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September 2013

The self-interested society

by Kenneth Minogue

Societies are all imperfect, but self-interested societies fare far better than any of their counterparts.

Editors’ note: Kenneth Minogue (1930–2013), a valued friend and contributor to The New Criterion, delivered a version of the following remarks to the Mont Pelerin Society in the Galapagos Islands in June. He died suddenly on his return trip.

Here in the Galapagos, the abstraction that must haunt our imaginings is evolution. But the term has two distinct meanings. Here is one genealogy, from Hayek:

[M]odern biology has borrowed the concept of evolution from studies of culture of older lineage. If this is in a sense well known, it is almost always forgotten.
Of course the theory of cultural evolution [sometimes also described as psycho-social, super-organic, or exsomatic evolution] and the theory of biological evolution are hardly identical.

Here is another, from Matt Ridley:

Thomas Hobbes was Charles Darwin’s direct intellectual ancestor. Hobbes (1651) begat David Hume (1739), who begat Adam Smith (1776), who begat Thomas Robert Malthus (1798), who begat Charles Darwin (1859).

Evolution is clearly a powerful word. The problem is that neither of these meanings has much to do with Darwinian natural selection which, by contrast with these meanings, is a blind process in which random mutations constantly generate new versions of a species that deals more successfully with the environment than its fellows. My concern by contrast is with the emergence of our free civilization, which has no blind random processes in it, though it may well be that Adam Smith’s “invisible hand” might be taken to function in the same way.

I am concerned with the evolution of that grand thing called a “free society”—specifically, the only society or civilization that has ever evolved into freedom: our own.

What I mean by this is that our society—namely modern Western Europe and its offshoots in the rest of the world—has evolved into a set of national states, each of which is an association of individualists, managing their own lives and pursuing their own individual projects. That might sound like a description of any kind of human life, so why am I suggesting that it is unique?

The contrast I want to make here is with every other society and civilization because all of them rest, at some level, on legitimation in terms of a comprehensive system of justice. Most such societies are of course largely agricultural, and in them each individual notionally occupies a social status valued according to its supposed contribution to the common good. Human beings living in these just societies live—in principle—the way all human beings ought to live: in castes, or under Sharia, or the Mandate of Heaven, or whatever the hierarchy of belief locally may be, down to and including small tribal groups.

We in Western Europe, however, have taken a different path in which individualists, often identified as town-dwellers or “bourgeoisie,” associate together generally according to their own inclinations rather than in terms of some determinate social status designed to contribute to the good of the community. Individualists (in their very role as individualists) merely associate rather than form a community, though as subjects of a state they may participate in various communities built around specific interests or passions—clubs, religions, industrial enterprises, and so on. But this is incidental to the free lives they lead.

Those who live in just societies have clear functions, and up to a point enjoy the respect appropriate to such a function. Some of these functions are precisely defined: ruler, wife, warrior, priest, etc. But in all cases there will be a well-understood hierarchy governing social life, and its purpose is to preserve the basic aspiration of such comprehensively just societies—namely, social harmony. Thus the Forbidden City in Beijing had a Gate of Supreme Harmony leading to the Hall of Supreme Harmony, passing on to the Hall of Central Harmony and the Hall of Preserving Harmony, all of them clearly issuing from the idea of individual imperial authority.

Individualists in free societies, by contrast, merely have a duty to conform to the laws of their state, which ideally do not distinguish specific functions. In advancing this distinction, I am obviously perilously engaged in an abstract sociological sketch, one at a level comparable to David Riesman’s famous distinction between people living in traditional and modern societies in The Lonely Crowd. In these terms, free individualists are notionally equal under the law, including the ruler himself or herself. But what is it, we may ask, that guides and motivates the lives of these free individualists? The common answer is: self-interest. And my central concern in this paper will be with making sense of this remarkable—and troublesome—term.

In an obvious sense, we all know what “self-interest” means. If a car comes careering towards me, I jump out of the way; it is the basic instinct of self-preservation, and hardly distinguishes an individualist from any other human being. More specifically, as self-interested, I prefer to get a higher rather than a lower wage for the same work. Again, I want my family to prosper and my children to do well at school. Obvious, in fact.

It should be clear that the meaning of self-interest must be understood as responding to the situation of individuals moving from a traditional to a modern society. In a traditional society, politics (to the extent that such a thing may be recognized amid absolutist justice) is not about interests but about ideals, and most notably about justice itself. People may be nice or nasty, selfish or generous, but the sphere of their actions is largely determined by the role or status they have. But as we move into an urbanized modern society, increasing numbers of individuals must find some niche or enterprise of their own within which to live. They must become, as it were, self-reliant so as not, if possible, to become a burden on others, and in order to respond to their own responsibilities. This virtue of self-reliance, more exactly than the idea of self-interest, recognizes the situation of the individualist as modernity spreads and people move from the countryside to the towns.

