market-like Forum leads to. It leads to a war between capital and labor, and the war among labor(ers) for limited high-paying jobs, in the Market for private goods. It leads to political chaos in the Market-like allocation of public goods through the Government. So, is an Authoritarian Leviathan the only alternative?
Macpherson argued no. Instead, it was possible through Developmental Democracy to avoid the war of all against all. In Metaeconomic terms, such a Democracy would encourage and recognize the legitimacy of a wide array of Other Forums beyond the Market Forum. Each person would be encouraged, and would actively participate and engage in Other Forums. It would thus be possible to change the context of the interaction in the Market Forum, e.g. facilitating and supporting labor unions, forming and supporting worker cooperatives, ensuring access to health care, providing for training beyond high school to give people a trade, if not a full college education, among other kinds of Developmental Democracy types of response. And, in terms of the kind of Government, think Scandinavian Market&DemocracyBasedGovernment, not the Authoritarianism emerging in several other European Countries like Hungary (sorry, Tucker Carlson and Fox News, and the seemingly growing group of anti-Democracy on the Right: Said Authoritarianism does not work, and, fails the test of being a Developmental Democracy that really helps people succeed). The kind of Authoritarianism being touted in both other parts of the Spaceship (Hungary, but also Poland, Italy, China, Russia and many other places) and in recent years in the US is not for us, not for we Travelers on the Spaceship.
Macpherson also made it clear that commodification (see Hansen, 2015, p. 21) did not move the system away from the social content at play in the background. It was still there, it was just hidden in the way the commodity, and the content of the product, was brought forward into the Market. Metaeconomics agrees: Every commodity has both self&other-interest content: Think of two overlapping sets of indifference curves --- absolutely joint and nonseparable --- in every commodity consumption space and two sets of isoquants in every commodity production space.
The social content of a strict version of a market commodity is also then the possessive character of it, relating to the possessive character of own-self: “(each) individual (sees own-self) as essentially the proprietor of his own person or capacities, owing nothing to society for them. The individual (is) seen neither as a moral whole, nor as part of a larger social whole, but as an owner of himself (Hansen, 2015, p. 24).” In Metaeconomic terms, said person has no need to be concerned with the shared interest in a commodity, or, indeed even the capabilities one has as a person: Each person is an island onto the own-self, only concerned with maximizing self-interest. Society and community (and the Government it represents) is reduced to creating, defining, and enforcing private property rights exchanged in Markets --- non-attenuated rights become prominent --- without any responsibility (attenuated rights have it) to the larger society. Society, Community and Government involvement is minimal, and, when engaged is only to ensure order in the Market.
So, the Econ dominates in Possessive Individualism, the Market Society. Hansen (2015, p. 28) quotes Hobbes: “Value, or WORTH of a man, is as of all other things, his Price; that is to say, so much as would be given for the use of his Power …) (and this means a market in power where) “power is treated as a commodity, regular dealings in which establish market (for labor) prices.” Metaeconomics would beg to differ: A Human has value V beyond the price P agreed to by an Econ (Neoliberal framing), who can raise that price P --- better reflecting the true value V --- only with power in the labor market. Unfortunately, mainstream (Micro)economics in effect enables the Neoliberal position that labor is not to have any power: The asymmetry of power with capital is presumed good, bringing about “efficiency.” Metaeconomics clarifies (and Macpherson likely would have agreed) that economic efficiency is patently impossible without offsets to the primal excesses of the Market, without offsets to power.
Property, and the best mix of private&public property, immediately comes into view (Hansen, 2015, p 30). Labor without some claim to property has little in the way of power. So, a corporation and the stockholders have inordinate power over an unorganized labor force. A union could offset, and bring said power into balance, in effect giving and reflecting a kind of private property right in one’s own labor. A worker cooperative could also give power, as now each laborer has a capital stake in the company. And, as Metaeconomics makes clear, it is not about private VS public property, nor is it about private OR public property, rather it is about finding good balance in private & public property, as in private&public-property, which also works to balance power, each essential to the other. And, any offset to power must also be tempered, as in labor unions can also become too greedy.
And, then, there is the matter of the morality of the market (Hansen, 2015, p. 34). In Metaeconomic terms, it is about the empathy based ethical system giving content to the shared other (with others, yet internalized within the own-self) – interest. So, in Possessive Individualism, the only justice is in the markets, as justice comes out of the presumed morality of the market, presuming everyone in the Market is moral and ethical. Peculiar: It is as though Possessive Individualism, as we see at the current time in the Neoliberal claim, is devoid of law --- devoid of ethics beyond what is generated in the Market --- as in law only evolves at the pleasure of, and the activity of, a Market? Market Laws govern society (Hansen, 2015, p. 36)? Peculiar, indeed, a frame quite empty of reality. In Metaeconomics, it is empathy based ethics that gives rise to the law, arising outside of the Market --- leading to all manner of rules, customs, and formal law --- all part of the shared interest which gives context to the Market while tempering the self-interest in that Market.
As Hansen (2015, p. ) points out, Macpherson was not satisfied with only the Market being used to evolve the morality, the ethical system, claiming (in quoting Macpherson, 1962, p. 106) that the “compulsions of the market society do somewhat demean the free rational individual who is usually put at the centre of ethical theory [traditionally understood in terms of transcendent values]. The morality of the market is not entirely acceptable to the humanist.” It is not acceptable in Metaeconomics framing, either: Morality reflecting the larger ethical system comes out of many Forums outside the Market.
Hansen (2015, p. 38) goes on to say that “A market society characterized by pervasive commodification is possible only when the historical development of human productive capacities and powers of social organization reduces if not eliminates altogether the need to call upon externally imposed standards of right.” Metaeconomic framing would point to the absurdity of presuming there is no external source of value V, no source of value other than in the Market Forum. Other Forums must also be pressed into service to find what is right, to evolve and reveal the standards of right. Often higher value V is essential to offset and otherwise condition the price P evolving in the Market.
And, then, there is also the matter of political obligation, an obligation to the shared interest in a viable Democracy. As Hansen (2015, p. 62) says it: “.. Macpherson’s account of possessive individualism was keyed to a specific task, namely, to address the lack of a coherent and binding theory of political obligation in a liberal democratic capitalist social order, or what he called a possessive market society. He felt that the development of capitalism and liberal democracy had undermined the ability of liberal democratic thought to carry out this task.”
In Metaeconomic terms, too much emphasis on the Market-only, price P only, would work to destroy the shared interest expressed in the polity, the value V, which has to be expressed in the Community, and in the Government representing it. Again, Macpherson believed that Possessive Individualism, the Possessive Market Society --- in effect using only the Market Forum --- would undermine Democracy. So, Macpherson was all about developing the framing and theory of a Developmental Democracy, that would give context to the Market, in effect, making it good.
A central feature of that framework and theory was the need to recognize, as Hansen (2015, p. 63) says it, the need to move away from the “… widespread acceptance of the rightness … of subordination to the rules or laws of the market and the consequent commitment to market relations as the only plausible form of orderly social relations.” Also, there was the need to press “.. for democratic political rights (which) challenged the exclusive political power of the bourgeoisie that had sustained cohesion in defence of private property (Hansen, 2015, p. 63.” Public property was also to play a role in Developmental Democracy: It was not just about private property to sustain Possessive Individualism.
Again, political obligation --- the placeholder for same in Metaeconomics being the shared other-interest --- entailed good balance in private&public-property, not just the private property of a Market-society. Relations --- the relations undergirding the Market and the Democracy --- are represented in the mix of property, and the character of the property rights.
Also, as Hansen (2015, p. 64) notes, the notion of self-interest from the enlightenment thinkers --- ostensibly represented in mainstream (Micro)economics “… would not be enough.. (and a) new form of political obligation would not be enough. There needed to be a new conception of social and political life, and a new conception of the free and rational individual.” In Metaeconomic terms, that new conception would recognize many overlapping shared interests, many different frames of other-interest, at work in a truly viable, humane economic and political system, all of which would temper the self-interest. A free and rational person has a responsibility to the shared interest(s) with others. The ego based expression of self-interest --- as represented in Microeconomics --- would need to be tempered. The account of Human nature --- the ontology in Macpherson --- in Metaeconomics is a person with a dual interest, sourced in the ego and the empathy -- thought of as joint modules --- of the Human brain (see Lynne, 2020, esp. the Brain Biology section in Chapter 1).
So, looking to the ontology (the real nature and situation of the Human at play, and the experience of that Human, Metaeconomics also clashes with enlightenment thinker Hobbes, as did Macpherson, who took Hobbes as his starting point (Hansen, 2015, p. 66), the “… notion that a person’s powers, roughly one’s capacities to achieve one’s aims or ends, was the product of market competition where one’s powers contended with those of everyone else … . that the value of someone was the price others would give for the use of those powers.” Macpherson would likely have agreed with the Metaeconomics framing that the capabilities of a person, and, thus, the powers of a person, have a value V. For example, said value V would be the outcome, the product, from a capable --- one that has been facilitated and has developed their unique capabilities to be and do, in working with elementary aged students --- elementary school teacher. Such value V is often not reflected, as in “Well, if they can’t make enough price P teaching they can go work at something else, or get a second job,” even though their capabilities are best applied in the classroom. Other Forums would be necessary to bring value V into setting price P, e.g., a labor union for elementary school teachers to better ensure the capabilities of said teachers are rewarded in their salary.
It becomes especially important in a Developmental Democracy to make visible and specifically address the relative power as between capital and labor. People with the most money, income, and wealth tend to also own substantive amounts of capital, and, the power it can buy. People who have only their labor tend to have far less wealth, and, in a democracy configured as a market, very little power. Macpherson understood said reality as the continual net transfer of power , where labor continually lost power relative to capital.
In the elementary school teacher example, the Market-only frame continually pushes for eliminating the public school (public property) system and replacing it with vouchers that can be used in private schools. In said cases, the Market-only frame is even asking that tax dollars (again, the voucher notion) be used to support private schools, to make private property in schools profitable while the public school slowly dies. It is all about the money, all about price P with little regard to value V, the latter often better served with at least some public property (like in ensuring every child has at least some rudimentary understanding of basics like math, English, and science).
