TD Journal - July 2007.p65


Dignity and work: global market and
self-sustenance

J J (PONTI) VENTER·

Abstract:It is argued here that market fundamentalistic theories ignore the issue of

human agency in work, and the different types of work, because – focussing on the

market mechanism, supply, demand, and price - they have lost track of that which

economic activities (work) are intended for, namely self-sustenance. They have also

minimised human agency in the economic theory, and therefore the understanding of

being-human is lost from both economic theory and practice. Thus they cannot explicate

the role of work for the individual and the community – namely care for self and others

– the significance quality work as part of human dignity is forgotten. I am arguing for

a restoring of meaningful self-sustenance as the norm for work, and the recognition of

the dignifying role of such self-sustenance – both for the community and the individual.

Keywords: Human dignity, global market, capitalism, labour,
competitiveness, socuiety, morality, human agency amd self-
sustenance

Disciplines: Philosophy, economics,ethics.

1. Springtime for the ‘market’-idea1

The different areas of the economic sciences (with the possible exception
of development economics) tend to identify ‘economic life’ (praxis) with
‘the market’. (In fact, since Adam Smith ‘market behaviour’ has become
a metaphor for all human interaction, and therefore and assumed
basis for human society.) The expansion of the ‘free market’ over the
globe tends to confirm this direction in theorizing as ‘universally’,
‘empirically’ true. The globalization of the unfettered market, however,

� Prof. JJ (Ponti) Venter is professor of Philosophy in the School of Philosophy,

Potchefstroom campus of North-West University.

1 This is a serious revision of a paper written for the International Society for the

Study of European Ideas (ISSEI). 8th International Conference, 22 - 27, July 2002,

Aberystwyth, Wales. Conference Proceedings: Section 5: Language, Philosophy,

Psychology. Workshop 501: Human Understanding in a Changing World: Social

Sciences and everyday thinking. Workshop chair: Natalia Smirnova. I also wish to

express my indebtedness to a long time friend and mentor, Bob Goudzwaard

(emeritus of the Free University in Amsterdam), and his colleague, H. de Lange (in

Canada), for their pointers in the direction of an economics of care.

TD: The Journal for Transdisciplinary Research in Southern Africa, Vol. 3 no. 1, July 2007, pp. 133-168.



is itself a universalizing of a set of values. These include:

� non-intervention in the market,

� the ‘law’ of supply and demand as the primary economic law,

� efficiency as satisfaction of ‘unlimited’ needs,

� commercial advertising as rightfully imposing itself,

� rewriting wants as needs, the urban lifestyle as the primary
way of life,

� work and skill as a purely marketable commodity,

� money-making as efficiency, and

� leisure/entertainment/enjoyment as an important (or the
supreme) economic need.

Since vast numbers of the people of the globe sustain themselves
outside of the ‘market’ 2 , and since in developed market economies
important economic activities do not directly fit under the ‘law’ of supply
and demand (such as crime and voluntary unpaid work) - the hidden
assumption of an identity between the formal ‘market’ and ‘economic
life’ is suspect and not universal. Its value system can therefore also
not simply be accepted as universal.

The serious question, which we have to address, on the level of theory
and intellectual thinking, is how this universalization came about,
and what consequences this has for a dignified life?

Given broader, shifting, social values about the conduct of a good life,
such as

� working honestly for your keep,

� supporting one’s family – including the elderly who cannot
work;

� children ‘working’ within traditional communities, versus
child labour as frowned upon;

� the ‘gender division’ of work in traditional societies and
the anti-discrimination movements in modern societies;

2 According to a recent article in Time magazine, in Saudi Arabia (origin of Osama

bin Laden and his inner circle), apparently the largest majority of citizens sustain

themselves outside of the ‘market’.

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TD, 3(1), July 2007, pp. 133-168.

� taking care of the poor – whether voluntarily or officially;

� the growing propagation of entrepreneurship and
innovation as the supreme meaning of human life;

� the idealisation of the supreme technician; and

� the developmentalist attitude towards everything not yet
touched by modern marketing and the culture shock effects
of this.

It has become necessary to ask oneself how the springtime of the
‘market idea’ influences ‘human dignity’ – the latter is more and more
recognised as a right.

