Ah, yes. Bourgeois virtues. Remember them? At this juncture the male, prudent, scientific, economistic, and materialist stoic breaks into indignant rhetorical questions: “Who cares about sweetness? ‘Sour’ tastes fine to me. Point, schmoit. What possibly could love have to do with the hard world of a commercial economy? Let’s get practical here. Can’t we do just fine in a world of bourgeois business without love? Isn’t that the, uh, point of economics? Isn’t love something for weekends and the Home?” Or as Yeats said in 1909, “The Catholic Church created a system only possible for saints. . . . Its definition of the good was narrow, but it did not set out to make shopkeepers.”[1]
Economics since its invention as a system of thought in the eighteenth century has tried to “economize on love,” that is, to get along without it, that is, to justify shopkeepers far removed from saintly or poetic Love. Economics has elevated Prudence, an androgynous virtue counted good in both men and women as stereotypically viewed, into the only spring of action. Tracing it back to Epicurus, Alfred North Whitehead complained in 1938 that “this basis for philosophical understanding is analogous to an endeavor to elucidate the sociology of modern civilization as wholly derivative from the traffic signals on the main roads. The motions of the cars are conditioned by these signals. But the signals are not the reason for the traffic.”[2]
The way most economists do their job is to ask, Where’s the prudence? “The rudimentary hard-headedness attributed to them by modern economics,” as Sen puts it, is the only virtue in the economist’s world.[3] When in the 1960s I wanted to show that Victorian Britain did not fail economically I used Prudence-Only calculations of productivity to calculate that there was no residual to be accounted for by causes other than Prudence. When in the 1970s I wanted to show that medieval English open fields were insurance in an age of terrifying uncertainty I used Prudence-Only calculations of portfolio balance to show that Prudence sufficed to explain the scattering of a peasant’s plots of land. When in the 1980s I wanted to show how to teach economics through applied examples rather than useless theorem-proving—which unfortunately has since then triumphed in advanced economic education—I used Prudence-Only arguments throughout, though I was beginning in that decade to worry that they might not suffice.
Adam Smith asserted in 1776 that “what is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.” A splendidly useful principle. Hard-headed. No talk of love, or of any other virtue than prudence. Smith, however, understood well what later economists have gradually come to forget. After all, said Smith as early as 1759, we want people to have a balanced set of virtues, including even love, not merely prudence, and this for all purposes, sacred, profane, business, pleasure, the Good, the Useful, the wide world, and the home, too. All. Annette Baier argues in “What Do Women Want in a Moral Theory?” that love and obligation, which are both necessary for a society to survive, arise from “appropriate trust.”[4]
The economist and historian Alexander Field has based a similar argument on biology. He notes that on meeting a stranger in the desert with bread and water you want you do not simply kill him. Why not? Sheer self-interest implies you would, and if you would, he would, too, in anticipation, and the game’s afoot. Once you and he have chatted a while and built up trust, naturally, you will refrain. But how does trust get a chance? How did it originate?
Field argues that it originates from “modules inhibiting intraspecific violence,” that is, from a very long evolution of a taboo on hurting ones own kind.[5] The “failure to harm” non-kin is hardwired into animals. It evolved from selection at the level of the group, Field argues, not the individual. It’s better for you as a behavioral egoist to kill the man you meet in the desert. But of course you are inhibited in doing so, because you are not in fact such an egoist: that’s best for the human species.
I remember driving once in Amherst past a woman walking towards me on the verge, and the strange thought entering, “Suppose I run her down?” I didn’t, I’m very glad to report. But there it was, the potential for intraspecies violence even in a very peaceable and law-abiding woman. André Gide’s novel of 1914, Lafcadio’s Adventures, turns on the utterly pointless murder of a stranger, pushing him off a speeding train, just to see it done. It happens.
But Field’s point is that usually it does not happen. Considering the opportunities to harm, the inhibitions to doing so must be powerful indeed. For my purposes it doesn’t matter whether the inhibitions come from socialization or from biology. Anyway—and perfectly obviously—we are equipped with desires for both the sacred and the profane, mutually reinforcing and completing. One of the sacred computer chips in our brains or one of the sacred virtues in our characters is “being nice and trusting.”
