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Following Bernard de Mandeville’s parable from long ago, neoliberal thinking sees people as ‘bees’ that compete for scarce resources. That competition is believed to bring out the best in people. This assumption is not only untrue, but also evil: it destroys both ourselves and the environment. It is better to strive for collective wealth by establishing rules that allow individuals not only access to shared knowledge, and which also empower them to create new knowledge.
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Just some recent events from Dutch news. First, people who violently refuse a vaccination, with the main argument being that they do not want to run any risks of side effects while they don’t expect to be really sick themselves from corona. Second, the tax authorities accuse innocent citizens of fraud. The responsible cabinet resigns, but is basically re-elected in the subsequent elections – most voters don’t seem toc are about the scandal. Third, Afghans who have supported the Dutch army are largely left to their own devices after the takeover of Afghanistan by the Taliban. This has no significant political consequences, apart from some ministers who step back.
All these cases show a lack of imagination: the inability to look at the world from the point of view of another person or from the standpoint of the collective interest. There’s plenty of empathy for those who are like us, but it seems incredibly hard to to empathize with those who aren’t like us — which is what is desperately needed.
In fact, many people do not seem to see the social collective of which they are a part as a coherent moral or social connection, but at most as a structure that should serve their personal preferences.
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I hate the overuse of the term neoliberalism, but you really can’t see this lack of imagination as something different than the total victory of neoliberal thinking. Introduced in the 1980s under Reagan and Thatcher, for whom there was ‘no society but only individuals’. Formed into a policy paradigm by left-wing leaders such as Kok, Blair, Clinton and Schröder, among whom it no longer mattered whether the government ensured the implementation of policies or the market or an organization that was somewhere in between.
For the roots of neoliberal thinking, we can go back to 1714 when Bernard de Mandeville, born in Rotterdam but living in England, published The Fable of the Bees: or, Private Vices, Publick Benefits. De Mandeville argued that private vices, such as economic activities, could lead to general prosperity. Before that time, economic actions were mainly seen as a necessary evil: you had to make, sell or buy things, simply to survive. It’s about self-interest and that was always morally reprehensible. Mandeville argued that even though all those actions might be bad in themselves, they ensured that everyone got what they wanted and that wealth was created on an aggregated level.
Mandeville’s idea was further elaborated by Scotsman Adam Smith in 1776’s An Inquiry into the Nature and Causes of The Wealth of Nations. Smith argued that if everyone acted on the basis of ‘self-love’, the competitive system of the free market would eventually work for it. that ensured that the greatest possible prosperity would arise on a collective level.
Smith fought against the then prevailing dogma that a country should protect its economy as much as possible. This dogma had exactly the opposite effect: it reduced prosperity, and this only on the basis of the belief that self-interest was inherently bad.
Over the years, it has been Smith’s thinking that has become a dogma itself, even though the self-love of the baker or blacksmith has meanwhile been exchanged for the pursuit of profit maximization by the investment bank or a venture investor. This leads to an increase in the gross national product, but this is just phantom growth. The extra income doesn’t end up with people, but with companies that seem to use this income mainly to generate even more income, instead giving it to their employees. In this, it is good to acknowledge that we are not exploited by the CEOs of the big companies, because they also are just employees, but by the companies themselves.
The people who work for those companies, including the CEOs, seem to have to work harder and harder to deliver the same performance. Everyone seems to be getting busier and busier, because there will always be someone who can work even harder. In this way, the market economy not only exhausts nature, but also humans. That person, even if he is the CEO, is just like nature nothing more than a resource, which is used to produce goods and services.
We must realize that neoliberalism is not so much a set of economic dogma’s, but of moral dogma’s in which the free market is basically seen as the only place where income is generated. Government intervention only leads to inefficiencies and therefore takes place as little as possible. From this dogma, austerity rounds follow austerity rounds, so that fewer and fewer public facilities remain, without resulting in richer countries.
Another article of faith is that the competitive system of the marketplace ensures that the best people get the most opportunities, which also leads to the most prosperity. After all, when the smartest people end up in the most important places, it delivers the most value. This idea is also reversed: people who can’t get to the top apparently can’t or don’t want to – because that’s how the system works. In short, success or failure is not a matter of luck or bad luck, but respectively of your own merit or your own fault. A competitive system is a zero-sum game: the gain of one is the loss of the other. No wonder there is little consideration for those who are unlucky: not only it is this lack of fortune their own fault, it also contributes to my happiness.
Adam Smith showed that economic dogmas of his day were counterproductive. The same can be said today: the neoliberal dogmas do not lead to more collective prosperity, only to collective poverty. They just aren’t true.
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To counter the neoliberal devastation, you can think of developing more solidarity and a better distribution of wealth, for example through a progressive tax regime or levying taxes on inheritances. We also need to get rid of the neoclassical idea that price is everything, as Marianna Mazzucato suggests. In her opinion, it is better to look at the value created by economic productivity, in which it is not only the market that does something, but also the government that invests, for example, in knowledge development and infrastructure.
But can we go further? Because both when it comes to solidarity and a different understanding of value, it is still about the distribution of scarce resources. Even though resources are redistributed or made less scarce, the idea that the economy is a zero-sum game with winners and losers is still persevered.
Can we also arrive at a different understanding of prosperity? Prosperity that does not begin with the wealth of individuals, which must then be redistributed, but prosperity that begins with the wealth of the collective. After all, the basis of human success is not the cleverness of individual individuals, but the cleverness that lies between us. Just think about it: there were also very smart people among the cavemen, but they did not come up with smart innovations, ground-breaking medicines and lucrative investment models. This only has become possible now because there is a much greater collective wealth.
