Brad DeLong — Should-Read: Peter Hall: IDEAS AND INTERESTS

Aristotle dealt with this in Nichomachean Ethics, Book One.

Aristotle asserts as evident that every agent acts for an end that the agent perceives as being a good. Aristotle went on to say that agents disagree over what is perceived to be good. Then Aristotle examines various theories based on different conceptions of the meaning of "good."

"Good" means desirable. So this reduces to desire is the chief motivator. But desire is not homogenous. The ancients distinguished between base desires, noble desire, and desire based on wisdom, corresponding to the belly (senses), heart (virtues) and head (wisdom).

Aristotle examines the different theories about this. 

Hedonism, from Greek hedone meaning "pleasure," emphasizes sense gratification. Pursuit of the good in this view involves maximizing pleasure and minimizing pain. This is essentially the view that Jeremy Bentham adopted that became the basis for the economic "calculus of utility." 

Higher than this are views that emphasize the virtues that are the basis of right action and sterling character. Heroism is its superlative. This is called sophrosyne in Greek and it is a form of wisdom

Higher still is the view that the summum bonum, or highest good, is wisdom. Wisdom is dividend into practical wisdom or prudence (phronesis), and theoretical wisdom (sophia). While sophia doesn't figure directly in achieving happiness in life since it is not practically oriented, it is the basis for being human and taking a rational approach to life, since it is based on reasoning. Homo sapiens identifies humanity as characterized by the rational element and its use.

 In the Greek vie, a primary and fundamental question with which aspiring and inquiring human beings face is what is the good for man (human being). This requires identifying and prioritizing various goods from base through noble to intellectual.

A related question is what does it mean to live a good life in a good society, since the ancient Greeks held it self-evident that civilized life is inherently social.

Approaching such questions is based on rational inquiry. Plato and Aristotle agreed that happiness results from a balanced life in which goods are prioritized in relative to the highest good.

The concept of the highest good persisted in the West until the Enlightenment, when tradition gave say to new methods of inquiry, scientific method in particular. Naturalism as a framework for doing science was taken to imply materialism. From a materialistic perspective, happiness seems to derive from maximizing pleasure and minimizing pain individuality. 

Maybe we would be well-advised to revisit the ancients?

Grasping Reality
Should-Read: Peter Hall: IDEAS AND INTERESTS
Brad DeLong | Professor of Economics, UCAL Berkeley

Oleg Komlik — Karl Polanyi on the Rise of Fascism and Market Economy

Karl Polanyi was deeply concerned by the essence of Fascism and focused on the institutional structure from which Fascism starts its march. He devoted the final parts of his magnum opus The Great Transformation specifically to this crucial topic and elaborated a bright analysis of the dark rise of Fascism between the two world wars. 

The following passage is composed from excerpts I selected from this insightful classic book and assembled them as a short article. I urge you to delve into this piece (and then to read the full original chapters) and to mull over the substance of fascist situations and moves, as well as their linkage to free market and economy of self-interest, which generate anti-individualistic and repressing endeavors directed to change not only the political sphere and societal fabrics, but human consciousness itself.

Economic Sociology and Political Economy
Karl Polanyi on the Rise of Fascism and Market Economy
Oleg Komlik | founder and editor-in-chief of the ES/PE, Chairman of the Junior Sociologists Network at the International Sociological Association, a PhD Candidate in Economic Sociology in the Department of Sociology and Anthropology at Ben-Gurion University, and a Lecturer in the School of Behavioral Sciences at the College of Management Academic Studies

Samuel Bowles — How the Deadly Sin of Avarice Was Rehabilitated as Self Interest

In the aftermath of the stock market crash of 1987, the New York Times headlined an editorial “Ban Greed? No: Harness It,” It continued: “Perhaps the most important idea here is the need to distinguish between motive and consequence. Derivative securities attract the greedy the way raw meat attracts piranhas. But so what? Private greed can lead to public good. The sensible goal for securities regulation is to channel selfish behavior, not thwart it.”

The Times, surely unwittingly, was channeling the 18th century philosopher David Hume: “Political writers have established it as a maxim, that in contriving any system of government . . . every man ought to be supposed to be a knave and to have no other end, in all his actions, than his private interest. By this interest we must govern him, and, by means of it, make him, notwithstanding his insatiable avarice and ambition, cooperate to public good.”…

The idea that base motives could be harnessed for the public good is what I term economic alchemy. And in Hume’s time it was definitely a new way of thinking about how society could be governed.…

Magical thinking that leads to the liberal paradox of reconciling social, political and economic liberalism, or to put it another way, reconciling homo economicus with homo socialis.

