Connections: Agustín Fuentes and the Stories of Free Market Capitalism

 Connections: Agustín Fuentes and the Story of Free Market Capitalism

Discussions about economic issues in the United States suffer from two debilitating limitations, neither of which shows signs of abating any time soon.

First, and perhaps most evidently, increasing social and political polarization has meant that such conversations too often descend into a cacophony of competing claims; a fundamental unwillingness to even listen to opposing points of view dooms them from the outset as participants stridently argue for and defend their particular position as being the only reasonable one.  The situation is captured brilliantly, if unintentionally, by a front page headline in the New York Times from June 16, 2019: Lost in Abortion Noise: Nuance, a headline applicable for most any fill-in-the-blank topic at this fraught moment.

A second, more subtle limitation – present even when people do manage to engage in a sober conversation about our economic future – arises out of the unwritten rules about what can reasonably be discussed, a concept referred to for politicians as the Overton window: “the range of policies politically acceptable to the mainstream population at a given time.”  Discussions about economic policy are constrained to an extremely narrow Overton window: falling within it are considerations over whether and how to regulate capitalism; on the other hand, considering alternatives to capitalism lies decidedly beyond its edges.

The implications of this second limitation, and the ways in which the mainstream both subtly and overtly enforce what is considered acceptable, were highlighted recently in an interview by Krista Tippett for her program On Being.

Although I’m a big fan and occasional supporter of On Being, and I find Tippett’s interviews deeply engaging and enlightening, I’ll admit upfront that in what follows I’m going to be rather unfair to her.  Tippett generously provides listeners podcasts of her unedited interviews with guests – the hour and half or so of raw material that goes into the final, officially released, hour-long program – and I’m going to take advantage of her generosity here by quoting directly from one of these unedited releases.

The interview in question was a fascinating discussion with biological and evolutionary anthropologist Agustín Fuentes, entitled This Species Moment, (the final program is linked to at right, along with the transcript of the final version, and the unedited interview).  In what follows here, the portions quoted in normal font are from the official transcript, while the parts quoted in italics are my transcription from the unedited interview.

In the final, released show, Tippett introduces her interview with Fuentes by noting: “We’re exploring his spacious perspective on human nature, and capacities his intelligence for working with the insights 2020 has laid bare.”  She goes on to highlight in particular their discussion on “modern economic theory … [and] the extreme inequity in wealth distribution across the planet in the early 21^st century.”

She opens this exchange on the economy by noting:

We touched on COVID-19, the virus, and this is also part of the human niche as you describe it. Then there’s the incredible economic fallout of the response to this virus. And it’s also a moment — this moment was upon us, but it’s even more upon us now, and I think this will deepen as we move into the next year — that there’s something profoundly out of whack in the way we do an economy.

Notably, however, most of the next several minutes of their exchange (around the 36’ mark of the unedited interview) don’t make the final, released version of the show.  Certainly, in going from an 80-minute interview to a 50-minute final show (which also includes musical interludes), the conversation will be smoothed out to remove the hesitations and false starts of typical conversations, and some whole segments will necessarily be left out.  But in these excised portions, both in the comments themselves and in how they are expressed, it feels like Tippett carefully avoids stepping outside what she perceives to be the Overton window for the majority of her audience with respect to discussions on our economic system.

In particular, she avoids directly suggesting that capitalism or the free market are implicated in the economic issues she highlights, and in so doing struggles to find a way to express her concerns.

The … the … the … I don’t know where to … you know, the … I’m mean … one thing that I’m so aware of is how the market … if we ever believed that it was some kind of reflection of overall economic well-being or was connected to the economic lives of actual people, that’s just clearly not true.  And, the economic disparity, which, whatever your philosophy of that is … such a small, small number, just literal number of human beings, control so much of the wealth of the global economy.

She seems clearly to be seeking a way to point at the economic issues she wants to discuss with Fuentes without actually saying “capitalism,” without calling into question the fundamental system.  Even when she mentions “the market,” she hesitates a moment, before plunging forward with her statement.

Fuentes, however, crashes through the boundaries of this Overton window on economics for her, linking capitalism and the market economy directly to the current suffering of so many.  This, effectively, gives Tippett permission to follow him through to broader considerations, which she promptly does, and the two then proceed into a concrete discussion of the current economic situation.

Fuentes: We created the contemporary economy, and we are suffering for it.  There’s no doubt about it.  I think the way you describe this is this idea that right now if you think about it, 0.7 percent of the globe’s population control nearly half of the wealth; that’s not right, I don’t know of any context in which that’s right.  

