Homo Economicus

It is currently trendy to blame the ills of the modern world on capitalism, as if that neatly explains everything. Capitalism does, of course, steer the behaviour of people to some extent, but it seems odd to me to only examine the incentive structure while ignoring the characteristics of the creature that is driven by those incentives.

Homo economicus is a term that has been used to denote a perfectly rational, self-interested economic actor. It is typically used in criticism of economic reasoning that is thought to be overly simplistic. I, however, use the term to describe that part of humanity, ascendant in our current age, that is driven by economic concerns. Here I will give some thoughts on this creature.

Homo economicus is typically characterised by excessive and conspicuous consumption. His consumption is excessive because it is out of proportion with his needs. It is limited only by his means, not by any sense of moderation. And his consumption is conspicuous because he must signal his status. This need for status, and the need to conform to the expectations of the culture, cannot be overstated. There are a great many people who care less about the luxuries they acquire than the impression that they can make on others simply by having them. I suspect that the strongest force here is actually the shared values and language created around a particular level of consumption. It just so happens that this level is being dragged upwards, both by those who care to signal their status competitively, and the ever increasing efficiency of production.

To this common description I would add a further charge – that of excessive labour. In order for there to be excessive consumption there must also be excessive production. Not that all labour is productive- more and more people exist between production and consumption, or outside that process altogether, skimming some money off the top, living off the excess production of others. There are also the rent-seekers – the modern day landed gentry. But the finer details are not important, what interests me is the social and spiritual cost of this system. I do not deny that the privileged position that I occupy, and the incredible standard of living now on offer to so many, is in part the result of the operation of this system. I do not long for the past, for in a material sense there has never been a better time to be alive. However, this system has been sold to us as a complete solution, and I think many are finding that it is unable to satisfy all of our needs.

To put it simply, Homo economicus seeks happiness through changes in the outer sphere – that is, the world. But he rarely considers trying to change the inner sphere – his own mind. And this is foolish because happiness does not exist in the outer sphere, all activity there is at best a clumsy and indirect attempt to affect the inner sphere. Why not work on the inner sphere directly? This is what sages and contemplatives have been telling us for as long as we have had words. So why has this advice not stuck?

There are forces that counter this. There is the social pressure, the endless status game. Perhaps we fear that the most shameful move in the status game is to bow out, we find it more comforting to play the same game as our peers even if we always lose. Status at least provides us a metric, and metrics are comforting. We stay in the game because that’s where our friends are, our families.

I am not interested in the status game, I do not care for the rules. I may be compelled to hold my tongue around those who have embraced it, for they may have tied much of their self-worth to that pursuit, and my disinterest will come across as contempt.

“the modern West cannot tolerate the idea that men should prefer to work less and be content to live on little; as quantity alone counts, and as everything that eludes the grasp of the senses is held moreover to be non-existent, it is taken for granted that anyone not producing material things must be an ‘idler'”
– René Guénon

The cost of entering the game is too high. I choose to work as little as possible because that allows me to follow my own interests, to spend time thinking about things like this. My life is made out of time, why sell more of it than I have to? I am selfish, I would rather keep it to myself. And there is nothing as important to me as the autonomy of my mind. The mind, as with the body, is shaped by work. I am happy to subject my body to some menial labour, it needs to be regularly in motion anyway, but my mind is my own, to put it to work on problems that do not interest me is to make it less fit for my own purposes. The world shapes the mind, and that influence is harder to resist than I would like.

But all of that is aspirational, which is perhaps just another spectre to shake off. We should be free to question the metrics by which society measures us, but what about questioning the very idea of metrics? Most wretched of all is the man with no aspirations of any sort, so we are told. It is at least coherent, if highly eccentric, to forgo the status game to pursue spiritual success instead. At least the spiritually inclined person wants something. The person with no metrics must want for nothing- how horrifying!


“Through evaluating alone is there value”
– Friedrich Nietzsche

Nothing is exempt from our judgement. Boundless, endless judgement is an inherent part of Homo Sapiens. Homo economicus simply anchors this familial propensity to the most discrete value – the almighty dollar. For most of the pre-history of mankind survival was the primary metric by which to judge ones actions. But for those wealthy enough that the possibility of death is rarely present, money now takes its place as the primary metric. And for those not interested in money, well, they will find some other metric. There is seemingly no getting outside of metrics.

How seductive money is as a metric- it exists as a number, as opposed to other metrics, which can be only inelegantly represented by numbers. This must be a powerful trait, as money seems to have superseded so many other metrics in importance, even while being only a very indirect method of achieving most people’s stated aims. Few people will say that their goal in life is to acquire money, but they will then spend the better part of their waking life doing just that.

I suggest to you that money is such a powerful driving force precisely because it is so easily measured. How does one begin to measure happiness, contentedness? Even pleasure, which is so directly related to behaviour, and which has become the basis for a large proportion of moral reasoning, is horribly difficult to define, let alone measure. Money is rarely ambiguous. $5 is more than $4, therefore $5 is better than $4. Money is easy to talk about and think about. This is a feedback loop- everyone talks about money because it is easy to do so – everyone is talking about money, so it must be important.

Are any of the truly important parts of life easy to talk about? This is the tyranny of the word – everything is subservient to it, and shaped by it. If something is hard to contain in words, we will talk about something else instead. The intellectual mind only understands words, and so has little sense of the value of those things that cannot be contained in words. Everything that is truly important to the unconscious is hard to talk about, and so is largely ignored by the intellect. This is the tyranny of reason – everything must be reasoned about, and reason operates on simplistic symbols. If something is complex, or only vaguely understood, it must be abstracted and systematised for reason to work on it, or it will be ignored.