From there, it was a short step to thinking that while ethical reasoning and concern for others should inform one’s actions as a family member or citizen; the same did not go for shopping or making a living.

Evonomics

How the Deadly Sin of Avarice Was Rehabilitated as Self Interest

Samuel  Bowles

Samuel Bowles, is at the Santa Fe Institute, recently published The Moral Economy: Why good incentives are no substitute for good citizens and is one of the authors of The Economy, a free online introduction to economics by the CORE Project, He also wrote Microeconomics: Behavior, Institutions and Evolution, and with Herbert Gintis, A cooperative species: Human reciprocity and its evolution.

Here are a couple of relevant quotes from Keynes:

When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals.We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease…

But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our godsfor a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.

—as quoted in "Keynes and the Ethics of Capitalism" by Robert Skidelsy

The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems — the problems of life and of human relations, of creation and behaviour and religion.— First Annual Report of the Arts Council (1945-1946)

Attributed to Keynes:

Capitalism is “the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds.”

— Attributed by Sir George Schuster, Christianity and human relations in industry (1951), p. 109

Recent variant: Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.— As quoted in Moving Forward: Programme for a Participatory Economy (2000) by Michael Albert, p. 128

Wikiquote

Adam M. Grant — Why Learning Business Economics Shrinks Our Souls – The perils of teaching homo-economicus

But maybe studying economics doesn’t change people. It could be self-selection: Students who already believe in self-interest are drawn to economics.

There is evidence for selection. In a study of over 28,000 students in Switzerland, 62% of economics students gave money at least once to help students in need, compared with 69% of non-economics students. These differences were already present before the students took a single economics course: students with lower giving rates were drawn to economics. As freshmen, before their first lectures, 71% of the students who chose economics contributed, compared with 75% of non-economists.

But this doesn’t rule out the possibility that studying economics pushes people further toward the selfish extreme. Along with directly learning about self-interest in the classroom, because selfish people are attracted to economics, students end up surrounded by people who believe in and act on the principle of self-interest.

Extensive research shows that when people gather in groups, they develop even more extreme beliefs than where they started. Social psychologists call this group polarization. By spending time with like-minded people, economics students may become convinced that selfishness is widespread and rational―or at least that giving is rare and foolish.

To figure out whether economics education can shift people in the selfish direction, we need to track beliefs and behaviors over time—or randomly assign them to economics exposure. Here’s what the evidence shows:

Research seems to indicate that those who study economics have a maturity problem.

As a business school professor, these effects worry me. Economics is taught widely in business schools, providing a foundation for courses in management, finance, and accounting. Business is now the most popular undergraduate major in the US, and it’s growing in market share.…

Calling economists “rational fools,” Sen observed: “The purely economic man is indeed close to being a social moron.”

Evonomics
Why Learning Business Economics Shrinks Our Souls – The perils of teaching homo-economicus
Adam M. Grant| Professor of Management at the University of Pennsylvania’s Wharton School

David F. Ruccio — “The quality of owning freezes you forever into ‘I'”

“The quality of owning freezes you forever into ‘I'” is a fundamental teaching of perennial wisdom.

A key teaching of perennial wisdom is that as long as one believes that one owns anything, one cannot own everything, even though in reality, you ARE everything; for reality is indivisibly one. Wisdom is realizing this. Love is the great unifier. Spiritual maturity is the expansion of love.

Right living is based on stewardship rather than ownership. Ownership is the booby prize. It is also a booby trap.

An economic system based on pursuit of self-interest, acquisitiveness, and ownership of property can never be the basis for a highly functional society. Internal contradictions arising from clashing interests and asymmetrical distribution doom it. The childish game of king of the mountain goes on until the level of collective consciousness rises enough to transcend it.

The applicable perennial wisdom is summarized in Meher Baba's discourse, The New Humanity, to which I have link several times in the past. This is the nub of it: We are captured within our own ignorance collectively, and we must rise above it individually in order to shift the collective mindset. A spiritual awakening is needed for this.

The root-cause of the chaos which precipitates itself in wars is that most persons are in the grip of egoism and selfish considerations, and they express their egoism and self-interest individually as well as collectively.