Adam Smith was not it seems a particularly religious man. But he was in his only regular academic job, at Glasgow University ages 28 to 41, a professor of moral philosophy, and took his assignment seriously. After his death, however, his followers came to believe that a profane Prudence, called “Utility,” rules. Jeremy Bentham and his followers, and especially his 20th-century descendents Paul Samuelson, Kenneth Arrow, Milton Friedman, and Gary Becker, are to blame. These are good men, great scientists, beloved teachers and friends of mine. But their confused advocacy of Prudence Only has been a catastrophe for the science that Adam Smith inaugurated. No need, declare the economists of the late 20th century, for the non-Prudent virtues—well, maybe a little Justice and Temperance on the side to keep the Prudence on track, but certainly not any need for the sacred, transcendent virtues, such as spiritual love. As Field writes,
To build a discipline on the proposition that [behavioral egoisms] exhaust the range of essential human predispositions is to lead to the unsustainable conclusion that there are no cartels, no racial discrimination, no voting, no voluntary contributions to public goods, and no restraint on first strike (defect) in single play Prisoner’s Dilemmas.[6]
And no nationalism, no honor, no love, no courtesy between strangers.
In our time the Prudence Only ethic has become, “Maximize stockholder wealth, and by the way make sure that you as the CEO or CFO have a good chunk of it, and a little inside knowledge about its present value.” You will find some ethicists in business schools arguing that the reason to be just or loving or temperate is precisely that it is prudent. Your stock options will be worth more if you do not sexually abuse your employees and cheat your customers. Virtue makes more money, doing well by doing good.
This is to miss the point of being virtuous. The point of a life exercising the virtue of love, for example, is its transcendence, not the stock options conferred on one who successfully lies about his commitment to the transcendent. In a famous article Milton Friedman argued, as the title put it, that “the social responsibility of business is to increase its profits.”[7] Milton argued that a society with more wealth can better pursue its transcendent goals, and more wealth is produced by maximizing profits. That’s right, and is one crucial argument for capitalism. He further argued that a hired manager for Boeing who improves his social standing in Chicago by getting the corporation to give to the Lyric Opera is stealing money from the stockholders. That’s right, too, though there is a contrary economic argument, namely, that the ability to play the noble lord with the stockholders’ money is part of executive compensation. The stockholders would have to pay the manager more in cash than they do if they insisted that he not be allowed to give away the corporations money to worthy causes. But most people who have expressed shock or pleasure at Milton’s article have not noticed that he adds a side constraint to the manager’s fiduciary duty to the stockholders: “make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.”[8]
The opposite argument is that being honest makes money. As it was expressed in a book on managerial economics, “unethical behavior is neither consistent with value maximization nor employee self-interest.”[9] Wouldn’t that be nice if it were true? The journalist Bennett Daviss wrote in 1999 in the magazine The Futurist an article entitled “Profit from Principle,” with the headline, “Corporations are finding that social responsibility pays off.” “In the new century,” Mr. Daviss believes, “companies will grow their profits only by embracing their new role as the engine of positive social change.”[10] Image ads spread the Good News.
It’s a tough-minded, American idea. A study in 1999 by the Conference Board found that 64 percent of American codes of ethics in businesses are dominated by profits. By contrast 60 percent of the European codes are dominated by “values.”[11] When many years ago the Harvard Business School was given more than $20,000,000 to study ethics it initiated courses that collapsed the virtues into the one good of Prudence, the utility of “stakeholders.” Harvard has since then taught thoroughly all the virtue that money can buy.
The point is that Smith got it right and the later economists and calculators have got it wrong. You can’t run on prudence and profit alone a family or a church or a community or even—and this is the surprising point—a capitalist economy. In far away Japan some decades before Smith one Miyake Shunro (also known as Miyake Sekian), the director of a newly formed academy for 90 bourgeois students in the merchant city of Ōsaka, gave his inaugural address on the theme. Tetsuo Najita explains that in Miyake’s discussion a profit is
nothing other than an extension of human reason. . . . Indeed, merchants should not even think of their occupation as being profit seeking but as the ethical acting out of the moral principle of “righteousness” [gi]. When righteousness is acted out in the objective world, Miyake went on, “profit” emerges effortlessly and “of its own accord” without passionate disturbances.[12]
In 1726 Japan, as only a little less urgently in Europe at the time, the task was to elevate the status of merchants, the lowest of the four classes of the Tokugawa régime. The elevation entailed leveling.
