Homo Economicus E-Book

Daniel Cohen

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2014

Seitenzahl: 227

Beschreibung

The West has long defined the pursuit of happiness in economic terms but now, in the wake of the 2007-8 financial crisis, it is time to think again about what constitutes our happiness. In this wide-ranging new book, the leading economist Daniel Cohen traces our current malaise back to the rise of Homo Economicus: for the last 200 years, the modern world has defined happiness in terms of material gain. Homo Economicus has cast aside its rivals, homo ethicus and homo empathicus, and spread its neo-Darwinian logic far and wide. Yet, instead of bringing happiness, Homo Economicus traps human beings in a world devoid of any ideals. We are left feeling empty and dissatisfied. Today more and more people are beginning to recognize that competition and material gain are not the only things that matter in life. The central paradox of our era is that we look to the economy to give direction to our world at the very time when social needs are migrating toward sectors that are hard to place within the scope of market logic. Health, education, scientific research, and the world of the Internet form the heart of our post-industrial societies, but none of these belong to the traditional economic mould. While human creativity is higher than ever, Homo Economicus imposes himself like a sad prophet, a killjoy of the new age. Drawing on a rich array of examples, Cohen explores the new digital and genetic revolutions and examines the limitations of Homo Economicus in our rapidly transforming world. As human beings have an extraordinary ability to adapt, he argues that we need to rebalance the relation between competition and cooperation in favour of the latter. This thought-provoking analysis of our contemporary predicament will be of great value to anyone interested in the relationship between what happens in our economies and our personal happiness.

Leseprobe

Table of Contents

Title page

Copyright page

Acknowledgements

Epigraph

Introduction

1: Gross Domestic Happiness

Lost Time

Divorcing and Ageing

Make Your Own Unhappiness

An Anthropological Monster

Ten Pieces of Advice

2: Work: A Diminishing Value

Management by Stress

The New Spirit of Capitalism

The New Age of Inequalities

The Hyper-Class

3: The Decline of Empire

Late Antiquity

Fall of the Western Empire

How the West Became Christian

Are We Rome?

Decline of American Civic Spirit

American Exceptionalism

4: De-Centring the World

From New York to Shanghai

Rethinking Poverty

Asia Takes off Badly

On China

Good-Bye Lenin

Democracy and Capitalism

Homo Politicus

5: The Great Western Crisis

Sad Globalization

Europe in Distress

De-Industrialization

Planetary Isolation

6: Darwin's Nightmare

Homo Numericus

Darwin and the Economists

The Selfish Gene

The Genetic Body

7: The Postmodern Condition

The Late-Modern World

A Postmaterialist Society?

The Spectre of Marx

Healthy Expenditures

Returning to Happiness

Conclusion

Index

First published in French as Homo Economicus © Editions Albin Michel, Paris, 2012

This English edition © Polity Press, 2014

This book is supported by the Institut français (Royaume-Uni) as part of the Burgess programme.

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ISBN-13: 978-0-7456-8012-5

ISBN-13: 978-0-7456-8532-8 (epub)

ISBN-13: 978-0-7456-8531-1 (mobi)

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Acknowledgements

I thank Francis Wolff for his friendly and profound reading of this manuscript, and I thank my editors Richard Ducousset and Alexandre Wickham for their prophetic advice.

How often have I watched and longed to imitate

when I should be free to live as I chose,

a rower who has shipped his oars,

and lay flat on his back in the bottom of his boat,

letting it drift with the current,

seeing nothing but the sky gliding slowly by above him,

his face aglow with a foretaste of happiness and peace.

Marcel Proust, Swann's Way

Introduction

Everybody is looking for happiness – ‘even the person who is going to hang himself’, as Pascal said. The modern world can almost be defined by the idea that happiness on earth is the goal of humankind. On the scale of centuries, that outcome seems to be materializing. According to Thomas Hobbes, yesterday life was ‘nasty, brutish and short’. Today, at least in the rich countries, it is long and prosperous; wars and epidemics are retreating, while democracy and freedom of thought now reign.

But that is not how people reason. For most, the harshness of life does not seem much reduced compared to how it was yesterday. About 14 per cent of Americans under the age of thirty-five have experienced a major episode of depression. In France over the last thirty years, the consumption of anti-depressants has increased three-fold, and suicide attempts among the 15 to 25-year age bracket have doubled. In the United States, indicators of wellbeing dropped by almost 30 per cent compared to the levels attained in the 1950s. In study after study, the result is the same: happiness regresses or stagnates in rich societies, in France as elsewhere.