So, as Hansen, (2015, p. 67) says it “(the Macpherson concept of ) the net transfer of powers constitutes an important link between the analysis of possessive individualism and the development and elaboration of his theory of democracy. So, the challenge in balancing and perhaps synthesizing Possessive Individualism with Developmental Democracy hinges heavily on the balance in private&public-property: The former requires more private property, the latter more public property. A synthesis sees the jointness, each dependent upon the other, and seeks the best balance.
Political Science Framing: Contemporary Applications of the Possessive Individualism and Developmental Democracy Framework (after Cunningham, 2019)
Consumerism, commodification of nearly everything, unbounded acquisitiveness, fixation on private property—C.B. Macpherson saw all these things as distinctive features of life and work in the modern world. Contrary to those who think that they have their roots in human nature, Macpherson devoted his entire scholarly career to showing that they are products of a specific sort of society, namely, one dominated by a capitalist market, to which he proposed an alternative mode of life and work based on a form of robust democracy (Cunningham, 2019, p. 11).
Metaeconomics, too, sees the nature of human nature as substantively different from that favored in a Market-only society. Such a society sees only the ego based self-interest, the Econ of mainstream Microeconomics. In contrast, Metaeconomics --- like did C. B. Macpherson --- sees a Human, a person that also has the capacity for empathy. In other words, Metaeconomics ontology sees (scientific and experiential) reality, as in Humans evolved to have both ego and empathy, the latter the capacity that leads to a shared interest in economic outcomes. Yet, it is fully recognized that ego is primal, and, the role of empathy is to temper it. As Adam Smith said it, there was the fundamental need (Smith’s ontology) to find that which everyone can go along with, the empathy (sentiments) base ethic(s) of it all.
And, what might help temper that ego based pursuit of self-interest, which is the key feature of Possessive Individualism in a Market-only society? Macpherson’s answer: “developmental democracy … (a person is) a doer, a creator, an enjoyer of his human attributes (Cunningham, 2019, p. 19).” Said conception adds another dimension, going beyond the mainstream Microeconomics notion of a person as a utility maximizer focusing exclusively on material consumption of things. Being a doer, creator, enjoyer means a wide variety of shared interests with others, which Metaeconomics handles through the notion of the other (shared with others, yet internalized within) – interest. The consumer now has both self&other-interest, with an internal synthesis of the classical liberal and communal/community-oriented frames of reference: Every person is both liberal(in classical sense)&community-oriented, in varying degrees of balance across people. Some are more oriented to the self-interest (classical liberal, individualist) while some are more oriented to the other-interest (communal, community-oriented), and, everyone has bit of both within. So, it is all about balance.
And, what is the content of the shared other-interest? Macpherson spoke of such things as “the capacity for rational understanding, for moral judgment and action, for aesthetic creation or contemplation, for the emotional activities of friendship and love, and, sometimes, for religious experience (Cunningham, 2019, p. 18).” And, such shared interest arises through cooperation in forming the shared other-interest with others, not in competition with others only in the domain of self-interest. It also shifts the emphasis by a person from consumer satisfaction to work gratification. Such framing also requires a different conception of property, seeing it as requiring balance, as in not only “…entailing a right to exclude others from the use of one’s possessions (but also as) socially responsible trusteeship (Cunningham, 2019, p. 19),” as in the notion from Metaeconomics of private&public-property. Such a concept of property would also carry over into the workplace, with offsets to power (e.g. labor unions, cooperatives) well established.
So, developmentalism --- Developmental Democracy --- was also then no longer considered as being in competition with economic efficiency but rather complementary to it. More democracy in the workplace would enhance economic efficiency, not take away from it. Metaeconomics makes easy of the contention, as democracy in the workplace brings the shared other-interest in outcomes into play with the self-interest in said outcomes, seeing each jointly essential to the other.
It also follows that not all social relations --- such as in the workplace --- can be represented in market relations, nor is all morality (and the ethical system) represented in market morality (Cunningham, referring to Macpherson’s interpretation of John Locke, who would have also agreed, 2019, p. 24). Relations come from a variety of sources, each represented in a variety of shared interests, several overlapping sets of other-interest working to temper the self-interest.
Macpherson also was quite aware of John Locke’s conception of private property, which arose when a person put labor into it, in effect joining the labor with, perhaps, a piece of land that heretofore was public property (Cunningham, 2019, p. 25)). It was the owned labor of a person, when mixed with something in a Spaceship Earth system like land, that created the private property in land.
The bulk of the Cunningham (2019) overview of C. B. Macpherson’s work is focused on applications of the Possessive Individualism and Developmental Democracy Synthesis, in effect bringing Macpherson’s frame and theory into helping resolve current issues. Topics covered include Neoliberalism (which Macpherson had addressed at length), Global Problems, Intellectual Property, Racism and Sexism, and Urban Challenges. We now address each in turn.
Neoliberalism
As Cunningham (2019, p. 121) characterizes it, Neoliberalism which has become the dominant frame on the Right of the political spectrum in many parts of the Spaceship, including the US, is all about “… advocacy of an unregulated market and the interpretation of all social relations in economic market terms.” Everything must be turned to private property, and, everything has a price P, with all value V considerations set aside. Everything is commensurable in monetary terms, and, there are no incommensurables. Back to the elementary school teacher: The value V of a very capable teacher is completely represented in the price P in the salary earned, period. So, the extremely low price P paid said teachers (and working to neutralize any organized labor union to help bring value V > price P into play) in most US states makes it clear that little value is placed on helping young people become fully capable. In fact, Neoliberals also want to eliminate all public (property) schools, too, making the false (not empirically supported) claim that private (property) schools somehow do, and are the only way, to indeed represent value V. So, two huge presumptions at work here: Only private (property) schools can do good things, and, that everything is commensurable in monetary terms: The popular ad about some things being priceless, well, not to a Neoliberal.
As Cunningham (2019, p. 122) points out, Macpherson saw the problem of price P without consideration for the value V in the labor markets as the “… most pernicious feature of a market society…” To a Neoliberal, labor (like that of the teacher) is just a commodity. Such things as the matter of being able to best develop a person’s capabilities, and to be recognized for same in one’s work, and, too, for establishing an identity around that capability leading to pride in work, well, that is a non-issue. The fact that work is an integral part of a person’s personality is, then, to a Neoliberal, a non-issue. To Macpherson, and to a MetaEcon (e.g. Lynne, 2020), value V must always play a role in the work place, focusing on the ability of a laborer to do and to be, to the fullest. It is not just all about the money.
Another feature of Neoliberal framing (well represented in Chicago School Economics, especially the Libertarian branch) is the dismantling of Government, except in the policing and military roles (ironically, such community-oriented organizations, completely public property, are somehow better than private policing and private military), and in enforcement of private property contracts. Somehow Government cannot in any way contribute to economic efficiency, and, anything done by Government is inherently inefficient. Not.
As Metaeconomics framing, using dual interest theory, makes clear: Government is generally essential to achieving economic efficiency. Neoliberals miss the point that unfettered economic choice can easily lead to inefficient choice, i.e. self-interest only choice generally needs to be tempered with the shared interest, and, if each person does not do it on their own, then there is a role for Government, especially in light of value V considerations.
As Adam Smith said it, a person needed to temper choices with that which the other can go along with (i.e. temper the primal tendency to extreme greed with the sentiments, an empathy based ethic needed to play a role, and, Government sometimes had to help ensure it). Macpherson (and, Adam Smith, too) clearly understood the role of Government in good balance, that the Market needed the Government, and the Government needed the Market.
And, “impeding freedom,” always the Neoliberal mantra, well, it is often the only way to achieve economic efficiency. Each person must come to realize (Neoliberals, especially) that every person needs to pay at least some attention to the shared other-interest. It is actually the only way to freely choose the best thing to do, and, to be economically efficient. As Metaeconomics clarifies (Lynne, 2020, p. 28), autonomy without homonomy (lacking in self-discipline and self-control required for paying attention to the shared interest with others) brings the need for heteronomy (outside control). Freedom comes with responsibility to the shared other-interest, as every aficionado of Macpherson (and very MetaEcon) understands.
More formally, Macpherson was concerned with Neoliberalism on three fronts (Cunningham, 2019, pp. 123-124 ), namely “… subjectivism, promotion of a version of pleonexia, and a propensity to encompass all aspects of a society.”
Subjectivism has to do with the lack of, perhaps even opposition to, ethical reflection. So, the Market price P of a pharmaceutical is the value V of it even when someone overdoses with it. The price of a doctor contributing to addiction at a price P is no different than a doctor contributing to essential pain management. The Market --- no matter what it produces --- is always Right, and, no pun intended. Neoliberals accept that reality due to the unfounded claim (lack of empirical support) that the Government ensuring an empathy based ethical system is functioning to temper said price P outcomes always leads to bad intervention. There is such a thing as good, ethical intervention, which Neoliberals deny (again, without empirical support). It follows that economic justice, too, reflected especially in the wages paid labor, is ignored by the Neoliberal: The Market price P, is always the “just” price, no matter whether it emerged under conditions of empathy based ethics or not. Also, then, all wants are right, no matter the want.
Also, power is left out. For example, the Neoliberal position is that a person can always go find another job, so, no need to bring empathy based ethics into play in fixing the working conditions or paying higher wages in any given job. Not. Again, empirical reality is needed: If a person has not alternative other than to sell labor (i.e. no capital), there is actually little freedom to choose: One has to work to eat, and employers can pay as little as they want (just enough to survive), and provide miserable working conditions. Free to choose for labor requires some empathy on the part of the employer to give any empirical content to the Neoliberal claim.
And, then, there is pleonexia: It is taught and in effect touted in the (Micro)Econ 101 classrooms! It is the idea that consumers have insatiable wants, that the utility curve never declines as one consumes ever more in material goods. It is, again, the notion that whoever gets the most toys, wins. Consumers work to maximize utility, with there never being an end (other than death) in sight. As Macpherson saw it (and a MetaEcon would agree --- and a Metaecon 101 course would teach), such a life would not likely be virtuous and/or happy, fulfilled. It definitely would not be peaceful. There is far more to life (as value V suggests) than what money can buy (price P): Indeed, life itself is priceless, not measurable in money wealth. And, such a life, driven by acquisition and possession is not only not rational (so it cannot lead to economic efficiency in the Markets), but it is also morally and unethically acceptable.