This collective wealth arises because we can share meanings through time and space. We can pronounce and write words so that they are not lost and spread. The words of Jesus Christ or Aristotle are thousands of years old, but we still know them and they still have a great influence on our thoughts and actions. In addition, our global vocabulary is still expanding daily: there are only more words, so that we can describe even more things and understand even more things.
With all those words and all those new understanding we can disclose more and more knowledge that we can use to solve and prevent problems and to build a civilization.
There is no scarcity in the intersubjective domain, because knowledge can be shared by everyone. The wealth of this domain is indeed collective and can multiply infinitely without ever making anyone worse off.
What are the conditions of intersubjective wealth when does it make us richer? I think the following. First of all, we must think in terms of a self-reinforcing process: it is about the possibilities that everyone has at their disposal to contribute to the increase of that collective wealth.
To make this possible, the institutions – also parts of the intersubjective domain that are shared – must ensure that individuals gain access to the collective knowledge stock and whereby these individuals can also add new knowledge to that stock. These institutions are the rules that apply within a certain social context and that guide people in their decisions.
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Viewed in this light, the ideas of Mandeville and Smith were not that crazy: in their own time, these ideas did contribute to the increase of collective wealth. In the first place because the free market provided an enormous boost for the further dissemination of knowledge and technology. But also because the rules of the free market provide the conditions of the ‘wisdom of the crowds’: a collective is smarter if a variety of individuals can make an independent contribution to the whole in the absence of major power differences.
The rules of the market are based on competition that stimulates individuals to innovate. New technologies, products and services that increase the quality of life. But at the same time, a lot is wasted in such a competitive system. Think of all those good ideas that never became successful, think of old stuff that you have to throw away because a better or hipper version has been introduced, think of the destruction of the environment, the exhaustion of workers who have to work harder and harder and of consumers who have to ensure that their old curtains do not become the laughingstock of the street.
The market alone can never be enough. It is essential that there are also other institutional domains that can contribute to collective wealth. Consider, for example, civil society, the development of this domain was characterized by the formation of public opinion via discussions in coffee houses and newspapers between equal individuals. These citizens came to think from the vantage point of an imagined larger whole of which they were a part as individuals. What we’re seeing here is that rules came into being that prompt individuals to articulate their ideas, to take note of the ideas of others, to think about what others might want.
The domain of science should also be mentioned. The scientific revolution meant little more than the introduction of new rules for good science. These rules required scientists to make public not only their findings, but also the way in which they arrived at those findings. Scientists had to show that their experiments were correct.
In short, different institutional domains ensured a level playing field, variation, and openness. The conditions for increasing collective knowledge.
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We now have more knowledge than ever at our disposal, we are no more than a few mouse clicks away from almost all possible information. Moreover, there is more equality than ever. Where women and workers could not participate, now everyone is empowered. Why isn’t that enough?
I do not pretend to have an exhaustive answer to this question. But I do think that this answer certainly has to do with the dominance of market thinking. As I wrote above: there is a lack of imagination. The rules of the market create the incentive to put your own interests first. If no civil society is opposed to that market, people will no longer have the opportunity to form an imagined collective. They cannot develop the ability to think about what is good for the community.
A second problem concerns the scale of that community. While the economy and the major problems of our time are global, we usually identify the community with a country or some even smaller context. There is no fit between our problem-solving structures and the problems. This also prevents ownership: even though environmental and social sustainability issues are widely recognised, individuals seem to find it difficult to relate them to their own lives. The responsibility to contribute to solutions disappears completely.
The market also seems to lead to more destruction than renewal. It is bad enough that people and the environment as resources are pushed to the limit, but it also doesn’t lead up to anything. Innovations mainly benefit the business itself, with companies merging into increasingly larger conglomerates or networks. This also affects the conditions for collective wealth: it reduces variation and if individuals have to compete against large organizations, there is by no means a level playing field.
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This system is unsustainable and must be changed. We must look for collective wealth that multiplies without being destructive. To do this, you would have to ask for any policy measure whether it makes it possible for individuals to have access to knowledge and to add new knowledge.
Some investment decisions are simple. More and better education, more science, more culture, a basic income. Such investments all amply pay for themselves, even if you can’t measure it in conventional ways.
But, most importantly, more imagination is needed, new ways of solving today’s problems. We need to develop domains that fit the scale of contemporary problems. We need to look for the rules that allow navel-gazing to expand into an ever-widening horizon.
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Further reading:
Dumont, Louis. 1977. From Mandeville to Marx. The genesis and triumph of economic ideology. Chicago and London: Chicago University Press.
Habermas, Jürgen. 1962. “Strukturwandel der öffentlichkeit.”
Heijne, S., and H. Noten. 2020. Fantoomgroei: Waarom we steeds harder werken voor steeds minder: Atlas Contact, Uitgeverij.
Mandeville, Bernard. 2017. The fable of the bees: or, private vices, publick benefits: The Floating Press.
Mazzucato, Mariana. 2018. The value of everything: Making and taking in the global economy: Hachette UK.
Smith, Adam. 1998. An Inquiry into the Nature and Causes of the Wealth of Nations. A Selected Edition. Oxford and New York: Oxford University Press.
Surowiecki, James. 2005. The wisdom of crowds: Anchor.
