Markets and Politics: The Human Product

Abstract

What values should a society seek to maximize? Religious values, as in Calvin's Geneva or Khomeini's Iran? Power and Glory? The Wealth of Nations, the Gross National Product? The greatest happiness for the greatest number? Or, in Humboldt's phrase, ‘the highest and most harmonious development of [man's] powers to a complete and consistent whole?’There is much to be said for wealth. Quite recently it has been discovered that the pursuit of wealth is a game against nature not a war game, a zero-sum game, with booty as its prize. The distribution of increments of wealth can, under these circumstances, be Pareto optimal. As Marx pointed out, winning the struggle against scarcity is a condition for everything else: men must eat before they can think. Similarly, in ordering a hierarchy of needs, the contemporary humanist psychologist, Abraham Maslow, makes the same obvious point: the satisfaction of physiological needs is a condition for the satisfaction of higher needs, in the end for self-fulfilment – for Humboldt's ‘harmonious development of man's powers’. Wealth gives satisfaction; Bentham believed it was the prime source of happiness. Adam Smith argued that ‘the desire of bettering our condition…[through] an augmentation of fortune’ was the most powerful (and vulgar) of motives, but it was often a mask for a concern for the good opinions of others. So strong a motive lends itself to social control: ‘the steadiest motive in ordinary business work is the desire for pay which is the material reward for work’. Like B. F. Skinner, Marshall held that money is a general reinforcer because of its universal appeal. And it is the foundation of civilization, not only because surplus value may be devoted to cathedrals, but, following Schumpeter, because a society guided by the rationalism of the market's manner of pursuing wealth, is reflected in the high art and science of the West. In the process of maximizing wealth, therefore, a society motivates its members, satisfies them, and provides the basis for high civilization.