Two behavioral economist researchers, Bowles and Gintis, are cited by Cunningham (2019, pp. 126-127) for their findings that point to how a Market-society simply does not evolve all the essential values V, leaving things out, like the “… loss of a sense of the intrinsic worth of one’s own activities, amorality in social interactions, and indifference to acquiring a reputation as being socially responsible… (which results in undermining)… a culture supporting social norms like cooperation, truth-telling, and non-aggression.” Sound familiar? Like the political economic chaos experienced in the US during the 2016-2020 period?
Lastly, there is the presumption that somehow Market-like transactions can also work in the realm of Community and Government, as though the shared interest can be resolved and produced, and “put on the shelves,” for consideration by a consumer to buy or not. Obvious examples, all with substantive problems, include (Cunningham, 2019, p. ) “… the transformation of what had once been thought of as amenities or social services valuable in themselves into commodities: university students become clients; homes become real estate investments; cities become global competitors; ideas become marketable possessions.”
The over-extension of Market-framing into the Community of shared interests, and into Government, was already alluded to earlier in the notion of a person owning their own labor. As a result, said person loses the connection with one’s work, and the attendant loyalty with it, as everything is reduced to a mere price P. Cunningham (2019, p. 128) refers to this phenomenon as the Self-ownership problem, which might work for an Econ, but not a Human. The owner of own- labor also means there is no social responsibility to the other, no sense of a shared other-interest influencing the price P one wants and needs in order to live a good and decent life, which requires others.
The related matter is what Cunningham (2019, p. 129) refers to a Catallaxy, a term used by Hayek (the Austrian School of Economics) who used it to refer to the application of Microeconomic framing and single interest theory to politics. So, people are no longer citizens with shared interests and responsibilities but rather are mere consumers spending tax dollars (price P for public goods) in a consumption process, while working to maximize individual utility without any regard for the joint outcomes with others. Cunningham (2019, p. 130) points to how (quoting Macpherson) such framing “ … deliberately empties out the moral content which [earlier liberal-democratic models] had put into the idea of democracy.
There is no nonsense about democracy as a vehicle for the improvement of mankind.” Self-interest drives everything, with little hope for forming new visions of what the shared interest ought to be, and just what influences that shared interest might have in tempering the self-interest driving the “political market” for votes and payoffs.
Overall, Cunningham (2019, p. 138 ) points out, Macpherson was in some sense diametrically opposed to Neoliberal framing, working instead to conjoin classical liberalism (which entailed liberal democracy) and community, rather than push for the rather narrow view of classical liberalism and democracy that looked more like a Market than a Government, as touted by the Neoliberals. It was not only possible, but the best way, because conjoining the two frames resulted in better represented what people were really all about. Real people were not like “… the neoliberals’ amoral and atomistic (conception, but rather were) … value-infused and social.” Metaeconomics --- based as it is in behavioral science, a sound empirical foundation --- confirms the latter and rejects the former. Real people work to temper their atomistic tendencies with empathy based moral and ethical considerations represented in the shared (with others) interest, value-infused and social.
Cunningham (2019) then goes through several applications not directly considered by Macpherson. Cunningham does so because he believes the conjoined framework and theory offered by Macpherson has direct application to, and can work to resolve, many contentious and seemingly, heretofore unresolved and unsolvable problems facing every Traveler on this Spaceship Earth.
Environmental Degradation and Global Problems
Cunningham (2019) sees an intricate link between Globalization and Environmental Degradation, so the topics are covered together. The two issues are especially interlinked in that anti-Globalization, such as in the anti-international trade frame, points to people who want to maintain national autonomy, not seeing the intricate interdependence of all Travelers (and, thus, the shared other-interest) on this Spaceship Earth. Homonomy (connecting with others in shared interest) is rejected. And, heteronomy of any kind (international control) is vehemently resisted.
As a case in point, unfortunately, autonomy not tempered can lead to widespread environmental degradation such as emanating from excess releases of greenhouse gases like carbon dioxide, and Spaceship wide species extinction, problems in pollution of the ocean, and over fishing the ocean, to just list a few. The tension between autonomy (the self-interest) and homonomy (the shared other-interest), and the need at times for heteronomy (outside control as in an international control to stop the over-fishing of whales), is quite real.
Cunningham (2019) points to how Macpherson saw both problems could be resolved by fixing the internal social and cultural problems within an autonomous nation. In effect, the challenge was in forming a shared other-interest (acknowledging the positive role of homonomy) within the nation state that addressed the issues caused by globalization (e.g. temper the moving of high paying jobs to low wage nation states) and environmental degradation.
In Metaeconomic terms, it is all about building a shared other-interest that worked for everyone within the nation state (e.g. helping retrain workers who lost jobs to moving factories to other nations), as well as finding common ground in a shared other-interest among all Travelers on the Spaceship (e.g. establishing and complying with limits, working toward Spaceship Earth sustainable releases of carbon dioxide from burning of carbon fuels). It was about forming a kind of globality or globalism --- the widely shared interest, local and Spaceship-wide homonomy --- in making globalism work within the limits of sustaining Spaceship Earth systems.
Again, sorry to repeat, but this is an essential point: It is all about sacrificing a bit of autonomy (self-interest) in order to make gains in other(shared with other nation states)- interest, the rebalancing toward the shared other-interest essential to harmony (homonomy) on a Spaceship Earth scale. It is about a kind of benevolent Cosmopolitanism --- each country walking in the shoes of the other, empathizing on the way to a shared ethic --- recognizing the gains from a better balance in self&other-interest on a Spaceship scale.
As Cunningham (2019, p. 148-149) clarifies, it is a Cosmopolitanism that would “… (often) uphold regional associations, often referring to the European Union… (as an example, or perhaps) … a world parliament… (terms that describe include mixing) … international, transnational, and global political arrangements.” The challenge is ways to ensure a Developmental Democracy prevails on the Spaceship scale.
An extreme version, made extreme by a narrow self-interest framing, is that of the free-traders of Neoliberalism. All country boundaries are taken-down, and replaced with free movement of labor, products, and goods, as if there are no Nation States. This kind of “cosmopolitanism” is favored only by the people who see the shared other-interest is in commodifying (private property for) everything: The only value V is that revealed in price P in Spaceship wide markets. As Cunningham (2019, p. 149) says it, “… the weakening of national autonomy removes strictures on free market exchanges that (Neoliberals) decry: public ownership; regulation of markets; state support for nation-based enterprises; and so on … claim is that just as a free market in an individual nation will ultimately benefit all its citizens, so free trade and in general removal of restrictions on market interactions across state boundaries will benefit the world as a whole.”
As Metaeconomics makes clear, free trade on any scale, national and/or Spaceship wide, requires a broader shared interest than Neoliberalism allows. Metaeconomics sees all Travelers on the Spaceship having a much broader shared interest than just more material goods sold at the lowest price P. It is also about such things as sustaining the Spaceship Earth system, which cannot generally be accomplished only with price P in markets. For example, there is no price P on many species in the ecosystem that are essential but not subject to trade in a market: Value V comes through a widely shared other-interest in ensuring the sustainability of diversity in the ecosystem. Also, Metaeconomics has a place-holder for cultural differences among nation states that have value V, and generally are not appreciated in only price P considerations.
As Cunningham (2019, p. 152) says it, “Macpherson’s theories are useful for illustrating how neoliberal and in general capitalist-serving globalization embodies and reinforces a culture of possessive individualism and for seeking weaknesses of the grip of this culture on popular consciousness.” A MetaEcon would make the same argument. It is all about synthesizing and finding balance in the Possessive Individualism of self-interest and the Developmental Democracy essential to forming and recognizing the role of the other-interest formed under principles of democracy, to temper that self-interest (again, see Lynne, 2020), as represented in the joint balance of self&other-interest.
And, just what is the content of that shared other-interest, coming out of a Developmental Democracy? Cunningham (2019, pp. 158-159) drawing on Macpherson points to such things as “Guarantee of a living wages, price controls, policies for full employment, shortening of the work week, making available child-care and affordable housing, and other such measures clear the time and provide the financial resources for people to undertake activities beyond just making a living. Also possible are government-sponsored programmes for youth activities, free or substantially subsidized education at all levels, providing quality sports and arts training and facilities not requiring wealth to access and not mainly dedicated to producing a few stars, and supporting worker cooperatives. These are examples of measures in a category relating to the aspirations and life styles people are assumed by Macpherson to favour given the opportunities to pursue them but denied in a market society… (also including) all levels of education, curricula and teaching methods … geared … in opposition to narrowly technocratic education, towards fostering critical thinking about alternative life goals, cooperation in potential-developing activities, and relating aspects of any one subject of enquiry to other subjects and to societal problems. Public broadcasting and provision of spaces for deliberation and exchange of information not dependent on corporate advertising can help to provide information and expose the self-serving nature of claims that support fatalistic acquiescence to market forces… (and include a kind of ) … ecological democracy” in addressing sustainability of Spaceship ecosystems. A Metaeconomics analysis would arrive at the same point, again, sorry to repeat, under the banner of providing for value V, not just price P, and that value V plays an essential role in defining what is economically efficient.
Intellectual Property
As Cunningham (2019, p. 177 ) characterizes Macpherson’s views on property, “… the idea that people have exclusive property rights is essential to a possessive-individualist ontology and that an alternative conception of property…” would allow that all people have a shared other-interest in very bit of property. In Metaeconomic framing, that shared interest is central to any theory of Developmental Democracy. The MetaEcon frame would see private property as needing to be attenuated in contrast to the notion of a free-for-all, do with it as a person pleases, non-attenuated private property right. Also, said Developmental Democracy ala Metaeconomic framing would see the key role of public property in achieving economic efficiency, as in seeing the need for good balance in joint private&public-property regime.
