Relational Anthropology for Contemporary Economics

Front matter

Ethical Economy. Studies in Economic Ethics and Philosophy

Jermo van Nes Patrick Nullens Steven C. van den Heuvel Editors

Relational Anthropology for Contemporary Economics

Foreword

Homo economicus is a character. He is said to act in accordance with his own interests and aim for personal wealth and well-being. Homo amans is said to act on different instincts and motivations, such as love, hope, care, and sympathy. One only has to look at some of the problems facing our present global society to see that change is needed. This book provides a remarkably interesting and intelligent exploration into the world of Homo amans. Is Homo amans a potential alternative to Homo economicus, the authors of this volume ask? In light of today’s economic, social, and environmental challenges the question is important to raise but, as the book shows, difficult to answer. Isn’t it the case, Wildman asks in this book, that “any large culture plays host to a great variety of mutually inconsistent anthropological visions”? One can even take this question one step further and ask whether Homo economicus and Homo amans aren’t interdependent and need each other on the path towards a more humane and dignified life for all? Why don’t we start this exploration with something that is laudable in the context of a humane society: respect for human rights — and, specifically, access to healthcare as a human right. Article 25 of the Universal Declaration of Human Rights reads as follows:

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.!

The right indicates that all humans should be able to live without having to worry about the basic requirements for a free, humane, and dignified life related to physical, mental, and social health. Having a right to primary goods and services related to our health and well-being is only the first condition for ensuring that humans are able to access and enjoy the benefits of these goods and services. The second condition is that these goods and services are actually available and accessible. As signatories to the declaration, governments have a responsibility to provide their citizens and other inhabitants of their countries with what is necessary to live a life

'https://www.un.org/en/universal-declaration-human-rights/ vi Foreword in dignity — sufficient medical care, food, shelter, and other goods. With the limited resources that they often have, they rely partially on the commitment and support of business and civil society to respect and promote the implementation of human rights. This sharing of responsibility is already implicated in the preamble of the Universal Declaration of Human Rights that calls on “every individual and every organ of society” to promote and respect human rights. International law scholar Louis Henkin noted in 1999 that “every individual and every organ of society excludes no one, no company, no market, no cyberspace. The Universal Declaration applies to them all.”? In many official documents relating to the principles and practice of business, including but not limited to the OECD Guidelines for Multinational Enterprises or the UN Guiding Principles on Business and Human Rights, the focus is mainly on respecting Human Rights. It will not be difficult to argue that it is in the interest of the company to do so.

Increasingly, however, a plea is made for a more active role for business in promoting human rights and a dignified life for all. A recent example is the UN General Assembly Resolution A/RES/70/1, adopting “Transforming our world: the 2030 Agenda for Sustainable Development,” which outlines the Sustainable Development Goals.’ In its introduction, the declaration calls for an inclusive approach to implementing the agenda:

It is “we the peoples” who are embarking today on the road to 2030. Our journey will

involve Governments as well as parliaments, the United Nations system and other interna-

tional institutions, local authorities, indigenous peoples, civil society, business and the private sector, the scientific and academic community — and all people. Millions have already engaged with, and will own, this Agenda. It is an Agenda of the people, by the people and for the people — and this, we believe, will ensure its success.

Already in the preceding Addis Ababa Action Agenda that was adopted in July 2015, governments and business had agreed to support the UN development agenda by making commitments to sustainable development, inter alia through the provision of (blended) finance. One of those business organizations was Philips, the company that was previously known for its lighting and household appliances — ranging from TV sets to electric shavers and toothbrushes — and recently transformed into a medical appliances company. As its core mission, it wants to “make the world healthier and more sustainable through innovation.’ To make that mission more tangible the company’s expressed goal is “to improve the lives of three billion people a year by 2030.” In addition, it wants to be “the best place to work for people who share our passion. Together we will deliver superior value for our customers and shareholders.”>

*https://www.business-humanrights.org/en/business-human-rights-a-brief-introduction shttps://www.un.org/en/development/desa/population/migration/generalassembly/docs/ globalcompact/A_RES_70_1_E.pdf

“https://www.philips.com/a-w/about/company/our-strategy/how-we-create-value.html ‘Ibid.