Does the totalitarian, universal, global market value system contain
enough basis for a dignified work life? (Many of the old fashioned
values, such as working honestly, care for family, care for the poor,
living in peace with one‘s neighbours, have been part of the idea of
‘human dignity’ since Cicero and the Stoics, and are also part of the
Ancient-Judaeo-Christian tradition.)

In this regard is it well worth noting that ‘human dignity’ was directly
associated with ‘rationality’ – at least until the middle of the 20th

century. Self-interested market behaviour was considered instinctual.
But somewhere in the 19th century self-interested behaviour was
suddenly considered ‘rational’. Thus the whole ‘nature’ versus ‘reason’/
‘culture’ dialectic, and the inversion of ‘rationality’ in economic theory
(still present in textbooks), must have had an effect on the
understanding of a dignified human life. Given the fact that the market
economy is based on formalised human employment (waged labour),
any connection between ‘rationality’/ ‘irrationality’ and market
behaviour, must therefore have had implications for the understanding
of work and its relationships to life in its totality.

The universalisation of the ‘market’ and its values grew of over a period
of centuries. In the course of this development, other social changes
had an influence: the decline of the Roman Catholic Church’s social
power, the Reformation, globalisation by colonisation, the advent of
the nation state and the idea of a national economy; two world wars,
decolonisation, the large dualism of the world economy, the collapse
of the Soviet bloc and its vassals, the advent of world communication
media. The influence of these are assumed and referred to, but not
analysed here. The argument follows the development of philosophical
ideas within the context of economic theory and occasionally practice
– it does not pretend to be an analysis of empirical economic
developments or a theory in economics. The focus remains the
development of the idea of the market, the understanding and

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appreciation of work in that context, and the relationship between work
in the context of market values, and human dignity.

2 ‘Human dignity’

Traditionally, in the West, human dignity has been identified with
‘rationality’. Being ‘rational’ has been considered the distinctively
human characteristic, and behaving ‘rationally’ meant behaving in a
‘dignified’ way – different from ‘irrational brutes’. ‘Rationality’, however,
is not unambiguous - I can quote (cf. Venter, 2006: 279ff) at least
nine fairly different definitions of ‘rationality’ covering the area from

� the logic of teleology in natural theology over

� the logical control of the emotions and passions, and

� the logic of spiritual efficiency (in a magical world view)
and

� ‘public reason’ (the logic of state security), to

� the logic of the maximizing of self-interest (individual
mechanical ‘teleology’).

Initially that rational behaviour which qualified as dignity behaviour,
was conceived of in first person terms:

In order to be dignified, I have to behave thus ... ‘ Cicero, Seneca, Anselm,

and especially the mystical process of self-dignifying in Pico della Mirandola

would be good examples. (Cf. Venter, 2000: 111ff)

But since Kant defined dignity in terms of ‘ ... never to treat any rational
being merely as an instrument ... ‘ (Venter, 2000: 133ff) the second/
third person perspective became much stronger - and after the collapse
of rationalism this perspective became dominant.

At least since the late nineteenth century the distinctively human - in
as far as it still functioned - could no more be universally expressed in
terms of ‘rationality’. This pushed the debate about ‘human dignity’ to
a different level; in fact a powerful tension arose:

� On the one hand the denial of the ‘humanness’ (however
we define it) of the individual human being (regardless of
specific social connections such as ‘state’ or ‘nation’) as a
normative value in itself, by Nazism and Fascism,
afterwards led to an enforcement of ‘human dignity’ as an
individual characteristic and right in many modern
constitutions and the charters of the United Nations. (Cf.
Venter, 2002c: 351ff; 2004: 538ff.)

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TD, 3(1), July 2007, pp. 133-168.

� On the other hand the growing belief in the power of science
– in spite of the irrationalistic philosophies underlying it -
subverted the belief in human life as something special,
and therefore ‘science’ moved in the direction of an outright
denial of human dignity and an insistence of the scientists
on their right to power over the human ‘object’.

But present-day ideas of ‘dignity’,

� Accentuate the preservation of subjectivity in interaction
through justice, welfare, cultural disclosure and love as
central.

� And within such a conception of human dignity, cultural a
ctivity, specifically work (and its quality) is something
central (given the self-imposing global capitalism).