This is the life of illusory values in which men are caught. To face the Truth is to realise that life is one, in and through its manifold manifestations. To have this understanding is to forget the limiting self in the realisation of the unity of life. 

With the dawn of true understanding the problem of wars would immediately disappear. Wars have to be so clearly seen as both unnecessary and unreasonable that the immediate problem would not be how to stop wars but to wage them spiritually against the attitude of mind responsible for such a cruel and painful state of things. 

In the light of the Truth of the unity of all life, co-operative and harmonious action becomes natural and inevitable. Hence, the chief task before those who are deeply concerned with the rebuilding of humanity, is to do their utmost to dispel the spiritual ignorance which envelops humanity.

Achieving spiritual understanding of true value based on the unity of existence and life is the practical aspect of the perennial wisdom that lies at the heart of all religions and wisdom traditions and has been imparted by sages from of all times and climes from time immemorial.

To understand the problem of humanity as merely a problem of bread is to reduce humanity to the level of animality. But even when man sets himself to the limited task of securing purely material adjustment, he can only succeed in this attempt if he has spiritual understanding. Economic adjustment is impossible unless people realise that there can be no planned and co-operative action in economic matters until self-interest gives place to self-giving love. Otherwise, with the best of equipment and efficiency in the material spheres, humanity cannot avoid conflict and insufficiency.

But what about individualism and freedom?

National, economic, religious and cultural freedoms are the reflections of the duality of existence. They exist only in varying degrees, subject to constant discordant adjustment. Even when won through persistent effort, they cannot be permanently maintained because the external conditions upon which they have been constructed are themselves subject to deterioration.

Only spiritual freedom is absolute and unlimited; when it is won through persistent effort, it is won forever. For, although spiritual freedom can and does express itself in the duality of existence, it is grounded in and sustained by the realization of the inviolable unity of all life....

One important condition of spiritual freedom is freedom from all wanting. It is wanting itself which chains life by attaching it to the conditions in environment which would fulfil that want. If there is no wanting, there is no dependence, and therefore no limitation."
The individual never achieves true freedom until he is no longer pushed or pulled by any inner compulsion. When he has worked through all the desires and worn them so threadbare that he can be, or not be — have, or have not — then he is free."

When the individualized soul breaks through the encasing steel armour of wanting, it emancipates itself from its illusory bondage to bodies, mind and ego. This is the spiritual freedom which brings with it the final realization of the unity of all life and puts an end to all doubts and worries....

It is only in spiritual freedom that one can have enduring happiness and unhampered self-knowledge. It is only in spiritual freedom that one finds the supreme certainty of truth-realization. It is only in spiritual freedom that there is a final end to sorrow and limitation. It is only in spiritual freedom that one can live for all, and yet remain detached in the midst of all activity.

Any other lesser type of freedom is like a house built on sand, and any lesser attainment is fraught with fear of decay. There is no gift greater than that of spiritual freedom, and no task more important than helping others to find spiritual freedom."

Meher Baba in The Narrow Lane, edited by William Le Page, pp. 133-134

Occasional Links & Commentary

“The quality of owning freezes you forever into ‘I'”
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Bryan Caplan — Conspiracy Theory: The Hidden Agenda of the Political Mind

It's a book review, but it's value lies in summarizing how ideology trumps self-interest. Self-interest is too narrow a concept to account for human motivation, choice and action. Narrow utilitarianism is not sustained by evidence.

Does self-interest explain individuals' political views? Surprisingly, political science's standard answer is No. While self-interest occasionally plays a role, it poorly predicts both issue positions and voting behavior.

Unlike most economists, I strongly endorse political scientists' consensus. Their research doesn't just look solid. I've also personally played with the data for over a thousand hours, confirming that their basic approach is correct. When I teach this material, I make my graduate students hunt for counter-examples - exceptional cases where self-interest ishighly predictive of political views. Most return from this quest empty-handed, or nearly so. 

Jason Weedon and Robert Kurzban's new The Hidden Agenda of the Political Mind: How Self-Interest Shapes Our Opinions and Why We Won't Admit It (Princeton University Press, 2014) frontally attack the academic consensus against political self-interest. Since they charmingly paint me as a leading voice in this consensus, it is in my self-interest for their book to be widely-read. Unfortunately, Weedon and Kurzban are basically high-brow conspiracy theorists. They trumpet a strong, incredible thesis, then "interpret" virtually every fact to fit it...