Foreword vii

The transformation of Philips did not turn the company into a charitable organization, thereby disposing of the conception of a human being as Homo economicus and replacing it by one of Homo amans. On the contrary, Philips is still a company that aims to create value for its shareholders by doing the things it is good at. As the mission and vision of companies like Philips demonstrate, mainstream businesses very gradually become more susceptible to the needs of society and the contribution they can make to “human flourishing.” They continue to perceive human beings as rational and as focused on their personal wealth and well-being, while at the same time acknowledging that making profit is not the sole purpose of a business in a dynamic society. For some, it is not the purpose of the business at all to make as much money as possible for shareholders. These enlightened companies see business as vehicle for producing goods and services for (consumers in) society, for which, obviously, a business has to be profitable. Without profits, there is no well-being for society. But the opposite also matters: without demonstrably creating value for society, the company believes it will have no future.

This book calls for a transformation of our thinking in, inter alia, economics, business, civil society, and politics in order to revalue the notion of a human being. We are invited to perceive human persons for what they are: individuals engaging in multiple relationships that add meaning to their life. The value of these relationships, and additional values, is not only perceived in terms of self-interested wealth creation but also in terms of mutual respect, care, love, and hope. The book wants to revitalize the idea of morality in business in the way that, for instance, Adam Smith was able to combine and align his economic and moral thinking. Yes, it does make sense to promote the division of labor to allow for specialization, without forgetting that, as human beings, our purpose in life is not to create as much personal wealth as possible.

Since the 1950s, our global economy has gradually become saturated with the belief that economic wealth creation is the alpha and omega of value creation in society — despite the pleas of critics challenging such a narrow view of what — and who — should count in the dominant economic and political domains of life. More recently, and partly as a result of the major social, environmental, economic, and financial crises that our society has faced and faces still, the economy is changing to one that is inspired by a sense of human dignity and flourishing. More and more, new concepts emerge, displaying and endorsing ways of management that promote values other than self-interest. The “commitment of the will to the true good of another” — McCloskey’s definition of love — is increasingly found to inspire key players in the economy. Excellent examples are set by social entrepreneurs and businesses aimed at promoting the common good. Even though these movements bring together important business leaders, their impact on the economy is still

°Recently Danone, the French multinational dairy company, announced it was becoming an “entreprise 4 mission” thereby aligning its social and environmental objectives with its purpose. Nonfinancial objectives have become as important as financial objectives: https://www.danone. com/about-danone/sustainable-value-creation/danone-entreprise-a-mission.html

Vili Foreword marginal due to the size of their operations. It is when a B Corp like dairy multinational Danone, or a major medical appliances company like Philips, steers towards a more humane economy that we can hope to make some progress. The word “hope” is quite appropriate in this respect. Over time, changing the prevailing economic paradigm has always been seen to be a rocky road towards — what the incumbent leaders of previous times believed to be — a better future.

In this respect, we need the aforementioned companies to do more than make sure that human rights are protected and that people are granted the right to health and well-being. Respecting rights is important but not sufficient for promoting human flourishing. It is precisely because Philips promotes access to healthcare in Africa through its Community Life Centers, and Danone works together with the Grameen Foundation to produce Shokti Doi, a nutritious yogurt providing the most needed vitamins and nutrients to young children, that we see progress materializing. These advances can clearly be seen as expressions of Homo amans, since the companies are not making any money on these activities. They are merely undertaken because of the social value that they create — although the companies hope to benefit strategically from these investments in a distant future.

It is in the intelligent combination of the strengths of economic development and the recognition of its weaknesses and limitations, that steps are made towards a more humane economy. This is a slippery path, however, asking us to continuously secure the progress that has been made, while simultaneously exploring ways of advancing further. In climbing the path towards this more humane future, it is not so much that Homo amans should take Homo economicus by the hand. Nor can Homo amans replace, or be an alternative to, Homo economicus in our present economic system. What is needed is an engaged conversation between the two on the purpose and values in life that matter for our global society and on the path that will lead us there. The attempts at this conversation that we gradually see being made — and the first signs of a changing paradigm in today’s business practice — still have something about them of the deaf supporting the blind, and vice versa. They are interdependent and therefore need each other. As Gerrit Glas argues in his contribution “new theories, concepts, and paradigms are a precondition for change, but they do not bring about change by themselves. What is needed is a change in the practices themselves, a change that is both personal and comprehensive.” It is precisely here that Homo amans can inspire economic practice, while at the same time diligently looking for support and guidance within current economic practices that will induce change and lead to an economy that promotes love, care, sympathy, and hope. The current economic, social, and environmental crises might actually be helpful in spurring change: these crises increasingly help to deepen the understanding of leaders of government, business, and civil society that there are limits to having wealth accumulation as the only purpose of their practices.

