Economics for the people – AEON Piece
By: Dirk Philipsen
Originally published in AEON Magazine
Against the capitalist creeds of scarcity and self-interest, a plan for humanity’s shared flourishing is finally coming into view
I’ve witnessed massive swarms of fireflies
grace my garden like never before, drawn
to the air cleansed of our arrogant greed,
their glow a flashback to the time before
us, omen of Earth without us, a reminder
we’re never immune to nature. I say this
might be the end we’ve always needed
to begin again …
– From the poem ‘Say This Isn’t the End’ (2020) by Richard Blanco
A basic truth is once again trying to break through the agony of worldwide pandemic and the enduring inhumanity of racist oppression. Healthcare workers risking their lives for others, mutual aid networks empowering neighbourhoods, farmers delivering food to quarantined customers, mothers forming lines to protect youth from police violence: we’re in this life together. We – young and old, citizen and immigrant – do best when we collaborate. Indeed, our only way to survive is to have each other’s back while safeguarding the resilience and diversity of this planet we call home.
As an insight, it’s not new, or surprising. Anthropologists have long told us that, as a species neither particularly strong nor fast, humans survived because of our unique ability to create and cooperate. ‘All our thriving is mutual’ is how the Indigenous scholar Edgar Villanueva captured the age-old wisdom in his book Decolonizing Wealth (2018). What is new is the extent to which so many civic and corporate leaders – sometimes entire cultures – have lost sight of our most precious collective quality.
This loss is rooted, in large part, in the tragedy of the private – this notion that moved, in short order, from curious idea to ideology to global economic system. It claimed selfishness, greed and private property as the real seeds of progress. Indeed, the mistaken concept many readers have likely heard under the name ‘the tragedy of the commons’ has its origins in the sophomoric assumption that private interest is the naturally predominant guide for human action. The real tragedy, however, lies not in the commons, but in the private. It is the private that produces violence, destruction and exclusion. Standing on its head thousands of years of cultural wisdom, the idea of the private variously separates, exploits and exhausts those living under its cold operating logic.
In preindustrial societies, cooperation represented naked necessity for survival. Yet the realisation that a healthy whole is larger than its parts never stopped informing cultures. It embodies the pillars of Christianity as much as the Islamic Golden Age, the Enlightenment or the New Deal. In the midst of a global depression, the US president Franklin D Roosevelt evoked an ‘industrial covenant’ – a commitment to living wages and a right to work for all. During the 1960s, Martin Luther King, Jr gave voice to the broader idea when he said that no one is free until we are all free. On Earth Day 1970, the US senator Edmund Muskie proclaimed that the only society to survive is one that ‘will not tolerate slums for some and decent houses for others, … clean air for some and filth for others’. We should call these ideas what they are – central civilisational insights. Social and economic prosperity depends on the wellbeing of all, not just the few.
Cultures that fundamentally departed from this awareness usually did not, in the long run, fare well, from the Roman Empire to Nazism or Stalinism. Will neoliberal capitalism be next? Rather than acknowledge the endless variety of things that had to be in place to make our individual accomplishments possible, it is grounded in the immature claim that our privileges are ‘earned’, made possible primarily by private initiative.
But what a claim it is: where would we be without the work and care of others? Without the food from the farmer? Without the electricity and housing and roads and healthcare and education and access to information and hundreds of other things provided to us, day in and day out, often for free, and routinely without us knowing what went into their existence? Seeing ourselves as seemingly free-floating individuals, it’s both easy and convenient to indulge in the delusion that ‘I built it. I worked for it. I earned it.’
The painful flipside are the billions of those who, through no fault of their own, drew the short end of the stick. Those who were born in the wrong country, to the wrong parents, in the wrong school district – ‘wrong’ for no other reason than that their skin colour or religion or talents didn’t happen to be favoured. The limited focus on the individual can here be seen as nakedly serving power: if those who have privilege and wealth presumably earned it, so must those who have pain and hardship deserve it.
Old and young, meanwhile, sense the loss of a cultural heritage that transcends the private, a purpose beyond the marketing of self. We likely fear, with good reason, that, in all the self-promotion, we can no longer rely on others to be there for us, to provide us with consistent work, a stable community, a bit of love and kindness. We are scared of climate change, the ultimate consequence of our voracious consumption. We dread loneliness and depression, too much work, the loss of jobs, debt. We sense, and often experience, that everyone looking out for themselves brings out the worst in us – me against you, one tribe against the other. Many experience it simply as a culture in distress.
