Homo economicus

"Capitalism is what humans do when they are left alone": In other words, when they are alienated from a meaningful context, of customs and traditions.

The statecraft which constructed the free market in England turned to its purposes the effects of a centuries-long development. In the course of this historical movement, market forces had come to be a dominant force in social life.

Market exchange there had always been, and in England a market economy had existed for several hundred years; but it was at this juncture in history that the truly free market came into being, thereby creating a market society.

Karl Polanyi notes that, ‘Ultimately … the control of the economic system by the market is of overwhelming consequence to the whole organisation of society; it means no less than the running of society as an adjunct to the market. Instead of economy being embedded in social relations, social relations are embedded in the economic system.

[John Gray]
False Dawn, p.11-12

As some economists have recognised, the pursuit of economic efficiency without regard to social costs is itself unreasonable and in effect ranks the demands of the economy over the needs of society.

That is precisely what drives competition in a global free market. The neglect of social costs which is a professional deformation of economists, has become an imperative of the entire system.

[…] the economic argument for unregulated global free trade involves a wild abstraction from social realities. It is true that restraints on global free trade will not enhance productivity; but maximal productivity achieved at the cost of social desolation and human misery is an anomalous and dangerous social ideal.

[John Gray]
False Dawn, p.83

The spread of new technologies throughout the world is not working to advance human freedom. Instead it has resulted in the emancipation of market forces from social and political control.

By allowing that freedom to world markets we ensure that the age of globalisation will be remembered as another turn in the history of servitude.

Jospeh Schumpeter understood capitalism better than any other twentieth century economist. He saw that it did not work to preserve the cohesion of society. Left to itself it could well destroy liberal civilisation.

That is why he accepted that capitalism must be tamed. Government intervention was needed to reconcile the dynamism of capitalism with social stability.

[John Gray]
False Dawn, p.208, 210

The laissez-faire policies which produced the Great Transformation in nineteenth-century England were based on the theory that market freedoms are natural and political restraints on markets are artificial.

The truth is that free markets are creatures of state power, and persist only so long as the state is able to prevent human needs for security and the control of economic risk from finding political expression.

[…] The parliamentarians who passed Factory Acts in the 1860s and 1870s were not reconstructing society or the economy according to a plan. They were responding to problems of working life - danger, squalor, inefficiencies - as they become aware of them. Laissez-faire withered away as the unintended consequence of a multitude of such uncoordinated responses.

[…] The market is not, as New Right thinkers have imagined or claimed, a gift of social evolution. It is an end-product of social engineering and unyielding political will. It was feasible in nineteenth-century England only because, and for so long as, functioning democratic institutions were lacking.

[John Gray]
False Dawn, p17

In a capitalist world, violent debates about truth—whether they concern questions of religion and virtue or questions about the nature of humanity— interfere with the productive conduct of commerce. It is therefore best for such questions to be eliminated or obscured.

“Capitalism,” concludes Nobel laureate Milton Friedman, “is simply what humans do when they are left alone.”

[Peter Thiel]
‘The Straussian Moment’

Paine's writings were in no special sense aimed at the working people, as distinct from farmers, tradesmen and professional men. His was a doctrine suited to agitation among "members unlimited"; but he did not challenge the property rights of the rich nor the doctrines of laissez faire.

[…] they were aimed at the great landed aristocracy, where the hereditary principle involved in the custom of primogeniture gave him offence. In terms of political democracy he wished to level all inherited distinctions and privileges; but he gave no countenance to economic levelling.

In political society every man must have equal rights as a citizen: in economic society he must naturally remain employer or employed, and the State should not interfere with the capital of the one or the wages of the other.

The aristocracy were the main target; their property might be threatened - even as far as Land Nationalisation or Henry George's Single Tax­ - and their rents regarded as a feudal exaction dating from "a French bastard" and his "armed banditti"; but - however hard trade unionists might fight against their employers­ - industrial capital was assumed to be the fruit of enterprise and beyond reach of political intrusion.

[E.P. Thompson]
The Making of the English Working Class, p.104-5

[…] the final years of the 18th century saw a last desperate effort by the people to reimpose the older moral economy as against the economy of the free market.

The classic exploitative relationship of the Industrial Revolution is depersonalised, in the sense that no lingering obligation of mutuality - of paternalism or deference, or of the interests of ‘the Trade’ - are admitted.

There is no whisper of the ‘just’ price, or of a wage justified in relation to social or moral sanctions, as opposed to the operation of free market forces.

Antagonism is accepted as intrinsic to the relations of production. Managerial or supervisory functions demand the repression of all attributes except those which further the ex­propriation of the maximum surplus value from labour. This is the political economy which Marx anatomised in Das Kapital. The worker has become an "instrument", or an entry among other items of cost.

[…] in the overstocked outwork industries, where there was always a sufficiency of unorganised "hands" competing for employment, these con­siderations did not operate. Here, as old customs were eroded, and old paternalism was set aside, the exploitive relationship emerged supreme.

[E.P. Thompson]
The Making of the English Working Class, p.73, 222-3

[…] what was ‘perfectly proper’ in terms of capitalist property-relations involved, none the less, a rupture of the traditional integument of village custom and of right: and the social violence of enclosure consisted precisely in the drastic, total imposition upon the village of capitalist property definitions.

Copyhold and even vaguer customary family tenancies (which carried common rights) might prove to be invalid at law although they were endorsed by the collective memory of the community.

Enclosure, indeed, was the culmination of a long secular process by which men’s customary relations to the agrarian means of production were undermined. It was of profound social consequence because it illuminates, both backwards and forwards, the destruction of the traditional elements in English peasant society.

[…] one finds a dense cluster of claims and usages, which stretch from the common to the market-place and which, taken together, made up the economic and cultural universe of the rural poor.

[…] But whereas it fitted the conditions of the Industrial Revolution like a glove, in agriculture it contested (at best) with older paternalist traditions (the squire's duty to his labourers) and with the tradition of earnings based on need (the older customs of differentials according to age, marital status, children, etc., which were perpetuated under the Speenhamland system of poor relief) […]

The doctrine that labour discovers its own "natural" price, according to the laws of supply and demand, had long been ousting the notion of the "just" wage.

[…] the perpetuation of Speenhamland and "rounds­ man" systems, in all their variety, was ensured by the demand of the larger farmers - in an industry which has excep­tional requirements for occasional or casual labour - for a permanent cheap labour reserve.

[E.P. Thompson]
The Making of the English Working Class, p.238-9, 244

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