Which do people choose – more money or less? If you think the answer’s obvious, you’ve been too influenced by economism and not enough by science. Sigve Tjotta shows that, in a variety of experiments, a significant minority of people choose the smaller sum over the larger.
This would not have surprised the Adam Smith who wrote the Theory of Moral Sentiments. “To restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature” he wrote (TMS I.I.44). Our sense of propriety, or our desire to look good to others, he thought, reined in greed:
Though it may be true…that every individual, in his own breast, naturally prefers himself to all mankind, yet he dares not look mankind in the face, and avow that he acts according to this principle. He feels that in this preference they can never go along with him, and that how natural soever it may be to him, it must always appear excessive and extravagant to them…In the race for wealth, and honours, and preferments, he may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if he should justle, or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play, which they cannot admit of. (TMS II.II.11)
Which brings me to a theory. One feature of neoliberalism is that restraint in the pursuit of self-interest is now absent. Bosses lack Smith’s “impartial spectator” which tells them to hold back, and instead feel no compunction about jostling others. They are content to plunder customers, pensioners, sub-contractors, workers or future workers.
Among her many claims for expenses, Glynis Breakwell, Vice-Chancellor of Bath University, claimed £2 for biscuits. Many of us would not have done so, thinking it too petty-minded to bother. Neoliberals, however, not only are petty-minded but don’t mind being seen as such by others.
In this context, critics of mainstream economics have a point. Economics’ language of optimization serves to normalize the maximal pursuit of money. What it misses is the potential trade-off which Smith identified, between greed and the good opinion of others. Randian talk of the rich as heroes also plays an important role here, as it functions to counter-act the stigma which greed would otherwise attract.
From this perspective, neoliberal bosses have something in common with child molesters. Both lack restraint in the pursuit of their own self-gratification in situations where they think they can get away with it.
And there’s the rub: where they think they can get away with it. My story here is not just about morality. Perhaps there never was a golden era of benevolent paternalistic bosses. What’s happened since around the 1970s is that the restraints upon bosses – from law, social norms and trades unions – have diminished. The problem isn’t just greed, but power.