How can we understand the paradox of a society that gives itself a goal it always fails to achieve? One answer comes immediately to mind: humans cannot be happy because they can get used to any improvement. Whatever the progress that has been made, of any kind, it quickly becomes ordinary. The page is always blank for any happiness yet to be constructed. But since humans do not manage to foresee this adaptation, their dreams of happiness remain inexhaustible. This is not in itself discouraging, since this trait is also the one that enables humans to keep an intact faith in a better future, a form of eternal youth. But this trait invites us to understand its mechanics. In this inexhaustible quest, what are the specific characteristics belonging to the contemporary world? Why does happiness seem harder to attain today than yesterday, despite (in the rich countries) much higher material wealth?

An anecdote will help us to grasp what is in play. The director of a blood bank wanted to increase his stock, so he came up with the idea of offering a financial reward to blood donors. To his amazement, the result was exactly the opposite: the number of blood donors fell. The reason is not very mysterious. People who give blood are showing generosity; they are driven by moral behaviour, a concern for others. The act of paying them changes everything. If it is no longer a matter of helping others but of earning money, their participation changes in nature. A different sphere of their brain is being called upon. The moral person leaves the room when Homo Economicus enters. Each of the two certainly has a role, but they cannot be seated at the same table.

To reach his goal, the director of the blood bank in fact had only two options: either he should give up his new arrangement and try to go back to the previous situation, or he should forge ahead by increasing the bonus to motivate donors to come forward anyway. For the last thirty years, much of the contemporary world has chosen the second of these alternatives. To function under the sole aegis of Homo Economicus, it has increased the rewards and the punishments. To keep its promises, it consequently creates a more unequal world.

This anecdote is drawn from a book with the fitting title of Les Stratégies absurdes (Absurd Strategies) by Maya Beauvallet. She shows that businesses have turned their management strategies upside down. By increasing bonuses, sometimes sharpening rivalry among their own employees, corporations are acting like the director of the blood bank. They are making the moral value of work disappear: any concern to do well, any search for one's colleagues' approval. Thus one major international corporation boasts that each year it eliminates 10 per cent of its staff in order to maintain the remaining employees' taste for winning.

And the economy is not the only thing affected. The mania for ranking things (schools, hospitals, researchers, friends on Facebook) is omnipresent. The best wins out over the good. The two most painful moments in adult life, according to all studies, are being fired and getting divorced. They have both become more frequent. In the case of marriage, I want to be able to leave my partner if I no longer love that person. But since this inclination is reciprocal, couples are becoming more precarious. To use a term from a leading light of economic analysis, Gary Becker of the University of Chicago, the labour market and the ‘matrimonial market’ now obey the same logic: to maximize the profit of the encounter, until new opportunities appear … Some win, others lose, but in every case the equilibrium becomes more fragile. A neo-Darwinian world in which the weakest are eliminated and subject to the contempt of the victors is everywhere taking hold.

Darwin himself, however, warned against the social uses of his theories. The ‘struggle for existence’ is a metaphor that he thought should be used carefully. As the biologist Jean-Claude Ameisen has shown in a poetic book,1 Darwin insisted on the existence ‘in many animal species; including humankind, of phenomena of cooperation among individuals of the same species, which he called sociability and sympathy’. But the modern world has gone in the opposite direction, to privilege competition over cooperation.

How can we understand this evolution? The list of possible causes is long. The fall of the Berlin Wall, the stunning rise of financial capitalism, globalization, and the infor­mation society are among the most frequently cited causes. Other sociological explanations had been advanced, such as the attitude of baby-boomers towards parental authority. The central paradox of this era, however, is the following: The economy is summoned to take charge of the direction of the world at a time when social needs are migrating towards sectors that are hard to place within the scope of market logic. Health, education, scientific research, and the world of the Internet form the heart of postindustrial society. None of these belong to the traditional economic mould. While human creativity is higher than ever, Homo Economicus imposes himself like a sad prophet, a killjoy of the new age.

At a time when billions of ‘new arrivals’ are coming to the table of a vacillating Western world, it is urgent to rethink from top to bottom the relation between individual happiness and the forward march of societies. By avoiding the two symmetric dogmatisms – knowing better than the people what is good for them, or inversely, letting them cope on their own – the question that is posed is nothing less than that of the course of the world society that is being constructed before our eyes.

Note

1 Jean-Claude Ameisen, Sur les Epaules de Darwin: Les Battements du Temps (On Darwin's Shoulders) (Editions les Liens qui Libèrent, 2012).

