The Perils of the Last Human: Flaws in Modern Economics

December 10th, 2014
in Op Ed

by Warwick Smith, The Conversation

Nietzsche’s much quoted line “God is dead” was not, as it is often presented, a statement of triumphant atheism but was a warning and a call to action. We had killed God with rationalism and science. With God had gone our moral compass and our sense of purpose and we had nothing to replace them with but science and logic.

Follow up:

This is an existential problem because, as David Hume famously proved, you can’t argue from “is” to “should”. We may be able to use science to help us get what we want but we cannot use science to tell us what to want nor to tell others what they should want.

This is where the field of economics has stepped in. Human well-being, according to mainstream neoclassical economics, is fundamentally about the expression of individual preferences. The more money we have the more preferences we can express and, therefore, the freer and happier we are. Boom, Nietzsche’s existential problem solved.

Jeremy Bentham, "An Introduction to the Principles of Morals and Legislation" said:

Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do, as well as to determine what we shall do.

The utilitarianism that underpins neoclassical economics simply equates money with choice and choice with the freedom to pursue pleasure and avoid pain. The freedom to buy.

Economists tell us that economic growth is, therefore, the key to progress. Growing the economic pie gives more people more options and that is the goal of society. It’s a technocratic system where we believe any problem can be solved by better application of theory.

This technocratic focus on economic growth has brought unprecedented material prosperity to the western world. As a result, major political parties around the world have ceded authority to the technocrats. The utilitarian calculus that sits beneath our economic system is never questioned. Instead, political debate centres on how to balance the trade-offs and whether to compensate the losers in the race to gain wealth and consume.

I’m very fond of boats myself. I like the way they’re contained. You don’t have to worry about which way to go, or whether to go at all – the question doesn’t arise, because you’re on a boat aren’t you?
- Tom Stoppard, from "Rosencrantz and Guildenstern are Dead".

Cruising, helmless

What’s missing, of course, is any basis on which to evaluate the direction that society, or indeed humanity as a whole, is taking. We’re on a giant cruise ship and we are completely free to explore and enjoy. However, there is nobody identifiable at the helm.

The issue of climate change is a perfect illustration. Our headlong rush for economic growth and consumer items is altering the very climate of the planet and we appear powerless to change course. Despite dire predictions from the world’s scientists very little action has been taken. The very notion of human induced climate change and the actions required to arrest it clash so fundamentally with the modern mantra of “gain wealth, forgetting all but self” that many simply refuse to believe it.

The economic constraints on freedom are extremely powerful. Risking economic security for the sake of the future climate borders on inconceivable in a society dominated by individualistic social hierarchies of wealth and the cult of celebrity.

Financial institutions lend ever more and more money to investors who pay more and more for real estate based on the assumption that others will pay more still. The result is that the average citizen has to spend their whole life in debt peonage to banks just to have a house to live in. They are no freer to challenge the financial system than feudal peasants were to challenge their lords.

Our farmers are similarly trapped by debt into fossil fuel based farming. Most can’t afford to take risks experimenting with more sustainable farming practices when they owe a million dollars to the banks for farm machinery.

Even those who do make climate action a priority in their lives find that there’s nowhere meaningful to take their petitions and nobody to read their letters. There’s nobody at the helm. Lines of accountability and power are so scrambled that even those in the highest political offices in the world appear powerless. The cruise ship sails relentlessly on.

Avoiding life, purposefully

In “Thus Spoke Zarathustra: A Book for All and None”, the work that Nietzsche considered to be his most important, he warns us about the perils of the last human being, a possible future for humanity in which we are mindlessly naïve, happy and healthy but lack all spirit, vitality and creativity; that is, we lack life itself. Nietzsche would be horrified by the modern cult of happiness seekers, seeing the pursuit of happiness and the avoidance of pain and suffering as being equivalent to the avoidance of life itself. Embracing life necessarily means embracing the painful and the difficult elements of life as well as the enjoyable and easy parts.

Instead of avoiding life by weaving a path that avoids discomfort, Nietzsche says we should master ourselves by embracing our inherently conflicting natures. He reaches back to ancient Greece, to the opposing but complementary elements of humanity represented by Dionysus and Apollo. Our modern capitalist society has subordinated the disciplined, considered and directed Apollo into the service of the hedonistic goals of Dionysus. If we can heed Nietzsche’s advice and value personal balance and self-mastery we can orient our lives towards an intentional vision for the future. For Nietzsche this was not about having a goal for the future but instead having an orientation for right now. The difference is subtle but extremely significant.

Our economic system funnels our will into the pursuit of material prosperity and comfort. This is the very opposite of freedom. It stifles creativity and forces our life energy inwards instead of outwards, turning us into what Nietzsche describes as “the sick animal”. Despite our material prosperity we suffer from “affluenza” and write self-help books to each other in an attempt to diagnose and treat the panoply of mental and physical afflictions caused by our wealth.

The fact that our economic system is a social construct means that we have made a choice, even if an unconscious one, and that we can remake that choice.

Instead of being bound to self-centred and self-destructive consumption by an economic system embedded with values we had no choice in, let us take Nietzsche’s advice and orient ourselves towards an intentional vision of the future. If we each bring our vision to bear on our political engagement we could lift the political and economic discussion out of its Dionysian opium den and develop a system that reflects what we truly value.

An shorter version of this piece won the New Philosopher writer’s award III.

This article was originally published on The Conversation. Read the original article.

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