This book offers delicious food for thought for a profound and inspirational conversation among academics and between academics and practitioners. It nourishes all those currently walking within the economic landscape, heading for greener and more humane pastures. One can only hope for a sequel, a future volume that would report on the fruits of the conversation along the way and the progress that has been

Foreword ix made on the road towards a more humane and flourishing economy. It is only when inspirational leaders point the way, and practical leaders simultaneously take action to actually create, implement, and secure change, that progress is made.

I began this contribution by referring to the right to adequate healthcare. This can help us understand how self-interested and other-interested behavior can go hand in hand and may even benefit from each other. Ever since it was proclaimed by the General Assembly of the United Nations in December 1948, the Universal Declaration of Human Rights has been an extraordinary and important signpost for human development and respect for every single human living on this planet. Over time, however, we have learned that a mere declaration is not enough to secure access to the most basic needs that humans need to live a life in dignity. Action is needed to promote the interests of others within the context of the current political, economic, environmental, and social boundaries. That context, the authors in this book have convincingly argued, is to a large extent still dominated by Homo economicus. Replacing Homo economicus by Homo amans is very likely not the best way of achieving a more humane economy and of promoting human flourishing. A dialectic relationship, leading to a constructive discourse between the self-interested Homo economicus and the other-oriented Homo amans, is more likely to clear the path towards the change that is needed in our current society. We have a long and interesting walk and talk ahead of us.

Maastricht University Harry Hummels Maastricht, The Netherlands

Contents

L UntrOduectiOl:42.ooosn eh e5h ohooh 956540464400 bancdw eee ees Jermo van Nes, Patrick Nullens, and Steven C. van den Heuvel

2 Towards a Relational Anthropology Fostering an Economics of Human Flourishing. 5364.4 4sesaeke venieed had wes eaneauans Patrick Nullens and Jermo van Nes

Dennis L. Krebs

Chapter 1 A Introduction Geek for Jermo van Nes, Patrick Nullens, and Steven C. van den Heuvel

Abstract Discussing the rise and fall of the anthropological concept of Homo economicus, Which is still a dominant model in the field of economics, this introductory chapter provides a framework for understanding the contributions in this volume. In response to a white paper in which a complementary model entitled Homo amans is proposed, they altogether reflect on the status of the Homo economicus model in contemporary economics from a multidisciplinary perspective.

Anno 2020, business is among the most popular fields of study for students in higher education, at least in Europe and the United States.! Already in 2013, however, Wharton professor and best-selling author Adam Grant was alerting us that the study of economics was in danger of discouraging prosocial behavior, referring to a number of studies showing that the study of economics was quashing cooperation and generosity.” It appears, for instance, that US professors of economics donate less money to charity than their peers in other fields (Frank et al. 1993), and that economics students, in comparison with students from other majors, are more

'See https://www.onderwijsincijfers.nl/kengetallen/internationaal/leerlingen-en-studenten/ aantallen-ingeschrevenen-in-het-hoger-onderwijs-naar-studierichting-in-europa (accessed 2 July 2021), and https://nces.ed.gov/fastfacts/display.asp?id=37 (accessed 2 July 2021).

? Adam Grant, “Does Studying Economics Breed Greed?”, Psychology Today, 22 October 2013, https://www.psychologytoday.com/us/blog/give-and-take/2013 10/does-studying-economicsbreed-greed (accessed 2 July 2021).

