Homo Economicus and the Absurd Human
The neoliberal project offers a vision of two classes, the rich, and homo economicus, the consuming human. Homo economicus is a new creature in the world, one of a long string of visions offered to the great mass of humans by the elites. It has sunk in so quickly that we are often unable to perceive the changes in our fellow humans, or even in ourselves. A simple way to imagine this is to ask what happened to the 40-hour work week, that triumph of social engineering, that badge of the middle class, handed down to baby boomers by their parents as a proud accomplishment of their parents and grandparents. Now we, all of the workers of this country, scramble to put together a work life from bits and pieces, a misery endured by adjunct professors and fast-food workers alike; or we are so moored to work that we have no actual human life, like these hominids described by Digby.
Philip Mirowski describes homo economicus in his book Never Let a Serious Crisis Go to Waste, especially Chapter 3, Everyday Neoliberalism. One of the central attributes of neoliberal humans is ignorance, meaning a perfect inability to decide on what will bring about the best outcome for society. The only function consuming humans can perform is choosing among the alternatives presented by the markets at the moment, whether it’s for consumption or for the purchase of their labor. Mirowski quotes a passage from The Birth of Biopolitics in which Michel Foucault discusses Adam Smith’s invisible hand:
For there to be certainty of collective benefit, for it to be certain that the greatest good is attained for the greatest number of people, not only is it possible, but it is absolutely necessary that each actor be blind with regard to this totality. Everyone must be uncertain with regard to the collective outcome if this positive collective outcome is really to be expected. Being in the dark[,] and the blindness of all the economic agents are absolutely necessary. The collective good must not be an objective. It must not be an objective because it cannot be calculated, at least, not within an economic strategy. Here we are at the heart of a principle of invisibility. … It is an invisibility which means that no economic agent should or can pursue the collective good.
Again, ignorance in this sense means that individuals are not capable of doing more than deciding what is in their personal interest. In other words, they are the rational choice mechanisms in the markets envisioned by neoliberal economists, and, in fact, among almost all economists through the theory of microfoundations. Individuals lack any useful agency beyond satisfying their desire of the moment. Perhaps at a later moment, they discover and satisfy another desire. Then perhaps they work at their jobs, to earn money to consume something to satisfy the desire of some other moment.
Now look at the absurd Mersault, as drawn by Camus in The Stranger. He has no interest in past or future, only the present. He only moves to satisfy a want in a moment of time. Here’s an example from the older Stuart Gilbert translation:
I told Marie about the old man’s habits, and it made her laugh. She was wearing one of my pajama suits, and had the sleeves rolled up. When she laughed I wanted her again. A moment later she asked me if I loved her. I said that sort of question had no meaning, really; but I supposed I didn’t. She looked sad for a bit, but when we were getting our lunch ready she brightened up and started laughing, and when she laughs I always want to kiss her.
Mersault is not stupid. He has a good job, does well at it, and is offered a transfer from Algiers to Paris to open a new branch for his employer. Here’s his response.
I told him I was quite prepared to go; but really I didn’t care much one way or the other.
He then asked if a “change of life,” as he called it, didn’t appeal to me, and I answered that one never changed his way of life; one life was as good as another, and my present one suited me quite well.
At this he looked rather hurt, and told me that I always shilly-shallied, and that I lacked ambition—a grave defect, to his mind, when one was in business.
I returned to my work. I’d have preferred not to vex him, but I saw no reason for “changing my life.” By and large it wasn’t an unpleasant one. As a student I’d had plenty of ambition of the kind he meant. But, when I had to drop my studies, I very soon realized all that was pretty futile.
Marie came that evening and asked me if I’d marry her. I said I didn’t mind; if she was keen on it, we’d get married.
Here’s how Jean-Paul Sartre, another investigator of the absurd, describes The Stranger:
Each sentence is a present instant, but not an indecisive one that spreads like a stain to the following one. The sentence is sharp, distinct, and self-contained. It is separated by a void from the following one, just as Descartes’s instant is separated from the one that follows it. The world is destroyed and reborn from sentence to sentence. When the word makes its appearance it is a creation ex nihilo. The sentences in The Stranger are islands. We bounce from sentence to sentence, from void to void….
The sentences are not, of course, arranged in relation to each other; they are simply juxtaposed. In particular, all causal links are avoided lest they introduce the germ of an explanation and an order other than that of pure succession….
[Can] we speak of Camus’s novel as something whole? All the sentences of his book are equal to each other, just as all the absurd man’s experiences are equal. Each one sets up for itself and sweeps the others into the void. But, as a result, no single one of them detaches itself from the background of the others, except for the rare moments in which the author, abandoning these principles, becomes poetic.
