Capitalism and “Human Nature”: A Rebuttal

In the celebrated section of The Wealth of Nations in which he discusses the advantages of the division of labor, Adam Smith advances the thesis that “common to all men” is a “propensity to truck, barter, and exchange one thing for another.”  Smith hedges on whether this “propensity” is a matter of original human nature or, as Smith, a man of the Enlightenment, preferred to believe, is an outcome of a capacity peculiar to humans for reason and speech.  But upon the unproven assumption that such a “propensity” exists, along with the equally unproven assumption of a universally innate human “possessive individualism” of having infinite needs in a field of scarcity, is based the whole of modern neo-classical economics.  We can pop open any mainstream economics textbook and encounter Smith’s famous phrase as an axiomatic starting point for the superiority of capitalism and of the so-called “free market,” since those economic forms are supposedly most closely in accord with this supposed human propensity.

Anyone who has had the pleasure of delving into the study of history and anthropology, as I have, marveling at the enormous variability of human societies and cultures across time and space and trying to discern some basic commonalities and patterns (which historical materialism shows do exist), will have noted the rank fallacy of the aforementioned assumption that the modern bourgeois character type is a human universal.  Most humans down through history have shown no such “propensity.”

Traders have existed in many, perhaps most, societies, but those who did so as a profession with the aim of enriching themselves might be looked upon with deep suspicion.  Trade was mainly conducted at the societal margins.  And, as David Graeber has shown in his monumental work on the political economy of “Debt,” no known society has ever been based on barter.  Much more prevalent until modern times was a Gift Economy in which goods circulated from person to person within a society and in which there might be no calculation of worth requiring something paid back of equal or greater value or expectation of eventual return.  The concept of “paying forward” is a poor modern counterpart.

Practices of accumulation for the purposes of fulfilling societal obligations or reinforcing status through gift-giving and the liquidation of wealth like in the famous potlatch of the Northwest Coast Indians, rather than the capitalist way of accumulation ad infinitum, were shocking to the Europeans who first encountered them.  So they tried to suppress them and inculcate proper bourgeois notions among the Indians about the work ethic, savings, and investment.  The Canadian government declared the potlatch illegal in 1884; some Indians who kept on with this “uncivilized” practice were thrown into jail and had their ceremonial regalia confiscated.  (The latter went to museums where they were frozen in time behind glass cases.)  In Africa, European colonialists commonly expressed frustration when market incentives did not get the natives to work harder and to produce more.  Instead, if the African villagers were able to earn a bit more, like peasants in many other parts of the world before the modern era, they would often choose to work less and to appreciate their greater leisure time instead.  They had to be made to produce more for the market through the imposition of hut taxes and the menace of violence.

Moreover, small-scale participation in the market does not necessarily reflect and entail the acquisition of bourgeois values, although in the longer run it may well have such corrosive effects on thoughts and actions.  People may decide to “truck, barter, and exchange” for purposes of “traditional” social reproduction, not necessarily to make a profit or to “get ahead.”  A gift economy may exist side-by-side or in articulation with a market economy.  Northwest Coast Indians traded furs and fish with Europeans to obtain exotic goods to add to their potlatches.

Recently, I read a fascinating book, The Discovery of France: A Historical Geography from the Revolution to the First World War, by Graham Robb, full of accounts of what everyday life in provincial France was like and how it changed on the cusp of modernity — just at the time when rural people who had lived practically their whole lives within their own local pays were finding out, sometimes to their wonderment and dismay, that they were part of a much larger entity called “France.”  One anecdote in particular sticks out in my mind: A group of women in the Auvergne region met to knit and sew clothing as part of a putting-out system, for which they received a small amount of money from traveling merchants.  But earning money was not the point.  The point was being able to stay up after dark and socialize.  The money from the knitting and sewing paid for the lamp oil so they could see.  For people like these women, Robb observes, addressing boredom was as powerful a behavioral motivator as any economic need.

Many other examples can be brought forward to show that human beings mostly haven’t fit into Adam Smith’s template of what we supposedly are either by nature or through the practice of “reason.”  As Karl Polanyi shows in The Great Transformation, there are a variety of economic rationalities that human societies have had; he groups them into reciprocity, redistribution, production for use in the household, and the market system.  Before the prevalence of the market system, economies were not stand-alone entities.  Despite whatever differences existed between stratified and more egalitarian societies, economies were all “embedded in” or “enmeshed with” social relations and thus based on precepts — such as esteem — not having to do directly with private economic interests.  Polanyi demonstrates how the “propensity to truck, barter, and exchange one thing for another” that has indeed become so characteristic of society did not come naturally to England, its main place of origin, but was instituted through a series of harsh legal enactments on behalf of the theories of laissez faire economics in the late 18th and early 19th centuries (hence the title of his book).  The state played — and continues to play — a central role in instigating and maintaining bourgeois property relations and capitalist norms.

For the good upstanding bourgeois, however, and for those mainstream economists who act as apologists for capitalism, all forms of behavior besides the maximization of private interests are considered “irrational.”  In schools, we have plenty of “how to succeed in business” courses but very few courses on how to form and run co-ops or conceive of other alternatives to exploitative and alienating “free market” processes.

Not surprisingly, out of this comes a groupthink in which anything different is outlandish and “utopian,” bound to fail, if it is considered at all.  Yet how rational, we may ask, is this society of ours with its massive, yawning inequalities between the haves and the have-nots — the 1% and the 99% — leaving one billion people going to bed hungry every night and with the out-of-control growth and consumption habits required for its economic viability putting the survival of the whole planetary ecosystem into jeopardy?

While the lives of pre-modern or early modern people ought not to be romanticized — Robb recounts French peasants perched precariously on the edge of destitution, awaiting in trepidation the next visit of the tax collector or a sudden devastating hailstorm — how much better might be a contemporary “cooperative commonwealth,” based in part on the enormous productive capacity brought into being by the capitalist mode of production but inspired by the more humane varieties of the Gift Economy anthropologists and historians have pointed us to?

Jay Moore is a radical historian who lives and teaches (when he can find work) in rural Vermont.

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