A few weeks from now, I will be taking a vacation from the Alberta winter to attend the 14th Annual Conference of the Eastern Economics Association in Boston, Massachusetts. There, I present a paper at the sessions sponsored by the Committee on Monetary and Economic Reform on the subject of “Frederick Soddy and the Doctrine of Virtual Wealth”.
Since I am not sure that all of the above will fill you with boundless curiosity, I may as well mention that I have also to act as a discussant for a paper prepared by my friend Mario Carota, of Toluca, Mexico. Mario is a farmer of Italian background, who sold out his holdings in Prince Edward Island, to live in Mexico to work among that country’s rural poor.
His paper deals with his attempt to assist the poverty of the Mexican peasant by establishing Christian producer cooperatives—for example, providing sheep or other livestock to one family which will in due course reproduce and be the starting capital for some other family: or providing marketing cooperatives so that the sweaters and blankets woven from the wool can be sold abroad and bring in money. It is all on an infinitesimal scale compared with the extent of the need—but it is a beginning.
The train of thought that this has started in my mind is this. In spite of making a presentation to a learned group of economists on what he is doing, Mario is challenging the accepted doctrine of Economic Man.
This is serious. He is attacking one of the most cherished assumptions of Economics itself. Every social discipline needs its concept of how the average citizen behaves. The law has its ‘reasonable man’—“the man on the Clapham omnibus”—the assumed average citizen with an innate sense of justice. Twelve of them, assembled in a civil or a criminal trial, are constantly used by the Law as the tool to make decisions of fact. So, Justice is kept in contact with popular sentiment by what these real people decide—and, as happened in some of the trials of Dr. Morgenthaler, their views can be a surprise to the experts.
Politics has its ‘average voter’, and the wise politician makes use of an incredible wealth of public opinion polls and sampling, designed to guide him as he sets out on uncharted waters, what the opinion of the public is likely to be on any issue. Disaster strikes the government that ever gets ‘out of touch’ with the mood of the voter.
Those engaged in marketing and advertising research make use of the same trial marketing and sampling techniques in order to find out what will best satisfy the different whims of different groups of consumers.
Economics, however, has set out on a different path. The tool of Economic science—if science it is—is a concept known as ‘Economic Man’: a person assumed to have no scruples or morals, except those imposed on him by the possible economic loss from being caught. Economic Man shops in the cheapest market, and sells his product for the very highest possible return. He does nothing he is not paid to do. He has no heart: no motivation except the welfare of his pocketbook. The theories of economics are postulated on the world being composed, as far as economic activity is concerned, by persons of this nauseating disposition.
Economic Man will never, for reasons of the general good, ‘buy Albertan’ or shop at his local Co-op store if the price of the product can be met by a different supplier at a lower price. He will never give to charity or do a turn for a friend, unless there is ‘something in it for him’. Indeed, Economics darkly hints from time to time that those who are foolish enough to disobey the ‘invisible hand’ are in some way disloyal to the smoothly working economy, and not only are doing themselves harm, but are also subverting the whole international economy.
All of which, of course, is the purest balderdash. If Economics is a science—as it claims—then its study should be of men as they actually behave, not as a theoretical model says they behave. The truth is, that the world is full of people who volunteer for good causes, Marios of various types, who give money to charity and food to the Food Bank, look after their aging relatives or handicapped children, and generally behave in a way quite contrary to that supposed for Economic Man. If Economics is to be considered a science, therefore, it should be doing market research on its model, and find out that humans at their best are motivated by a great many other factors besides greed for money.
Indeed, those who study civilizations would say that only when the world is filled with such people does civilization progress. A nation filled with Economic Men is a nation in the course of dissipation and decline. Just as the Hutterites, in a religious community, may be a model of one of the few successful ways that farming can be undertaken in the modern world, so my friend Mario, who has given up a good deal to work in Mexico and to teach Mexicans how to build up prosperity through cooperative community, may be on to a key to development that no amount of ‘aid’ programs through the injection of money can achieve.
The concept of a social system that guarantees a minimum share of economic welfare to all goes back to the time of Moses, and the idea of a rich man ending his days in a lake of fire for want of compassion on the beggar who dies at his gate dates from the time of Christ. Rightly or wrongly, for a couple of thousand years or so, a substantial number of people in the world have believed and acted accordingly, thereby abandoning their personal ambitions for wealth or political power. In other words, they have refused to act as Economic Men.
It’s just a thought—but is it possible that economic planning based on the concept that people will behave like Economic Men is doomed from the start, because such persons cannot create a free and prosperous society: putting their own economic interests first, they can do nothing but impose slavery on others?
If the truth of the way the world works is that ‘He who loses his life, the same shall find it’, then Economic Man is not only a fiction, but a fraud. The answer to Mexico’s problems is not more foreign aid—it is more non-Economic men like Mario.