In spite of its necessary place in responding to modernity, there is a great deal of hostility towards the idea of self-interest. It is associated with ruthless self-promotion, taking no account of the good of others. It is sometimes thought to be at war with common decency, and even a form of exploitative attitudes to others. We sometimes think that La Rochefoucauld got it right in remarking, “We all have courage enough to bear the troubles of others,” in addition to his many other cynical remarks. Or we may take our bearings from Gore Vidal: “It’s not enough to succeed. Others must fail.” Or even the fictional Gordon Gecko: “Greed is good.” And at that point, self-interest has become quite explicitly identified with the vice of selfishness.

It is common ground, of course, that human beings are fallible and sinful creatures, much given to what Hobbes recognized as vainglory. Hobbes was particularly impressed by the pleasure humans take in thinking they are superior to others—being “foremost” as Hobbes put it. Hobbes thought he was talking of all men, and his account of human nature was certainly always true of prominent men and women, but it is plausible to think that Hobbes was particularly generalizing the individualists of his own time. Christianity of course emphasizes the place of foolish vanities in human lives. But there is nothing essentially individualistic about such human imperfections. They are universal. All human beings exhibit such weaknesses.

It is also noticeable, however, that free individualists are remarkably generous and public spirited, and not only because they belong to richer societies. They are generous in helping the poor all over the world, in responding to remote catastrophes, and in endowing museums and other cultural institutions. Individualists can also exhibit the most remarkable solidarity in helping each other in difficult situations. In spite of their supposedly isolating and selfish individualism, their capacity for spontaneous fruitful cooperation if a crisis occurs is striking. They have succeeded in creating societies in which the vulnerable are helped, and in which women may live on equal terms with men in ways hardly to be imagined in some “superior” just societies. The test of these judgments lies not in any “Eurocentric” vanity, but in the fact that millions from supposedly just and perfect societies will do almost anything to migrate into our vile, self-interested, capitalist world.

In spite of these facts, two remarkable beliefs have come to be widely held about free, Western societies.

The first is that human beings are naturally selfish creatures, and that they can only become virtuous by overcoming their natural self-partiality. This moral opinion descends from some versions of Christianity, was powerfully taken up by French moralists in the seventeenth century, contributed to satirical views of commerce in the early eighteenth century, was influentially refuted by Adam Smith, and was revived to plague us once more by the Marxists (and other ideologists) in the nineteenth century. But the individualist, in pursuing self-interest, is not, according to our critics, overcoming self-partiality.

The second and related view is that Western Civilization is technically prodigious but has basically failed to overcome prejudice, superstition (e.g. religion), bigotry, racism, imperialism, national selfishness, and other such evils from which only the wisdom of international organizations can save us. This curious form of civilizational self-hatred results not from judging that we are worse than others but from the belief that since we have more control over our nature, we ought to have been able to do better.

We have, then, a problem and a solution. The problem is how to give a more or less neutral account of the broad motive that animates our free societies, and the common solution is to say that it is “self-interest.” But then we discover that the expression “self-interest” loses its neutrality, and thus cannot function without becoming pejorative. We might, I have suggested, replace self-interest with self-reliance, but that would be to identify free societies with a virtue. What to do? We must, I think, look again at the character of the free societies we inhabit.

How did our free society emerge, evolve, develop . . . get off the ground? The answer is that it has emerged from an immensely complex set of social and moral contingencies, and even to ask about its “causes” is hopelessly to simplify the remarkable thing that has emerged. Some signs of it may be found in the peoples to whom we look back with admiration—the Greeks and Romans, most notably, but also the Jews and, later, the various barbarian peoples who moved into the western Empire. The form that Greek philosophy took, and its flourishing from Thales to Aristotle and beyond, clearly became one of the central resources of our freedom. The Romans valued this feature of classical Greek culture, and passed it on to those working to turn the Christian revelation into a faith that could animate new ways of life. But there were many other elements of social life that adumbrated the possibility of free relations between individuals—for example the consultative practices of feudal monarchies that came to be generalized in England by Magna Carta. And the common account of our civilizational past, the story that takes us from the Greeks to the present over a period of several millennia, amounts to a sketch of how this new thing emerged.