Econlog
Conspiracy Theory: The Hidden Agenda of the Political Mind

Bryan Caplan | Professor of Economics, George Mason University

Bryan Caplan — The Evidence of Altruism

The logic of collective action versus the free rider problem. Take that, economic liberalism.

Each of these stories appeals to self-interest, but economists almost uniformly reject them as absurd. Why? Because they ignore another beloved economic insight: the logic of collective action. When actors have a small effect on big social outcomes, and their only incentive to act is the big outcome itself, selfishness urges them to stand down, twiddle their thumbs, free ride, and yawn "Let someone else do it."

Econolog
The Evidence of Altruism
Bryan Caplan | Professor of Economics at George Mason University, research fellow at the Mercatus Center, adjunct scholar at the Cato Institute.

Bryan Caplan is a Libertarian (anarcho-capitalist). But see his Why I Am Not an Austrian Economist.

Apparently, some Libertarians (right libertarians) get it about the logic of collective action and the free rider problem that arises from economic liberalism based on self-interest (rational pursuit of maximum utility).

On the other hand, all left libertarians get this, as well as social democrats and heterodox economics of the left — which is why they are on the left. Caplan links to the Wikipedia article on the logic of collective action, which is chiefly about the book of that title by Mancur Olson. What it fails to mention is Nobel laureate in economics Elinor Ostrom's collective action and social development. See her paper, Collective Action and the Evolution of Social Norms.

Oh, and contrary to Libertarian assumptions to the contrary, some people are actually motivated by altruism. Moreover, this is the normal path of human development toward self-actualization and unfolding human potential.

Altruism one manifestation of spiritual maturity. Caplan seems to think that his explanation is comprehensive, whereas it is only partial. Just as humans develop physically, emotionally and intellectually, they are also capable of developing spiritually, that is, the the direction of greater universality as the boundary of individuality recedes toward the horizon of wholeness.

Spiritually immature people imagine that altruism means giving up individual desire, choice and action, which kill one's individuality, one's sense of personal self, that to which one relates everything, which is what one is. However, the opposite is the case. As one grows spiritually through actualizing one's potential as a human being, one becomes more fulfilled, more complete, and happier. As Aristotle observed in Book One of Nichomachean Ethics, happiness or well-being (eudaimonia) is the by-product of excellence (arete). This is consistent with the perennial teaching of those to whom humanity looks to as sages about the spiritual path and the progressive realization of inherent potential. To miss this is to miss what is truly important in life.

Gavin Kennedy — Mickey Mouse Is Not A Guide To Adam Smith's Example Of His 'Butcher, Brewer And Baker' Example

Setting the record straight on Adam Smith and pursuit of self-interest.

The short quotation from Adam Smith refering to the famously misunderstood example of the “butcher, brewer, and baker” in Wealth Of Nations. The quotation has nothing to do with selfishness by only focussing on their own self-interest. I have demonstrated this many times on Lost Legacy. It is about how people try to co-operate in markets by mediating their self-interests in their behaviours by using ‘persuasion’ and ‘bargaining’ and by each addressing their potential partner’s self-interest, not just their own. Th do this by trying to show how it is in their partner’s interest to co-operate on acceptable terms that addresses sufficient of their partner’s self interests for them to conclude an acceptable bargain that meets some (maybe, to all) of their initial views on their self-interest (see Wealth Of Nations, Book 1, chapter 2, paragraph 2). It is in this manner that people exchange things they have for other things they want - implicitly: 'IF you give me some of what I want that you have, THEN I shall give you in exchange, some of the things that you want, which I have'. This is the self-interested bargainer's conditional proposition: 'If, Then'.Adam Smith's Lost Legacy

Mickey Mouse Is Not A Guide To Adam Smith's Example Of His 'Butcher, Brewer And Baker' Example

Gavin Kennedy

Gavin Kennedy — Adam Smith's Self Interest is Not Served by Selfishness

Gavin Kennedy explodes another Smith myth.

George Stigler’s 1976 opening admonition that economics is founded on the “granite of self-interest” needs to be modified by the inclusion of the words “the granite of mediated self-interest”! Smith might then have saved the Chicago ‘boys’ from embarrassment in Chile if they had read Smith properly and not been enthused by Stigler’s enthusiasms for a half-understood idea that wasn’t Smith’s anyway.

"Mediated" means by serving the interests of others, you know, like customers and associates.

See also Alexis de Tocqueville on the principle of self-interest rightly understood.