1

Gross Domestic Happiness

Lost Time

In 1998, the King of Bhutan declared that the country's goal was to attain the highest possible level of gross national happiness. But in 1999, he committed a fatal mistake: he lifted the ban on owning a television set. Rupert Murdoch quickly supplied forty-six channels via his satellite network Star TV. And so the inhabitants of the kingdom could see the usual lot of sex, violence, advertising and serials that the inhabitants of the rich countries were also watching. The result was not long in coming: divorces, criminality and drug use immediately shot up.1

Bhutan, a small country nestled between India and China, experienced in a short space of time a transition that had lasted several decades in the rich countries. In France and the United States, television was almost non-existent in the 1950s. Today there are at least two TV sets per household. Americans spend on average almost five hours a day in front of their TVs. Europeans spend an hour less. For Robert Putnam, the renowned sociologist at Harvard University, television is the principal cause of the decline of the American civil spirit. Being stuck too long in front of the set leads to neglecting friends, family, clubs and associations – all that he calls ‘social capital’.2

Television offers immediate gratification to the viewer, to the detriment of pastimes that require learning, like playing a musical instrument. But it is a pleasure that is soon regretted. All the studies show that screen entertainment is one of the most frustrating leisure pastimes for the viewers themselves. The correlation between the number of hours spent watching TV and any measure of satisfaction is negative: ‘Like other compulsive or addictive behaviours, television seems to be a surprisingly unsatisfying experience’, writes Putnam. According to the available studies, despite the time devoted to it, television satisfaction is far behind other leisure pursuits. Americans rank it after ironing clothes! Economists have identified this problem as that of ‘time inconsistency of preferences’: humans are given to activities that they later regret having practised!3 The person I am today is not what I would like to be tomorrow. For example, I would like to stop drinking, but I cannot manage to do it. I would like to read the book rather than watch the TV series, but I cannot manage that, either. To speak the language of psychoanalysts, humans are torn between the ‘id’ that seeks immediate gratification, and the ‘superego’ that pushes for deferred satisfactions that lift us above ourselves. Psychologists have even identified two regions of the brain: the limbic system for immediate satisfaction, and the lateral prefrontal cortex (the calculating part of the brain) for deferred satisfactions.4 Two distinct parts of our being are competing for our attention.

But television does more than supply immediate gratifi­cations: it transforms our gaze upon the world and into ourselves. TV characters are beautiful and rich. After a suicide on television, it has been demonstrated that the real suicide rate also increases. When a group of women are shown top models, their morale significantly drops! The impact of feminine standards as fixed by fashion magazines has been studied in France by Fabrice Etilé, who shows that it causes persistent misery. Claudia Senik speaks of ‘hopeless comparisons’ of one's own life to that of figures who cannot be imitated (stars and celebrities) – but sometimes also to those close to us who have succeeded better than we have.5

Television and advertising play on an essential aspect of human nature: the pathological need to compare oneself with others. A person can genuinely cry at the misfortune of someone else, and yet simultaneously be envious of the person who succeeds better than he does. In a laboratory experiment where people are asked about their preferences, the students at an American university respond that they would prefer to earn $50,000 when their fellow students earn $25,000, rather than earn $100,000 when the others earn $200,000. The results of this experiment are observed in real life. Happiness depends on comparisons that each person establishes with a reference group, whether friends or colleagues. In American families, an astonishing observation has been made: a wife will have a greater probability of working if her sister's husband earns more than her own husband. In effect, she must compensate for the lack of earning power she feels vis-à-vis her own sister.

But fortunately human rivalry does not extend across all dimensions. It disappears in leisure, for example. The same American college students were asked to choose between two options: (1) you have two weeks vacation and your colleagues only one, or (2) you have four weeks vacation and the others eight; they all chose the second option, that of spending four weeks on holiday. No mimetic behaviour is being observed here. Rivalry bears only on visible traits of social success. The silent happiness of others – here about free time – does not sharpen competitiveness.

The economist Bruno Frey has proposed a very useful classification to understand the mechanisms at work when people compare themselves to others. He suggests distinguishing between ‘extrinsic goods’ and ‘intrinsic goods’.6 The former relate to status and wealth: these are the external signs of social success, the social heritage that is accumulated over the course of time that marks everybody's place in society. Intrinsic goods are linked to the affection of others (relatedness), to love, to the feeling of having a purpose in life. These are experiences ‘in flux’, which change with passing time. Extrinsic goods sharpen social rivalry, while intrinsic goods augment wellbeing, but silently.

