Why "Economic Man" Is Not Enough

If you defend liberty the way most economists do, you've conceded the issue to the socialists


It may be surprising, but many friends of liberty share some important ideas with socialists. Even more, this is a fine thing!

A central complaint of socialists has been that capitalists entertain a faulty conception of human nature. And they're right about some of the most prominent defenders of capitalism. These people have argued and still argue for capitalism on grounds that every human being is a rational maximizer of personalized utilities—a being engaged in the orderly, systematic satisfaction of unique tastes or preferences. And such defenders of capitalism maintain that it is the best system for human beings because it makes possible the widespread success of such striving for self-gratification.


The origin of this sort of defense of the free society—heard most frequently from economists—lies in the thinking of the British philosopher Thomas Hobbes (1588-1679). It was Hobbes's view that there is no essential human nature, no basic features common to all human beings. Indeed, nothing has an essential nature, in Hobbes's view. Instead, the identity of things lies simply in our having assigned them names, a view known as nominalism.

Although Hobbes, and others who more or less followed in his footsteps, didn't intend to give support to anything like capitalism, numerous influential minds did use the position to defend that system. Hobbes's philosophy was attractive for this purpose because it was regarded as a scientific outlook, mainly because there wasn't any room in it for a supernatural deity. For Hobbes there were, ultimately, only bits of matter in constant motion, governed by the principles of mechanics. This did indeed appear to be a view warranted by the most sophisticated science of the times, Newtonian physics. In line with it, human beings were seen as merely complicated composites of matter-in-motion, each seeking to sustain its life (motion) as long as possible—that is, each self-seeking, possessive, acquisitive, callous, and antisocial (except as social cooperation might help his survival).

Today, this view of human nature and social life underlies the work of many economists. One consequence of so viewing matters is that no one is supposed to desire friends, adventure, or work as such, but only their results. When such Marxist socialists as C. B. Macpherson zero in on capitalism, all they talk about is the "possessive individualist" ideas derived from Hobbes. (Even John Locke, who actually argued for the natural moral right of everyone to be free and to pursue prosperity, has been characterized as but a sneaky follower of Hobbes, not only by Marxists but by numerous conservatives.) Anti-capitalists are glad to focus their criticism on such amoral Hobbesian arguments for freedom, for this makes statism appear to be the morally sensitive position. So it is not surprising that anti-capitalism has appealed even to some who would otherwise have no sympathies for socialism and its implications.

Even socialists get some things right, and their criticisms of the Hobbesian view are on the mark. Not that being calculating isn't part of human nature; it definitely, and indeed fortunately, is—very much so. Without the ability to engage in strategical, practical reasoning, there would be nothing like technology, engineering, mathematics, and numerous other valuable and interesting human endeavors.


But this sort of thinking isn't all that human beings are capable of performing, contrary to widespread contention. We are able to appraise, evaluate—rationally choose between what is better and what is worse for human life in all of its multifaceted aspects. The world presents us innumerable possibilities, not just concerns about how to get from one place to another, how to make something happen, or what means to use to achieve some goal we seek. One of these many facets of the world presented to us concerns the issue of what is good and what is right, and this too is something the human mind is able to answer. Besides the "engineering" questions—how to do something—we can also pose and answer questions about what to do.

In short, the human mind isn't confined to working on just one plane; reason itself can adjust itself to cope with various different aspects of existence. Where Hobbes and his followers thought and think that all the mind can do is figure out the means by which to satisfy fixed goals—with reason at the service of built-in drives, instincts, and passions—the alternative, Aristotelian idea of human reason sees us as capable of shaping our tastes, preferences, desires, passions, and motives by the careful use of our reason.

Interestingly, in their disenchantment with the narrow conception of human reason, of human nature, the socialists gave expression to a view that would ultimately serve the cause of liberty more than of socialism. Karl Marx devoted many passages in his writings to criticizing the atomistic individualism of the economic defenders of capitalism. He rejected the doctrine of natural rights as stemming from a philosophy in which "the freedom in question is that of a man treated as an isolated monad and withdrawn into himself" and contended that, thus, "the right of man to freedom is not based on the union of man with man but on the separation of man from man." Although this is a complete misunderstanding of the meaning of the doctrine of natural rights as expressed, for example, in the Declaration of Independence or by John Locke, it does point to the frequent association of the advocacy of the free, capitalist society with the Hobbesian point of view.