For example, the function of the hydrologic cycle --- the massive natural water distillation service on the Spaceship, that which evaporates water and produces precipitation, pure water --- would be retained as a public property. In that MetaEcon frame, perhaps some private property would made possible in such things as the water right to remove water from a stream or an aquifer for irrigation of valued agricultural products. And, that retention of public property in the hydrologic system would see a key role for Government, joint with the Market running on private property rights (attenuated, but still sound enough to encourage economic investment, say in efficient irrigation systems), in good balance, as in Market&Government. Each would be deemed essential to the other.
Cunningham (2019, p. 178) quotes Macpherson: “Common (N: public) property is created by the guarantee to each individual that he will not be excluded from the use of benefit of something; private property is created by the guarantee that an individual can exclude others from the use or benefit of something.” Again, a MetaEcon sees the need for both, seeing each as essential to the other, in a joint private&public property regime. Such balance is essential to happiness (every person needs to have some capital, as in owning the hydrologic system as a public property), as well as to peace in a stable system, and, yes, to economic efficiency.
Racism and Sexism
Racism and sexism have no place in a Developmental Democracy. Anything that contributes to imbalance in the expression of self-interest --- perhaps white men favored --- is counter to such a Democracy. As Metaeconomics makes clear, both racism and sexism ensure economic inefficiency, as well as a great deal of unhappiness and turmoil rather than peace in society. Fundamentalism of any kind --- both secular and religious fundamentalism --- is to be avoided. Eliminating both “isms” is essential to avoid injustice on the way to a society that serves everyone. Possessive Individualism --- which historically has been very male oriented, and, often very much favoring white males, and, arguably is represented in the single interest theory of mainstream Microeconomics, the indifference curve of the household representing the white male in charge. Progress continues to be made on said fronts, but, racism and sexism can still be systemic, buried under the surface in the Invisible Hand of the Market. Said racism and sexism can only be rooted out by a mindful consideration of same in the Visible Hand, as Metaeconomics makes clear. As Cunningham (2019, p. 193) argues it, the matter is all about creating a sense of community (shared other-interest in Meteconomic terms), reaching out to every person on the entire racial and gender spectrum.
Urban Challenges
Cunningham (2019, pp. 218-219) argues that many urban areas, especially the larger cities, tend to encourage Possessive Individualism: “In the possessive-individualist city a high premium is put by its citizens on being left alone to pursue their private interests, and city officials resist citizen input to the making and implementing of policies. Instead, they attend to the impact of market forces and pay special attention to the demands and bribes of major economic players. When citizens in this model are proactive is it often selfishly to resist things like public housing in what is often described as a not-in-my-backyard (NIMBY) way. (Though it should be registered that the charge of NIMBYism is more often than not levelled by private developers or in support of city mega projects without regard to the merits of neighbourhood concerns.)” In Metaeconomic framing, the focus in large cities is shifted to the self-interest, with the shared other-interest downplayed.
So, what is to be done? Explicit attention needs to be put to ensuring an adequate production of items in the shared other interest, around such matters as “education, safety, cost of living, employment, level of pollution, health care, transportation, and activities for children (Cunningham, 2019, p. 220).” As a MetaEcon would argue, an urban area and the associated city needs to be about value V, not just the price P in an important financial district like Wall Street and Banking. Cunningham (2019, p. 232) points to how the Scandinavian countries tend to fare better on said fronts, e.g. Copenhagen ranks 1st while New York ranks 47th on this Spaceship. It is about quality of life, not just materialism, in the who dies with the most toys, wins, notion.
Institutional Economic Framing: Saving Capitalism by Escaping Possessive Individualism (after Bromley, 2019; for a short Review, see Lynne, 2021 at https://tinyurl.com/ElsevierLinktoReview )
The Enlightenment created the individual, thereby liberating us to engage reason. The emergence of the individual authorized the charming pursuit of self-interest. Economic theory offered convenient justification for our unleashed acquisitiveness. Possessive individualism imprisons (Bromley, 2019, pp. 1-2)
Contemporary (Micro)economics is built around the individual as a mere consumer who seeks to maximize utility (Bromley, 2019, p. 260).
(Also, in contemporary (Micro)economics) Rarely is the firm seen as the essential component in the economic well-being of households … (rather there is) indifference to the well-being of households … contestation over wages and work conditions arises… (the solution being) —economically and politically—… to bring capitalist firms into a joint obligation with the government (to fix the problem) (Bromley, 2019, p. 207).
Bromley (2019) is an essential read for all economists, and serves to complement Cunningham (2019) and Hansen (2015) who are writing in the frames of political science. Bromley (2019) brings both traditional institutional and neoinstitutional economics (John R. Commons thread, not the new neoinstitionalism, which is just neoliberalism under a different veil) into play. And, as indicated in an email response to my comment about the Possessive Individualism book, Professor Bromley confirmed that Metaeconomics in Lynne (2020) is very much on the same side, telling much the same story as is Bromley (2019).
Also, notably, Bromley (2019) does not use the phrase Developmental Democracy (from Macpherson, 1973), albeit there is substantive overlap with that Macpherson construct. The focus in Bromley (2019) is on Possessive Individualism (from Macpherson, 1962), looking at origins, developments, and clarifying the relationship between it and the current crisis in capitalism. It is also about how to move beyond Possessive Individualism --- escaping, cutting the chains --- toward fixing the crisis in capitalism: As Bromley (2019) makes clear at the end of the book, there is Hope it can be fixed.
There are three Parts to Bromley (2019): Part I is about The Problematic Triumph of Capitalism. Part II is about The Great Unraveling of it on the way to the current crisis, and especially about the role of mainstream (Micro)economics in that unraveling. The book finishes out with the most important part, what to do about it all, in Part III, Recovering Hope: There is Hope, if we change the way we do economics, helping the move to a new economic narrative and a new “ism.”
Part I The Problematic Triumph of Capitalism
Part I explains the path to the current crisis going through the evolution in capitalism from industrial through financial capitalism to the current managerial capitalism, which is now exclusively a possessive individualism. And, here rests the problem: “Possessive individualism—a joint phenomenon growing out of the Enlightenment and the emergence of contemporary economics as the civic religion of modern life—is at the core of the emerging world disorder (p. 3), ” said disorder driven by the crisis of capitalism.
The Crisis of Capitalism
Under industrial capitalism, labor identified with, and was loyal to, work, e.g., a factory worker in an automobile assembly plant proudly identified as an auto worker, and, was committed, perhaps even buying and driving the brand of car being built. There was commitment, loyalty and obligation to the company, and, the company had commitment, loyalty, and obligation to and with the worker, and the community (perhaps funding a little league baseball team or some such), loyalty leading to commitment going in every direction.
The identity, commitment, obligation, and loyalty all start to wane (a key feature of possessive individualism) with financial capitalism. Under the latter, both wall street and the banks, and people making money from manipulating assets, start to dominate. Employees lose their high paying jobs while financial gurus buy yachts. Former hedge fund managers become CEOs and sell off the profitable parts of companies while bankrupting the rest. The focus shifts to profit maximizing for the shareholders, the CEOs paid in stock options, and the financial gurus. Labor also loses the means for offsetting power, a key feature of possessive individualism being that labor unions lose influence, which also meant a loss of identity among workers, and workers with companies. Obligation and commitment also went awry.
Economics: The Dubious Enabler
And, what role has mainstream (Micro)economics played in all this? Well, several propositions especially stand out: “Economics, it turns out, is just political ideology in disguise (p. 27)… (people dressed in that disguise) ought to behave as rational utility maximizers, and (economists) will show them exactly what they must do (maximize self-interest) in order to fulfil that obligation… (p. 28)… There is not a single concept of greater importance—and mischief—in economics than that of efficiency (p. 31)… (and perhaps the most important matter) The requisite idea of the scientific objectivity—the ethical neutrality—of economics …(p. 32) … … Robbins insisted that economics concerned the study of the allocation of scarce means among competing ends. Such ends (involving ethics) were beyond question to the economist (p. 33)… (so focus only on the means of the) … central figure in microeconomic theory … the consumer … a simple diagram in which two commodities are arrayed… a budget set marks off the zone of consumption possibilities that will allow the individual to reach the highest possible level of preference satisfaction (utility)… (p. 34)… (all of which ignores the ultimate ends, which relate in particular to the reality of) … the individual’s embeddedness in a household with other loved ones, the individual’s participation in the social aspects of a neighborhood, or in the civic activities of a political community (p. 34)… (all such things representing the shared ethic with other Humans)”
It is an ideology (and ontology, the nature and supposed experience of a person) of self-interest only --- a person represented as an Econ, in contrast to a Human, maximizing utility in consumption. It is all about the Econ, the Me, which is also the dominant frame on the Right of the political isle, and has little to nothing to do with Us, as represented more commonly on the Left. There is no Us (no embeddedness with loved ones, no social aspects, no political community, no shared other-interest, no concern with ends) in the standard indifference diagram. Efficiency can only come from maximizing said self-interest of the Me in a free-to-do-as-you-please market, with any kind of community (Us), represented in the government, attempt to temper the market with the shared interest --- the other-interest in Metaeconomics, after Lynne, 2020 --- deemed an intervention producing distortion. And, again, the ends are ignored.
So, calling for that kind of efficiency achieved by an Econ is subjective, and not objective science, even ignoring the neuroscience of how the Human brain actually works. And, then the matter of the moral dimension, that which the other can go along with as expressed in an ethical system: There is the additional subjective judgment that only ego based self-interest is deemed moral and ethical (Ayn Rand and Atlas Shrugged comes to mind), a claim that is not ethically neutral. So, again, it is not based in science, as science shows empathy based other-interest, often evolved outside the market, that holds the ethical content of a market system: A market is not inherently virtuous, e.g., the extremely low pay in the market for elementary school teachers likely needs a nudge from outside that market, from the shared other-interest in elementary education. And, markets in child pornography are also not virtuous.
Bromley points to how it all leads to a cultural echo, with the stories from microeconomics turned into a tenuous “common sense” on such matters as public schools always do more poorly than private schools (and teacher pay is a non-issue), so, vouchers must be introduced, that socialized medicine will ruin health care, that regulations cause inefficiency, that raising the minimum wage will make the poor worse off, and that trickle-down economics really works. Such myths weaved by mainstream microeconomic “science” have become the foundation of the possessive individualism framed culture, which lacks in scientific content.