So, if this economic system, this sort of current capitalist market global economy that is sort of not the only but essentially the dominant in the world, if this only benefits a teeny percentage of humanity really, that doesn’t sound very good.  Humans usually don’t do things on average that are highly deleterious for the vast majority of any given community. 

Tippet: Right!

Later in their discussion, it is Fuentes who circles back to observe the challenges associated with questioning capitalism and the free market; having stepped outside the Overton window, he looks back at it to emphasize the need to initiate among the general population a broader conversation about how our economics systems could and should function.  Not surprisingly, along the way he feels the need to defend himself against the criticism always quick to be mounted against anyone questioning capitalism as the one, true economic system.

Fuentes: Absolutely, but it’s systemic processes, and the problem is, everyone talks about individuals.  Economies are not about individuals, they are about societies, the processes.  And so, in fact, I think if we could push a little bit, and educate folks, or have folks think more deeply about, What is it we’re doing?

And I’m not arguing against our contemporary systems writ larger; I’m not saying get rid of our economy, but we can – there’s always going to be inequality – but we can manage how that inequality is shaped, how extensive it is, and how it works.  We know that, economists know that, it’s unavoidable, if you understand how these systems work. 

And yet, so many people are much more, sort of, structured in their belief systems to go buy a lottery ticket, than they are to vote, or to really think about how one would change the given system, and the power of the belief of human nature, this idea, the idea that this contemporary market system is free and open and the cream rises to the top.  It’s simply not true.

Tippett then hints at the bludgeon that critics so often used to silence questioning of capitalism, a rhetorical weapon invented by the economic winners, who have craftily convinced the economic losers to wield for them – and Fuentes again takes her lead to make it explicit:

Tippett: Right.  And this is such an … this discussion is alive in our society, and I’m a bit older than you, and it’s a fascinating thing to me that it’s alive, I mean, the cold war kind of shut down any question about capitalism.

Fuentes: I think something that’s really important to point out is that everyone says, “Well, communism failed.” Yes. Soviet communism failed miserably. That doesn’t mean that American capitalism is working wonderfully. Those two things are actually not even related.

Tippett: Right. Again, it’s a false binary.

Fuentes: So let’s get rid of that binary, and let’s ask ourselves, how does our economy work? Are people getting paid the level, the value of the quality of their work? Is there equal access to different things? These questions, as you said, have been going on — for example, in the United States over the last century, there’s been this incredible dynamic of thinking about these kinds of economic processes. But now I think you’re right, I think people are saying, wait a minute. How did we get here?  And the thing is, we know how we got here, and we know how to change it.

Tippett: Something I also appreciate, that you point out, and really, first of all, that it’s possible to have this conversation and take it out of that fight, about capitalism versus communism.

Here, then, the fundamental plea: unburden discussions and considerations of our economic future from the simplistic accusation so often used to shut them down – that questioning capitalism necessarily implies advocating Soviet-style communism as the alternative.  And, thus freed, enter into a constructive conversation about what a sustainable economic future could look like.

---

During their conversation on economic issues and how to begin addressing them, Tippett and Fuentes touch on a number of themes that point to holes in the dogma built up to defend the existing economic system, and that have been getting increasing attention from scholars from a variety of fields.

 The pair note, for example, a simple yet powerful realization about our economic system:

Tippet: One of the things you’ve pointed out is that our economy reflects our view of human nature, our beliefs about human nature.  And so, this is a mirror of … it’s such a tangible reality, and yet it is an invention, it is an act of the imagination.

Fuentes: We created the contemporary economy, and we are suffering for it.

That is, the economic system we have today did not evolve naturally but rather was constructed.  To use the language of historian Yuval Noah Harari in his book Sapiens (my review linked to at right), it is one of many stories that humans created and tell themselves:

There are no gods in the universe, no nations, no money, no human rights, no laws, and no justice outside the common imagination of human beings.

Harari expanded on this idea and its implications, in a 2017 interview with Sam Harris on the Making Sense podcast entitled Reality and the Imagination (at 27’ 55’’), in language that aligns with Fuentes’ comment above that we are “suffering” as a result of one such story, that of our economic system.