In Europe the priesthood of all believers cast doubt on God-given hierarchy in general, and yielded the radical egalitarianism of, say, Smith or Kant, with precursors a century before in the literal Levelers. One’s position in the great chain of being came to be seen as a matter of nurture, not of Nature. Thus Smith in that egalitarian year of 1776:
The difference of natural talents in different men is, in reality, much less than we are aware of. . . . The difference between . . . a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education. . . . [F]or the first six or eight years of their existence . . . neither their parents nor their playfellows could perceive any remarkable difference. . . . [T]hey come to be employed in very different occupations. . . . till at last the vanity of philosophers acknowledge scarce any resemblance. . . . By nature a philosopher is not in genius as disposition half so different from a street porter as a mastiff is from a greyhound.[13]
Similarly in Japan, Conrad Totman notes, the 17th and especially the 18th century witnessed a nascent if minority “belief in universal human potential” and a “defense of callings other than rulership.” The merchant’s son Itō Jinsai (1627-1705), declared in 1683 that “all men are equally men.” Another scholarly merchant’s son, Nishikawa Joken (1648-1724), wrote even more startlingly, “when all is said and done, there is no ultimate principle that establishes superior and inferior among human beings: the distinctions result from upbringing.”[14] Obvious, yes? Not to the men of the 17th century, in Europe or Japan.
As also for Smith and the other pro-bourgeois intellectuals of the Enlightenment the philosophical elevation of the bourgeoisie in Japan was achieved by showing business to be consistent with ethical behavior. As in Europe it took two centuries or so to become widely accepted. From small beginnings in the late 17th and early 18th centuries the Japanese gradually reversed the ancient Confucian contempt for merchants, as the Europeans at about the same time reversed their own classical and Christian anti-commercial prejudices.
At length in the new East and in the new West you did not need to be a Chinese general or a Confucian bureaucrat, a Buddhist priest or a samurai, a Christian monk or a duke, to be honorable. Najita explains that gi (recall Benedict on gi-ri: social obligation) meant in Western terms “justice,” but with a prudent emphasis on its calculative side, “the mental capacity to be accurate and hence fair, principled, and thus non-arbitrary, . . . . the human capacity to know external things, evaluate them, and make intellectual judgments as to what was, or was not, just.”[15] A few decades after Miyake Shunro had lectured on bourgeois virtues to the school in Ōsaka its new leader declared that “human beings are endowed by heaven at birth with a virtuous essence consisting of compassion, righteousness, propriety, and wisdom.” It was a Confucian-based egalitarianism, from which Miyake deduced—as Confucius himself, hostile to merchants, did not—”like the stipend of the samurai and the produce of the farmers, the profit of merchants is to be seen as a virtue.”[16]
Adam Smith, had he known of these contemporary developments in Japanese thought—though it was, I repeat, a minority movement there—would certainly have agreed, as his latter-day followers in the business-ethics movement do, Robert Solomon, for example. Business needs, Solomon declares, “both ethics and excellence,” a motto that would serve for Japanese and American business nowadays on its sweetest behavior. No greed. No crony capitalism. “Less money, fewer clients,” as Tom Cruise says in Jerry McGuire. No avarice.[17]
* * * *
A hardened Chicago economist, or just a Chicagoan, might reply, “So? Call me ‘greedy’ or ‘avaricious’ if it makes you feel better, but I like my SUV and my mink, and if screwing other people gets me such toys, fine. What do I care about my so-called ‘soul’?” To which Zeno the Stoic replied, as Gilbert Murray put it, “Would you yourself really like to be rich and corrupted? To have abundance of pleasure and be a worse man? Apparently, when Zeno’s eyes were upon you, it was difficult to say you would.”[18] Zeno’s Roman-Greek follower Epictetus said, “No man would change [honorable poverty] for disreputable wealth.”[19]
It seems so, by the Deathbed Test: what would you wish to remember on your deathbed, more diamond rings consumed or more good deeds done in the world? Drek or mitzvoth? Aristotle wrote that things good by nature are those that “can belong to a person when dead more than alive.”[20] “Although therefore riches be a thing which every man wisheth,” wrote Hooker in 1593, “yet no man of judgment can esteem it better to be rich, than wise, virtuous, and religious.”[21] Unto death.