Emergence of the Isolated Household
Part I is finished out with the cogent tail of how such framing has led to the isolation of the key element in an economy, the household. In particular, there has been “…the gradual emasculation of the household as the basic unit of provisioning… a gradual redefinition of the purpose of the household from the center of entrepreneurial initiative to a besieged and insecure provider of inconvenient and unwanted labor to managerial capitalism whose central imperative is to reduce labor costs in the service of greater net returns to owners of capital.” The current household is, indeed, in dire straight, caught up in its’ own focus on possessive individualism with continual accumulation, becoming a low-paid, unwilling consumer of material goods that do little to help people in said household to function as fully capable Humans. And, the politicians cater to it, promising to keep taxes low so people can accumulate even more, including giving tax breaks to the ostensible job creators in managerial capitalism, which is not what that kind of capitalism is about, at all. The household is under attack, both from within and from without, by the frame of possessive individualism.
Part II The Great Unraveling
Part II starts with the ancient story of the foxes and the hedgehogs. The wiley fox --- the household in managerial capitalism --- is faced with finding full-time work that produces enough income, and that such “… full-time work is now a remote dream when considered against the daily scramble of juggling children, schooling, aging parents, unreliable (and often unaffordable) child care, flawed urban transportation, and the many other aspects of modern life (p. xiii). The managerial capitalists, as the hedgehogs, in turn can push a button on some remote computer and eliminate whole factories, especially hard on low-wage earners.
The Cleaved Core
As Bromley (p. xiii) characterizes it, “Global commerce is now orchestrated by a class of financial wranglers, hedge-fund conjurers, and private equity tormentors who—like the reliable hedgehog—need to know only one big thing.” The big thing is eliminating higher paying jobs and lowering working conditions in order to cut costs in order to raise stock prices, and, or, to sell off the profitable parts so the rest can be bankrupted. Such wrangling produces nothing. Capitalism eats its children (p. 89), and, “… we wonder why some voters are angry (p. 90). The financial wizards who prey on “inefficient” firms have no empathy with labor or apparently anyone else. Also, it is absolutely unethical to dump “unwanted labor on the public purse (p. 108),” especially if the firm has been avoiding taxes during the whole time of operation.
And, labor unions, who used to serve as an offset to such power, are the first to be eliminated, or stopped from being formed, is perhaps the most insidious --- and without empathy --- effort a firm can embrace: Less than 12-percent of US workers are now in unions (p. 94). Also, huge often international companies seek inordinate tax breaks to move new factories in, where others have been destroyed, often with politicians looking very foolish when it does not turn out like the hype used to sell it (p. 94, covering a recent example in Wisconsin). Such distortions in power do not give rise to the freedom of choice claimed by mainstream “scientists” like Hayek and Friedman. The autonomy in mainstream economics is only one part, as freedom also requires, in Amartya Sens’ frame, immunity (protection from unethical encroachment), and, most importantly, the opportunity to develop and engage life fully with one’s capabilities, all other-interest things (p. 103).
The book then turns to examining a great deal of data on just what sectors are providing employment, and, just how happy are the workers, showing only about 29-percent are satisfied (p. 113). Part of it is related to the continual need for some to seek other employment (the wiley fox, controlled by the hedge-hog who does one thing, cut labor costs): So, there is also dissatisfaction in communities, with a “.. cost-cutting decision by a private firm … (dumping) unwanted labor on the public purse (p. 109)… (and, while) …Capitalism (historically was) an engineering problem in disguise… quest was to combine ‘factors of production’ into goods and services by another name, and to do so at the lowest imaginable cost… Economic theory, with its model of the individual as nothing but a constrained maximizing consumer, provided the scientific gloss… Capitalism is no longer a source of living. It was once a consumer’s dream. It is now a worker’s worst nightmare… what “ism” is to follow (p. 124).” Bromley suggests that perhaps a Humanism, which in Metaeconomics means a Humane Capitalism, must evolve.
The Isolated Periphery
Part II is finished with the matter of the periphery, the countries still not able to be full players on the Spaceship. Colonialism is highlighted, and how the remnants of it still keep countries back from full participation. One especially fascinating story here is the “tax bargain” in the more developed part of the Spaceship, and, even though the taxpayer, too, is now a mere consumer of public goods purchased with tax (price P evolved in Government “markets”) dollars, at least said people can influence how much tax is used to produce what public good. In contrast, in poorer parts of the Spaceship, where taxes are not generally collected, but rather the Government runs generally on the largesse of the natural wealth --- forests, oil, minerals --- which generally is exported with gains to the people in charge, the citizen has little influence on outcomes.
In such countries, the people generally have no way to influence how the money from sale of the natural wealth is used. And, in many cases the approach was learned from countries who really should have known better: As Bromley (p. xv) points out, “Colonialism was (and the practice now often operant within countries, still is) especially bad … (with exports of) oil, tropical timber, precious minerals (diamonds, gold, silver), tasty spices and condiments (salt, pepper, chilies), comforting beverages (tea, coffee), and—most despicably—slaves.”
After reviewing the economic profiles of dozens of countries across the Spaceship, Part II ends with the claim that global capitalism is a misnomer. It really is a capitalism dominated by few large companies and the OECD countries. The other countries, even China, are largely peripheral to it. And, often the “isms” in said other country are not about capitalism, at all.
And, most telling, even in the headquarter countries, “The old days, in which large corporations behaved as if they cared about the communities in which they were situated, are now long gone. … Nominal bonds of community no longer exist. The pressure of greater returns to shareholders … (p. 163) ” drives everything. Generally, the problem is “… weak and dysfunctional governance, which then undermines coherent economic activity, leading to despair and alienation (p. 164).” And, caution here: The dismantling of the Government by the frame of possessive individualism moves all countries in that direction.
Part III Recovering Hope
Part III shifts attention to the matter of what can be done to save capitalism, giving Hope, made possible by Escaping Possessive Individualism. It frames that story with the observation that mainstream (Micro)economics has had it wrong for over 200 years, putting all the emphasis on the utility of the consumer, and elusive efficiency, among other untenable ideas in the mainstream frame. The real issue is to find a meaningful way of provisioning all the Travelers --- the Humans, not the Econs --- on the Spaceship. The need is for an “ … evolutionary economics (which gives) the ability to explain institutional change because it is the institutional architecture that determines what is a cost, what is a benefit, and what accounts for the constellation of incentives that push individuals in particular directions (p. 175)” in effect, producing an efficiency.
Also, it needs to be clarified that Bromley (2019) is not about synthesizing classical liberalism and socialism, per se, like is Macpherson (1962, 1973), but it is about tempering the perverse form of classical liberalism that has emerged. Bromley (2019) is about rebuilding the institutions that give context to the market and make it work better for everyone, not just a few in the meritocracy. As a result, it very much overlaps with Lynne (2020).
Escaping Possessive Individualism
Escaping possessive individualism is about applying volitional pragmatism, moving toward doing what works. Also, an evolutionary economics focuses “… attention on the structural parameters of the economy rather than on the variables in that economy (p. 191).” So, endogenous change, as mainstream economics sees, is actually a kind of circular reasoning, a mechanical determinism: “Individual choice is endogenous in economic models, and by being endogenous it no longer qualifies as choice. Its endogeneity strips it of any capacity to differ from that which its very structural dependence preordains for it (p. 191).” In effect, the economic story is predetermined as soon as the analysis starts. It becomes mere mechanism, as in the market mechanism vernacular. The focus must be changed to the structure, which means --- as Metaeconomics (Lynne, 2020) makes clear --- focusing on the shared (with others) interest that gives context to the choice variables reflected in the pursuit of self-interest within the market: “… public policy—institutional innovation—is nothing but collective action (i.e., representing shared other-interest) in restraint, liberation, and expansion of individual (i.e. self-interest) action (p. 184).”
The point is that when things are not working, like in contemporary managerial capitalism --- the status quo ante (p. 174), the structure buried deep (systemic) in a dysfunctional invisible hand, is not working --- we must consciously (make the structure, the shared other-interest, visible) and volitionally enter into “purposeful change (and a) gradual evolution in social structures and processes (which goes through) three phases: (1) animation (driven by irritation); (2) adjustment; and (3) adaptation … change is both inevitable and necessary… (it is best characterized as) volitional pragmatism … (on the way to) a theory of change in human systems (p. xvi).” The notion of volitional pragmatism, which is a search for sufficient reasons to change the structure, is fully developed in Bromley (2006; for reviews, see Lynne, 2007, 2009), which really needs to be read in consort with Bromley (2019).
As summarized in Lynne (2007, p. 1122): “The policy (institutional change, to change the structure) process is volitional pragmatism in action: We doubt and become irritated; we are surprised; we search for what to believe about the future; we envision new futures and the means to achieve same; we propose hypotheses and test with new data; we evolve sufficient reasons for newly warranted beliefs, moving away from merely maximizing utility; and we settle on those new beliefs which have emerged with new values (not just prices) embedded in the new institutions, reflecting the human will in action… The individual (and/or the representative) participates in this collective action in the pursuit of a jointly shared other-interest… this is a (participatory) democracy (which is what Macpherson, 1962, also saw as essential to tempering possessive individualism).” Moving to a humane capitalism is about changing the structure, context --- the institutions --- that which we share, evolving a new shared other-interest(s) that works better.
And, Bromley brings it all together: “Institutions represent the application of ethics (what works for everyone) and jurisprudence (someone, a judge, a court of law, may have to choose when there is conflict over that shared ethic) to the ubiquitous economizing (we face scarcity, so prudent economizing is better) behavior that defines our daily life (p. 194).” It is all about people doing (actions), deciding (rules, institutions), and believing (ideas), with Bromley referring to John Dewey’s “arc” with actions ultimately leading to ideas. Bromley also emphasizes the role of science in arriving at warrantable beliefs on the way to sufficient reason(s) (Bromley, 2006) to change the rules. And, governments fail when actions fail in deciding to work with the best ideas associated with the best (pragmatically speaking) rules.