 

Adam Smith's Lost Legacy
Adam Smith's Self Interest is Not Served by Selfishness
Gavin Kennedy | Emeritus Professor, Heriot-Watt University

Ira Chernu — If Only the Tea Party Crowd Knew Where Their Ideas Came from

It all began when I was re-reading Gordon Wood's The Radicalism of the American Revolution (trying to escape from obsessively tracking the DC rollercoaster.) As Wood observes, the Jeffersonians and Hamiltonians divided over basically the same issue that plagues us now: How much of a role should government play in people's lives? (Though the clash back then was so fierce, and split American society so sharply, that it makes today's politics look rather mild by comparison.

But Wood takes us deeper into the substance of the issue. Jeffersonians were willing to limit government only because they assumed that there was "a principle of benevolence ... a moral instinct, a sense of sympathy, in each human being." They were founding an American nation upon the European Enlightenment's belief that "there was 'a natural principle of attraction in man towards man' [as Hume put it], and that these natural affinities were by themselves capable of holding the society together."

This was exactly the point that frightened Alexander Hamilton most. He summed up his opponents' view quite accurately: "As human nature shall refine and ameliorate by the operation of a more enlightened plan," based on common moral sense and the spread of affection and benevolence, government eventually "will become useless, and Society will subsist and flourish free from its shackles." Then Hamilton, the greatest conservative of his day, dismissed this vision of shrinking government as "a wild and fatal scheme."

The Republicans who now control the House obviously have a very different view of what it means to be a true conservative. But that doesn't mean they have become Jeffersonians. Not by any means. In many ways they would be closer to Hamilton, who scorned Jefferson's trust in human nature.

AlterNet
If Only the Tea Party Crowd Knew Where Their Ideas Came from
Ira Chernu

Gavin Kennedy — Adam Smith on Self-Interest Not the Same as Found in Modern Economics

From: Philosophy Stack Exchange, 'a question and answer site for those interested in logical reasoning'

Adam Smith's Lost Legacy
Adam Smith on Self-Interest Not the Same as Found in Modern Economics
Gavin Kennedy | Emeritus Professor, Heriot-Watt University

Chris Dillow — Happiness Vs Options

Utility is not the same as happiness.

In Book I of Nichomachean Ethics, Aristotle asserts that every rational agent acts for an end and humans generally agree that this end is happiness. He goes on to observe that people disagree over what happiness is. He then consider various options, including what we now call utility, and rejects them as insufficient to meet his criteria because they engage only a partial aspect of human capacity.

Aristotle then elaborates his own view: While happiness is desired as an end, that is, for itself and not for anything else, it cannot be sought directly because it is a byproduct of excellence in living, that is, unfolding  human potential over the course of one's life by perfecting one's inherent capacity as human being, as well as one's individual talents.

The view of perennial wisdom is similar, but it includes only Aristotle's first criterion, that of perfecting one's capacity as a human being by realizing the full potential of consciousness, the outcome of which the abiding happiness of transcendental bliss. It is said to be "transcendental" because it is of the nature of consciousness and is not dependent on mind, body, or environment.

This view was expressed in a similar vein but more in terms of personal experience by Socrates in describing the method his teacher, the priestess Diotima, had taught him in the famous "ladder of love" passage in the dialogue called The Symposium  210a-212b.

Stumbling and Mumbling

Happiness Vs Options

Chris Dillow | Investors Chronicle (UK)

Reuters — Pope Calls For New Economic Model, More Ethical Markets

Pope Benedict on Friday called for a new economic model and ethical regulations for markets, saying the global financial crisis was proof that capitalism does not protect the weakest members of society....

In it the pope said economic models that seek maximum profit and consumption and encourage competition at all costs had failed to look after the basic needs of many and could sow social unrest.

"It is alarming to see hotbeds of tension and conflict caused by growing instances of inequality between rich and poor, by the prevalence of a selfish and individualistic mindset which also finds expression in an unregulated financial capitalism," he said.

The pope said people, groups and institutions were needed to foster human creativity, to draw lessons from the crisis and to create a new economic model.

The Huffington Post
Pope Calls For New Economic Model, More Ethical Markets
Philip Pullella | Reuters

Chis Hedges — Book Review: The Righteous Road to Ruin by Jonathan Haidt

Chris Hedges eviscerates Jonathan Haidt, as only he can do.