Standard economic thinking both seeds and feeds the underlying fear by instructing that we’re all in a race to compete for limited resources. Most definitions of mainstream economics are based on some version of Lionel Robbin’s 1932 definition as the ‘efficient allocation of scarce resources’. The answer to scarcity coupled with people’s presumed desire for more is, of course: keep producing stuff. Not surprisingly, the guiding star for success, of both policymakers and economists around the world, is a crude, if convenient metric – GDP – that does nothing but indiscriminately count final output (more stuff), independent of whether it’s good or bad, whether it creates wellbeing or harm, and notwithstanding that its ongoing growth is unsustainable.
It’s circular logic: (1) scarcity makes people have endless needs, so the economy needs to grow; (2) for the economy to grow, people need to have ever more needs. Such thinking dominates the field of economics, and much of contemporary culture: Man (yes, those ideas overwhelmingly come from men) as the endless optimiser of self-interest; people reduced to producers and consumers; all aspects of life that go beyond the mere accumulation of stuff – morality, joy, care – confined to kindergarten, fiction and the occasional ethics course in high school or college. The result is what Nicholas Kristof in The New York Times calls a ‘moral myopia’ threatening to collapse under a mounting pile of stuff.
Dysfunctions such as climate change, racism and inequality are not unrelated and naturally occurring features of life. On the contrary, they are based on the fictions and failures of the ‘private’ that later turned into systems that now govern our lives.
In reality, we collaborate, organise together, show love and solidarity – as the Nobel laureate Elinor Ostrom documented in her book Governing the Commons (1990) – in the process invariably creating common rules and values that organise communal life. We rely on society, community, family, day-in and day-out. And yet the tragic disconnect between our lived reality (however embattled at times) and the dominant ideology, celebrating ‘the private’ in textbooks, newspapers and Hollywood movies, often eludes us. When large corporations, run by people who preach the gospel of the market and private gain, need the public to bail them out, few in power raise the most obvious question: why do you need public money to bail you out if you are supposed to be pulling yourself up by your bootstraps?
A deeper question might be: why should wealth and privilege – largely built on the free work of nature and the cheap work of labourers – be rescued, when in trouble, by the very people otherwise deemed ‘disposable’?
The particular version of the ‘private as property’ likely has its origins in the Roman empire. It comes with the notion of absolute dominion – denoting one’s right to have full control over one’s property. Initially, such dominion was exercised by the male head of household, over both things and people – or, more precisely, over things, but also over people who, in what was possibly the first legal power grab in the name of the private, came to be defined as things (children, slaves).
When George Floyd was killed on 25 May 2020, it put on global display, once again, that most people – poor, younger, older, Black, Brown, non-male – remain disposable in the regime of private interest. All too often, they are violated in the scarcely disguised name of private property, perpetrated by those tasked to defend it, the police. The mistake of vandals in recent demonstrations, as satirists have pointed out, was that they didn’t loot in the name of private equity firms. Put differently: in order for the law not to put its boot on your neck, your theft has to come at white-collar scale and the sanction of power.
The tragedy of the private, in short, doesn’t come from the private as individual, but from the private as ownership, as control over land, resources and others. To own was always less about protection of the self than it was about exclusion of others. As such, it is a logical violation of the ‘other self’ or, really, other selves. You against me – your gain as my loss.
To illustrate: no single event, short of war, created as much misery in a country like England as when those with access to violence (arms, laws, wealth) privatised and fenced in the land that people needed to stay alive. It came to be known as ‘enclosure of the commons’ but represented a largescale and bloody theft, allowing a tiny percentage of people to exclude the majority from access to a common heritage. The result has since been naturalised and replicated the world over and sanctified in law as ‘the rights of private property’.
No bodies were ever more violated than those brutalised as slaves or serfs, all in the name of profit and – as authors such as Kidada Williams have documented in painstaking detail – sanctified by a vicious regime of private property. Racism, as thinkers from C L R James to Angela Davis to Barbara and Karen Fields remind us, is an essential building block to the system of private capital.
No form of governance, social or economic, has plundered the resources provided by nature as much as private property (though the state ownership of communism came close).
No single circumstance undermines political rights and freedoms today more than poverty – the violent exclusion from essential human rights: access to work, income, vital resources.
