Do we need to be saved from capitalism? May God save us instead from daydreamers, utopians, and naive believers in human goodness who don’t understand, or don’t want to accept, human nature and its true motivations and causes. With all their magnanimity and good intentions, they would create a catastrophe if ever they were to achieve the power to put their ideas into practice.—Most of us have encountered this notion so frequently in our lives, in any of its many variations, for the automatic response to be triggered. Capitalism, according to this commonsense view, means a dynamic economy, growth, and prosperity because it rewards performance and effort, promising a career and success to those who keep fighting, tolerate adversity, and are persistent in pursuing their goals.
What is bad about an economy that promotes initiative and personal responsibility, but at the same time appeals to ambition, greed, and egoism in order to set free the inexhaustible source of human creativity? True, capitalism does produce great inequality. But is that not precisely the secret recipe motivating people to reach the highest levels of performance—the chance to achieve unimaginable wealth while simultaneously living with the constant risk of social decline?
Humans after all are not noble, helpful, and good. This is why a successful economic system has to start with those characteristics that are typically human instead of relying on those that a majority of people simply do not possess. Sounds plausible. But is this in fact an accurate picture of human nature? An acquisitive, calculating, selfish homo oeconomicus whose universe revolves exclusively around himself? This view is immediately contradicted by the fact that loneliness and social isolation cause humans the worst suffering. Even great wealth can usually not make up for this. The connection between wealth and happiness is that the rich experience social exclusion much more rarely and receive more social respect than the poor, usually regardless of the source of their wealth.
It is interesting that in Indo-Germanic languages, the word freedom has the same root, fri, as the words friend and the German word for peace, Frieden. fri means “to love” and to be free originally meant “to belong to friends” or also “to live in peace (Frieden) with others.”6 Not the absence of ties but having ties with others makes you free, because only ties can sustain you. Humans are social creatures who live much more contentedly if they are connected to others than if they feel left alone. Not even capitalism would work if it was populated for the most part by selfish homines oeconomici who always calculate how their personal benefit can be maximized. If this image of human nature corresponded to reality, there would be no volunteer work, no citizens’ initiatives, no voluntary firefighters, and no associations except for those that could offer material benefits to their members. Ultimately, no school, hospital, or even commercial enterprise would function if everyone contributed only the bare minimum of what their employment contracts stipulate and can be controlled by their bosses. “Work to rule” is not a normal situation, but an implicit rebellion, which would quickly undermine the functioning of any organization.
This is not contradicted by the fact that people will often behave egotistically and that the needs of one’s own family are closer and more important than those of strangers. Biological and cultural evolution have equipped us with both: the instinct for self-preservation, which is primarily about one’s own and one’s family’s wellbeing, as well as empathy for the fate of others, ruthlessness and benevolence, resentment and support, greed and the joy of sharing, envy and indignation in the face of injustice even if it happens to others. As individuals, we may all have our own mix of character traits. But what characteristics become dominant in society, what types of behaviour shape a society, depends on what kind of behaviour a society promotes and rewards and what it sanctions by withholding respect and success.
Results of experimental economics suggest that initially people tend towards cooperative behaviour, which is lost when others respond repeatedly with uncooperative behaviour and make cooperation costly. A child that learns early in life that trust and openness will be exploited and abused by others will become distrustful and withdrawn. In a comparative time-series analysis, British social scientists Richard Wilkinson and Kate Pickett have studied to what extent mutual trust is dependent on social factors. Their findings are clear: The greater the degree of social inequality, the less trust people have in each other. While in the 1960s, 60 percent of Americans had basic trust in their fellow citizens, today this figure is less than 40 percent.7
When social cohesion dissolves, being trusting is no longer beneficial but instead increases the risk of being exploited. Wilkinson and Pickett’s studies also show that people have measurably less interest and concern for each other when the income gap widens.8 Thus empathy and solidarity can be socially encouraged or discouraged.
It is really not difficult to comprehend: Where honest people are taken advantage of, lying will be a recipe for success. But does it follow that people are born liars? Where the unselfish are for the most part exploited, selfishness and a chilly social climate will thrive. Yet do we not feel better in a social environment of a different kind?
As the economic historian Karl Polanyi emphasized, people’s goals are always embedded in social relations. He writes: “He does not act so as to safeguard his individual interest in the possession of material goods; he acts so as to safeguard his social standing, his social claims, his social assets.”9 This is supported by the fact that as a rule people view their material situation in relation to that of others. When behavioural experiments ask whether the subject would prefer having a monthly income of 4000 euros in a society where the average income is 2000 euros, or a monthly income of 5000 euros in a wealthy society where the average income is 10,000 euros, a majority will regularly opt for the lower income of 4000.