My understanding is that a source of human power, but also the source of much human misery is … the human imagination, and the ability of humans to create fictional stories, and then to believe them, to such an extent that they can start entire wars just because they believe some religious or national or economic fiction. ... We control this planet not because as individuals we are much more intelligent than chimpanzees or pigs or dogs, but rather because we are the only mammal that can cooperate in very large numbers;  and we can do that because we believe in fictions. If we examine any large-scale human cooperation, you always find a fictional story at the basis, whether it’s about god, or the nation, or money, or even human rights. Human rights, like god in heaven, they are just a story invented by humans, they are not a biological reality.

And critically, Tippett and Fuentes go on to note that the creation of our economic system, this story we tell ourselves, actually originated out of false understandings about human nature.  Their discussion of this begins with a consideration of why humans don’t behave as rational economic actors – as individuals focused on maximizing their personal benefit from the economy – and then transitions to comment on the fundamental origins of these assumption of rational economic behavior.

Tippett: Something that you point at that I really appreciate is that why we don’t behave as rational economic actors — because you are about understanding why and how we actually do things — is not because we’re stupid, but because we’re social.

Fuentes: Exactly.

Tippett: There’s this sentence from your writing that — I had to think hard about it. But you said, “We willingly accept losses as often as gains, in exchanges. The reason is that for the majority of humans” — because classic economic theory would say that we would have an intolerance for loss. But you said, “For the majority of humans, exchanges are not about profit, but about making and keeping social connections.”

Fuentes: Exactly. These exchanges, these back-and-forth — this is about our sociality. It’s not about the money. There are many exchanges that are about money, but really, humans are constantly — we do things all the time for people, which if we did the cost-benefit analysis, we’d end up losing, but we do them because we end up winning. They’re part of this whole social dynamic that we’ve been talking about.

And I think if we understand that, then we come back to this notion that what’s really central for humanity are our acts of compassion and caring. And that gets us back to this idea of hope. There’s always hope for humanity, and there’s capacity, if we think about our exchanges not just as economic relationships, but as the patterns and processes of building the human society, we’re gonna think about it in a very different way.

 
These last thoughts from Fuentes, that “what’s really central for humanity are our acts of compassion and caring,” resonate strongly with the thesis of historian Rutger Bregman in his book Humankind: A Hopeful History.  Bregman argues that our deep-seated belief that competition and greed are fundamental and even necessary characteristics of human nature – that absent a thin veneer of civilization, people’s true, selfish nature would emerge – is not only wrong, but worse it undermines our ability to progress further on our project of civilization. Using a fresh analysis of human history, he rebuts the presumption that humans are inherently selfish, a belief that he notes has been largely unchallenged doctrine for millennia.

And, just as Tippett brings up with Fuentes that “one of the things you’ve pointed out is that our economy reflects our view of human nature, our beliefs about human nature,” so Bregman argues that it was during the Enlightenment that these cynical ideas about human nature became institutionalized. Enlightenment period philosophers and politicians celebrated it, building institutions based on reason and rationality that aimed to encourage and support each individual’s (apparently inherent) selfish behavior as a path to furthering the greater good. Thus were born: economic systems that encouraged people to focus on a desire to make a profit; democratic systems such as the U.S. constitution that created “a system of ‘checks and balances’, in which everybody kept an eye on everybody else;" and more generally a rule of law “governed by reason alone.”

Certainly, acknowledges Bregman, “a few centuries into the Age of Reason [a]ll things considered, … the Enlightenment has been a triumph for humankind … our lives … exponentially better and the world … richer, safer and healthier than ever before.”  But he then, in perhaps the most trenchant statement in his engaging and convincingly argued work, fires a direct shot across the bow of the cruise ship filled with end of history celebrants, saying of these Enlightenment approaches to our world: “it was the best answer – until now.”

For, willing to grant the Enlightenment institutions their due in lifting the world over the past several centuries out of the abject poverty and misery that was the inheritance of the shift to an agricultural society, he proposes that these institutions are not the final, best approach. He argues that it has come time to consider the next step in our social evolution, pointing out that:

the Enlightenment also had a dark side. Over the past few centuries we’ve learned that capitalism can run amok, sociopaths can seize power and a society dominated by rules and protocols has little regard for the individual.

The flaw of Enlightenment thinking and the institutions that arose from it, according to Bregman, is in fact precisely the mistaken assumption that selfishness is fundamental to human nature.  (My review of Bregman’s book linked to at right.) 

And Fuentes expresses Bregman’s idea of this selfish image of human nature as being a learned concept in an exchange later in his discussion with Tippett:

Tippett: And this, the perspective that you bring, is an interesting and, I think, a refreshing way to look at it, because the discussion that gets had becomes very partisan, and actually quite emotional. But just to point out, as you do, that we have this system that actually is based on an idea about how human beings behave, that is simply not true –“

 Fuentes: Yes.