The dollar is highly amenable to the word and to reason. The improvement of the human spirit is not. I do not wish to understate the importance of words and reason, they are surely our most powerful tools, but they must be wielded with precision. What proportion of all recorded words and reasoning has furthered the human spirit? Only a tiny fraction.

The vast majority of our words and reasoning have been dedicated to changing the world with ever increasing efficiency. Though we have benefited materially, it is not clear to me that we have improved ourselves greatly as a species.

On the Origins of The Species

The agricultural revolution placed a new selective pressure on humanity – those who produced more, did better. In the early ages, crops had not yet undergone the generations of refinement that would greatly increase their yields, and farmers were less knowledgeable. In those times, famine and hardship would have been common, and those who worked harder and longer would have seized a survival advantage over those who did not. Lazy, contented Homo sapiens, whose needs were met by infrequent labour, and who relied on the world as it was, were replaced by production obsessed Homo economicus, who must always be altering the world around themselves, and whose survival depended on efficiency.

Homo sapiens was gifted by nature two incredible abilities. The ability to shape the world, and the ability to shape oneself. Shaping the world began with tool use, with the precision and dexterity of the hand that allowed the creation of the spear. It expanded as we learned to harness fire, which required of us the intellectual capacity to understand, model and predict the behaviour of parts of nature.

Our ability to change ourselves is somewhat less refined. The basis of this ability is learning. Without information, there can be no change in ones mind. Learning is crucial to both of these capabilities, we have no instinct for spear production- that was a learned behaviour. Learned behaviours are found in many animals of course, but only to a very modest extent. As we settled over most of the planet we learned to wear clothing in cooler climates, hunt whatever kinds of animals we encountered, and eventually to farm and construct with whatever natural materials were available to us. We learned a multitude of ways of living, dictated by the environment and by religious and cultural norms.

Changing our way of life seems to be primarily a group activity. Rarely an individual has wandered into the desert and invented a new way of living, most of us go with the flow, so our mode of living is dictated by no individual, nor even a committee, rather it is decided by the unconscious will of the masses. We are pack animals, social pressure is the main method by which our way of life is controlled. Any deviation from the current social arrangement is resisted, it is for this reason that personal change is hard.

Homo economicus is obsessed with changing the world, but rather disinterested in changing himself. He also thinks of worldly change as the ultimate goal, any personal change is subservient to that goal. He learns and changes only so that he may become more efficient in pursuing that goal.

My awareness of this sub-species came from the realisation that I am not among their number. I clearly have some urge to production and labour, or I would not have written all of this, but it is not natural or easy. I am, essentially, lazy. I suspect that this is at least somewhat genetic. I am lazy as Homo sapiens is lazy, and as most other mammals are lazy. The benefits of excessive production do not inform my behaviour, I am not driven in that way. Further, I question the culture that has made it the norm. I am productive, but only in the ways that my interests dictate. I do not feel the urge to produce for the sake of production or consume for the sake of status.

The Real Problem

“Far out in the uncharted backwaters of the unfashionable end of the Western spiral arm of the galaxy lies a small unregarded yellow sun. Orbiting this, at a distance of roughly ninety million miles is an utterly insignificant little blue-green planet, whose ape descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea. This planet has, or had, a problem, which was this. Most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small, green pieces of paper, which is odd, because on the whole, it wasn’t the small, green pieces of paper which were unhappy.”
-Douglas Adams

We have woven a grand narrative about wealth, one that pervades every aspect of our culture. It is this – that wealth and consumption can bring happiness. And it does not seem to matter how many times it is disputed, or how much evidence we gather to the contrary, we continue to behave as if it is true. This narrative is tightly coupled with the western ideals of individual freedom and progress.

As I have said, the opportunity to display status is surely a large part of our desire for material wealth. And the need to signal status is universal among humans, although it can take many forms, and can be somewhat suppressed by cultural norms. Status is a proxy for genetic fitness, a way to determine the quality of potential mates. There will always be competition for status, but economic competition provides an upwards pressure on production.

Consumption is thought to more directly bring happiness. This is, despite our efforts, central to our narrative, because it is told to us by our own minds. This is the very nature of wanting – the state of wanting is mildly unpleasant, and the state of having is imagined to be pleasant. Having is pleasing, of course, but only temporarily. Satisfying a want only frees you up to want the next thing. There is no end to wanting, and yet acquiring a want feels like progress.

“Growth for the sake of growth is the ideology of the cancer cell.”
– Edward Abbey

Our economic systems are built upon another kind of progress – growth. Perpetual growth may have seemed possible when there were a few million, even a few tens of millions of people on the planet. But now? There is no room to grow into. The growth of the human world was merely the redistribution of finite natural resources. As a cancerous growth redirects blood vessels into itself, so we have been siphoning all available resources out of the environment. We are a cancer on the world. To some extent we are aware of this, but what is our solution to the problems we are causing? More technology, more progress. If we just keep marching down this road maybe everything will come good again. Once again, our instinct is that the world can be changed to suit us, rather than changing ourselves to better fit in this world.

Consumption, individual freedom, progress. The grand unified theory that people getting things they want is progress, a step on a path that goes somewhere. There is no end to that path, nor even a sense of what an end could look like. Our utopian visions are of unlimited consumption without any productive labour, as if that could be psychologically satisfying. Is there supposed to be some escape velocity where life becomes measurably better if your wants can just be satisfied rapidly enough? Faster, more, now – this is the guiding principle of our culture. Although “guiding” may be a slightly misleading word- blindly following our desires is not choosing a destination.

Austerity, self-control, contentment. Let us at least consider alternative ideas.


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