J. van Nes (È<) - S. C. van den Heuvel Evangelische Theologische Faculteit, Leuven, Belgium e-mail: Jermo.vannes @etf.edu; steven. vandenheuvel @etf.edu

P. Nullens Evangelische Theologische Faculteit, Leuven, Belgium

University for Humanistic Studies, Utrecht, The Netherlands e-mail: Patrick.nullens @etf.edu

© The Author(s) 2022 1 J. van Nes et al. (eds.), Relational Anthropology for Contemporary Economics, Ethical Economy 61, https://doi.org/10.1007/978-3-030-84690-9_1

2 J. van Nes et al.

willing to deceive for personal gain (Frank and Schulze 2000), more easily rate greed as morally good (Wang et al. 2011), and have less concern for fairness (Marwell and Ames 1981; Carter and Irons 1991). Experiments further demonstrate that altruistic values among economics majors drop over the years (Gandal et al. 2005); that economics students become more selfish during their studies and gradually expect worse of others (Frank et al. 1993); and that just thinking of economics can make people less caring (Molinsky et al. 2012).

One of the reasons for the destructive effects of studying economics in the twenty-first century, as Grant points out, is that certain (neoclassical) economic models still rely on the assumption that every person is essentially a “Homo economicus’’, i.e. a rational being who attempts to maximize his or her utility for both monetary and non-monetary gains. The history of this theoretical construct — a “universal bogey,” as Lionel Robbins (1932, p. 90) called it — is complex. While the term Homo economicus came into use as late as 1883 (Hengstmengel 2020, p. 177), the idea of economic man can be traced all the way back to Xenophon of Athens (c. 430-355 BCE) as his treatise Economicus includes a Socratic dialogue in which Socrates — wisdom personified — helps the economist Kritoboulos to see “that he cannot do good for himself if he is not doing good for the polis: his own well-being and that of the polis are not separate enterprises” (Wilson and Dickson 2012, p. 16). Accordingly, Wilson and Dickson (2012, p. 22) see the idea of Homo economicus foreshadowed in Xenophon’s Economicus as both are personifications of instrumental activity directed towards ends or values outside themselves.

Joost Hengstmengel (2020, pp. 45—64), however, argues that the idea of Homo economicus could never exist in classical Antiquity as true happiness and ‘the good life’ were connected to immaterial things. At that time, economics was a moral ‘science’. It was normative, being allowed to tell how people should act yet realistic about people’s capacities. All human economic activity was evaluated in terms of the cardinal virtues of prudence and justice. With the rise of Christianity, the virtue of charity was added. Accordingly, in Antiquity and early Christianity an economics of sufficiency and love were promoted respectively in which self-interest was condemned when it harmed others and did not contribute to the good life of the community as a whole. This “prelapsarian” state of economics, as Hengstmengel (2020, pp. 14-16) calls it, slowly but radically changed during the early modern period (c. 1500-1650) due to three major transitions: (1) communities changed into societies, (2) man changed from a community being into an economic being, and (3) living the good life in terms of a virtuous life changed into the ideal of living a life maximizing one’s utility and pleasure. These transitions were encouraged by the emergence of the Renaissance spirit, which exposed man’s allegedly ‘true nature’ to be addictive to power, pleasure, and profit, as well as the rise of political economy as a modern science, which suppressed the normative status of economics as the ties with moral philosophy and religion were slowly cut.

As a result of these important shifts in early Modernity, the sense of community was supplanted by economic individualism as the social and religious stigma attached to self-interest gradually disappeared from political discourse. Inspired by the political writings of Thomas Hobbes (1588—1679), whose social contract theory encouraged that submission to an absolute sovereign was in people’s best interest as the sovereign secured protection and property, all sorts of (British) intellectuals ranging from clergymen to politicians in the ‘long’ eighteenth century (c. 1650-1800) started to promote the social value of self-interest. Some tentatively argued that self-interest is only one of man’s inherent drives and is controlled by a natural balance of motives. Others proposed that self-interest constructively organized the movement of human bodies in society. Yet others contended that self-interest brings about a natural division of labor and results in higher collective productivity (Myers 1983). The gradual legitimation of self-interest in this age of Enlightenment is what Hengstmengel (2020, p. 14) calls “the Fall” of economics as self-interest was turned from vice into virtue.