Unless you are a saint or a socialite (Schopenhauer said: without being either ‘Stoic or Machiavellian’), both kinds of goods are certainly necessary in order to be happy. But the problem is that it is hard to understand one's own emotions, and we systematically underestimate the benefits of intrinsic goods. Many people dream of a mansion and therefore choose to move out of the city centre to find a better ratio between quality and price in real estate. But they forget the psychological cost of commuting and often end up (without wanting to admit it) regretting their choice.

Why is it so hard to understand what is good for you? Daniel Kahneman, a psychologist by training who got the Nobel Prize in economics, has taken up this question. He shows that we tend to retain only two moments: the most intense and the last. Of vacations, I remember the farewells when going home and the most exciting day. Everything else vanishes in the halo of life that is past. This ‘peak/end’ model makes us forget intermediary moments.7 Doing so, projecting into the future, people tend also to ignore experienced duration. They project themselves into ‘peak’ experiences to the detriment of others in the ‘strong flow’. Memory has a hard time retaining the silent emotions of ordinary days. Marcel Proust's genius in his novel In Search of Lost Time is to show the struggle in oneself to get beyond the ordinary propensity to retain only the outstanding moments. ‘Lost time’ has the double sense of past time that you think you have forgotten, and the time you think you lost in doing futile things that are nevertheless essential.

Divorcing and Ageing

Another fundamental trait of human nature is its incredible capacity for adaptation. Polar bears and brown bears form two distinct species. Humans, by contrast, undertook long migrations both north and south; they did not mutate, but instead adapted. Inuits and Pygmies belong to the same human species, they can mate and have children. In the realm of human psychology, research has long noted this essential trait of adapting to life's events, whether happy or tragic.8 Whatever the ordeal a person may experience, the indicators of satisfaction quickly return to their initial levels.

A person seems to get used to everything, which is both reassuring and depressing. Thus across time and space, the percentages of happy and unhappy people are remarkably stable.9 This stability obviously owes a lot to humans' formidable capacity of adaptation and imitation. Any wealth or any progress is relative, and quickly dissolves in a comparison with others. When millionaires are asked about the size of the fortune necessary to make them feel ‘truly at ease’, they all respond in the same way, whatever the level of income they have already attained: they need double what they already possess! The heart of the problem is that people do not anticipate their own capacity to adapt. They think that they might be happy if they were given (a little) more and then they would be satisfied, but they are not. The rise in income to come always makes one dream, although once it is achieved, this rise is never sufficient. For people compare their future income to their current aspirations, without taking into account the ineluctable evolution of the aspirations. This is the principal key to the vain quest for happiness.10 For Kant, ‘happiness is not an ideal of reason, but of the imagination’.11

Given the average stability of levels of happiness, though, there exist certain essential parameters that affect it systematically. The relation between happiness and age is the most surprising. It resembles a U-curve: the young and the seniors are (much) happier than adults of intermediate ages. From 25 to 50 years of age, happiness constantly shrinks, before rising back up. One finds at age 70 the happiness of a young person of 30. At 80, one has rediscovered (on average) the joy of being 18! How can we make sense of this astonishing graph? Perhaps economists are not best placed to answer this question, but the distinction proposed by Bruno Frey helps us grasp what is in play. Old age liberates us from a huge weight, that of accumulating useless goods, and allows us to give their place back to intrinsic goods.

Rabelais puts in the mouth of one of his characters this question: ‘What shall be the end of so many trials and tribulations?’ The answer given is: ‘That when we return we shall sit down, rest, and be merry.’12 Old age opens us to the pleasure of simple ‘duration’, of passing time that is intrinsically valuable. Milan Kundera in Testaments Betrayed (1993) marvels at the ‘crepuscular’ late work of Beethoven. In the evening of his life, the master composed sonatas that broke the traditional codes of composition. According to Kundera, this is the work of a genius liberated from the weight of having to be one, of having to please.

Two other factors are predominant in all ages and on all continents. Whatever the situations of interviewees, divorce and the loss of a job reduce happiness by considerable proportions. These are the moments that send individuals back to solitude and to doubts about their own identity, which may make them despair. François de Singly has well described the shock represented by divorce for the person who is abandoned. The ‘ego’, supposed sovereign master of individual decisions, no longer amount to anything when the partner has gone.

One is tempted to say that it is not necessary to go much further to understand the modern world: divorce and job loss are its two most striking traits. Is the concomitant rise of these two miseries, in two such different registers, a coincidence? It is difficult to believe so. But what would be the logical connection? How can we have concocted a society that multiplies those events that so increase widespread malaise?