Tippett:  that this kind of economy is based on an idea that we are essentially rational, logical economic creatures, and to the extent that we’re not, we’ll balance each other out, and you pointed out this study that I hadn’t heard about, in the 1990’s, this study in twelve countries, four continents, and there was not a single society in which people consistently behave in accordance with expectations of basic economic theory.

Fuentes: And that’s because, to behave in expectation … to behave as a good capitalist, you have to grow up in a capitalist society, that’s the way it works; if you grow up in a different kind of society, then your values, your perceptions, the way in which you think about money, for example, are totally different. And so, if we created it, right, we can alter it.  And that’s my point.

Thus, Fuentes argues, we are trained (as Bregman also claims) to believe that humans are fundamentally selfish, and, as a consequence, that free market capitalism is therefore the best possible economic system, and so finally raised to be good capitalists who actively defend the system against any evidence to the contrary.  As Fuentes points out earlier in the interview:

you’ve got to ask yourself, where did we get this and what’s going on, and that’s the really interesting question, because so many people who are even harmed by the contemporary economic system, they’ll support it, because they believe wholly and fully that this is the outcome of human nature, that this is the outcome of naturalness.

Another aspect that Fuentes explores of the economic story that has been created, is a more recent addition to the narrative we have been raised – particularly in the West – to believe:

Fuentes: that those who have money have money because of reasons of their genetic endowment or some kind of incredible business neuro-biological savvy…”

Tippett: It is kind of ‘survival of the fittest’ …

Fuentes: Yes!

Tippett: A very simple equation.

Fuentes: And it’s just not true, right?  People who have money aren’t necessarily – some could be quite smart – [but] many of them inherit money; the vast majority of people who have a lot of money have always had it.

Tippett: Or, they’re smart at some very specific little thing …

Fuentes: Right

Tippett: Not necessarily wiser, or smarter on balance.

Here, Fuentes draws similar conclusions to those of economist Thomas Piketty in his engaging and thought-provoking book Capital in the Twenty-First Century (my review at right).  Piketty presents extensive data that demonstrate Fuentes’ point about the significant impact of inheritance, and its powerful tendency in the capitalist system to cause wealth to become more concentrated among an elite few under quite naturally occurring economic conditions.  But, more directly to Fuentes’ specific point, Piketty also calls out the illusion of meritocracy that those who most benefit from the economic system as it exists today have propagated among the rest of society, in order to maintain their own right to further enrich themselves:

The conventional wisdom that modern economic growth is a marvelous instrument for revealing individual talents and aptitudes … has all too often been used to justify inequalities of all sorts, no matter how great their magnitude and no matter what their real causes may be, while at the same time gracing the winners in the new industrial economy with every imaginable virtue.

Later, focusing more specifically on the enormous and still growing disparity in wage income, particularly in the United States, Piketty writes:

a very high level of total income inequality [which] can be the result of a ‘hypermeritocratic society’ (or at any rate a society that the people at the top like to describe as hypermeritocratic) … a very inegalitarian society, but one in which the peak of the income hierarchy is dominated by very high incomes from labor rather than by inherited wealth …. It is hardly surprising that the winners in such a society would wish to describe the social hierarchy in this way, and sometimes they succeed in convincing some of the losers.

For many years there have been attempts to reform capitalism by pointing out its negative impacts, such as dramatically rising inequality and ignored environmental externalities, which, despite the benefits capitalism has brought about historically, now lead to concerns about its future sustainability.  These approaches at reform have mostly failed to gain traction, in large part because of the kind of aura that has built up around capitalism as the inevitable, ultimate outcome of human economic development.  This end-of-history belief has become so strong that even the losers in the economic status quo defend the system, easily persuaded that other reasons lie behind their economic struggles, typically some other they who are to blame: another race, immigrants, foreign governments, to name a few.

 In the past few years, however, a new front has been opened in the pursuit of economic reform, one focused on pointing out that free market capitalism is not necessarily the final stage in the evolution of economic systems, but rather an artificial construct built on potentially incorrect assumptions about human nature.  And, if the story we have been telling ourselves is no longer working, then perhaps it is high time to write ourselves a new one.

---

Other notes and information:

---

Have you read this book, others by this author, or even similar ones by other authors? I’d enjoy hearing your thoughts.

Other of my book reviews: FICTION Bookshelf and NON-FICTION Bookshelf