Haidt like E.O. Wilson, whom Haidt calls “a prophet of moral psychology,” believes that evolution has constructed us to be selfish. We rationalize selfish behavior, he writes, as moral. He asks whether moral reasoning wasn’t “shaped, tuned, and crafted to help us pursue socially strategic goals, such as guarding our reputations and convincing other people to support us, or our team, in disputes?” The moral glue that holds us together, Haidt writes, is concern for our reputations [read "ego"]....

But while Haidt correctly excoriates conventional morality as largely a form of self-justification, his solution is not to seek a moral code that benefits our neighbor but to ask us to surrender to this self-interest and become part of human “hives,” including corporations....

Happiness, then, comes with conformity. If we are unhappy it is not because there is something wrong with the world around us. It is because we have failed to integrate into the hive. This, of course, is the central thesis of positive psychology, which Haidt is closely associated with. And it is an ideology promoted by corporations and the U.S. military to keep people disempowered....

Haidt mistakes the immoral as moral. Totalitarian structures, including corporate structures, call for us to sublimate our individual conscience into the collective. When we conform, we become, in the eyes of the state, or the corporation, moral and righteous. Haidt would do well to remember historian Claudia Koonz’s observation that “the road to Auschwitz was paved with righteousness.” This is a book that, perhaps unwittingly, sanctifies obedience to the corporate state and totalitarian power. It puts forth an argument that obliterates the possibility of the moral life. Submission, if you follow Haidt, becomes the highest good.

Read it at Truthdi
Book Review: The Righteous Road to Ruin
by Chris Hedges


Especially telling:

[Haidt's] transformation from a liberal to a conservative, he writes, took place on 9/11 when “the attacks turned me into a team player, with a powerful and unexpected urge to display my team’s flag and then do things to support the team, such as giving blood, donating money, and yes, supporting the leader.” In short, Haidt became a lover of conservatism and nationalism when he became afraid. He embraced an irrational, not to mention illegal, pre-emptive war against a country, Iraq, that had nothing to do with 9/11. And if there was ever a case for reason to conquer fear and the emotionalism of the crowd, the Iraq War was it. But Haidt, rather than acknowledge that fear had turned him into a member of an unthinking, frightened herd, holds this experience up as a form of enlightenment.

Ok, swept up in emotion, but this is the kicker:

In a very revealing anecdote—which he titles “How I became a pluralist”—Haidt writes of his three months in the Indian city of Bhubaneswar. He has servants. He visits the homes of male colleagues and is waited on by their wives. He writes that “rather than automatically rejecting the men as sexist oppressors and pitying the women, children, and servants as helpless victims, I began to see a moral world in which families, not individuals, are the basic unit of society, and the members of each extended family (including its servants) are intensely interdependent.”

 His embrace of rigid social hierarchy and oppression, which makes him sound like the apologists for racial segregation, is a window into the entire book. He does not speak Oriya, the local language, and so is dependent on an educated, wealthy elite. He, by the standards of India, is rich. He makes no effort to explore the lives of the underclass. He celebrates what he calls “a moral code that emphasizes duty, respect for one’s elders, service to the group, and negation of the self’s desires.”

Here Haidt doesn't see that he is buying into the caste system that is culturally endemic in India, and the quintessential example of class division based on heredity. Hedges doesn't point that out, but I'll do it for him.

Haidt is so clueless he hasn't seen what has happened to him. He has become diminished as a human.

Dani Rodrick — Ideas over Interests

The most widely held theory of politics is also the simplest: the powerful get what they want. Financial regulation is driven by the interests of banks, health policy by the interests of insurance companies, and tax policy by the interests of the rich. Those who can influence government the most – through their control of resources, information, access, or sheer threat of violence – eventually get their way....

Yet this explanation is far from complete, and often misleading. Interests are not fixed or predetermined. They are themselves shaped by ideas – beliefs about who we are, what we are trying to achieve, and how the world works. Our perceptions of self-interest are always filtered through the lens of ideas.

Read the rest at Project Syndicate
Ideas over Interests

by Dani Rodrick | Professor, Harvard University Kennedy School of Government

There may be trouble with this like due to something amiss at Project Syndicate. I got in initially but am having difficulty now. UPDATE: Link working again now.

