New Wold Order & the Economic Man

Once a week, I watch the American CBS TV program: The 60 Minutes. This time part of the program was about the latest fad among some teenagers: beating homeless people, some resulting in death. The reporters had obtained the footage of a security camera which showed how four young men beat an unfortunate homeless man for fun. The reporter then interviewed another young man (part of a group of four) that had participated in killing a homeless man. When the reporter asked the young man why he had done this, he replied for fun.

The reporter went on to point out how a DVD film called BUMFIGHT, in which two homeless people were paid to beat each other, had become very popular among the American teenagers. The National Coalition for the Homeless (NCH) says that beating the defenceless homeless people has become a perverse national trend. Across the country, packs of teenage boys are stalking homeless people and attacking them. The reporter went on to blame the “Bumfight” DVD and its twenty-something year old producer (who incidentally had sold his DVD rights for 1,5 million dollars) for being partly responsible for these attacks.

The day after I began to receive the usual calls from friends and associates: did you watch the 60 minutes last night? Wasn’t it awful? How can this sort of things happen? Well, that is US for you. It seemed to me that what my friends hadn’t realised was that what happens in US today, will happen in London a few months later and then it spread throughout Europe. Usually we get a milder form, a bit later in Norway. The fact is that US is a trend setter. If they succeed in their policies, we adopt them, and if they fail, well, we won’t touch them. But sometimes their success is illusory and comes with a very heavy price tag. But by the time the Americans realise this, we have already jumped on board hoping to take advantage of whatever new technique or policies that they have come-up with.

Americans, unlike Europeans, are not shackled by traditions. They are risk takers and energetic. They try anything once and are willing to share their experience with all, especially if they can also benefit from it. But sometimes they believe so strongly in their policies that they try to get everyone to implement them, sometimes even by force if necessary.

For the past 100 years, the US have been experimenting with various forms of capitalism and we in Europe have been (to some extend) copying them. We have consistently adopted, although always in a milder form, the American economic policies, from the New Deal of F.D. Roosevelt, to Consumerism and Neoliberalism. By copying them we accept to take the same risks.

We should not shake our head and think that this is just an American phenomenon. What is happening there will happen here, it is just a matter of time. You only have to go to London or Paris to see the homeless sleeping rough in the streets. It is only matter of time before some teenagers try to have some fun with these poor people; after all we have adopted consumerism as well. What these teenagers did and are doing only reflect the extreme of what the current value-less, pleasure seeking, and self-centred consumer-oriented society is all about.

John Berger, the British writer, was correct in his observation when he said that: “the poverty of our century is unlike that of any other. It is not, as poverty was before, the result of natural scarcity, but of a set of priorities imposed upon the rest of the world by the rich. Consequently, the modern poor are not pitied...but written off as trash. The twentieth-century consumer economy has produced the first culture for which a beggar is a reminder of nothing.”

The indifference, indeed hostility that we show to the homeless or the poor is just a very small part of a bigger problem facing our societies today. The big problem, as I see it, is one of corruption of our most basic values and ideals. In our capitalist democratic societies where individual’sinterestis proclaimedto be the centre, we are seduced by the promise of happiness that money can buy and in pursuit of that dream we both seduce and are seduced; going round and round in the circle of illusory compassion, loyalty and real indifference.

A few years back, I attended the launch ceremony of a new software release by a Swedish company in Stockholm. At that time, two Swedish economic professors (Ridderståle & Nordstrom) had written a controversial (in Scandinavia) book called “Funky Business”. One of these gentlemen was invited to start the ceremonies by giving a short speech about their findings on how western society was changing and its implications for businesses. I certainly was not prepared for what I was about to hear. Nordstrom started his speech with the following: Loyalty is dead, Family is dead,….. what is left is shopping and f…ing.

At first I was surprised and indignant. Surely these guys are mistaken. Are these the only things that people are concerned with? And then slowly I began to understand that although we are not there yet, “there”, is where we are heading.

Loyalty is dead. In an era of down-sizing, BPR (Business Process Reengineering), TBC (Time-Based Competition), Six Zigmas, etc, peopleare hired and fired at will. There is no room for loyalty. In an era of “what have you done for me lately”, there is no loyalty. In an era of prenuptial agreements there is no room for loyalty. In an era where politicians are bought and sold, there is no room for loyalty. Now it seems loyalty is rented and not earned.