The private as dominion over property thus inevitably violates the private as personal integrity and freedom. Humans become objects – my slave, my worker, my child – and are denied access to the essentials of life. Thus deprived of independence, the private reduces the freedom of the majority, all those without access to sufficient capital, to the narrow choices provided by the marketplace in service of private property – they are, in Amartya Sen’s words, effectively denied ‘the capability to realise one’s full potential as a human being’.
Over generations, open theft of common heritage became disguised as private property, hiding behind legal contracts and the cold fiction of money as wealth. One gets used to customs, this history suggests, even when they defy rational thought. The original freedom fighters against the enclosure of common land, groups such as ‘the Diggers’, were remarkably less mystified than their modern compatriots: no one is free, they declared in 1649, ‘till the Poor … have a free allowance to dig and labour the Commons’. Thomas Jefferson (the freedom fighter, not the slaveholder) would’ve understood the logic – as would’ve Toussaint L’Ouverture or Nelson Mandela.
Legally ‘set free’ to sell their labour power, the landless were instead reduced to a state of abject poverty where they became the unwilling ‘masses’ populating the satanic mills of early industrialisation – freedom as a choice between misery or death.
The excuse for the ruthlessness of the exclusion and exploitation of others in the name of private interest was always the same: the prospect of a better future for all. Today, we should ask: has it succeeded? It is a question far more difficult to answer than modern apologists such as Steven Pinker would have us believe. Yes, by any available measure, capitalism (based on private interest) has generated unprecedented wealth and knowledge.
This explosive creation of wealth, however, came, and continues to come, with a steep, and exponentially rising, price. Powered by fossil fuels, it is both depleting and burning up the planet. Grounded in extraction and exploitation, capitalist progress carries mounting violence and destruction in its wake. The flipside of civilisation, in Walter Benjamin’s words, appears to be ‘a document of barbarism’. Growth, expansion, development – the struggle to conquer scarcity both gave and took in large measure from those who populated our land. Perhaps it’s finally time to recognise the carnage that created the wealth.
At first, modern economies succeeded in providing more calories to a starving patient. Based on this initial success, the economics profession (no doubt based on sophisticated mathematical models) concluded that more calories will forever improve health. Now dealing with a lethally obese patient, our leaders and economic advisors stubbornly resist acknowledging the obvious question: if we continue on an exponentially increasing regimen of calories, won’t we incapacitate, if not kill, the patient – ourselves?
Much has been said about how the incessant race for more, bigger, faster has also led to a crisis of meaning and purpose, what King, Jr called a widening ‘spiritual death’ of living in a ‘thing-oriented’ rather than ‘a person-oriented society’, or what D H Lawrence simply labelled ‘the Mammon of mechanised greed’.
But whether the death is one of spirit or meaning, or the actual death of nature and people, all spring from a common root: the single story of self-interest, and its logical manifestation, the private. ‘We do not have to escape from the Earth,’ as the environmental activist Vandana Shiva exhorts us in Oneness vs the 1% (2019), ‘we have to escape from the illusions that enslave our minds …’
We live in a different world now. Whatever might have been justified in the past to overcome poverty and scarcity no longer holds sway. Today, we face an entirely different challenge. Not too little, but too much. Not scarcity, but abundance.
In the modern world, more is actually less. Indeed, the costs of economic growth have begun to outpace their benefits, visible in the plunder of the environment and escalating inequality. We no longer need more, but rather better and more fairly distributed, in order to provide prosperity for all. Collectively, we produce and grow enough for every child, woman and man to have a good and dignified life wherever they live. As a world community, we know more and create more than we know how to process. It’s a huge accomplishment. We should celebrate and enjoy it together, rather than remain on the deplorable path of pitting one against the other in the race for ever more, one dying of too much, the other of too little.
And yet, our dominant economic systems continue to follow colonial extraction and brutal exclusion, in the process creating two organically related, existential problems: the perpetuation (and in some cases intensification) of poverty, and the violation of the biophysical limits of our planet. What a tragic irony that, in the early 21st century, higher education’s economics departments worldwide still instruct some of our brightest minds in simplistic economic models about the efficient allocation of scarce resources, rather than in how to sustainably build the good life based on an abundance of knowledge and resources.
To emphasise: chasing the bogeyman of scarcity, we are, by now, in the process of passing some frightening historic thresholds, altering the very makeup of life and creating an unsustainable future for our children and grandchildren. It’s Barbarism 3.0.