Study: How Wealth Reduces Compassion

As riches grow, empathy for others seems to decline

Read it Scientific American
How Wealth Reduces Compassion
by Daisy Grewal

Favorite paragraph: In order to figure out whether selfishness leads to wealth (rather than vice versa), Piff and his colleagues ran a study where they manipulated people’s class feelings. The researchers asked participants to spend a few minutes comparing themselves either to people better off or worse off than themselves financially. Afterwards, participants were shown a jar of candy and told that they could take home as much as they wanted. They were also told that the leftover candy would be given to children in a nearby laboratory. Those participants who had spent time thinking about how much better off they were compared to others ended up taking significantly more candy for themselves--leaving less behind for the children.

Kevin Drum — Helping the Poor is Now Apparently Anti-Bible

...while I might not be an expert in the Bible, I've read enough to know that Jesus sure didn't seem to think that helping the poor robbed them of dignity. Can someone help me out here? What part of the gospels do you think [Rev. Rick] Warren is referring to?

Read it at Mother Jones
Helping the Poor is Now Apparently Anti-Bible
by Kevin Drum

Certainly not Matthew 25:31-46.

Chris Dillow — The Power Of Prosocial Motivation

Chris Dillow reports on scientific research on reciprocity as a motivator. This study suggests that reciprocity is a more powerful motivator than narrow self-interest.

What this research does do, though, is further undermine the notion that high-powered selfish incentives are the best way of motivating people. This belief probably rests more upon a desire to justify inequality than it does upon a basis of empirical evidence.

Read it at Stumbling and Mumbling — An extremist, not a fanatic
The Power Of Prosocial Motivation

Chris Dillow | "Economist, Marxist, cook, bluegrass guitarist"
His "day job" is writing for Investors Chronicle (UK)

(h/t Mark Thoma)

Not surprisingly this kind of behavior is found far down the evolutionary chain because the ability and propensity to coordinate favors adaptability rate, as Roger Erickson would say.

Bruce Levine on Ayn Rand's America

Some historical insight into Ayn Rand's life and philosophy, and its extraordinary reach in American culture:

Rand’s impact has been widespread and deep. At the iceberg’s visible tip is the influence she’s had over major political figures who have shaped American society. In the 1950s, Ayn Rand read aloud drafts of what was later to become Atlas Shrugged to her “Collective,” Rand’s ironic nickname for her inner circle of young individualists, which included Alan Greenspan, who would serve as chairman of the Federal Reserve Board from 1987 to 2006.

In 1966, Ronald Reagan wrote in a personal letter, “Am an admirer of Ayn Rand.” Today, Rep. Paul Ryan (R-WI) credits Rand for inspiring him to go into politics, and Sen. Ron Johnson (R-WI) calls Atlas Shrugged his “foundation book.” Rep. Ron Paul (R-TX) says Ayn Rand had a major influence on him, and his son Sen. Rand Paul (R-KY) is an even bigger fan. A short list of other Rand fans includes Supreme Court Justice Clarence Thomas; Christopher Cox, chairman of the Security and Exchange Commission in George W. Bush’s second administration; and former South Carolina governor Mark Sanford.

Read it at AlterNet

How Ayn Rand Seduced Generations of Young Men and Helped Make the U.S. Into a Selfish, Greedy Nation

by Bruce E. Levine, a clinical psychologist and author of Get Up, Stand Up: Uniting Populists, Energizing the Defeated, and Battling the Corporate Elite (Chelsea Green, 2011)

This article reveals how Rand and Randism play on the dark side of the frontier spirit and rugged individualism that built America and made it great — giving proof to the Oriental proverb, "The bigger the front, the bigger the back." It also illustrates the Taoist concept of opposites — anything taken to the extreme turns into its opposite.

Building a society on a philosophy rugged individualism taps into the virtue of personal responsibility encourages competition along with coordination, and innovation as the basis of entrepreneurism. However, pushed to the extreme it brings out all the vices that the wise have inveighed against across the globe from time immemorial — for good reason in terms of the result. 

Meher Baba, reiterating and summarizing perennial wisdom on this issue, sums up the effect of a mindset like this when put into action:

Self-interest, caused by low selfish desire, is the root cause of contemporary world chaos and individual misery.

— Quoted in Jane Barry Haynes, editor, Treasures from the Meher Baba Journals: 1938-1942, Sheriar Foundation (1980)

This is the mindset that dominates in an age of ignorance. Fortunately, ages of extreme and destructive ignorance are followed by ages of enlightenment in reaction. Ravi Batra's historical model, explicated most recently in The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos (Palgrave Macmillan 2007), is based on this view of cycles and cyclical change.