Leave off if you wish the religious part or the death talk. “The virtuous person’s reward is . . . an entire life of satisfying actions,” writes Daryl Koehn, “while the vicious person’s punishment is a life of actions that produce both unexpected and unintended consequences for himself and others.”[22] Even in consequentialist terms, in other words, an instrumental and materialist view of love is a scientific mistake. A loveless economy would not work. And it would be hell. The secular meaning of the Christian word “hell” is personal corruption, which in truth makes ruling in such a figurative place worse, not better, than serving in heaven. “We must picture Hell,” writes C. S. Lewis, “as a state in which everyone is perpetually concerned about his own dignity and advancement, . . . where everyone lives the deadly serious passions of envy, self-importance, and resentment.”[23]
David Schmidtz sees again into the core here. He notes a mental experiment imagined by another philosopher that we could “pull a lever” to decide whether or not to have scruples. “Many of us would pull a lever that would strengthen our disposition to be honest.” But as we actually are after Eden we are weak. If you profess an Abrahamic religion you can call the weakness “original sin.” Or you can argue as Schmidtz does that natural selection has made people, alas, “built to worry about things that can draw blood, not about the decay of their characters.”[24]
In The Invisible Heart (2001), a finely crafted “economic romance” (sic), Russell Roberts makes a similar point about the limits of instrumentalism. He improves upon a famous mental experiment of Nozick’s in which you are asked whether you would like to be hitched up to an “experience machine.”
“Superduper neuropsychologists,” Nozick had posited, in a tradition going back through Huxley’s Brave New World and Descartes’ thought experiments to Plato’s cave, “would stimulate your brain so that you would think and feel you were writing a great novel, or making a friend, or reading an interesting book. All the time you would be floating in a tank, with electrodes attached to your brain. . . . Would you plug in?”[25] In other words, “what else can matter to us, other than how our lives feel from the inside?” Apparently there’s something more than instrumental feeling, more than what our good friend Max U cares about. As Nozick remarks in another book, “We are not empty containers or buckets to be stuffed with good things.”[26]
Or imagine a “transformation machine,” which would make us at the flick of a switch into the lives and characters of Albert Einstein or Queen Elizabeth I, “really.” If you were starving on the streets of Calcutta you would instantly agree. But among you, you comfortably bourgeois readers, any takers?
Roberts sharpens the questions by making clear, in his economist’s way, the opportunity cost. His character Sam Gordon is discussing the matter with his class of high-school seniors:
But there’s one detail that I neglected to mention. This imaginary life that you get to experience while on the Dream Machine must replace your actual life. You will never wake up. You enter the room today as the teenager you are. You win the Masters, the Nobel Peace prize, surpass the popularity of the Beatles, then you grow old and die. It can be a painless death, preceded by [the dreamt experience of] a glorious old age. . . . But after they unhook the last electrode, . . . they put you into the ground. . . . They cart you away and bring on the next.[27]
“Still interested?” Sam asks his kids. Of course not. Max U would leap at such a chance to achieve—well, at least to “experience”—utility. But you as your actual self would not do so, because you intend to go on being you. “While a cat will be satisfied leading an animal’s life of sensation and appetite,” remarks Daryl Koehn, “a human being needs something more.”[28]
The difficulty of life, within limits, is its charm. Sen makes this point with the use of his somewhat veiled term “agency.” [29] He speaks of an “agency achievement” that is not reducible to “enhancement of well-being” in a utilitarian sense. His way of putting it sounds like David McClelland’s old idea of “need for achievement,” that is to say, the need for an identity that strives. No striving, no identity. You would agree to a magic spell to stop a cancer, surely. If you could repeat your life you might do so, especially if this time you had a chance to get it right. In stories in books and TV you temporarily enter into imagined lives, perhaps not temporarily enough for your own good.
But scarcity in your own life seems essential for a real human life. Imagine you were an Olympian god. Being immortal, you would have no need for the virtues of hope, faith, courage, temperance, or prudence. These make no sense if you, like the Devil, cannot die. Othello stabs Iago, who replies in defiance, “I am cut but do not die.” Though then he does. Most virtues are useless to someone who really cannot die. Even on Olympus, admittedly, the virtues of love and justice might have political rewards. But what gives human love its special poignancy, and gives human justice its special dignity, is the limit to life. You love a man who will die. You help a woman who is a mere mortal. Not being either a cat or an Olympian god you want a real life with real hazards and rewards, not an experience machine. You wish to retain an identity, a Faith and Hope, as you might put it, named You.