Reimagining the Firm
Meaningful work in humane --- best --- firms is a key part of what we share in said institutions, giving context to a freely chosen, pragmatic structure of the firm that works for everyone. We need to apply an evolutionary economics --- doing, deciding, believing --- to the task of forming the structure of a Reimagined Firm, seeing the “… solution—economically and politically—is to bring capitalist firms into a joint obligation with the government in this essential task. The persistence of union-busting, desultory pay and fringe benefits, layoffs, plant closings, automation, and outsourced jobs to foreign countries ought to remind politicians—and capitalists— that radical solutions are always available if hope is too long delayed (p. 207).”
So, don’t delay, as said things are bad ideas, and radical solutions (like authoritarian politicians and oligarchs coming into power) need to be avoided : Fix the idea, by forming a shared obligation/ethic/interest between companies and the government. Such things as non-compete clauses are eliminated, a better idea being labor freely moving to higher wage companies (or even to higher paying franchises, like within McDonalds, an example in the book). Customers cannot be banned --- e.g., not willing to bake a cake for a LGBTQ wedding --- on the false premise of such discrimination somehow being a “right.” And false claims such as that “this is my land and I can do as I wish” are treated for what they are worth, nothing, and, bad ideas: “Such claims are soon found to be silly. Ownership and control are social constructs (p. 210),” in the shared other-interest.
Also, the ethic --- the moral dimension of the firm --- cannot reliably come from within the firm. The firm must empathize with the broader community within which it is embedded (a Metaeconomics contention), on the way to finding an ethic that works for everyone, not just the owners and managers. The notion of the ethic evolving within the firm, is simply another bad idea, the “moral manager… (evolved within, has been) revealed to be unreliable (p. 211).”
And, evidence: The “moral manager” frame does not work in practice, in that firms operating under managerial capitalism often “… imagine that they own their workers (p. 208).” So, if one perceives in effect owning the worker, in the-right-to-do-as-you-please-with-what-you-own notion that dominates the possessive individualism frame, it is easy to see why workers are not always treated with sufficient empathy based respect. And, that empathy must come from interaction of the firm with the larger society, not just within itself.
Bromley also makes the key argument that a private firm does not have a right to exclude customers --- another bad idea --- for reasons unacceptable on a wider scale. The example used is the well-documented case of Lester Maddox, a racist, who claimed the private right, because of owning the restaurant as a private firm, to not serve people tracing their genetic ancestry back to the slaves brought to the US from Africa. Maddox even imposed his “moral manager” rules using a baseball bat. Again, private firms do not have rights to make such rules: A private firm is also a public trust --- there is no such thing as a private firm (p. 223) --- as in the Metaeconomic concept of joint private&public-interest, the latter widely accepted, that which must be served by every firm, not just some private interest supported only by a narrow shared interest with other racists.
Bromley also makes the key point that the Friedman Doctrine, dating back to the early-1970s, that business had no social responsibility, and only had responsibility to the shareholder (owner) of a company also fails on the same front. The fact that the Doctrine was widely accepted --- even though a bad idea --- in business schools, economics departments, and the corporate world has contributed in dramatic ways to the failures of managerial capitalism. Again, much like the cases of McDonald’s not allowing workers earn more money in another franchise, and Lester Maddox discriminating on the basis of race, the no social responsibility Doctrine from Friedman (touted to this day among the Libertarian framed economists of the Chicago School) is flawed in the same way. And, leaving it to the law, does not adequately address it.
Quoting Friedman on the matter of the role of law, which supposedly justifies being responsible only to the owners/sharedholders: “It is the responsibility of the rest of us to establish a framework of law such that an individual in pursuing his own interest is . . . led by an invisible hand to promote an end which was no part of his intention (p. 212).” Bromley goes on to point out that far more than the rule of law is at work, here, as law may only reflect empathy (again, a Metaeconomics contention) in the past, and may not have moved on with new ideas. And, while some law does reflect good ideas (e.g., that which gives context to the actions of the U.S. Environmental Protection Agency, or perhaps the Food and Drug Administration), far more is needed. It is all about putting in place new rules, customs, institutions, and law, to bind a firm into the broader effort to serve the public interest, and not just the private (self) interest of the CEO and shareholders as has been going on since the early-1970s.
Also, the related Reagan Revolution starting in the early-1980s reduced the effectiveness of the Government in bringing law and rules to bear, as Government was dismantled under the false claim that the Government can do no good. Case in point: The tax fraud unit within the IRS was continually downsized, underfunded, and, in effect rendered ever more useless. Also, rules and regulations coming out of the EPA, well, every chance to avoid and resist same has been used ever since the early-1980s “Revolution.” The Friedman Doctrine in consort with the Reagan (and Thatcher in England) Revolution has had devasting effects on the degree to which the public interest is now served by the private firm.
As Bromley says it, we must work “.. to grasp the contingent nature of the private firm. Firms are contingent precisely because the state—the political community—must decide to what extent the public interest is served by the grant of a limited degree of autonomy to certain kinds of non-household going concerns… (there are) socially sanctioned rights and socially sanctioned obligations… (and firms must avoid) unauthorized transactions… there is no such thing as a private firm (p. 213).” Firms avoiding social responsibility and contributing to dismantling of Government, which when doing the right thing, is working to bring rules and law the community has agreed as something which others can go along with, well, that needs to be fixed in order to save capitalism. As Metaeconomics also clarifies, there is no such thing as a private property (as in a private firm) right to do as one pleases: There is only good balance in an empathy based balance in a joint private&public-property in every firm, a private&public-interest, each dependent upon the other. There is a public property right in McDonald’s employees move to higher wages within (as well as out of ) the company, and there is a public property right in the Lester Maddox restaurant to include people of all genetic backgrounds.
And, how do we get there? Again, we search for sufficient reason(s), using abduction, which is “…a class of inference that yields explanatory hypotheses for observed phenomena or possible explanations of them. Most of us believe that deduction and induction exhaust our ways of understanding. This is not a true belief… (and, it is an old idea)… Aristotle called this way of knowing diagnosis… (like) physicians faced with a distressed patient, automobile mechanics contemplating an engine that will not start … (p. 217).” So, a property “right” ostensibly held within a private firm, that is not working: Well, diagnose it, work to find out why it is not working, and, then, fix it (like Mcdonald’s changing hiring rules, and the Civil Rights Act of 1964) with that which everyone can go along with, an empathy based ethic evolved and brought to bear in a new balance in private&public-property rights.
Bromley also digresses a bit, pointing to seeming differences between Adam Smith and John R. Commons. Smith saw the continual possibility for harmony and mutual benefit, while Commons saw inherent conflict because of scarcity, necessitating negotiation and struggle.
Legislation was just a recommendation to the courts, ultimately the Supreme Court, with said courts eventually having to choose a side (no mutual gain, there!): jurisprudence at work. Bromley (p. 221) points out how Commons referred to that choice with the phrase “to pick a value.” Metaeconomics easily handles the phrase with the notion of value V in the self&other-interest possibilities frontier space of the Other Forum (legislative, court), which comes back to affect and influence the price P in the Market Forum. So, perhaps Smith and Commons both have it correct: Commons was just dealing with the conflict space which involved “reasonable valuing” leading to value V while Smith saw mainly the harmonious space of price P, but yet Smith saw the harmony coming from the moral sentiments which reflect V (that which the other can go along with) and influence P.
Bromley then addresses how current private firms under managerial capitalism are anything but harmonious entities with respect to labor. It is inherently about conflict and not about mutual gain, in that labor must work if a person is going to eat, provide for other basic needs. As Bromley (p. 225) says it, “…firms have the capacity to inflict considerable harm on households. Firms can refuse to hire members of households when asked to do so. Firms can fire members of households. Firms can make extraordinary work demands on members of households…” among other things. And, under managerial capitalism, as also highlighted in Metaeconomics, there are few offsets to power, especially since labor unions have essentially been stopped in operation.
Also, private firms are given far too much credit as “job creators” by the politicians who think managerial capitalism works, even making claims for that kind of market model in the operation of government (e.g., privatize the postal service, which is a service, like is the military, not a commodity). The same politicians deem it appropriate for the private firm to not pay taxes, not seeing the essential role of the public goods (which are paid for with taxes) in the economic system.
Bromley (p. 227) concludes, that under managerial capitalism, “The evidence is now clear that the capitalist firm cannot be relied upon to assure the economic future of households.” So, what to do about it? How can it be fixed? Bromley points to both behavioral and structural issues. Behavioral defects are actually quite easily fixed, as represented in such things as addressing “(1) a federal minimum wage; (2) tax reform to capture the majority of ostentatious compensation gifted by self-dealing incestuous boards of directors; and (3) endowed employment programs in which workers—after several years—become vested in a company.” Also, as pointed to in Lynne (2020), companies can narrow the pay and wage scales from the top to the bottom, like Dan Price did in a financial services company in Seattle in the notion of the “$70000 Minimum Wage” which was paid for by reducing the compensation at the top.
The structural problem is more challenging, as affected especially by automation --- robots, computers --- and other technologies replacing Human labor. Bromley (2019) points to how historically machines came to be used by labor to make for more productivity. Recent and current trajectories still have that dimension, but with the growing trend to actually replace labor becoming ever more prominent: “The future is one of too little work (Bromley, 2019, p. 229).” So, what do?
At this juncture, we are brought back to Dewey’s Arc: Recall it is about actions, rules, ideas --- i.e., about doing, deciding, and believing, overriding Arc from actions(doing) to ideas (believing). The problem of too little work will be solved with the Arc, as long as we do that which everyone can go along, as Adam Smith admonished. Metaeconomics sees it quite plausible that there will be plenty of work, especially if everyone is provided with at least a community college level of training, and re-training, in the trades and other areas the new “robot” economy needs: It is about building that possibility into the shared other-interest. Also, Humans expressing capabilities, freed-up by decent pay, will find all kinds of creative ways to make and do work.
