Love and Economics

From the introduction, "Homo Economicus and the Noble Savage."

Economic and political institutions can only remain free if they are largely self-regulating. Free societies need institutions that produce social order yet allow ordinary people to conduct their activities with minimal government interference.

The decentralized market economy is probably the most celebrated self-regulating social institution. Adam Smith’s "Invisible Hand" insight shows that people pursuing their own self-interest can actually end up furthering the public interest through no intention of their own. Since Smith’s time, free market economists have developed the Invisible Hand concept further through a construct called homo economicus, or economic man. Economic man is a rational person who calculates the costs and benefits of each potential action and chooses the action that brings him the most happiness.

But we are not born as rational, choosing agents, able to defend ourselves and our property, able to negotiate contracts and exchanges. We are born as dependent babies, utterly incapable of meeting our own needs—or even of knowing what our needs are. As infants, we do not know what is good or safe. We even resist sleep in spite of being so exhausted we cannot hold our heads up. We are completely dependent on others for our very survival.

In our experience as helpless infants, we learn some very important things: whether the world is a safe place that can be counted on to meet our needs; whether we in particular are worthy of living; and whether others can be trusted. We learn whether people respond to us favorably, and we learn ways to encourage them to do so.

Orphanage workers and developmental pediatricians have observed a "failure to thrive" syndrome in minimal care orphanages. Children who are deprived of human contact during infancy sometimes fail to gain weight and otherwise develop. All their bodily, material needs may be met. They are kept warm and dry; they are fed, perhaps by having a bottle propped into the crib; they contract no identifiable illnesses. Yet they fail to thrive.

Some scientists now believe that the presence of a nurturing figure stimulates the growth hormones. Others believe that this psychosocial growth retardation is stress-induced. In any case, observers report that orphanage children from former Soviet-bloc countries fall behind an average of one month of growth for every three or four months of orphanage life. Head circumference, which may signal brain development, is typically smaller for orphanage children. Whatever the exact mechanism, failure to thrive children sometimes even die from lack of human contact.

These children without families often have difficulty forming attachments to others. Even children who are later adopted by loving and competent families sometimes never fully attach to them or to anyone else. Experts believe that children who do not develop attachments in the first eighteen months of life will have grave difficulty in forming attachments later. If the parents of such children do not intervene by the time the child reaches twelve years of age, the prospects for successful future intervention are thought to be diminished to the point of hopelessness.

The classic case of attachment disorder is a child who does not care what anyone thinks of him. The disapproval of others does not deter this child from bad behavior because no other person, even someone who loves him very much, matters to the child. He responds only to physical punishment and to the suspension of privileges. The child does whatever he thinks he can get away with, no matter the cost to others. He does not monitor his own behavior, so authority figures must constantly be wary of him and watch him. He lies if he thinks it is advantageous to lie. He steals if he can get away with it. He may go through the motions of offering affection, but people who live with him sense in him a kind of phoniness. He shows no regret at hurting another person, though he may offer perfunctory apologies.

As he grows into adolescence, he may become a sophisticated manipulator. Some authors refer to this kind of child as a "trust bandit" because he is superficially charming in his initial encounters with people and can deceive them for long enough to use them. In the meantime, his parents, and anyone else who has long term dealings with him, grow increasingly frustrated, frightened, and angry over the child’s dangerous behavior, which by this time may include violence, arson, and sexual acting out. As the parents try to seek help for their child, they may find that he is able to "work the system." He can charm therapists, social workers, counselors, and later perhaps even judges and parole officers. This child is unwilling even to inconvenience himself for the sake of others.

Who is this child? Why, it is homo economicus—rational, calculating, economic man, the person who considers only his own good, who is willing to do anything he deems it in his interest to do, who cares for no one. All of his actions are governed by the self-interested calculation of costs and benefits. Punishments matter; loss of esteem does not. As for his promises, he behaves opportunistically on every possible occasion, breaking promises if he deems it in his interest to do so.

This is the child whom some social theorists might have imagined a "noble savage," untouched by corrupting adult influences. This is the child in the state of nature, who takes care of himself, who has no society around him, having survived a life that truly was "nasty, brutish, and short." But plainly this person is not fit for social life. Most people would call him a sociopath, and not dignify him with the label homo economicus. Certainly, this left-alone child bears no resemblance to anyone’s notion of a "noble savage."

I did not describe homo economicus as an attachment disordered child because I believe that any economist believes that this is how children are or ought to be treated. But the desperate condition of the abandoned child shows us that we have, all along, been counting on something to hold society together, something more than the mutual interests of autonomous individuals. We have taken that something else for granted, and hence, overlooked it, even though it has been under our noses all along. That missing element is none other than love.

Reprinted with permission of Spence Publishing
www.SpencePublishing.com