This describes Homo Economicus perfectly. I buy something, and the marketplace moves on to the next instant. Perhaps I buy something else. It really doesn’t matter. The market doesn’t care. It has no meaning. The next instant occurs. The absurd person has no sense of past or future. There is only the minute. Then the next minute. Both the market and the person are unable to see a future or a past. This is the life neoliberals envision for us.
In the middle of The Stranger, Mersault kills a man. At the end, he is convicted and sentenced to death. It doesn’t mean anything. It could have happened another way. Mersault is happy with his life. So is homo economicus. I guess.
Neoliberal philosophy: The Unexamined Life is the only life for your proles.
And what of the rich? Are they the ones with the panopticon vision of the whole? An imaginative view beyond the immediate choices? Or are they the vanguard of the shut-ins?
That will disappoint the entire political enterprise of administration and management.
This goes back to how the micro-level is related to the macro-level if not through aggregates. Now, I think you are pushing at the idea that there is not strict temporal independence either. The choices that homo economicus faces in the real world in fact are related to the choices that homo economicus faced in a previous time period, and one of those is whether to forego purchasing anything until another time period. From a modeling standpoint that choice links to some future time period when the choice is exercised or it ends as a null action. That network of event lines have complicated but not necessarily random effects on the future choices facing homo economicus.
Moreover there is an entire social mechanism devoted to making those choices comprehensible, meaningful, and framed within a narrative. Otherwise all those marketing dollars are wasted. Rational expectations are socially imposed–like it or not.
So then we face two extreme situations. Coke or Pepsi. Or a fifty-foot counter of microbrewery products from all over. As a matter of behavior, habit takes over unless and until the choice is tilted by fighting habit. Only occasionally do consumers stand there indecisive. Does that matter in considering the weekly sales of from the soft drink and beer sales?
The neoliberals are not modeling the behavior of the person as homo economicus despite their claims. They are modeling a particular kind of sales transaction that happens to be stupid enough to be tractable as an example. You can count bottles. A soft drink or beer has a small range of attributes.
And most importantly, most of the time the externalities of these transactions do not overwhelm the focus of the transaction. Unlike most corporate and government purchasing decisions in which bribes and kickback should be explicitly incorporated into the the “rational expectations” models. Wouldn’t you love to see a predictive model of defense budgets done on that basis.
The Foucault statement is interesting in that it lays out the Smithian view of a “market” as a social institution that in transaction sets both the price and the quantity for each type of good for the time period in which the market occurs — because of haggling. On most days, haggling clears the market and the producers do not have to transport home unsold goods. (Isn’t that the fable?)
And that is what all of the Coaseian superstructure of global corporations is constructed to prevent. Marketing, accounting, sales forecasting, all of the supply chain modeling, all of the customer relationship management–all that intends to prevent the information darkness that Foucault describes. And not a little of it intends to confuse the homo economicus who is the customer.
The last thing that all this administrative and corporate superstructure intends is a win-win situation (Foucault’s “certainty of collective benefit”) because that means that the corporation has left cash on the table.
Keep up with this fascinating series, Ed. I think the casting of Mercault as the example par excellence of homo economicus in on target. Maybe we need to revisit who it is who actually are the types of actors in the economy.
But notice the contradiction:
This only applies to the plebs:
It doesn’t apply to Hayek, Friedman and the rest of them. They are have real knowledge and the ability to decide on what will bring about the best outcome for society.
I am not sure how well people understand the power of monopoly. The monopoly that not only snares all natural price demand for a given product, but the monopoly that sucks down all discretionary and perhaps even non discretionary spending. In the case of business demand, the monopoly can suck down all business capital expenditures and then some. In the case of personal demand, the monopoly can suck down spending for food etc. So examples of this are cell phones, cable, restaurants, tobacco, alcohol, financial lending, charge cards, pay day check cashers. the medical industrial complex, military intelligence complex etc.
The neo liberal so called “free market” degenerates into a race to capture government regulation to create the monopolies in lieu of using disruptive technology.
Anytime some neo nutjob starts spouting Ayn Rand f**king Alan Greenspan “free market” nonsense when in fact that circle is responsible for the Reagan regressive tax increases and the inflation of the government debt to pay for the corporate plundering of America I have learned to just chalk it up to some people will always be fooled.
I am not clear as to why “The Stranger” should be singled out a absurd, to be coupled with markets operating moment to moment as if such behavior is absurd. If so, then the whole notion of Zen is absurd, along with Karl Popper’s falsification of Scientific Determinism.
The neoliberal project may offer a vision of homo economicus, but that doesn’t mean I have to accept it. Many people actually enjoy the work that they do and find fulfillment in it. Many others more enjoy their free time, and pursue various recreational pursuits. Most people don’t spend a lot of time shopping, and many enjoy charitable pursuits. Probably most people strike what to them is a fair balance between living in the moment, remembering the past and planning for the future.
