How Economic Individualism leads to Anarchy. And a possible Way Out

In Thomas Hobbes’ (1588-1679) prominent state of nature every individual fights against all other individuals. Each individual does so to survive: When I kill my neighbor he can no more steal my belongings or kill me, I am consequently safer now. Hobbes’ state of nature is an individualism-based condition of anarchy: Neither laws nor governments nor any form of contracts exist. His ultimate objective is to find ways to leave or avoid this condition.

 

The individualistic concept was new then and characterizes many schools of thought in the modern period. Among others, the neoclassical theories in economic sciences of the 20th century generally rely on the methodological individualism. Each individual aims to rationally maximize its utility accordingly.

Through neoliberal politics these theories were implemented in many countries in the last 30 years: The transfer of theoretical concepts like the methodological individualism was essentially (although not exclusively) transferred and supported by such politics into the real world. Today, they structure to large parts the perception of how the economy functions and what it is in reality. This thinking is also based on competition because others are understood as (potential) competitors. The assumption of this politics of deregulation was that market-ruled competition alone establishes the most effective and efficient solutions.

 

Yet, individualism (as also competition) is not bad per se. Every one of us is an individual and it is nothing else than self-evident that individual rights need to be protected. But, the methodological individualism as the one of economic provenience was implemented at the cost of the community. In Switzerland e.g. voluntary community work is strongly decreasing (e.g. there are less football coaches for children). People are too busy with their individual job career and want to score (financially) in their personal competitive game.

 

The strong individualism of today may be seen as a kind of a global state of nature. Some examples: The exploitation of workers and local communities by transnational corporations is fostered by political deregulation and missing cooperative global governance structures: Responsibility is left often to individual managers; because of removing or not establishing regulation it is often made easy for managers of firms to enrich themselves excessively. Conversely, single individuals can trigger shitstorms against firms by posting individually declared violations of political correctness in the social media. And, as mentioned, voluntary community work is decreasing. The neoliberal politics of deregulation thus led at least partly to conditions which for Hobbes were imperative to leave in place.

 

A possible way to balance the corrosive consequences of such overreaching (economic) individualism on communities is that we, the civil society, begin rebuilding voluntary, non-market based cooperation between us citizens. A stronger togetherness between neighbors and friends etc. can foster the creation of values that provide a whole society meaning and vision. The economy can rediscover its role in and for society by cooperating more seriously with and for stakeholders.

 

Of course humans are competition-oriented individuals but they are also cooperative and social beings needing mutual value and meanings. The sociologist Richard Sennett and communitarianists often write about the importance of cooperation and togetherness in civil societies. And the stakeholder theory explains the advantages and appropriateness of an economy understanding itself more as a part of society and related to stakeholders.

 

 

Claude Meier

Ties that bind

Recently, I had a talk with a catholic priest about people’s participation at the Mass. Not surprisingly, he told me about the continuously declining numbers of participants, but he was more worried about the decreasing level of general social participation in his parish. As a matter of fact he pointed out the additional problems of recruiting or retaining members of various parish-related associations like charities, youth, hiking or card playing groups. In his opinion this phenomenon was not basically a question of religious faith, but mainly one of individualism. As people want to take their lives in their own hands and like to organize more and more aspects of their lives individually, they make ever less use of the parish’s social offerings. Again, this is not a new insight, as Robert Putnam (2000) described in his seminal work “Bowling Alone” various aspects of the American community (political, civic and religious participation, workplace connections etc.) and its decreasing level of social activity or, as he named it, social capital.

I am asking myself what the consequences of this shrinking in social capital are for people’s willingness to participate in collective actions regarding social issues. Let’s take the steadily increasing disparity of incomes and wealth in most of the Western countries as an example: “We are the 99 percent” is one of the corresponding “Occupy”-movement’s slogans. But why are those 99 percent not able to trigger any societal change regarding fairness in the dissemination of income and wealth? “No, we can’t!” seems to be the more adequate slogan.

I think that individualism is part of the problem. If people are striving for their own personal goals, they are not really organized regarding the pooling of shared interests in the context of a social issue. Further, people’s membership in and their feeling to belong to associations, unions and other social groups fosters the development and maintaining of shared values, norms and interests in the context of a social issue. Therefore, not only personal relationships, but also memberships in social groups lead to ties that bind among people.

One possibility to approach a social issue is a stakeholder network. Especially regarding complex social issues for which cooperation among the affected actors is needed to create sustainable solutions, stakeholder networks are a promising organizational form. However, even if stakeholder networks have proved their potential to create value regarding a complex focal social issue, they are no panacea. Stakeholder networks depend heavily on the knowledge and skills of the different stakeholders’ representatives participating in the problem-solving regarding the focal issue at hand. Therefore, through the interactions of representatives in a stakeholder network, the corresponding shared values, norms, and interests regarding the social issue are emerging. These personal interactions, in the sense of people for people, are important for creating sustainable solutions in complex issue-based stakeholder networks.

Stakeholder networks and its organizational form create social capital by supporting two different kinds of ties that bind. On the one hand, there are the already mentioned interactions among representatives of different stakeholders. On the other hand, shared values, norms and interests provide the social glue among individuals. This glue is needed to address complex social issues like the increasing disparity of incomes and wealth.

Tom Schneider