The obvious move would be to consider the “causes” of this new thing, but “cause” is too crude an idea for this task. Instead, we must imagine a vast range of face-to-face encounters between Europeans, over a long period under many varied circumstances, changes of demeanor which sometimes evolved into doctrines or explicit practices—such as chivalry—but which were more commonly slight variations in manners and moral assumptions, feeding slowly into institutional practices (in universities as they emerged, for example) that, towards the end of what we call “the Middle Ages” began to make it clear that something quite new was coming into existence. For institutional change emerges spontaneously from personal responses.

The growth of modern natural science is one example of how a tradition—in this case, of philosophical questioning—became the route into a quite new intellectual adventure as it came to involve enterprising thinkers in countries ranging from Poland to France and Britain. But perhaps the most notable verbal sign of something new happening was the rising currency, from the seventeenth century onwards, of words hyphenated with “self-”—as in my central example of “self-interest.” In this idiom, human experience was being bifurcated into two elements—a subjective and an objective part—and it was registered in language by the recognition of “self,” often as a kind of managing agent in how human beings respond to the world.

My concern is with “self-interest,” but there is an endless sequence of such hyphenated terms emerging from the seventeenth century onward. Such terms might be used by individuals explaining themselves, or they might be used analytically, or critically, by outsiders. “Self-expression” might be a good thing, but being “self-opinionated” was generally not. In moral discourse, the distinction between “self” and “others” came to be prominent, and approval was likely to focus on how any particular “self” responded to “others.” In traditional societies, a focus on “others” obviously had been possible, but in that context the “others” were more commonly specified in terms of their relative social status. They were less likely to be merely abstract “others.” Thinking in these terms led many to the cynical view that underneath most, indeed perhaps all, social life would be found a destructive selfishness. A common thought was that the men of this period were living through a period of decline.

The real significance of the “self-interest” formula is that it reveals to us some elements of the basic conflict in our society between freedom on the one hand and justice on the other. Here is an expression that might merely mean a rational response to circumstances, or could signify the moral fault of selfishness (and it was often assumed to do just that), but there can be little doubt that its usage has generally been pejorative. It thus constitutes the basic premise that slides to, rather than actually entails, the idea that a free society is essentially unjust because the strong, in pursuing their interests, oppress the vulnerable, and hence that justice requires that the state should take steps to restore, by political action, the fairness that has been lost in the very operation of the economic process. The “strong” in these cases might turn out to be the rich, or the enterprising, or those who have better “social capital” because of more fortunate family life, or such further variations of the idea of “privilege” as may respond to the discovery of relative (rather than merely absolute) deprivation. On such a view, a free market economy is essentially unfair because the basic drive animating it has no moral content. Individualists in pursuit of self-interest are merely seeking benefits for themselves. And yet, in the real world, morally valuable and cooperative behavior is evidently a feature of our modern societies. The question thus becomes: How might we describe such virtue in our real world, and how account for it?

The answer, of course, has generally been in terms of the virtue of altruism or benevolence, which, as distinct from self-interest, is recognized as the model of goodness when it occurs between “self” and “others.” It is this contrast that is at the heart of a good deal of moral theorizing. Our world is full of benevolent people performing prodigies in order to raise money for charities. This is one way of showing that they are not spending their lives merely pursuing their own interests. Such activities are clearly admirable. But as exhibitions of virtuous conduct, they raise problems.

The first problem is that the virtue of benevolence can attach itself, like a parasite, merely to the having of good intentions. The crimes of communist regimes often avoided censure by virtue of the supposed good intentions of those committing them. Again, people lacking integrity (in, for example, exploiting claims for expenses) commonly defend themselves by the claim that they had broken no rules. Further, the term “interest,” even in the moral context of “self-interest,” invokes politics, understood as an arena in which interests conflict with each other. Hence at its least sophisticated, one form of self-ascribed good intentions may be the mere fact of supporting welfarist political policies. Such a view, not uncommon in leftish parties, takes the illusion of costless good intentions to its limit.

And this leads us to a second defect of this version of the moral life: That altruism and benevolence, as the essence of goodness, cast into the shade such more elusive and subtle virtues as integrity and courage. One notable collapse of integrity consists in the happy belief that the costs of one’s policies will be borne by others, and particularly in politics, by the more heavily taxed rich. Just such a belief is a popular recourse in the more demagogic versions of current politics. Such a view corresponds precisely to the corruption that Greek philosophers diagnosed in democracy as a political system, understanding it as an instrument by which the poor might plunder the rich.