The most important intellectual writer on the (moral) question of how individual self-interest can be a constructive force for the collective welfare in the eighteenth century was the Scottish philosopher Adam Smith (1723-1790), who is generally considered to be the father of modern economics and founder of the classical school of economics. In his most famous studies The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Smith — standing in a long tradition of virtue ethicists — sought an economic solution to what is in essence a moral question: Can individual self-interest be a constructive force for the collective welfare? Answering in the affirmative, Smith attempted “to reconcile economic and moral behaviour in the emerging system of market capitalism and to quell the anxiety this market gave rise to” (Comyn 2018, p. 29). Acknowledging the complexity of human nature yet arguing that people are predominantly driven by self-love and self-interest, Smith discerned mainly egocentric forces in economics (Hengstmengel 2020, p. 166).

While the term Homo economicus was not coined yet by the turn of the nineteenth century, many scholars (e.g. Ridder 1941—1942) see the spirit of free market capitalism as reflected in the writings of Smith as the delivery room of the concept. John Stuart Mill (1806-1873) was among the second generation of classical economists who continued to explain economic behavior by means of self-interest, but consciously abstracted it from other human motives. As Mill (1844, pp. 137-138) notes on the ever-growing science of political economy:

It does not treat of the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end. It predicts only such of the phenomena of the social state as take place in consequence of the pursuit of wealth. It makes entire abstraction of every other human passion or motive; except those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely, aversion to labour, and desire of the present enjoyment of costly indulgences.

This famous quote implies two important methodological assumptions: (1) economic behavior can be explained solely in terms of people’s pursuit of wealth, and (2) economic decisions in terms of ends and means are judged rationally by people. Mill himself was very clear about the hypothetical and imagery character of his anthropology, but insisted on its necessity if political economy wanted to develop into a science

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of equal status as the natural sciences: “Not that any political economist was ever so absurd as to suppose that mankind are really thus constituted, but because this is the mode in which science must necessarily proceed” (Mill 1844, p. 139).

In response to Mill, Charles Devas (1883, p. 27) was the first to use the term Homo economicus in noting that “Mill has only examined the homo oeconomicus, or dollar-hunting animal.” He abstracted “‘economic man’, who is under no ethical influences and who pursues pecuniary gain warily and energetically, but mechanically and selfishly” (Marshall 1890, p. vi) and “whose activities are determined solely by the desire of wealth” (Keynes 1891, p. 16). Mill’s conceptual ‘invention’ of Homo economicus was by no means adopted by every economist, but it further stimulated economics to develop into a theoretical, deductive, and abstract discipline in which moral philosophy was no longer needed to study the relationship between self-interest and happiness. Accordingly, the traditional virtue ethical concerns were slowly but steadily replaced by the emerging ideal of utilitarianism — to maximize happiness and well-being for all affected individuals. This resulted in a ‘positive’ form of economics, which was consciously amoral (Hengstmengel 2020, pp. 173-187).

Assuming that agents make consumption choices so as to maximize their happiness or utility, economists like Stanley Jevons, Léon Walras and Carl Menger formalized Mill’s ideas into a set of axioms in the late nineteenth century. This “guaranteed the internal coherence of economic assumptions and allowed the use of mathematics to deduce testable implications from those assumptions” (Rodriguez- Sickert 2009, p. 224). The field of study that emerged from this mathematical enquiry is known as rational choice theory, which is particularly associated with the Chicago school of economics. The basic premise of this theory is that the decisions made by individual actors collectively produce aggregate social behaviour. Proponents of rational choice theory also assume that individuals have preferences available and choice alternatives. Advocates of rational choice theory do not (cl)aim to describe the choice process, but rather help predict the outcome and pattern of choice. They consequently assume that the individual is self-interested and comes to a decision that maximizes personal advantage by balancing costs and benefits (Friedman 1953, p. 15). As such, the idea of Homo economicus is still very much alive in contemporary economics, at least in this branch of the discipline (e.g. Becker 1976; Jensen and Meckling 1994).