Reimagine the Individual
Part III also points to the need to Reimagine the Individual. The civic (economic) religion is that the “.. individual is nothing but a utility-maximizing consumer… (searching).. for the best bargains … (driven by the) culturally prized urge toward persistent low-cost acquisitiveness (p. 235).” The challenge then is to change the choice regarding “...what fraction of disposable income will be devoted to culturally reinforced hedonism and what fraction will thereby be available for other-regarding commitments… (p. 236),” with Possessive Individualism causing the choice to allocate far too much to feeding the hedonism, the self-interest only driver. In Metaeconomic framing, it is about tipping the balance toward the shared other-interest, in the process of rebalancing self&other (shared with others, yet internalized within the own-self) – interest. And, politicians actually exacerbate the problem by cutting taxes that are essential to choosing the other-interest related public goods --- in effect reinforcing the Possessive Individualism frame of mind --- and, thus, further encourage extreme expressions of self-interest in the buying spree to acquire way too many private goods.
As Bromley (p. 236) characterizes it: “Our pleasure-yielding acquisitive habits are rationalized by appeals to our freedoms and our rights as individuals. We are free to choose, free to acquire, and free to satisfy our momentary whims. Our freedoms are part of our bundle of rights, including the right to do precisely as we wish.” And, said framing is fundamentally flawed, as Metaeconomics makes quite clear, in that it is only a freedom to choose framed by the shared interest --- tempering excessive greed, tempering excesses in the hedonistic mode --- that actually brings happiness, peace, and, yes, economic efficiency. Less than tempered, whimsical buying on Black Friday --- every day is a Black Friday --- does not work: Temperence is a virtue with value V that must continually work to temper price P (see Lynne, 2020). The lack of temperance is played on by politicians, who play to said distorted view of freedom, which then also “serves to corrode civic trust and engagement (p. 237).”
And, consumers not tempering the greed of acquisitiveness are their own worst enemy. As Bromley (2019) says it: “Firms are able to get away with particular unwelcome behaviors because we—a society composed of steadfast possessive individualists—enable them in their practices. We allow them to behave in a manner that is consistent with our own hedonistic acquisitive commitments. And when they hold wages low, refuse to offer feasible fringe benefits to their workforce, or outsource certain jobs—the better to hold prices low—we continue to reward them with our custom. The lower their prices, the happier we are.” Problem is: The excessive greed of said firms, and the consumers, ultimately must lead to capture of the economic system, with the inevitable outcome --- extreme inequality in income and wealth, with a few controlling most of it (which, then, breeds resentment and political economic chaos, like being experienced in many heretofore democracies plagued by managerial capitalism).
So, there it is: Both consumers and firms --- all people --- trapped by their own excesses. As Lynne (2020) makes clear, the only solution is to temper the greed. And, as Bromley (p. 238) declares, ultimately “it is all about ethics” which Lynne (2020) clarifies, is even more fundamentally about empathy, as empathy is the starting point. It is empathy based ethics that gives content to the shared interest, the other-interest which must temper the self-interest, temper the excessive greed (again, see Lynne, 2020).
So, what is the solution? Bromley (starting on p. 245) argues it is about recovering obligation. In Metaeconomic terms, it is about reformulation of a shared interest --- generally involving a myriad of other-interests --- that works for everyone. Each person owes something --- is obligated --- to the community, the greater society, within which the person is embedded. Each person is embedded in an array of overlapping other-interest(s). Each person must also be a citizen, not just a consumer, with each person needing to “abandon our affinity for rights talk and come to understand that … — comprehensive citizenship — requires the acceptance of correlated obligations (p. 246).” Again, overlapping other-interests represent said obligations.
The seeming dilemma is this: “It is logically impossible to be a free person and then be obligated to submit to the commands of another person in order to survive. The gradual emergence of a possessive market culture, under the claimed virtuous and salubrious—and freedom-enhancing—experience of thoroughgoing markets, turns out to be the fatal defect of the charming promise of the Enlightenment (p. 253).” Possessive Individualism, as it has evolved, touts a free to choose person who is obligated to take whatever the firm offers in pay for labor, and, who becomes chained to possessions, which are often only around for a short time on the way to the land fill! And, it seems Enlightenment thinking has led to this dilemma, by touting the freedom of an individual person to choose, being freed of obligations of all kinds.
Lynne (2020) argues that some Enlightenment thinking actually anticipated the dilemma, especially the moral philosophy of Adam Smith in The Theory of Moral Sentiments. As Smith said it, first addressing own-interest (notice Smith does not refer to self-interest) in On the Nature and the Causes of the Wealth of Nations:
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 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 (Smith, 1776/1789, loc 239-251)
And, then, addressing shared interest, the other-interest in The Theory of Moral Sentiments book, noticing that own-interest means a tempered self-interest, the tempering of self-love:
Though it may be true, therefore, that every individual, in his own breast, naturally prefers himself to all mankind, yet he dares not look mankind in the face, and avow that he acts according to this principle. He feels that in this preference they can never go along with him, … If he would act so as that the impartial spectator may enter into the principles of his conduct, which is what of all things he has the greatest desire to do, he must, upon this, as upon all other occasions, humble the arrogance of his self-love, and bring it down to something which other men can go along with (Smith, 1759/1790, loc 1714-1727).
So, the way to avoid Possessive Individualism is clear, going back to Adam Smith: It is about humbling the arrogance of self-love --- tempering the self-interest – with that which the other can go along with. It is about maximizing the own-interest composed of good balance in self&other-interest. And, just what is it that the other can go along with? Well, it starts with empathy (the starting point for the moral sentiments), and leads to forming a moral and ethical system widely shared, in many overlapping sets of other-interest. It is the other-interest(s) that must temper the now responsible expression of self-interest.
Recovering Personhood
Part III finishes out with the notion of Recovering Personhood, the ultimate in bringing Hope that the crisis can be resolved, starting out with (p. 259): “The fundamental crisis of capitalism is that the self-absorbed individual—and the self-dealing capitalist firm—are locked in a perverse contest in which their mutual dependence is both acknowledged and resented. Re-creating historic ideas of obligations—civic duties—seems impossible to imagine.” It is the restoration of civic duties --- the shared other-interest --- that brings one back to Personhood.
In effect, there is the need to move away from the more primal selfish-gene tendency, as that tendency needs to be tempered. As Bromley (p. xvii ) says it, the fix is to rescue Personhood “… from the comprehensive ravages of possessive individualism,” which in Metaeconomics framing, is to rescue the Econ on the way to once again being a Human. Also, moving to such a system means moving away from the meritocracy of managerial capitalism, wherein only a few gain from it. As Metaeconomics makes clear, it is about bringing the American Dream back into play for everyone, not just a few.
Bromley sees the key in returning to Personhood is through nudging and otherwise bringing back and facilitating loyalty. A Human has loyalty to a firm and the community, while the firm and community has loyalty to the Human, which in Metaeconomic terms arises from empathy going in every direction. Loyalty is one way to characterize putting full attention to the other (shared with others, yet internalized to the own-self) – interest, brought about through mindfulness, joining in empathy with the other.
It is about finding the mutuality of interests, the shared interests, the many overlapping contexts of other-interest(s). As Bromley (p. 265) says it, “We see that the mutuality of interests … strengthens an organization and serves to turn it into a real community. The workplace is not just a place of work. The workplace is a community. Loyalty is not an obligation. Loyalty is an offer of concern and commitment to something beyond the individual. Loyalty undermines the corrosive hedonism of possessive individualism.”
And, how is the system moved in the direction of a loyalty based shared interest? Well, through transcendence, which is about nudging people to pay attention to, and, at least to some extent, giving into the collective will. The danger is “… that we fall into egoism—the sufficiency of the individual. The only escape is loyalty through transcendence (p. 269),” which means empathy (the moral sentiments) are at play. So, nudge empathy.
Also, loyalty is often a burdened loyalty, which is rewarded: “Full personhood is found in rewarded burdens—often unwillingly endured. But it is the undergoing … that comprises the practice of living. Without undergoing, there is no life. Full personhood is burdened loyalty to loyalty. Personhood requires a community that demands acknowledgment and contending. Personhood is energetic (p. 270).” The energy is put to finding the balance in self&other-interest, with a bit of sacrifice in both domains essential to happiness, peace, and economic efficiency (Lynne, 2020), made possible with empathy tempering ego.
With loyalty, it then becomes possible to move to Recover Personhood, the latter something more akin --- as argued in Metaeconomics --- to what Adam Smith had in mind (rather than what John Locke and other Enlightenment thinkers who put too much emphasis on the autonomous individual). It is the only way to move away from Possessive Individualism, and to move beyond Managerial Capitalism, both of which have contributed to bringing capitalism, and the political economy in general, into crisis. As noted earlier, Smith (1759/1790; 1776/1789) clearly saw the need to provide for seeking (and, yes, maximizing if possible) the own-interest --- requiring balance in a jointly arising self&other-interest, not just self-interest --- as Lynne (2020) makes clear, and, which is essentially the same point as in Bromley.
References
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Bromley, Daniel W. Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions. Princeton, NJ: Princeton University Press, 2006
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Hansen, P. Reconsidering C. B. Macpherson: From Possessive Individualism to Democratic Theory and Beyond. Toronto: University of Toronto Press, Kindle ed., 2015.
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Lynne, G. D. Review of Bromley, D.W. “Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions.” Princeton, NJ: Princeton University Press, 2006, 244 pp. in American J. of Agri. Econ. 89,4 (November 2007): 1120-1122.
Lynne, G. D. Review of Bromley, D.W. “Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions.” Princeton, NJ: Princeton University Press, 2006, 244 pp. in Journal of Natural Resources Policy Research 1,1 (January, 2009): 118-120.
Macpherson, C. B. Democratic Theory: Essays in Retrieval. Oxford: Oxford University Press, 1973.
Macpherson, C. B. The Political Theory of Possessive Individualism. Oxford: Oxford University Press, 1962.
Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations. Edited by E. Cannan. New York: Random House, 1776/1789 (http://www.feedbooks.com ).
Smith, A. The Theory of Moral Sentiments. Edited by D.D. and A.L. Macfie Raphael. Indianapolis, Indiana: Liberty Fund, Inc., 1759/1790 ( digireads.com ).
Metaeconomic Framing: An Analytical System for Integrating Possessive Individualism and Developmental Democracy (after Lynne, 2020)
(Macpherson saw the need for a) “… humanist theory of democracy that was liberal but not possessive individualist… (Hansen, 2015, p. 188)”
…democracy may best be understood as the capacity of the people as a body to enter and achieve good things in the public realm (Hansen, 2015, p. 192).