And so there is nothing wrong with people deciding what is in their personal interest, whether it’s working, recreating, working for the common good, shopping, etc. if that is their desire of the moment.
“I came into this world, not chiefly to make this a good place to live in, but to live in it, be it good or bad. ” — Henry David Thoreau
The fact is that the prevailing economic situation has deprived a very substantial number of people from enjoying their work or any recreational pursuits. Current conditions demand that the employee work mandatory overtime and observe rules to “increase productivity” so as to make the job experience oppressive, i.e. refraining from unnecessary activities such as talking to coworkers or even scratching one’s nose too many times.
Many people are victimized by the stressful climate of ramped up productivity when their bodies give out under the pressure and they are cast aside by the employer with no job and no benefits, therefor no way to enjoy “recreational pursuits.” This is the reality for a great many American worker in the present day.
Probably you are referring to unskilled workers, a sector which has poor worker treatment coupled with high unemployment. However there is a large shortage of skilled workers, especially in IT and healthcare, where worker compensation and treatment are bound to be better because of the shortage, plus the work should be more interesting and enjoyable. Employers badly need trained workers, untrained workers are “a dime a dozen.”
In regard to the health care field, the fact that skilled nurses are leaving that job in droves due to the workload placed upon them would not attest to it being any longer an “interesting or enjoyable” career. As for IT, many people laid off from factory or office jobs that were outsourced went back to school to learn IT skills, only to expeeince a dearth of employment opportunities. This refrain of “employers needing trained workers” is a myth used to camouflage the grim pictureof employment opportunity in America from its populace.
It’s true that you don’t have to act like either homo economicus or the absurd person. Camus would say that having the courage to recognize the absurd and to move on in a lucid way ins spite of the absurd is the mark of a true human being.
But the plain fact is that many people know nothing outside their jobs (and only the day to day aspects of their jobs), a bit about their families, and a tiny bit about some other aspect of their immediate society, and whatever they glean from watching TV. The life of homo economicus is described in detail in this excellent book by Jennifer Silva, Coming Up Short. Most people are a lot closer to that existence than I care to think about, because it calls into question the nature of our democracy, such as it is. I watched the John Oliver show on Snowden and it is shocking to see the depths of the ignorance of people.
Much of that has to do with myths of the market. The idea is that the market is the supreme computing machine that always produces great results, but it only works if people act from ignorance. The notion that ignorance is good permeates the atmosphere. Why else do we find ourselves arguing about science with people who think evolution is a matter of opinion?
I can’t imagine that any reader of this site would be homo economicus. But that’s a tiny number. The number of non-participants in political life is large and growing. Those people are the targets of the ad campaign manipulation of the vast amount of money spent on political ads, people who market ideas about human nature and how Jeb! can meet their need of the moment.
The only thing the homo economicus needs to do is turn off the TV.
Ignorance is also avidly pursued as a desired outcome by members of the NTC. Passivity and submission make for better followership and ignorance is often a necessary to get there, whether in schools, politics, religion, corporate culture, whatever. It can come from lies, misstated facts or planned oversaturation. Texas textbooks and Fox News are good examples of promoting ignorance. So are providing false choices, apparently voluminous but in reality quite narrow. So, too, is teaching the controversy, instructing in falsehoods such as intelligent design, to convey a false equivalence between fact and propaganda, which obscures facts and leaves less time to study them. The beauty from the NTC’s perspective is that so many people want submissive followers for so many different reasons, it makes propagating it easier and less controversial.
“Homo economicus” is an imaginary straightjacket into which the neoliberal thought collective would like to confine hoi polloi. Defining humans as only economic actors deprives them of their humanity, their connectedness to others, and their capacity for group behavior. That misdescription is essential for a political movement afraid of democracy and hateful towards its political and economic opponents, but whose proponents and sponsors are always exceptions to its rules.
The assumptions about Homo economicus are as unreal as most economic assumptions. The NTC dismisses the problem by claiming that inaccurate assumptions are irrelevant if the outcomes are as predicted, a parsing that avoids the observation that economic predictions are about as accurate as weather forecasts. Indeed, 2007-2008 crash apologists denied that prediction is a function of economics.
For the political movement that is the NTC, Homo economicus share no common needs, concerns or outcomes. They have no brains, only behavior, unlike the Hayeks, Friedmans, Rockefellers, DuPonts, Sloans, Kochs and Rands. A pillar of the NTC is the contradiction that people individually are hapless, but their aggregate, mindless behavior is the most successful massively parallel computer in existence. It drives the economy and all human behavior. And necessarily inadvertently, it generates the only good outcomes possible. No planful behavior, no government policy or social movement could better it, only interfere with its brilliance. The Randian emotional projection is palpable, as is the contradiction that the NTC is itself is a generations long political movement.