Thought for the Day: The Pursuit of Happiness

What is the American Dream?: Dueling dualities in the American tradition by James Gustave Speth at New Deal 2.0 examines a key philosophical and normative fundamental that is central to the conception of economics, especially as it relates to policy formulation. It is worth a read in entirety. I intend to address these issues in future posts, since it involves the philosophical foundations of economics.

The American Dream is summarized in the Declaration:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

This is elaborated in the Constitution, and summarized in the Preamble:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

It is evident that both national security and a legal system based on order and justice are prerequisites preserving life and liberty, and that a democratically elected government responsible to the people is required to ensure that the benefits of good government are extended to all.

But the meaning of "the pursuit of happiness" is less clear. Speth lays out the different visions of happiness that have shaped political interpretation of it.

This is key for macroeconomics, especially, since it deals with government as a key economic factor. Accordingly, the conception of the purpose of both life and government underlie the assumptions of a macroeconomic theory, since macroeconomists shape their theories with an eye to policy formulation. Economic theories and especially macroeconomic theories can be viewed as providing the rationale for policy proposals that are normative through and through, in spite of being disguised as being entirely positive, e.g., neoliberalism.

Therefore, economics presupposes views of metaphysics as the study of what is, epistemology as the study of what we can know about what is, ethics as the study of what we ought to do about what is, and aesthetics as the study of how we should feel about what is, in addition to using science as an empirical method of testable explanation of how things stand and change state, and what this may imply causally.

Without a critical approach to economics through the philosophy of economics as a method for clarification of assumptions and other aspects of thought and language that remain implicit, economic reasoning is not only unclear but can also be misleading.

For example, there is growing interest in examining the assumption that growth is an adequate criterion for economic progress when it may not be related to happiness. Happiness is an ambiguous concept, so it must be clarified first. On examination, Speth shows, growth as an economic criterion is based on a conception of happiness that well-defined in terms of the survival of the fittest. Therefore, "growth" as a criterion can be determined by GDP change, regardless of distribution. This is the neoliberal assumption that has become conventional wisdom.

The problem with this is that the US has the largest GDP globally, but it is the lowest in many key social indicators that involve happiness considered as "utility," i.e., relative material satisfaction. On many measures, the US is not the happiest nation on earth, "American exceptionalism" notwithstanding.

A key concept of Modern Monetary Theory is public purpose. Certainly, this must relate to the founding documents, and in particular to key statements from those documents cited above.

How then should MMT define itself wrt "the pursuit of happiness"?

The neoliberal view is that maximum utility is the criterion of action, presuming homo economicus to be a rational actor pursuing self-interest and capable of being modeled econometrically in terms of a representative agent. This is presumed to be self-evident, but it is contradicted by research in both cognitive and social science, as well as having been dismissed as actually irrational by thinkers for millennia because it overlooks the inherently social nature of human beings.

Maximum utility is based on methodological individualism. It is called "methodological" because the assumption of self-interest as the guiding principle of human motivation is a methodological presumption. However, this presumption is often if not generally presumed to be ground in ontological individualism, that is, that individualism is constitutive of human nature. Some economists leave this implicit, while others, especially the Austrian School, make it explicit.

Others claim that such presumptions ignore society as a complex web of relationship, involving interdependence in modern societies, and now global society. This is called "community," and it is the meaning of "fraternity," in the Enlightenment political ideal of "liberty, equality and fraternity." Now "fraternity" is called "solidarity in Europe.

Modern Monetary Theory based itself on a broader view of methodological individualism than neoliberalism or Austrian economics, in that it agrees that individuals are the elements in complex social system, and explanation must be ultimately grounded in causal mechanisms that stem from individual action. However, it accepts that other factors are at work in shaping individual decisions other than rational self-interest as generally conceived by methodological individualism that presumes ontological individualism. Ontological individualism is an oversimplification of human complexity.

According to MMT, the purpose of government is public purpose, that is to say, government is to serve the public interest rather than dominant private interest groups. The public interest is distributive. Economic happiness is only one aspect of human happiness and it involves prosperity.

Microeconomics is about prosperity of households and firms, whereas macroeconomics is concerned with the prosperity of entire societies and in the age of globalization, with global prosperity. At the macro level, prosperity is necessarily distributed. Public policy is about achieving this distribution through government pursuit of public purpose, which complements the pursuit of private purpose by individuals and interest groups, such as firms.