(Economic justice) … will struggle along for some decades yet in the capitalist countries (and longer in the Third World) until in the advanced countries it is either brought down entirely by a totalitarian or corporatist state, or transcended in a new society by a concept of human fulfilment which will surpass the concept of economic justice (quote from Macpherson, 1985, The Rise and Fall of Economic Justice, in Hansen, 2015, p. 271)”
The fundamental crisis of capitalism is that the self-absorbed individual—and the self-dealing capitalist firm—are locked in a perverse contest in which their mutual dependence is both acknowledged and resented. Re-creating historic ideas of obligations—civic duties—seems impossible to imagine (Bromley, 2019, p. 259).
Metaeconomics (Lynne, 2020) is built on the same general frame as that pointed to in the quotes. It is about finding the way to a more humane I&We, Person&Community, Self&Other, Market&Government, and writ large, synthesizing Classical-Liberalism&Developmental Democracy, with the “&” seeing that each is essential to the other. Such a humane system is the only way to lessen the burdens of the chains inherent in possessive individualism, which is driven by self-interest based excessive greed, leading to excessive acquisitiveness. It is about tempering the ego based self-interest that leads to the excesses, the starting point being empathy. An empathy based pursuit of the shared interest --- the other (shared with others, but yet internalized within the own-self) – interest --- is the only way to temper the more primal self-interest. Civic duties (as represented in a variety of shared other-interest domains) once again become recognized as essential to temper the self-interest.
The overall goal is to find the better (and best if possible) --- that which everyone can go along with, so, the empathy influenced ethical --- balance in self&other-interest, and, again, the best balance in Market&Government. And, both need to be Humane, serving all Humans and not just the self-interest only Econs. The Econs may still prefer to be chained to their possessions: Most Humans (and the Econs would likely be happier, too) do not, so Metaeconomics provides a way to think about that possibility, allowing for both inclinations to co-exist in harmony.
And, following on the quote from Hansen (2015), Metaeconomics is about encouraging a Participatory (Developmental as Macpherson, 1973, referred to it) Democracy based Government that facilitates achieving good things in the public realm, which always requires some public-property, which in Metaeconomics is represented in the shared other-interest. It is about finding Economic Justice, which means ensuring everyone has a piece of what a good capitalism can produce: It even goes beyond mere Justice, toward the kind of human fulfillment (happiness, peace, and, yes, economic efficiency) that Macpherson envisioned (see the Hansen, 2015, p. 271, quote). Said justice means doing good things in the public realm, which does not preclude also doing good things in the private realm, so, Metaeconomics is also then about finding good balance in private&public: Good things in each depends on the other. It is especially about finding good balance in private&public-property because said balance is the key to offsets in power within a Democracy based system.
Metaeconomics overlaps greatly with the framing by Macpherson (1962, 1973) as explored in Hansen (2015) and Cunningham (2019), as well as by Bromley (2019). In addition, Metaeconomics brings an analytical system that can be used to bring said ideas together under one analytical mantle. It provides an analytical system in ways similar to that used in mainstream (Micro)economics using the standard indifference and isoquant curves, product and other outcome frontiers, as demonstrated in figures and images in any standard Microeconomics book. It also provides a Mathematical Metaeconomics for the math inclined thinker and researcher to use and further develop. The difference is that while
Microeconomics sees only self-interest, Metaeconomics sees the role of both self-interest and other(again, sorry to repeat, but it is essential to understand: Shared but yet internalized within the own-self) -interest, as represented in overlapping sets of indifference curves in consumer space and overlapping isoquants in production space. As a result, the Metaeconomic story overlaps while still being substantively different from the Microeconomic story. The Metaeconomics analytical system is demonstrated in Figures 1-4.
Figure 1 characterizes the main feature of Possessive Individualism. Each Econ at best tempers choice a bit on path 0G, buying mainly good g (g for greed, material goods that increase utility, the material life-style of the Phools). Path 0G gives little attention to good m, with said good having to do with being a Human, an empathy (m) good that reflects a sharing with the other. And, in extreme greed, the Econ person may even operate on the vertical axis. It is said that economic efficiency is only possible on the greed path 0G, or, even the extreme greed path 0.
Figure 2 recognizes that a Human also has an other (shared with others) – interest represented on path 0M. In Metaeconomic framing, path 0M works to temper the choices on path 0G. Also, it not only recognizes that some people will operate closer path 0G, while others will operate closer to path 0M. In fact, a person may even vacillate, operating more on path 0G at some point in time and more on path 0M at some other time. Figure 2 also clarifies that seldom if ever will a person attain economic efficiency, happiness, and peace on either path 0G or 0M.
Figure 3 clarifies --- as Adam Smith tried to teach --- that happiness, peace, and, yes, economic efficiency was served only on some path 0Z. It is the Z-path of Budhist framing. It is a path arising from having been to the station of the impartial spectator --- as Adam Smith referred to it --- and considered how one could arrive on a path that everyone could go along with, which was never path 0G (and certainly not the vertical axis). It was about the moral sentiments --- empathy based ethics --- tempering the more primal tendency to self-interest only. As Adam Smith made clear, and mainstream (Micro)economics missed the point, maximizing self-interest could never achieve happiness, peace, and economic efficiency, which is only possible on path 0Z. Possessive Individualism brings the crisis in capitalism, which is resolved in good balance on path 0Z. Path 0Z synthesizes and integrates Classical-Liberalism&Community, each represented respectively paths 0G and 0M.
Figure 4 also clarifies that some things are priceless, that value V indeed plays a role for Humans in a Humane economy. It is not only about price P. And, indeed, value V not only influences price P, but at times overrides it. The possibility frontiers, like are found from moving along the income constraint line in Figure 3 and plotting the payoffs from consuming good g and good m. The value V curves arise from each person considering the best balance in the self-interest good g and shared other-interest good m, generally in some Other Forum in a Community or in the Government representing it. Value V could also arise within the more Humane Firm, which recognizes the loyalty of labor to that Firm, and the management being loyal to labor, with loyalty going in every direction. The CEO and upper management are now in empathy with labor, community, consumer, and, yes, with the systems on Spaceship Earth within which the Firm is embedded. It is no longer just about maximizing shareholder prices for the holder of the capital. Notice how value V determines the best path 0Z in Figure 3, which also means that value V gives context to and influences price P in the markets. Also, value V is incommensurable with price P: Somethings are indeed priceless, as the popular ad declares.
For lots of examples of how the analytical system represented in Figures 1-4 can be applied to a myriad of issues, including family, gender and racism, education, industrial policy, and environmental concerns, see Lynne (2020). The Metaeconomic Mathematics is also covered, in the Appendix to the Lynne (2020) book.
Conclusions
Cunningham (2019), Hansen (2015), and Bromley (2019) are all on target in bringing the work of C. B. Macpherson back into consideration. And, Bromley (2019), adds substantively to the Macpherson framework by bringing Institutional Economics into play. The fundamental flaws of mainstream economics are now made abundantly clear, and, most importantly, can be fixed. All three books focused on Possessive Individualism provide for an abundant set of ideas and suggestions for what needs fixing and how to fix same. Lynne (2020) provides an analytical system, as represented in dual interest theory, to help bring it all into explicit focus using detailed economic frameworks, including a mathematics of synthesis and integration across Classical-Liberalism&Community, the I&We, as it were, of life under capitalism. Please consider joining in the task of saving capitalism.
References
Akerlof, George A. and Shiller, Robert J. Phishing for Phools: The Economics of Manipulation and Deception. Princeton, NJ: Princeton University Press, 2015.
Bromley, D. W. Possessive Individualism: A Crisis of Capitalism. New York: Oxford University Press, Kindle ed., 2019.
Commons, John R., Institutional Economist, cited in Whalen, C.J. Saving Capitalism by Making it Good: The Monetary Economics of John R. Commons. Journal of Economic Issues 27,4 (1993): 1155-1179
Cunningham, Frank. The Political Thought of C. B. Macpherson: Contemporary Applications. Series in Critical Political Theory and Radical Practice, Edited by Stephen E. Bonner. New York: Palgrave Macmillan, Kindle ed., 2019.
Hansen, Phillip. Reconsidering C. B. Macpherson: From Possessive Individualism to Democratic Theory and Beyond. Toronto: University of Toronto Press, Kindle ed., 2015.
Lynne, G. D. Metaeconomics: Tempering Excessive Greed. New York: Palgrave Macmillan, Palgrave Advances in Behavioral Economics, Kindle ed., 2020.
Lynne, G. D. "Metaeconomic Sensibilities: Toward the Human Firm on a Sustainable Blue Spaceship." Journal of Behavioral Economics for Policy 5, John Tomer Memorial Issue (2021): 55-64.
Lynne, G. D. "Review of Bromley, D.W. Possessive Individualism: A Crisis of Capitalism. New York: Oxford University Press, 2019." Journal of Behavioral and Experimental Economics (December) 95, 2021 https://tinyurl.com/ElsevierLinktoReview
Lynne, G. D. and Saarinen, P. P. "Metaeconomic Solutions to Dysfunctional Water Markets." In Constructing a More Scientific Economics: John Tomer’s Pluralistic and Humanistic Economics, edited by M. Altman. New York: Palgrave Macmillan, 2022.
Macpherson, C. B. Democratic Theory: Essays in Retrieval. Oxford: Oxford University Press, 1973.
Macpherson, C. B. The Political Theory of Possessive Individualism. Oxford: Oxford University Press, 1962.
Smith, A. (1759/1790). The Theory of Moral Sentiments. Indianapolis, Indiana, Liberty Fund, Inc. (accessible at digireads.com)
Smith, A. (1776/1789). An Inquiry into the Nature and Causes of the Wealth of Nations. New York, Random House (accessible at www.feedbooks.com) .
Wapshott, N. Keynes Hayek: The Clash That Defined Modern Economics. New York: W. W. Norton and Company, Kindle ed., 2011.
Wapshott, N. Samuelson Friedman: The Battle over the Free Market. New York: W. W. Norton and Company, Kindle ed., 2021.