Of all present threats to human dignity, however, the assumption of
the market as the only real economic process, and the imposition of
‘market freedom’ globally, may be the most serious, since it is hidden.
A deepened understanding of economic activity as the self-sustenance
of a person, household, or community, puts work in a central position
in terms of a new understanding of a dignified life. For stable
employment is the only way of self-sustenance in an urbanized life
form. Not only work, but also the quality of work, and the problem of
a fair remuneration (sidelined by the supply-demand-’law’) are
necessary parts of a dignified life in the more recent senses of the
word ‘dignity’ – the very having of a work at all is essential. An important
(both political and sociological) question is how to preserve dignity where
the market fails?

In this regard it is necessary to conceptualize human dignity also in
terms of the ‘decent work’ paradigm of the International Labour
Organization. All these will touch also on the dignity of women and of
traditional societies which are not yet fully organized in terms of market
principles.

In the present global technological economy, fewer persons are
accommodated stably in the labour market. The Zimbabwean question
of land is not simply one of political manipulation, but also one of vast
numbers of people attempting, and failing, to enter the labour market,
and then returning to the resource for self-sustenance traditionally
communally available - the land.

Understanding human self-sustenance therefore contributes to
understanding human dignity. This on condition that human life is
considered to be something distinctly valuable.

� Marcuse, a dialectical materialist(!) (1966: xi) makes this a
point of departure,

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� Christianity sees it as part of the essence of being created
in the image of God, and the

� United Nations calls it a ‘faith’.

3 The global market as a cultural formation

Economic globalization favours a very specific type of market: more
and more resources circulate through the minimally productive section
of the ‘market’, such as the money markets, the ‘gaming’ industry
(casinos, lotto cmpeititons), the entertainment industry, the leisure
industry, and the consumption market. This implies a specific culture
apparently sustainable in societies where ‘basic needs’ have seemingly
been met.

The global market is therefore supported by a value system given
direction by these societies - a value system that transforms local
culture in economically weaker areas to fit its aims. It reallocates
resources away from ‘basic needs’ in less developed economies, and
imposes values that probably clash with local traditions of self-
sustenance.3

We have to re-theorize economics in terms of the cultures of self-
sustenance.

But this implies a different understanding of economic processes: they
are not impersonal causal processes similar to, or analogical to physical
processes, as Friedman (see below) would like to have it. They are
cultural processes brought into action by human beings in a normative
setting.

Economic theories - especially Neo-Classical and Monetarist - are
missing out on creative economic activity because:

a) they elevated the market to a process divinity which allows for
almost no human agency;

b) they confuse market behaviour with human behaviour - in order
to have a deductive theory

c) they espouse a value dialectics in which work is opposed to

3 From Turgot over Adam Smith up to the psychologist Maslow in the West, a set of

teleological values came to dominate not only economic activity, but human life as

such, since human life is seen as economic in nature, or at least as self-interested

contractual behaviour. The issue here is that material needs are hierarchised, and

more complex needs are then constructed as superstructure on top the less complex,

material ones … It is the question whether those needs which are here reserved for

‘later’, are not as fundamental as the material ones.

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enjoyment - and thus we have an irony: those who would have been
the leisure class are slaves, and those who need work have the leisure
which they cannot afford to have.

4. The market as ‘the’ economy and ‘the’ society

When reading newspapers and listening to/watching economic
analyses on the electronic media, one almost only hears about the
value of the currencies (usually measured against the US dollar), the
upd and downs of the world’s stock markets, the level of the interest
rate (coordinated with the inflation rate), exports and imports, and
the (un)employment rate.

All these analyses are clearly focused only on market activities, and to
a large extent it is a selection of market activities in which a limited
percentage of the world population is active.

What percentage of economic agents (people) in the world show up in
the figures of the world stock markets? How many economic subjects
are active agents in the currency markets (we know that large numbers
are ‘victims’ of what happens there)? Even in the well-developed
economies small businesses provide more than 80 per cent of the
employment – these economic agents may register in interest rate
analyses, and employment statistics, but they disappear in the
percentages and index points.

I have indicated above that the majority of the citizens of Saudi Arabia
apparently do not register in the formal (market) economy; so do
millions of the rural poor in many developing countries. Since the
Saudis are human beings who stay alive by acting in specific ways,
possibly following traditions thousands of years old - they must be
economic agents in some sense of the word. [Is the urban economy -
which dominates the media - really the one that feeds the people of
the world?]