Alain Ehrenberg supplies a useful key to interpretation (although generally speaking he contrasts France and the United States, the answers in this domain are perfectly concordant). A modern individual aspires to autonomy, to the freedom of realizing a destiny worthy of his or her expectations. But along the way he or she discovers an unforeseen obstacle: competition with others. Tocqueville made the same observation about American society in a strong chapter explicitly titled ‘Why Americans are so restless in the midst of their prosperity’:

When all the prerogatives of birth and fortune are destroyed and all the professions are open to everyone and a person can reach the top of any of them on his own, ambitious men may readily conclude that the road to success is wide and smooth and easily imagine illustrious futures for themselves. [… However] not only are they powerless by themselves, but at every step they encounter huge obstacles that they failed at first to notice. Having destroyed the obstructing privileges enjoyed by some of their fellow men, they run up against universal competition.(trans. Arthur Goldhammer)

For an economist, competition is a priori a good thing. It is customary since Adam Smith to explain that it makes the price of merchandise drop and increases the purchasing power of consumers. On the employment market, compe­tition is supposed to enable a better matching of employees to their employers. But does this line of reasoning hold good for private life? Should we believe that couples divorce because ‘matrimonial competition’ increases the possibility of their finding a better partner? Gary Becker, Nobel Laureate in economics, thinks so.13 In A Treatise on the Family, one of the most important of postwar writings, he analyses marriage as the search for a partner in an ‘imperfect market’ that is subject to the costs of learning and rupture, and aims at the efficacy of the encounter, i.e. mating. The result (marriage) remains in suspension, however, due to the discovery of ‘better’ opportunities that would improve the efficacy of the matching. Studies of happiness show that divorce resembles more a zero-sum game: the one who is abandoned loses the happiness battle. The virtues of a competitive world are no longer valid when one is the losing party.

Make Your Own Unhappiness

Aspirants to happiness often believe they are disciples of Epicurus, who agreed with the modern idea (notably propounded by Jeremy Bentham in the eighteenth century) that one should seek pleasure and avoid pain.14 But Epicurus takes great care to distinguish pleasures ‘in movement’, which are linked to the satisfaction of a need and hence mixed with pain, and pleasures ‘in repose’, which are static, pure, and presuppose that desires have been satisfied.15 Plato in The Gorgias is more radical. The search for happiness suffers from a fundamental contradiction: happiness requires desire, yet desire excludes happiness. For Plato, happiness (if it can be called that) is the recompense for a ‘good life’, not its goal. A good life (eudaimonia) means finding one's place in the human world, like a star that turns in harmony around another. Aristotle prudently concludes that since the specificities of what is human are reason and virtue, ‘hence [a person's] life does not need pleasure to be added [to virtuous activity] as some sort of extra decoration; rather, it has its pleasure within itself’.16

Economists have long objected to the distinction between vulgar pleasures and those that uplift the soul. People who understand the beauty of a work of art are certainly happier than others. The effort that has to be devoted to understand the artistic force of an opera is repaid by a greater happiness in experiencing it, like an investment. But this does not create a qualitative difference between opera and television, only a difference in degree. Richard Layard, a disciple of Bentham, willingly admitted that variables such as purpose in life and positive relations with others and with oneself count for a lot in an individual's happiness. But why should they be opposed to the search for other, more trivial satisfactions, like having a nice car or a nice apartment? The happiness of going to a brothel might be compared with that of going to church, given that the same person can do both and calibrate the time spent in each. Everything is a question of doses.

Like a sovereign who possesses all the power levers, Homo Economicus is supposed to choose freely, according to this model, between good and evil, between time spent working and time spent lazing around. But who believes that? Far from keeping accounts of his affects, any person is a composite of diverse personalities that cohabit more or less harmoniously. You can be going to a meeting that is essential for your career and yet you jump into the water to save someone who is drowning. No calculation is at work. Due to the force of emotion, you jump from one state to another. In his book Is Capitalism Moral? Andre Comte-Sponville17 has proposed a useful typology that is inspired by Blaise Pascal's theory of three powers, which distinguished between the body, reason and the heart (‘that has its reasons that Reason does not know’). Comte-Sponville proposes four categories: economics, politics, morality and love. Each has its own rationale. A mother who takes care of her children only out of duty would be a bad mother. A politician who depended on morality to guide his or her actions would make a poor leader. Similarly, economics has its rules, those of calculation and profit-seeking, which are distinct from those of morality or politics.