You might as well give in and call it a soul. [30]
* * * *
The late 18th-century impulse and especially the utilitarian impulse was to force ethics into a behaviorist and naively scientistic mode, reducing it to some “immensely simple” formula, as one of the virtue ethicists put it.
For example, many utilitarians and some Kantians do not want to acknowledge the force of words and free will and inner light. I myself acknowledged these un-behaviorist motivations late, finally realizing that the meaning of a human action, not merely its external appearance, is important for its scientific description.
Virginia Held argues that in ethics “we should pay far more attention. . . to relationships among people, relationships that we cannot see but can be experienced nonetheless.”[31] We would not call a mother “virtuous” who felt no emotion in carrying out her duties towards her children. Nor would we call a good Samaritan “good” who saved the drowning victim in order to achieve fame.[32] Or call a business person “ethical” who followed the law out of fear of jail time. Virtue is not merely a matter of observable action. It is dispositional—feeling for example love and regret and anguish and joy for our acts of will.
That is, it is a matter of character, ethos, exercising one’s will to do good, to be good. It is a matter of one’s soul.
The text above is an excerpt from The Bourgeois Virtues: Ethics for an Age of Commerce, the first volume of Deirdre McCloskey’s trilogy on the ethical and historical origins of modern prosperity.
[1] Yeats, Estrangement, 1909, entry 51, p. 334.
[2] Whitehead, Modes of Thought, 1938, p. 31.
[3] Sen, Ethics and Economics, 1987, p 2.
[4] Baier, “Ethics,” 1994, p. 10.
[5] Field, Altruistically Inclined? 2003, p. 300.
[6] Field, Altruistically Inclined? 2003, p. 313.
[7] Friedman, “ Social Responsibility of Business,” 1970.
[8] Friedman, “ Social Responsibility of Business,” 1970, p 33, emphasis added, as Daniel G. Arce M. does when quoting this passage (”Conspicuous by Its Absence,” 2004, p. 263).
[9] Quoted in Arce M, “Conspicuous by Its Absence,” 2004, p. 265.
[10] Daviss, “Profits from Principle,” 1999 (2003), pp. 203, 209.
[11] Donaldson, Financial Times, 2000 (2003), p. 100.
[12] Najita, Visions of Virtue in Togugawa, 1987, p. 91.
[13] Smith, Wealth, 1776, I, ii, pp. 28-30.
[14] Totman, Early Modern Japan, 1993, pp. 181, 359.
[15] Najita, Visions of Virtue in Togugawa, 1987, p. 88f.
[16] Nakai Chikuzan, around 1760, quoted in Totman, Early Modern Japan, 1993, p. 359.
[17] Solomon, Ethics and Excellence, 1992, p. 21 and throughout.
[18] Murray, Stoic Philosophy, 1915, p. 30.
[19] Epictetus, The Book of Epictetus, Fragments, p. 286.
[20] Aristotle, Rhetoric, c. 350 BC, 1367a, p. 81.
[21] Hooker, Laws, First Book, X, 2, p. 189.
[22] Koehn, “Virtue Ethics,” 2005, p. 536.
[23] Lewis, Screwtape Letters, 1943, p. ix.
[24] Schmidtz, “Reasons for Altruism,” 1993, p. 170.
[25] Nozick, Anarchy, State, 1974, pp. 42-44. William James posed a similar question in Pragmatism, 1907.
[26] Nozick, Examined Life, 1989, p. 102.
[27] Roberts, Invisible Heart, 2001, p. 138.
[28] Koehn, “Virtue Ethics,” 2005, p. 535.
[29] Sen, Ethics and Economics, 1987, p. 43, and p. 55: “Self-interested behavior can scarcely suffice when agency is important on its own.”
[30] As Nozick asks, “For ethics, might the content of the attribute of having a soul simply be that the being strives, or is capable of striving, to give meaning to its life?” (Nozick, Anarchy, State, 1974, p. 50).
[31] Held, Feminist Morality, 1993, p. 8.
[32] Compare White, “Kantian Critique,” 2005, MS p. 6. The example is Kantian.