The Evening of Life   /   Fall 2018   /    Book Reviews

Beyond the Market

Gerald J. Russello

Street art during Hong Kong’s Umbrella Revolution, 2014; Jayne Russell/Alamy Stock Photo.

There is no such thing as an abstract economic person.

R.H. Tawney, Karl Polanyi, and E.P. Thompson confronted the dislocations of industrial capitalism with a conviction that economics was essentially a moral discipline that must integrate ethics and a sense of community. Each opposed utilitarianism, and despite their differing backgrounds, each looked to the moral tradition of John Ruskin and William Morris to address contemporary problems. In his latest book, Tim Rogan, a fellow of St. Catharine’s College, Cambridge, groups the three thinkers under the rubric “moral economists”—social critics who were opposed to “the tendency of Victorian political economy to put the pursuit of pecuniary gain over all other human motivations in envisaging social order, reducing society to a matrix of economic transactions.” This vision of human society is explicitly non-moral. It proposes that economic laws govern activity regardless of historical or social context. Now labeled neoliberalism, it remains as powerful today as it was in the Victorian era. 

But what if—as Rogan’s moral economists claimed—happiness has no price, and social order cannot be reduced to economic transactions? From Thomas Piketty’s 2013 tome Capital in the Twenty-First Century to Pope John Paul II’s 1991 encyclical Centesimus Annus, much has been written on the conceptual weaknesses of a utility-maximizing model of the person. Rogan’s book is a welcome step toward uncovering and building up a tradition of alternative economics, one in which economics is not a value-free discipline, but, rather, is shaped by social customs, expectations, and values. 

Rogan focuses on three books: Tawney’s Religion and the Rise of Capitalism (1926), Polanyi’s The Great Transformation (1944), and Thompson’s The Making of the English Working Class (1963). Each of these writers addressed the dislocations brought about by industrial capitalism and, later, the technological society. All three flirted with the left—Thompson explicitly became a Communist—before rejecting extreme collectivism as they had rejected extreme market individualism. 

Tawney (1880–1962) spent formative years after Oxford in the north of Britain, where he saw strong communities “even where work was scarce and living conditions straitened.” He also rediscovered his religious faith and began working with the Christian Social Union. Religion and the Rise of Capitalism, a foundational text for the British left, explained the need for noneconomic communal bonds in an economic context. In the doctrine of the Incarnation from his ancestral Christianity, Tawney found the insight into what he called “the infinite value” of human personality that materialist economics lacked. Writing for what was still a largely Christian nation, Tawney wanted his audience to extend the Christian recognition of the value of the human person to economics. Thus, campaigns against slavery, sweatshop labor, and the like might have been contrary to straitened notions of efficiency or convenience, but such notions were not thereby just, because they denied the unique value of persons subject to those conditions. 

Unconvinced by Christianity and later disillusioned by Marx, Polanyi (1886–1964), for his part, rejected the necessity of an “incarnational” theory of the person to combat utilitarian capitalism. He simply decided he did not need one. Drawing on Adam Smith’s work on political economy, Polanyi argued that all he had to do was show that human nature—whatever it was—was different from other measurable natural phenomena. Human motivations and passions could not be squared, he argued, with utilitarian models of supply and demand.

A generation later, Thompson (1924–93) would abandon Stalinism because it recapitulated, in Rogan’s words, “the very premise that capitalism’s critics since Tawney in the 1920s had been challenging.” That is, Stalinism assumed that economic man was the manifestation of “true” human nature, the very assumption Thompson contested. Instead, having lived in Yorkshire since 1948, he refocused on its working classes, as well as those of London. Thompson conceded that while the Industrial Revolution had brought material advances, that was not the full story. What he found from his research on working-class communities was that even into the nineteenth century, old customs and economic relationships persisted under the onslaught of the new capitalism, and even created news ones.

However, for Rogan, Thompson’s overarching theme was the “depersonalized nature of relations between worker and employer.” Like Tawney, Thompson saw in these rural communities—but not in urban centers like London, where social cohesion was lacking—forms of solidarity that were resilient in the face of falling wages and surplus labor. And like Polanyi, Thompson groped for a moral critique “framed around a conception of human personality derived not from sacred but from secular sources.” 

But as Rogan suggests in this richly detailed account comprising not only the lives of his subjects but also their effects on British life over the course of almost a century, the three economists’ project ultimately failed. With Thompson, he writes, the moral economists’ critique “reached the peak of its influence but only at the moment when the basis of its moral claims was melting into air.” The cultural baseline that supported Tawney’s Christian-influenced socialism or even Thompson’s working-class solidarity had disappeared, and the neoliberalism that took hold in the 1980s continues to best rival visions of political economy. The recent controversy over requiring paid parental leave illustrates the poverty of our economic language. The debate collapsed into a binary fight between those who argued that child rearing was an individual decision that should not burden companies or impede economic growth and those for whom any proposal short of nationalized childcare was a betrayal.

Rogan finds heirs to the moral economists in present-day economists such as Kenneth Arrow and Amartya Sen. Arrow’s impossibility theorem claims that one cannot not derive social goods from individual desires, thus frustrating a central contention of utilitarian economics. Sen adds further nuance to this view, contending that Arrow is correct, so long as one understands that “social goods” will vary by time and place; that is, the priority of such goods must be determined by the noneconomic desires of those sharing in those goods and subject to their obligations. This is a healthy corrective to the concept of the abstract economic person. But utilitarian assumptions remain influential: The stock market still rises when workers are laid off, and GDP is still used as a proxy for societal prosperity. Those metrics can be useful. But when it comes to understanding actual human communities, we still need economists who can find and defend happiness outside the market.