Determinism, thus, did not merely negate the distinctiveness and complexity of the human self, it also led, in step with social Darwinism, to the repudiation of moral responsibility in individual behaviour. Since the circumstances that controlled the individual’s behaviour were beyond his or her control, the rich or the powerful could not be blamed for what happened to the poor and the downtrodden. This in sharp contrast to the religious worldview which considers all human beings responsible for their own actions and, hence, accountable before God.
The Enlightenment worldview did not immediately lead to either moral decline or to an erosion in the humanitarian values of the religious worldview. It did, however, succeed in driving a wedge between the scientific and the religious models and in giving rise to a number of concepts which are in conflict with humanitarian goals. The three most important concepts which form the pillars of the conventional economics paradigm, are: rational economic man, positivism, and Say’s Law. The meanings and implications of these for economics are briefly discussed below.
Conventional economics is deeply committed to the assumption that individual behaviour is rational. Whilst there may not be any great difficulty in accepting this assumption, there is nevertheless a problem in defining rationality, and, indeed, there are a number of ways of so doing.6 However, once the normative goals of society have been specified, we may not be left with unlimited freedom to do this. Rational behaviour would then automatically become identified with behaviour that is conducive to the realization of these goals. It would then imply that an individual intelligently takes into account all the different factors, economic and non-economic, that affect the realization of these goals and, thereby, his as well as other people’s well-being.
Economics, however, did not do this. Taking into account the well-being of others would have implied constraints on individual behaviour. This did not fit into the secular paradigm of economics and had to be ruled out. Hence, in keeping with the social-Darwinist approach to economics, rationality was equated with the serving of self-interest. This is clear from the depiction of ‘rational economic man’ by practically all writers. They “interpret the drive of self-interest in man as the moral equivalent of the force of gravity in nature”.7 Edgeworth clearly expressed this idea by saying that “the first principle of economics is that every agent is activated only by self-interest”.8 Within this framework, society came to be conceptualized as a mere collection of individuals united through ties of self-interest.
It is, however, possible to serve even self-interest in different ways, economic as well as non-economic, pecuniary as well as non-pecuniary. But, in keeping with its materialist orientation, economics ruled out all non-economic aspects of self-interest and primarily equated rationality with the ‘economic’. Even the ‘economic’ was confined solely to the pecuniary. Economics created the imaginary concept of ‘economic man’, whose “one and only one social responsibility is to increase his profit”.9 Economics, thus, primarily concerned itself with the behaviour of rational economic man who was motivated only by the serving of self-interest by maximizing his wealth and consumption in whatever way he could. All other passions that bring human beings together, such as cooperation, compassion, brotherhood and altruism, whereby people strive for the well-being of others even when it hurts their immediate self-interest, were totally ignored. Thus, what the secularist trapping of economics did was to essentially make the serving of self-interest through the maximization of wealth and consumption the primary device for filtering, motivation and restructuring.
The individual can also serve his self-interest within the constraints of a number of humanitarian goals, the realization of which is considered to be crucial for human well-being. This being the case, then both present and future generations as well as other earthly creatures that coexist with humans, together with material and non-material aspects of life may have to be given due attention. The freedom of the individual would, in this context, be only one of the goals. Once all the desired goals are recognized, then the most rational way to measure positivism may be to look at the progress made in the realization of not just one, but rather all these goals in accordance with their priority in human well-being. All factors that affect individual behaviour and have the potential to contribute to the well-being of all, may have to be taken into account, irrespective of whether they are economic or non-economic, public or private, moral or mundane. Moral and institutional factors complement the material factors that are taken into account by the market mechanism, and thus help in the realization of goals.
Positivism does not, however, accept either the equal importance of other goals or the significance of non-material factors in the realization of these goals. It gives the utmost weight to rational economic man’s freedom to pursue his material self-interest. It argues that every individual is the best judge of his self-interest and should be left free to choose any of the various alternatives that he considers to be in his best interest. He should not be subjected to any constraints, moral or otherwise. This does not, however, take into account the fact that while the individual may be the best judge of his own self-interest, he is not necessarily the best judge of social interest.
Such excessive emphasis on individual freedom led to an anathema regarding value judgements and to the insistence on value-neutrality. Economics was declared to be “entirely neutral between ends”10 and “independent of any particular ethical position or normative judgements”.11 The preferences or subjective valuations of individual members of society were to be taken as given. No judgement could be passed on these in terms of their consistency with normative goals. Consequently, it has become the primary task of economists to describe and analyze ‘what is’ so as to be able to predict what may happen in the future.12 They cannot pass any judgement on ‘what is’, or suggest ‘what ought to be’. They can only discuss the possibility function and not the preference function.
Positivism has become such an integral part of the economics paradigm that it has been treated as non-controversial and generally accepted by the rank and file of the economics profession since the seventeenth century, despite the Neoclassical and Keynesian revolutions.13 This, in turn, has led to a disregard of the role of moral values as a filtering device in the allocation and distribution of resources and to the treatment of tastes, preferences, and socio-economic institutions as exogenous variables. All these, it was argued, required value judgements, which were a matter of subjective choice and therefore untestable. Hence prices and incomes determined by market forces became the primary instruments for determining the allocation and distribution of resources, and have played a predominant role in the descriptive, analytical and predictive functions of economics. It also contributed to the concept of Pareto optimality, which asserts that only that policy is acceptable which makes at least one person better off without making anyone worse off. According to John Rawls, one must never act solely to increase general happiness, if in doing so one makes any person unhappy.14 Since there is hardly any policy which does not make anyone worse off, what, in fact, the absence of value judgements and the concept of Pareto optimality have accomplished is perhaps the paralysis of policy making by leading, in the words of Solo, “to inaction, to non-choice, to drifting”.15
Positivism also became “associated with the belief that any question asked by economics must have an empirically determinable right or wrong answer”.16 If the answer is not empirically determinable, economics should not consider the question. This automatically led to an emphasis on concepts which are measurable in pecuniary or material terms. The Social Science Research Building at the University of Chicago reads: “If you cannot measure, your knowledge is meagre and unsatisfactory.”17 Such an attitude deprived economics of the task of analyzing the impact of social values and institutions on the allocation and distribution of resources18 and of suggesting a programme of social steering to actualize the social vision.