Somewhere along the line in capitalist theory the appreciation for work
has been swept under the carpet. Goudzwaard provides intensive
analyses of this (cf Goudzwaard & De Lange, 1995P:  47ff)). Two
thinkers in this tradition did show some sensitivity for the nature and
value of work: Alfred Marshall and JM Keynes. If, however, we take a
closer look at the actions of the world’s pacemaker economic
institutions - such as the World Bank and the International Monetary
Fund (IMF) - then these two are not holding their own against Neo-
Classical, Monetarist, and Austrian economic theory, who, though
different among themselves, share certain values:

� Most of them are very apprehensive about the state’s role

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to promote justice, for all of them tend to give primacy to
market values. All accept the view of Adam Smith that the
human being is by nature a barterer who always takes
care of his/her own individual self-interest - even if this
interest is not directly translatable into monetary terms.

� And the stronger paradigms here, Neo-Classicalism and
Monetarism, share the idea of a quantitative deductive
economic theory based on ideal equilibrium situations.

� Both of these tend to neglect those activities where money
does not change hands, for since they want a quantitative
economic theory, they reduce economic activity to such
activities as where money - as a measure of value within
the parameters of supply and demand - is transferred. Thus
the activities of a housewife, of a voluntary welfare worker
(Goudzwaard en De Lange: 1995: 55ff), and of people
exchanging their produce as ‘gifts’ rather than as ‘goods
for sale’ (Latouche et al: 15ff), are not taken into account
as ‘work’. In fact the subsistence economy and the
communal economy find only sporadic negative mention
in economic textbooks, and thus (not being studied in any
depth), it becomes very difficult to disclose the potential of
these economic cultures.

In order to make this neglect understandable, it may be helpful to give
an overview of the basic parameters of the development of capitalist
economic theory with regard to the dis-appreciation of work.

5. Adam Smith

Since Adam Smith – the 18th century father of capitalistic liberal
economic theory - there has been a progressive undervaluing of all
(also non-waged) work, as economic activity. This has its foundations
on the one hand in the value system adopted by theorists, - a value
system which we have imbibed over centuries - and on the other hand
in the progressive stereotyping and later elimination of economic agency
and action as such from theorizing (by transforming agency into a
mechanical equilibrium-seeking competitiveness).

5.1 Adam Smith – specialisation and work

Adam Smith represents the human being as an individualistic
contractual being first and foremost. Human beings live by concluding
self-interested contracts between individual and individual. This is

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the way of nature, and the state is allowed to intervene if and only if
the network of individual contracts is threatened in some way. Smith
espouses the foundational belief that the human being is primarily a
being caring for himself/herself originally through agriculture or
hunting/gathering (a ‘peasant’ way of life). Yet he already accepts the
market – bartering - as a direct consequence of this productive
behaviour.

The ongoing specialisation (‘division of labour’; Smith, 1950: 17) in
turn - the source of national wealth - is the consequence of market
development (especially of the growth of markets, and therefore
urbanisation) (Smith, 1950: 19).

i) The original human being is a peasant who barters (i.e.
contractually sells) his products (agricultural products,
bows and arrows, plough shears).

ii) This is followed, historically, by the feudal tradition in which
landownership was concentrated in a few hands (the lords).

iii) Finally we have the industrial era in which the capitalist
middle class sets the pace of an economy, using vast armies
of workers in factories.

All these are factored into Smith’s price theory: the price of a product
is determined

a) on the one hand by the division of income from production, to

i) the rent of the land (remnant of the feudal system),

ii) the wages of labour (remnant of peasant agriculture), and

iii) the profit of capital (the new middle class of traders in the
market), and

b) on the other hand by the ‘gravitation’ of supply and demand in the
process of buying and selling  - the sophisticated, modern form of
contractual bartering (Smith, 1950: 32-100).

Smith had to take all these into account, since they were presupposed
in his very view of the human being:

This division of labour, from which so many advantages are derived, is

not·originally the effect of any human wisdom, which foresees and intends

that general opulence to which it gives occasion. It is the necessary, though

very slow and gradual, consequence of a certain propensity in human nature

which has in view no such extensive utility; the propensity to truck, barter,

and exchange one thing for another. Whether this propensity be one of those

original principles in human nature, of which no further account can be

given, or whether, as it seems more probable, it be the necessary consequence

of the faculties of reason and speech, it belongs not to our present object to

inquire. It is common to all men, and to be found in no other race of animals,

which seem to know neither this nor that species of contracts .... Nobody

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ever saw a dog make a fair and deliberate exchange of one bone for another.