In an era where over 50% of all marriages end in divorce, there is no room for family. In an era where parents have to spend most of their waking time working, there is no time for family. In an era when a child will cost hundreds of thousands of dollars to educate, there is no incentive to create a family. In an era where the old are sent to retirement homes to die, there is no place for family.

Family unit is important. It is around this unit that we gather, creating villages, towns, cities, and countries. It is the glue that keeps our societies in place. Family functions on two things: love and loyalty. Constant betrayal by corporations, governments, friends and even spouses, has effectively destroyed the notion of loyalty.

That leaves us with love, which we have began to treat as another commodity. Friend finders, Marriage bureaus, online dating agencies, etc are places where people exchange CVs and list their assets hoping to find another person that is willing to give more than he/she is willing to take. We even have speed dating; often used to find out what the other person has to offer in as little time as possible.

With loyalty almost gone, and love commercialised, there is nothing left but a huge vacuum, which the governments and corporation are trying hard to fill with products. That is why Nodstrom was saying that there is nothing left but shopping and f…ing.

The oft-repeated saying in the US is: there is no such a thing as a free lunch. If the family unit is being slowly dissolved and our social interaction is reduced to quid-pro-quo, then indeed we are on a slippery slope to our very own individual hells.

The Economic System of Quid-Pro-Quo

The best example of this economic system is known as market economy or free market economy. The American Heritage Dictionary defines this system as “an economy that operates by voluntary exchange in a free market and is not planned or controlled by a central authority; a capitalistic economy.” This system relies on “market forces” (supply and demand) or the “invisible hand” for the allocation of resources. In other words the product’s availability and its price are automatically determined by supply and demand without any interference from the government or any other central authority. It is important to note that the government is not the only authority that can influence the market.

Some groups may find some things objectionable (drugs, pornography, etc). Church , for example, may interfere with the market if it declares usury a sin. In an ideal free market only the supply and demand determine the availability and price of the products. And that supply and demand is generated by individuals. At the core of this system, therefore one finds the individual and not the group. In this system, it is the interest of the individual that is paramount. Everything revolves around the individual and his desires; and since it is self-interest that is at the centre, the social transactions become a series of quid-pro-quos.

One of the early proponents of free market policies (repudiating the existing Mercantilism), Adam Smith, in his magnum opus “the Wealth of the Nations” (1776) argued the case for quid-pro-quo system as such:

“But man has almost constant occasion for help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers another bargain of any kind, proposes to do this, Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the greater part of those good offices which we stand in need of.”

Of course a system that relies on individual’s self-interest necessarily requires an individual that is free. That is why all the proponents of this system such as Adam Smith, David Ricardo, John Stuart Mills and others were also were proponents of democracy and individual freedom. But it seems, to me at least, that individual freedom that is required in a truly free-market economy can not be achieved in a democracy. Democracy means that although certain individual’s rights are guaranteed; it is the majority’s (i.e. the group’s) interest and not the individual’s that is at the centre. Here is the crux of the problem: individual’s interest vs. the group’s interest.

All the proponent of the free-market economy, especially those that preach Consumerism (economic policies that place an emphasis on consumption, and, in an abstract sense, the belief that the free choice of consumers should dictate the economic structure of a society) have tried and are trying to get rid of anything that interferes with this free-market. That is why they constantly push for smaller government, more individualism, and more deregulation.

From a purely economic point of view, any regulation imposed on the market interferes with the efficiency of that market, i.e. reduces the profit for individuals. Now consider the function of laws and regulations. Laws, rules and regulations are necessary to keep order in any democratic society. If one gets rid of all the regulations, then one is left with nothing but chaos; and chaos is where profit is maximised.

Look at history and see how few people have earned tremendous profits in chaotic times. Look at how robber barons in US amassed tremendous wealth in absence of regulations. Look at the Russian oligarchs and how they became billionaires in a short time because of chaos and absence of regulations. Look at Enron. For a few, it makes sense to deregulate the market, to have smaller government and to have a “free market”. But to achieve this in a democracy we need to have people that are willing to vote for such a society. There is only one type of a person that is willing to benefit from chaos and that is the Homo Economicus or the Economic Man. This Man is an individual that is in essence an amoral being driven solely by his/her pursuit of self-gratification.

To be continued

Dr. Abbas Bakhtiar

Dr. Abbas Bakhtiar lives in Norway. He is a consultant and a contributing writer for many online journals. He's a former associate professor of Nordland University, Norway. [email protected]

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Author`s name Dmitry Sudakov