In contrast to this Hobbesian view, the socialists swung toward the other extreme of the pendulum. They stressed the social nature of human beings and propounded the morality of collectivism. Marx wrote very early in his career that "The actual individual man must take the abstract citizen back into himself and,…in his empirical life, in his individual work and individual relationships, become a species-being; man must recognize his own forces as social forces, organize them, and thus no longer separate social forces from himself in the form of political forces." In other words, everyone's entire existence ought to be made an existence devoted to society—a socialized existence.

To those with a sense of realism and humanity, the socialist idea appeared far more sensible than the artificial idea of atomistic individualism that denied any place for morality and stressed each person's identity as an isolated being. This made it appear that the socialist idea of human nature, and the ideals derived from it, are far more appreciative of the complexities of human life. Today, socialism has proven itself a widespread failure when put into practice, and millions have testified with their blood and their very lives to its horrible consequences. Even so, it is still widely accepted as the humanitarian, compassionate, decent social ideal; whereas capitalism is something cruel, heartless, dog-eat-dog, and at best efficient merely for material enrichment.

Interestingly, one of the strongest appeals of the socialists has always been their attempt and wish to extend an idea they picked up from defenders of capitalism, rooted in the very idea of human nature and reason that they found objectionable. Bhikhu Parekh put the issue very clearly in his introduction to The Concept of Socialism:

The bourgeois view of man also defined him as a rational being and rationality as a capacity for planning, but for socialists there was a contradiction. They thought it odd that men should plan their lives individually but not collectively, that they should live as men individually but as "animals" collectively, and wondered if it was ever possible for an individual to act rationally in a society that was not itself rational.

The main difference between capitalists and socialists—that the former are individualists while the latter are collectivists—lies in the scope of rational planning, and not in any differing view of rationality. Parekh reinforces this by noting that "the idea of social planning seemed to socialists to be inherent in their [capitalists'] definition of rationality, indeed, in their definition of man."


It is interesting that today some defenders of the free society find the connection between the so-called bourgeois and socialist conception of rationality so disturbing that they decry rationality itself. F.A. Hayek, among them, has mounted a concerted attack on what he calls constructive rationalism and has embraced an alternative view whereby reason doesn't (or shouldn't) really play a significant part in human social life. And it is well known that conservatives have long disparaged man's rational nature, stressing instead the intuitive, religiously oriented element that favors faith as opposed to reason. What is less well known is that one argument used to support this preference has been the close connection between the capitalist and socialist viewpoints in the respect they have paid to reason—at least a form of reason.

The problem is, however, that the view of reason advanced by capitalism's Hobbesian defenders is only partially right, while the socialists have mistakenly interchanged the social aspects of human nature and human rationality, which is in fact fundamentally tied to each person's individuality. As a faculty or capacity of human beings, rationality entails that each person must initiate his or her rational mental activities. The very distinction between rationality and irrationality presupposes the capacity for genuine individual choice within the domain of thinking. This means, in turn, that only individuals can, in the last analysis, generate rational ideas and conduct—that is to say, rational planning by society is impossible, since only individuals can exercise rationality.

Of course, this fact about the connection between individuals and rationality does not yield the Hobbesian idea that individuals are isolated atoms. On the contrary, by using their minds, individuals can quickly recognize the value of social, and even political, association. They can also see that they are indeed of the same species, but this does not require of them that they abandon their individuality in favor of what Marx called some sort of collective species-being. Trying to do this, and thereby trying to collectivize human reason itself, must lead to the hopeless efforts exhibited by the Soviet and other socialist governments to engage in centralized planning of the lives of members of human communities. Socialists are guilty of committing the fallacy of composition—jumping from the observation of rational capacity in individual human beings to the attribution of such a capacity to groups of individuals as such. This is the fatal theoretical and tragic practical element of socialist political economy.

So while socialists, along with many supporters of the free society, reject the purely economic defense of the capitalist system which rests on an atomistic idea of human nature, they also consider the rational capacity of human beings a vital aspect of their respective philosophies. But there the similarity ends. Socialists tried, and are still sometimes trying, to collectivize human reason, which simply cannot be done. And they have not, unlike anti-Hobbesian defenders of the free society, taken seriously a different type of individualism—one that stresses, not the atomistic separation of everyone from everyone, but the moral independence and self-responsibility of every human being, even as various forms of social and political association are fruitfully pursued by each of his or her own free choice.

Tibor Machan a senior editor of REASON. On leave from the Philosophy Department at SUNY College, Fredonia, he teaches courses in the Economics Department of the University of California at Santa Barbara.