On 6-7 June 2019, the Institute of Leadership and Social Ethics, a research institute of the Evangelische Theologische Faculteit in Leuven, Belgium, organized a symposium in the Peace Palace in The Hague, the Netherlands, to address the importance of reflecting on the status of the Homo economicus model in contemporary economics from a multidisciplinary perspective. In order to kindle a constructive dialogue, a discussion paper drawing on anthropological research in the life sciences, social sciences, and humanities was prepared that outlined the contours of what could potentially serve as a refined version of Homo economicus, preliminarily entitled “Homo amans” — the human person as a loving being. A number of keynote speakers and respondents working in various academic disciplines were invited to interact with this paper. Most of the contributions in this volume were presented during the symposium; others were written later, by invitation. As a result, some of the essays do not directly engage with the discussion paper but reflect on relevant themes evoked by it; others dialogue directly with some of the ideas presented in the discussion paper; and there are some that interact with someone else’s paper.

In the second chapter, Patrick Nullens and Jermo van Nes open the discussion by addressing the problem that overall human flourishing is hindered by the ongoing dominance of the Homo economicus paradigm in contemporary economics. They believe the Homo economicus paradigm overemphasizes people’s rational capabilities at the cost of their relational qualities. By way of suggestion, Nullens and Van Nes develop the contours of the holistic concept of Homo amans as phenomenologically constituted by the virtues of faith, hope, and love, since multidisciplinary study has shown that human persons are searching, expecting, and relational beings. They also suggest that people are able to search for meaning, project their longings into the future, and relate meaningfully to others by means of their ability to trust.

The contributions by Dennis Krebs and James Beauregard in Chaps. 3 and 4 respectively support the overall idea of Homo amans. Rejecting the common claim that evolutionary theory implies that all animals are selfish by nature, Krebs argues that social animals can propagate their selfish genes in psychologically unselfish ways. As such, the central function of morality is to uphold adaptive systems of cooperation. Throughout human history, as Krebs explains, primitive psychological sources of moral behavior such as perspective-taking and moral reasoning have helped the human species to evolve. From a personalist perspective, James Beauregard offers a robust anthropological vision which presents the human person as a dynamic unity — active, and capable of learning, and living the virtues of faith, hope, and love. He also believes that neuroscience can inform the Homo amans model, but warns about its conceptual limitations.

In Chaps. 5, 6 and 7, contributors (in)directly engage with the argument of the discussion paper. Deirdre McCloskey argues for the connection between free will in Abrahamic theologies and free action in liberal ideologies. In God’s eyes, she insists, a free-willed person should be free from human interference in religion as well as behavior and business. This implicitly critiques the Homo amans model as living up to the virtues of faith, hope, and love may interfere in people’s freedom. Rebekka Klein questions whether the nature of love is truly phenomenologically discussed in its ambivalence. Drawing on Kierkegaard’s phenomenology of love, she argues that love cannot be clearly distinguished from selfish acts without reference to an external party. Gerrit Glas sides with the concerns raised by Klein, adding that thinking that science helps in validating and legitimizing a biblically informed concept of love is committing a naturalistic fallacy. In addition, he seriously questions whether academic disciplines by themselves will be able (and should be expected to be able) to transform deeply ingrained, institutionally anchored economic practices. What is needed more, Glas insists, is a change in economic practices themselves, a change that is both personal and comprehensive.

More specifically, the contributions in Chaps. 8, 9 and 10 address the notion of virtue and reflect on the potential of the Homo amans model. James Van Slyke

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focuses on the virtue of love as altruistic concern, arguing on the basis of psychological studies that this type of love uniquely informs the virtue of humility, as it puts people ahead of or before the self. In the context of business, humility is formed through the development of relational values and is best expressed in how superiors show concern for others. Those who value the intrinsic worth of other persons are less likely to express the various vices of pride and will more readily demonstrate humility towards others, as was demonstrated in moral exemplars, such as Holocaust rescuers. Emilio Di Somma focuses on the notion of trust. Using Taylor’s concept of “social imaginary”, he argues that in order to implement the Homo amans model a desire for trust among people and institutions is to be instilled in people first. This takes courage as it requires the affirmation of the objective goodness of virtues such as faith, hope, and love. According to Hendrik Opdebeeck, a paradigm shift from Homo economicus to Homo amans is not a utopia as long as the models are not considered as rivals. With the right attitudes, as advocated in the Homo amans model, a rational economy can turn into a responsible economy, or, in his words, a “u-globia”.