The evolutionary analogy that is Homo economicus is forced. Evolution may be a mindless process of nature, but its consequences are not progress, only change and local adaptation. It captures, however, the NTC view that only a few adapt to changing environments and become the norm in a new population. The corollary is that the vast majority of species’ members are left insufficiently adapted and dead. The wealth elite prosper because they are “naturally” well-adapted. The remainder of humanity live “unavoidably” nasty, brutish and short lives.
The analogy is false. Nature may have no intentions, but humans do, collectively and individually. Morality and thought are supposedly what separate us from the rest of nature. The analogy is also strained because the NTC’s preferred referent is not to evolution but to Social Darwinism. SD is neither social nor Darwinian, neither biological nor scientific. It is a self-serving attitude that elevates brutal selfishness to a high art. SD treats success as deserved, “natural” and unchangeable by human action, thus encouraging ignorance and passivity. In reality it is an outcome of lucky parentage and persistent individual and group behavior.
The success of the NTC in penetrating economics, business, law and political science faculties, think tanks, banking, corporate boards, governmental decision making and the culture in general, despite the harm it does to the vast majority of people, is a tribute to brains, guile, persistence, unlimited financial backing and social networking. It is proof of the very social character that the NTC wishes to deny to those who would oppose them.
I think Foucault’s interpretation of the invisible hand is rather dodgy. A lot of the historical details in Birth of Biopolitics probably don’t bear close examination. That’s forgivable because it is a set of lectures; not a carefully edited and researched book. And details aside, he was onto the significance and the key features of neoliberalism early. Mirowski, Harcourt, Dean and others have provided interesting and important revisions since.
Anyway, back to the invisible hand. A lot of Foucault’s work turns on notions of visibility and invisibility and reversals e.g. Discipline and Punish. It’s no surprise he picks up on the invisible hand and gives it his own particular twist. Mirowski, it should be noted is critical of Foucault on this issue. He’s also very skeptical of the kinship neoliberals claim with Smith and with good reason. The invisible hand appears once in Wealth of Nations. It’s a metaphor. Not a concept. Not a theory. The whole modern notion of the invisible hand didn’t get traction until the rise of neoclassical economics. It’s mystification.
Read Smith or some of the historians and philosophers who have read him carefully and attempted to reconstruct what he was saying in the context of the period he was writing and in the context of his other big book, The Theory of Modern Sentiments, and you’ll understand that Smith’s thinking is at odds with neoclassical economics and neoliberal thinking. That is to say you don’t need to read Mirowski to debunk neoclassical economics and neoliberalism. You could simply read the person they claim as the the great father and debunk them because their claims of kinship are complete horseshit.
Back to Foucault on origins:
I agree that Foucault’s reading of the “invisible hand” is a strange reading. I take it to be a more nuanced conception, looking for ways to justify the neoliberals who assert that markets are a better way to manage the economy than governments. Thus the next sentences in The Birth of Biopolitics relate to the impossibility that government can do a better job of allocating resources than the markets, and worse, that the sovereign cannot even have a position of the use of markets.
Much of neoliberal theory depends on multiple meanings of words. What is freedom? What is a market? What does the invisible hand mean? In each case, there are multiple meanings. You can hide a lot from people by claiming that you support freedom, you can conceal graft and corruption and legislative conniving behind the word market. The invisible hand metaphor, like all metaphors, is best seen as a way of trying to make an idea seem concrete. It certainly shouldn’t be operationalized, nor should any metaphor.
Ed, I agree. I think another difficulty with Foucault, certainty apparent from recent debates, is that it isn’t always clear when he providing a reading of a text or an account of someone else’s reading of a text.
I do think he is onto something, which you also pick upon, that power is often about visibilities and invisibilities. The invisible hand of the market in the hands of neoclassical economists and neoliberals is pure mystification. Smith adopts a plain, common sense approach. He’s not the author of the invisible hand of the market nonsense.
And too true about freedom. Their conception of freedom is very limited. You are free to be a rational utility maximizer in the totalitarian world of the market!
Foucault also has interesting stuff to say about the neoliberal self in Birth of Biopolitics. It is not merely that we are rational utility maximizers but that the self is itself a rationale utility maximizing project. We don’t just participate in markets; the market is our very being. We are entrepreneurs of the self.
It is quite an interesting journey to read David Graeber’s The Utopia of Rules in one sitting after reading this post. The discussion of inequality of power making the powerful lazy and thus stupid and stupidity being the logic of systemically violent institutions just because they can. And then the folks on the short end of things are obligated to spend time in energy trying to figure out the institution in which because of stupidity, one moment is disconnected from the next.
Nice summary, TarheelDem