Since people are social creatures, they greatly care about what others think of them. Socially prohibited behaviour is therefore avoided, at least to the extent that this is an option. Of course social disapproval of begging and stealing will not keep a poor person lacking any opportunity for work or other support from doing either. However, the religious prohibition of commercial activity made it more difficult for the Catholic nobility in France and Spain to ruthlessly increase their wealth through early capitalist methods than for their Calvinist and Puritan counterparts in the Netherlands or England.
Religious and social legitimation of characteristics previously considered as a vice such as monetary greed, selfishness, and lack of social concern were at least as important for the ascent of capitalism as was the invention of the steam engine. Calvinism, for example, glorified ruthless self-enrichment as a God-given virtue. According to the Calvinist moral canon, failing to take advantage of a profit opportunity was a graver abdication of religious duty than showing a lack of concern for others. A community in which a majority of members is guided by such a morality is necessarily a cold, brutal, and unfriendly place.
In non-religious spheres, the legitimation of unscrupulousness and villainy was also advanced with fervour. Even before Adam Smith—and much more radically and cynically—the Anglo-Dutch physician and writer Bernard Mandeville praised the social benefit of greed and selfishness. His besteller, The Fable of the Bees, first appeared in 1714 with the subtitle “Private Vices—Public Benefits”. The story is about a beehive that is rich, powerful, respected, and successful, even though—or precisely because—it provides an environment in which fraud, lies, and crime thrive. Everything is working just fine—the rich bees bathe in luxury and live out their greedy lust for ever-increasing wealth without restraint while the poor bees slave away producing the luxury goods for the rich bees, which does at least give them work and an income. Of course, morality or fairness of course have no role to play.
The life of the prosperous community, however, is interrupted by the God Jupiter, who shows up uninvited and severely reprimands the sinful bees in order to return them to a virtuous life. Enrichment is now prohibited, and the rich bees henceforth live modestly and are content with life’s basic necessities. As a result, the crafts and trades are ruined, the entire bee hive becomes impoverished, while the poor bees are much worse off than they were before since they can’t find any work. The conclusion happens to be precisely the moral with which we are all too familiar.
In the cynical view of Mandeville, the rich ought to be proud of their extravagant lifestyle, since it creates opportunities for the poor to earn their keep. Few would nowadays put it so bluntly, but in a somewhat more subtle form we encounter this argument to this day.
It is quite common for the super-rich to exert massive pressure in order to push their investments towards maximum returns, exploiting any legal loopholes they can find in order to minimize their tax payments. At the same time, they boost their reputation by engaging in philanthropic projects which tend to cost them only a fraction of the taxes they have evaded, while all the more effectively burnishing their personal image. In her book on the super-rich, Canadian writer Chrystia Freeland quotes a billionaire who describes the way the super-rich view themselves in the following words: “It is the top one percent that probably make bigger contributions towards the betterment of the world than the remaining 99 percent. I’ve never seen any poor people do what Bill Gates has done. I’ve never seen poor people hire a lot of other people. That’s why I believe we should honour and hold up the one percent, those who have created value.”10 The question by what means and at whose expense someone like Bill Gates has made his billions in the first place is usually not discussed in such views.
How the top one percent view themselves is one thing. As long as the rest of us adopt greed and selfishness as the basis of society’s wealth, as long as we do not look down upon the unrestrained enrichment on the part of those who are already wealthy but instead shower them with admiration, we give all the greedy and selfish people the pleasant feeling of being socially accepted. And then we are surprised if highly profitable corporations do not have the slightest compunction about developing ever more sophisticated models for how to lower wages, circumvent environmental laws, or defraud society of the last cent of taxes they owe, all for the sake of achieving another half percent of additional profit. Or investment bankers with their bets on derivatives, which may double the price of corn or undermine entire states, doing so without even the slightest scruples and with a great deal of self-satisfaction.
Humans are not by nature ruthless, greedy, and selfish. However, a society that provides the greatest opportunities to the selfish, the greedy, and the ruthless and considers them smart, whereas allegedly good people are seen as simple-minded and naive, should not expect the majority of its members to act in the spirit of fairness and solidarity. What is perhaps more surprising is how many people nevertheless continue acting in this way.
Keynes once remarked that capitalism was based on “the peculiar conviction that repulsive people with repulsive motives would somehow produce general welfare.” One might argue that for a certain period of time this approach did more or less work. By now, however, it would be difficult to find in the actions of “repulsive people” and their “repulsive motives” any positive contribution to our common good. How could one object to the idea that in the future we should try out an economic order in which decent people with respectable motives promote the common good?