I wonder if the real tragedy of the private lies in separating what can function only when together, in the process excluding, individualising, destroying, alienating and, in consequence, undermining the innate creativity and resilience of a necessarily complex system of interaction – between human and human, and between human and nature.
We’re living in the midst of a historic transition. It might be our great fortune that, at this juncture, we still have a choice: to wake up, or continue to muddle along on our current path. If we choose the latter, as most mainstream experts from around the world keep telling us, ‘collapse is very difficult to avoid’.
Certainly, the history of how we got here, and the options of changing course, are immensely complex. Yet the reason why collapse is virtually assured if we continue on our current path is actually quite simple: too much.
The Achilles heel of modern economies is the exponential nature of economic growth. Based on what economists consider a ‘healthy’ growth rate of about 3 per cent, the economy would have to double in output roughly every 23 years. If such growth is difficult to imagine, that’s because it is absurd. Imagine economies such as the United States with 16 times the output in 100 years, 256 times in just 200 years, or 5,000 times in as little as 300 years. There is one diagram in economic theory, writes Kate Raworth in Doughnut Economics (2018), that ‘is so dangerous that it is never actually drawn: the long-term path of GDP growth’.
Instead, we should ask, what do we really value? And how do we measure it? When authors write about economies for the common good, or for the wellbeing of all, they highlight a very different set of values than those, based on private property and private gain, that dominate modern economies today – not efficiency but health and resilience; not the bottom line but collective wellbeing. They are founded on the basic moral claim that, as the legal scholar Jedediah Purdy puts it in This Land Is Our Land (2019), ‘the world belongs in principle to all who are born into it’.
Most civilisational traditions agree that everyone brought into this world should have an equal claim to thrive. If we follow those traditions, we must conclude that cultures ‘already parcelled out’ into private property and wealth are morally bankrupt. They value the private over people.
In The Value of Everything (2019), the economist Mariana Mazzucato points to an underlying flaw in thinking: ‘until now, we have confused price with value’. Economists and policymakers have created a system disconnected from the real world that privileges market transactions over our personal and planetary wellbeing. This, too, is standard circular logic: earnings are justified because something was produced that presumably has value; value, in turn, is defined by the amount of earnings.
Here perhaps is the crux of our technocratic era: we value what we measure. When we measure the wrong things, the result is perverse. Today, what matters most to a thriving life is not counted at all in our dominant economic performance indicators. A natural environment that will continue to provide us with fresh air, clean water, rich soil – not counted. Communities that educate and nurture their members – not counted. Forms of governance with a stable degree of accountability – not counted. In the end: our ability to continue life on Earth (what is meant by the word sustainability) – not counted. We have an economic system, reflects Lorenzo Fioramonti in Wellbeing Economy (2017), ‘that sees no value in any human or natural resource unless it is exploited.’ The result is what the medical historian Julie Livingstone calls ‘self-devouring growth’. The triple challenges of climate change, pandemic and systemic racism highlight the deeper systemic defects.
Perhaps it is, then, unrealistic to expect individuals to make smarter choices, when dominant economic reasoning rewards them for moving in the wrong direction. I see this every spring when talented undergraduates face limited choices for their future: corporate law, consulting, finance, highly specialised medicine. Can we build forward on fleecing investors, addicting consumers to ever more products or making a career lying to the public, yet make it virtually impossible for those seeking a sustainable future and balanced life to pay their bills?
The urgency of now might instead require a change in the operating logic, a system that supports the core values that make up all thriving life – health, diversity and resilience. One might call it ‘shared prosperity within biophysical boundaries’ or, as Raworth has it, ‘doughnut economics’.
Whatever we call it, we need an economy focused on shared flourishing, rather than on the chimera that more money will somehow, someday magically get us there. It’s a simple and hard-nosed recognition of reality.
Beyond what is possible, we should ask what we actually want. Perhaps the deepest tragedy of the private is not even the destruction of our home in the name of self-interest, but missing out on history’s greatest opportunity, failing to realise what thinkers of the past could only dream about – a life liberated from want and scarcity. A culture where ‘the love of money as a possession’, in the words of John Maynard Keynes in 1930, ‘will be recognised for what it is, a somewhat disgusting morbidity.’ A future, as Vandana Shiva aptly summarised it, in which the economy’s ‘currency is not money, [but] life’.
