These days the Mauritian people are being bombarded on an almost daily basis with extraordinary figures relating to “fortunes” which have been accumulated by individuals or companies, through possibly barely legal means but most certainly in morally unjustifiable circumstances. Morally unjustifiable, if only for the fact that we still live in a country where a large number of people still earn less than Rs 6000 for a month’s hard work.
We have borrowed the above title from the book by Robert and Edward Skidelsky called ‘How Much Is Enough? The Love of Money and The Case for the Good Life’ because it very closely captures “the” interrogation which keeps cropping up so often in conversations among most “ordinary” people these days. They are thus unwittingly raising a question which moral philosophers have been pondering for centuries: what happens to a society when members of its elite start seeing acquisitiveness no longer as a means to the good life but as an end itself?
Far from us any thought of passing moral judgement here. The objective of this article is rather to broach some of the larger issues related to what is the presently predominant phase or mode of global capitalism and its close links with the kind of behaviour being decried. For indeed the events which are unfolding in front of our eyes and so close to us, may be deemed to be our own local version of the exposure of greed and rapaciousness among Chief Executives of corporations in the US and Europe in the midst of the financial crisis which led to the “Occupy movements” there. Does our tryst with capitalism of the financial kind condemn us to a Faustian bargain wherein enjoyment of material goods is at the cost of giving up our soul?
Capitalism and Predation
One striking feature of this phenomenon is how during the recent financial crisis, described as one of the worse since the Great Crash of 1929, the term “real economy” came to be an accepted part of the vocabulary used to distinguish the latter from the (virtual!) “Financial” economy. In his book ‘The Locust and the Bee: Predators and Creators in Capitalism’s Future’, Geoff Mulgan assimilates the movers and shakers of this “virtual economy” to the “takers and predators, the people and the firms who extract value from others without contributing much in return. Predation is part of everyday capitalism… It’s commonplace in the behaviour of slum landlords and loan sharks, in pornography and prostitution.”
To be faithful to the spirit of the book though, one needs to add that Mulgan also writes that “Capitalism has never been as creative as it is now. But it also has never been as predatory.” A formula which succinctly sums up the dilemma of a growing number of people who are waking up to the unsustainable nature of the present model of capitalist development but are struggling to find the alternative reformist platform. Maybe the experience of the new Greek government — a firebrand leftist David against the Goliath of European finance — may offer some light at the end of the tunnel?
From “having” a market economy to “being” a market society
One facet of present-day capitalism, which would certainly have shocked even an Adam Smith or a David Ricardo, the founders of the theory of the invisible hand and Utilitarianism, would be the all-pervasiveness of the market in the system which dominates our lives today. The perversion of values to which this kind of ubiquity/supremacy of market principles in society may lead can be illustrated by an example from what is described as the “life settlement” industry. Investors buy the life insurance policies of the sick and elderly in the hope that they will die sooner rather than later. Investment banks are then busy bundling these into marketable securities known as “death bonds.”
Such commoditization of what for the majority of people still pertains closer to the domain of the sacred and spiritual is only an example – albeit an extreme one of how societal values are being subordinated to the inexorable penetration of the market in all spheres of life. As suggested by R&E Skidelsky, quoted above, these are the kinds of behaviour which should serve as a warning regarding the drift about how “our ability – individual and collective — to pursue valuable lives has been undermined because a certain form of political philosophy, and in particular the influence of contemporary economic thinking, has numbed our understanding of what is the good life.”
Economics of Wants and Needs
As students of economics we have all inevitably been confronted with the classic definition of its being the study of human behaviour in an endeavour to satisfy WANTS in a context of a “multiplicity of ends and scarce means that have alternative uses.” The advantage of this definition is that it neatly isolates the range of problems that are peculiarly “economic”. If means are not scarce and everyone has all of everything he wants, then there is no economic problem.
John Maynard Keynes in an essay written in 1930 entitled “Economic Possibilities for our Grandchildren” explored what would be in reserve for his grandchildren a century hence. He forecasted a four- to eight-fold increase in the standard of living, which would put “the economic problem… within the sight of solution.” Whereas Keynes was spot on as indeed the per capita income averages 400 per cent across rich countries since he made his prediction, yet we are still far away from the “economic solution.”
Going back to our classic definition of economics above, it becomes clear that Keynes’s great “mistake” is justifiably his inability to grasp that WANTS are insatiable whereas indeed NEEDS can be satisfied. In the middle of the 20th century it was well nigh impossible for him to conceive that the liberal society would be so busy creating new WANTS that the economic solution would be forever distanced from achievement.
Over the more than half a century since Keynes’s writing, he could not predict that this perpetual creation of wants would indeed be the driving force for what could be the most progressive era of liberal economics and capitalism that has transformed the material living conditions of humanity. And yet what unfolds before us in the beginning of the 21st century is a world which is drifting even further away from the “economic solution”.
“What are we doing here? The amount of resources we currently use is 1.5 times the world’s resource capacity. Is that sustainable? A billion people still go to bed hungry. Is that sustainable? The richest 85 people have the same wealth as the bottom 3.5 billion. Is that sustainable?” If you thought that these comments come from some revolutionary leftist party leader, you would need to think twice. These are extracts from an interview of Paul Polman, Chief Executive of the multinational Unilever.
They inevitably beg the fundamental question about the sustainability of a model driven by this unrelenting creation of wants whereas mineral and other natural resources are being exploited to their limits. They also raise the issue of the relevance of a model which, left to its own volition, has contributed to the most skewed and unfair distribution of wealth.
Such is the tension between the creative faculties of the system and the ravages which it simultaneously causes at the individual and collective levels. The essential conditions for dealing with this are leadership qualities of integrity, humility, intelligence and hard work — all ingredients which unfortunately seem to have been in short supply lately.
* Published in print edition on 13 March 2015