Economics as First Philosophy?

A Critique of Economic Reason

Overview

Our world is pervaded by economic thinking and action. Economics has long since spread far beyond the social sphere of business and enterprise; there is no longer a single area of society that has not, in recent decades, been subjected to economic evaluation and optimisation: “It’s the economy, stupid!” Bill Clinton told his voters in 1992. Economics has become the “first philosophy,” and prosperity the yardstick by which we orient our thinking and our actions: education is good because it creates individual and social prosperity; competition is good because it fosters innovation, which creates prosperity; diversity is good because diverse companies generate higher profits, which creates prosperity. – The list could go on.

The result is an increase in the prosperity thus placed at the centre that would not have been remotely conceivable two hundred years ago. The middle class in Western countries leads a better life than the wealthy nobility of the early modern period, and ever broader sections of the population in emerging countries are catching up. Yet we also see the downsides of this spreading economisation: the climate crisis and species extinction show us that we have been living at someone else’s expense. Obesity and mental illness are effects of an economic world that tempts us with ever more while at the same time demanding ever more. The growing gap between short-term marketing promises and the reality experienced in the medium term is also driving the radicalisation of politics.

The proposals put forward to “save the system” either try to solve its problems with its own methods (long-term capitalism, CSR, etc.), or they call the market-economy approach into question as a whole, without being able to offer an alternative that has not already documented its own failure. Since the “end of history” diagnosed by Francis Fukuyama, there seems to be no way out any more. Although Beijing, Riyadh and Washington are governed by different political systems, the economy everywhere runs by the same rules. The universal freedom proclaimed by the European Enlightenment ultimately came to be realised as economic freedom. – But does this apparent lack of alternatives also mean that every sphere of society must follow economic logic?

The book resists this thesis. In three parts, it sets out how a specific reading of modern philosophy stood godparent to economic thinking and has shaped it for almost 300 years now. Economic thinking is egocentric, fixated on the present, and system-oriented. It was able to prevail because it connects seamlessly with our everyday thinking and, moreover, radically simplifies decision-making processes. It is stabilised by a new managerial class that has long since ceased to manage only companies, by social discourses that present economics to us as the solution to every problem, and by quasi-religious elements that offer a new source of meaning. The book shows into which aporias we manoeuvre ourselves with economic thinking, and how we could and should think differently in order to be able to act differently in society once again.

Economic Reason as the New First Philosophy

The first part traces the rise of economic reason from the guiding ideas of modernity: the autonomy of the subject, fixation on the present, and systemic thinking. The rise of the self-conscious subject is traced through René Descartes’ Meditations on First Philosophy and Fichte’s thinking on the self-positing of the I. Augustine and Edmund Husserl serve as reference authors for the temporal power of consciousness and the reduction of time to the present. At the same time, modern consciousness finds itself running short of time, as shown with reference to Martin Heidegger. That the world is, for modernity, fundamentally rational and open to systematisation is exemplified by Georg Friedrich Wilhelm Hegel, as well as, again, Husserl.

A reading of the history of economic ideas shows how these philosophical perspectives develop further within theoretical and practical economic and management doctrine, and gain influence far beyond the narrow field of business and enterprise. With authors such as Hermann Heinrich Gossen, Gary Becker, Frederick Taylor and Milton Friedman, the book describes the further development of this economic edifice of thought, and its prevailing first in the economy and finally in other spheres of society. The subject of modern philosophy becomes homo oeconomicus, the present becomes Net Present Value, and the system of thought becomes a management system. Economic logic is readily adopted in other areas of society, as shown by the privatisation of formerly public services and the self-economisation of sport and art.

The first part concludes with an examination of the consequences. With Niklas Luhmann, it can be shown how the economy stabilises itself as a social subsystem, and why it thereby also becomes a stabilising factor for the overall system. For this stabilisation it is inherently compelled to grow (Mathias Binswanger), which, on closer analysis, turns out to be a compulsion to accelerate to which every sphere of society is exposed. This is understood as an overarching characteristic of modernity (Hartmut Rosa). Some theorists opt for a flight forward and extol “accelerationism” as a solution to the fractures of modernity (Gilles Deleuze, Mark Fisher, Nick Land), a thesis that, however, only partly convinces (Benjamin Noys).

The Stabilisation of the Economy as a Social System

The second part analyses the mechanisms of domination inherent in economic thinking. It argues that, across large parts of society, we have lost not only the ability to act differently, but above all the ability to think differently. Economics has established itself as first philosophy in a way that displaces other modes of thought. Three decisive elements can be identified.

First. Contrary to the diagnosis that the great narratives have come to an end (Lyotard), economic thinking has, for some fifty years now, managed to give them what amounts to life-prolonging treatment. The free movement of people and goods has partly redeemed the promise of freedom; the emancipation of workers was rendered unnecessary by a redefinition of the concept of property; in place of the enrichment of all, a new understanding of justice as fairness (John Rawls) has taken hold; and the salvation of all creatures is now sought in sustainability and purpose, meticulously tracked by economic indicators.

Second. Through “management,” economics has produced its own ruling class, which not only follows the same codes worldwide but also, with the idea of “meritocracy,” possesses its own founding narrative. Through schools, universities, and lobbying and interest associations, it consolidates its existence as a social institution. It has developed its own cultural capital, which supplants the classical educational canon and shapes identity. At the same time, it is more fluid and, owing to its entanglement with the “middle class,” less vulnerable to attack than earlier ruling classes. Some of its members are not even aware that they belong to it.

Third. We owe the description of capitalism as a religion to Walter Benjamin. But its uninterrupted character and its dynamic of indebtedness have only fully come to light today. The public capitalist cult is, moreover, complemented and sustained by the private spiritual practice of mindfulness. In a secularised and hollowed-out formerly Buddhist teaching, the self no longer seeks its own extinction but its own strengthening. The formerly religious orientation towards the other, even unto self-surrender, is replaced by constant self-affirmation and self-optimisation.

Beyond Economics?

The third part looks for fractures in modern thought, but also in economic action. It shows where economic thinking fails on theoretical and logical grounds, and what options we would have for thinking differently and acting differently. Given the crises we face, there is not only a need to shape society differently – we also hold everything in our hands to actually do so.

Where payments replace relationships, the society designed to endure dissolves. The autonomy of the subject is lost, because the space in which autonomy can be gained is no longer stable. By discounting payments to their present value, we devalue the future. Combined with the illusion of money that everything is substitutable for everything else and infinitely multipliable, this deprives our children of their foundations of life, both natural and social-infrastructural. But even today we are already increasing the risk within the system. The frequency of crises in recent years is no coincidence, but is structurally built into the system.

Yet we could think differently. We could understand the subject not as homo oeconomicus but, with Emmanuel Levinas, as sub-iectum – as subjected to the claim of the other, as a subject that only becomes a subject through responsibility for the other. We could regard time not as a limiting factor to be optimised, but as an expression of the relationship with the other. And we could grasp, with Marcel Mauss and Jacques Derrida, that every exchange begins with a gift, one that makes possible a life beyond the economic illusion of scarcity.

If we thought in this way, we could formulate the conditions for a different form of social coexistence, defining well-founded exceptions to the reach of the economic: education and banking, art and a critical press, infrastructure and care would be such domains. We would question the role of incentive mechanisms that constantly suggest scarcity to us where we in fact live in abundance. And we would dare to orient education and upbringing once again towards maturity and autonomous judgement (Mündigkeit, Adorno) rather than towards usability.