It is a sorrow of the narrow that modern cultures, for the most part, no longer give themselves permission to dream and strive for a better life. Rather than idolise some past greatness or false realism that never was, why not imagine a grown and healthy adult who is no longer prisoner to the regimen of ‘ever more calories’ – a mind liberated from ‘the love of money’ that the sustainability economist Tim Jackson envisioned in Prosperity Without Growth (2009). Yet it could be even more. Prosperity without mental and cultural imprisonment, without the drudgery of wage labour, and the dismal reduction of life to cost-benefit analyses – a life, in the words of the poet Langston Hughes, ‘where greed no longer saps the soul’.
It could be a life as imagined by theorists such as adrienne maree brown in Emergent Strategy (2017) and the young activists of the International Indigenous Youth Council, the Movement for Black Lives, Fridays for Future, the Sunrise Movement or the Wellbeing Economy Alliance. People in such groups are imagining life within stable and healthy communities, respectful of difference. They envision regenerative and carbon-free economies, communities that offer meaningful work to everyone who wants it. They have drafted sophisticated policy proposals (see links above), and authored detailed accounts of a possible wellbeing economy. They are fighting for what the legal scholar Amna A Akbar in The New York Times called a governance system ‘whose primary allegiance is to people’s needs instead of profit’. In short, by finding our personal and collective sovereignty, we could, in solidarity with each other, build a thriving society for the common good, not just for the select few.
Given our current global situation, the temptation is to dismiss all such thinking as idealistic and naive. And yet, if you pay close attention, signs of life are cracking through the edifice of the old everywhere. As the social theorist Patricia Hill Collins reminds us, ‘there is always choice, and power to act, no matter how bleak the situation may be.’
German millennials have called out their elders with the missive Ihr habt keinen Plan (2019), or ‘You Don’t Have a Plan’, and then set out to construct a vision that holds promise for future generations. The public intellectual Rutger Bregman asks us to finally stop defending the indefensible. His book Utopia for Realists (2017) is grounded in a profound realisation: many utopias are more realistic than current reality, no matter how much the latter is defended as the only option by those with suits, impressive university degrees and big bank accounts.
We need to have a broad democratic dialogue on the mix of policies that might work best in promoting the common good, in overcoming the tragedy of the private. A new freedom will have to nestle within the realities of nature and the rights of others. Limits will be rediscovered as essential to freedom. This will require difficult transitions – away from fossil fuel or the mass-produced consumption of meat or the acceptance of rampant inequality. Yes, a sustainable wellbeing future will make obsolete many skills and professions, likely eliminating more jobs than it replaces, opening up opportunities for shorter working weeks for everyone. Among the many possible paths forward, the following core features will be essential:
- local, national and international regulations preventing the violation of critical ecological thresholds;
- repair of the most egregious market failures through true-cost accounting, properly valuing essential work(ers), ending the privatisation of gains and socialisation of costs, and compensating for essential ecosystem services and the care economy (a full-cost accounting of gasoline, for instance, could raise the price to $16 a gallon);
- making available basic services and basic income to everyone (we could call it a ‘self-evident truth that all Earthlings have an unalienable right to the preconditions of life, liberty and happiness’);
- access to work for all, for everyone deserves the opportunity to make a meaningful contribution;
- a basic moral recognition that nothing – not race, not nation, not gender, not personal contributions, not your zip code – should ever be legitimate cause for either extreme poverty or excessive wealth;
- and, most fundamentally, a basic acknowledgement that we don’t own or control this planet, but simply borrow it ‘from the seventh generation’ – those coming after us. The principle should always be, as many learned in kindergarten: ‘Leave it as good as, or better than, you found it.’
Yes, it is time to rewrite the script. A climate in deep crisis, a global pandemic, systemic racism and inequality are all part and parcel of the same bad script, the tragedy of the private, aggravated by an elite inability (or unwillingness?) to contemplate a better future.
Even though narrow selfishness, when elevated into ideologies in service of the private, has repeatedly brought the world to the brink of disaster, we have thus far survived largely because of our underlying ability to cooperate. It is now time to make our exceptional human capacity to create and cooperate part of our governance structures – part of the operating logic of modern societies. Perhaps then we can bring to life what others could only envision: a system focused on wellbeing of people and planet, liberating our individual and collective capabilities.
Learn more about Dirk Philipsen here