Even the device of off-loading the costs of one’s public altruism on the taxable rich, however, is merely a political solution to the problem, and what politics gives, politics can also take away. The ideal solution to such a problem is—an ideal! The public altruism of welfare must be entrenched in the ideals of justice and of rights. A real solution to the conflict between self and others must transcend this distinction itself, for in a real community, cooperation transcends conflicts of interest between individuals. Such, I think, is the logic behind our admiration for “social justice,” however difficult we may find it to define. And it seems to me that in the concept of justice, in its contrast with self-interest, we have one clue to the destiny of our free society: That we shall never quite be free of the illusion that our psychological foundation in self-interest is the imperfection, the vice, that stands in the way of the social and human perfections that would create a better world.

And it is in terms of this move to social justice that we leave our free societies behind and find ourselves entertaining a comprehensive system of justice understood as the right and fair and just outcome of economic enterprise. Our Western understanding of merely civil justice in a free society cannot lead to any precise conception of a right order of things (as entertained in other civilizations), because no free process can be relied upon to guarantee any particular outcome. It is further important that no particular outcome, if it did occur, could then be protected against later change. Freedom is thus incompatible with any version of comprehensive justice.

The point is that justice in our Western understanding is thought to be (in principle) a freely accepted rule that mitigates some problem arising from a pre-political condition, often theorized as a “state of nature.” This understanding of civil law in no way depends on whether we take the story of the state of nature seriously. What is fundamentally involved is a recognition that justice in a free society comes from the needs of the ruled, and that it consists in a process of rules that could not generate any particular desired outcome. Historically generated rules of law based upon this basically contractual order of social relationships were early professionalized in Europe and embedded in our governing practices as a limitation upon the caprice of executive action.

What we may call “the moral life” as it exists among Western Europeans emerges directly from these conditions. Practical moral judgments result from asking, in a moral sense, “what ought I to do in this situation?” and in most societies, the appropriate answer is given by religion, or by custom, or by the realities of situational power.

Both religion and custom will also be found in European states, of course, but the moral life as we experience it may be distinguished from these concerns. It consists in judgments balancing reasons about the consequences of alternative actions for the interests of both the actor and those his act will affect. It is, in principle, no less independent of custom and religion than the Socratic model of living the right kind of life which our moral practices (very distantly) echo. Custom and religion may become influences, but only as elements in a process of moral calculation. That is one element of what is individualistic about such a moral practice, and it may affect both actions that come within the ambit either of the distinction between good and evil or of right and wrong. An important element in the moral life as Max Weber analyzed it resulted from the Protestant judgment that a holy life could be lived in the world, rather than requiring immersion in a specialized religious institution. And as the modern world developed, the aristocratic concern with honor became generalized into various criteria of identity such as conscience and reputation. In other words, the competitive character of every other feature of free modern societies became a feature more in our moral life than in the economy. The outcome has been that in this area, as in most others, Europeans found themselves living within a world of conflicting understandings about what ought to be done. And it was precisely in embracing this and other forms of conflict that Europeans recognized themselves as free.

Some people take the view that we in the West are fortunate to enjoy freedom, because it is a universal human aspiration that has been commonly frustrated in most societies. This is one of the more pernicious illusions we entertain about human kind. Most people have never lived in free societies, nor exhibited any desire or capacity for freedom. Totalitarian movements reveal even the danger that many who have enjoyed freedom can be happy to abandon it in the name of some passionate cause. The illusion that everyone wants to be free means only, perhaps, that people don’t much like being frustrated, but that is quite different from the self-discipline involved in an association of individualists managing their own lives. This illusion has been happily indulged by many commentators on the “Arab Spring” of recent times, in which the instability of authoritarian regimes might suggest a whiff of libertarian feeling. What most people seem to want, however, is to know exactly where they stand and to be secure in their understanding of their situation.

Rules and processes are risky because they will produce unexpected and sometimes unwelcome outcomes, and it is this contrast which makes freedom constantly vulnerable to those who try to seduce us with dreams of perfection. My argument has been that even perfectly valid ways of explaining ourselves can easily slide into pejorative accounts of freedom. When that happens, it can seem obvious that governments should not merely regulate the economy (as they must as part of the rule of law in modern societies) but that they should also intervene to manage its outcomes by the use of subsidy redistribution and welfarism. These policies are suggested by the slide from a descriptive account of human psychology (the pursuit of self-interest) to a corrupt identification of the description with the vice of selfishness, ruthlessness, greed, and similar evils. The reality of pursuing self-interest in a free modern society is no doubt better described by invoking some such virtue as self-reliance, but that is the demand which a free society makes on everyone, and it is that demand which is often found burdensome by those who find security in a structure of welfare from which they may benefit.

Much of this corruption may be regarded as political sentimentalism. I am not, of course, suggesting that individuals do not suffer in many ways from the ups and downs of economies and the many other conditions that invoke the concept of vulnerability. But politics can, of course, only respond to abstract classes of suffering—such as that of unemployed people, or drug addicts, or pregnant teenagers. The real situation of individuals in these classes is immensely variable. In political discussion it can only be grasped in terms of some image or archetype. Democratic politics extensively consists of the conversion of abstract classes of vulnerability or hardship into images of a persuasive kind. And politically, there is no doubt which way expenditure on these imaged policies will go. It rises relentlessly upwards. The classes of the vulnerable multiply, and the demands on the public purse rise in order to deal with problems that in earlier generations were accommodated within the exigencies of family life.

In politics, every policy has some advantages and also some disadvantages. But notable about the disadvantages of this range of welfarist reforms is that they have led most rich Western states into a condition of chronic bankruptcy. The crisis of the early twenty-first century is no doubt attributable to bankers and to other public actors, but unmistakably central to the problem is a level of both personal and public debt, which is unsustainable, and will get worse for more than demographic reasons. And when governments become indebted, they have virtually no solutions to the problem except to deceive their populations with inflation and other monetary forms of smoke and mirrors.

It is not merely governments that act corruptly. It is also the democratic voter. As we have seen, the demos is also corrupted. A great deal of political sentimentalism floats on the illusion that rising public expenditure would not affect most of the population because the rich can be taxed more heavily. Much indignation is often expended about large firms that “avoid” taxation, as if taxation were a form of charity one should offer to governments, rather than known rates to be paid by specific and well-defined classes of taxpayer. The problem is in part that the rules of taxation have become so complicated that skilled professionals are needed to reveal what must be paid and what may be kept. Politicians however are keen to talk of the rich “paying their share” of taxation; it is a cry advanced under the popular rubric of “fairness.” It is only as it dawns upon voters that the costs of welfare cannot forever be loaded onto the rich without serious economic consequences that public opinion turns against welfare spending.

My argument is, then, that societies are necessarily imperfect, and making them perfect is not an option for creatures such as humans. We can, however—up to a point—choose where imperfection may least harmfully find an outlet in our complicated societies. And in making this judgment, we need to remember the practice of freedom on which our wealth seems to have depended. Solutions that reduce our freedom put modernity itself at risk.

The experience of twentieth-century politics presents us with an obvious alternative. We can accept the inequalities of economic life as necessary imperfections, or we may try to correct them by taking decisive political action, which means greatly expanding the power of states so that they may use their power to make economic outcomes more just. It will hardly be news that expanding the power of states has seldom been anything but a risky option. In the twentieth century, states taking over the economy generated totalitarianism. Merely to refer to the body count of those bold experiments is enough to rule that option out of contention. Here today, we are well into the twenty-first century, with a history of increasing welfarist policies long established, and they have led us to unsustainable levels of debt.

The unavoidable conclusion seems to me to be that letting economies rip, however much we may disapprove of the consequences, is much the better option. For one thing, it leaves open the possibility that the more vigorous members of society will take some action themselves to mitigate, at least in part, the sufferings of those genuinely in need of help. The balance in our tradition between the rules we must respect because they are backed by the authority of law, and the free choice in the other elements of our life is one that free agents rightly will not wish to see disturbed.

It seems to me that our preoccupation with the defects of our civilization is a standing temptation, and a dangerous one, to have recourse to civil authority in order to deal with what we may be persuaded to understand as social imperfections. And that preoccupation with our imperfections is most commonly grounded in the corrupt sense of explaining freedom in terms of self-interest. To recap, such an assumption about the motivation of moderns invokes the moral criterion of justice or fairness as condemning many of the consequences of our economic life (in terms of the supposed distribution of benefits). Such a view in turn generates a succession of vulnerable classes of people each with claims on the state for redress. Welfare programs responding to this process have no determinate end in sight. There is no viable conception of a society without vulnerable classes demanding special treatment as victims of one or other kind of injustice or unfairness. We begin to conceive of modern societies as associations of incompetents and cripples, which is absurd. The human condition is not like that. We entertain many foolish ideas, and no doubt will continue to do so. But this is a piece of nonsense that we can no longer afford.

Kenneth Minogue was Emeritus Professor of Political Science at the London School of Economics.

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This article originally appeared in The New Criterion, Volume 32 September 2013, on page 4

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