Nobody ever saw one animal by its gestures and natural cries signify to

another, this is mine, that is yours; I am willing to give this for that (Smith,

1950: 15).

Following the traditional line of characterising the human being by
comparing it with (brute) animals, Smith refers to the ancient view
that the characteristically or essentially human is ‘rationality’, and
almost half-heartedly tries to relate ‘contractuality’ to this tradition
(in terms of ‘reason and speech’). He remained unsure whether the
tendency to conclude contracts is ‘primitively’ or ‘archetypically’ or
‘essentially’ present in human nature, but he did see it as a distinctive
and universal human trait. In fact, he finally elevated it in a somewhat
metaphorical form to being the best possible basis of all social
relationships, excluding love or benevolence as necessary for a stable
community4 .

This is important: what Smith says is that it is possible to have sound
human relations based solely on the premise that each cares far his/
her own interest. Thus social institutions and formations such as
marriages, families, religious institutions, can all be based on self-
interest, and function well.

Smith is an adherent of the contract idea of society, but his contract
society is an almost anarchic boiling pot of self-interested contracts.5

In taking this line, he confirmed and established a moderate Hobbesian
perspective on the individual human being in relationships to others
– the idea that we are naturally competitive and want to outdo others.
But Smith’s idea of ‘competitiveness’ is moderated by his belief in
basic human goodness: within the discipline of the market, we shall
behave fairly. In fact, the market will reveal any bad intentions, and
through the negotiation process, eliminate this.

This would take firm hold in the liberal tradition. During the past fifty
years this approach has become stronger; on the one hand through
the threat of communism, and finally through the collapse of
communism. The self-interested individual in the ‘anarchic’ social
market, and under the discipline of the market place, is (supposedly)
acting as he/she should, and in the only way his/her human essence
will allow. But: the same individual acting in the same way in the

4 Society may subsist among men, as among different merchants, from a sense of

utility, without any mutual love or affection; and though no man be bound in

gratitude to any other, it may still be upheld by a mercenary exchange of good

offices according to an agreed valuation (Smith, 1976: 86).

5 This differs very clearly from the structural collectivistic, securocratic,

contractualisms of Hobbes and Rousseau (Venter, 1996: 177ff.). It is a difference of

world picture – Rousseau thinks in terms of organic holism, and Smith follows a

mechanistic aggregationism.

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structured relationships which constitute the state or the political
sphere, is considered a threat to freedom and must be given minimal
leeway.

Smith anticipates Marx when he says that in the early stages of society
‘the produce of labour belongs to the labourer’, and the value-basis of
exchange resides in ‘equal quantities of labour’. The appropriation of
land (feudalism) and the accumulation of stock (capitalism) makes it
possible to purchase somebody’s labour, thus the product is alienated
from the producing worker; (Smith, 1950: 49-50). In the original state,
then the farmer owns all his/her produce – the alienation takes place
under feudalism and capitalism:

The produce of labour constitutes the natural recompense or wages of labour.

In that original state of things, which precedes both the appropriation of

land and the accumulation of stock, the whole produce of labour belongs to

the labourer. He has neither landlord nor master to share with him (Smith,

1950: 66).

It is important to note that Smith analyses productive work always
only from the perspective of individual production, since this is already
implied in his view of the human being. He conceives of work, even in
a factory, as a long row of specialised individuals – a pin is made more
efficiently if one person makes the head, another the shaft, another
fixes the head to the shaft, another sharpens it. (Understanding of
real team work came much later.)6

It is by treaty, barter, and purchase, that we obtain from one another the

greater part of those mutual good offices which we stand in need of: so it is

this same trucking disposition which originally gives occasion to the division

of labour ... And thus the certainty of being able to exchange all that surplus

part of the produce of his own labour, which is over and above his own

consumption, for such parts of the produce of other men’s labour as he may

have occasion for, encourages every man to apply himself to a particular

occupation, and to cultivate and bring to perfection whatever talent or genius

he may posses for that particular species of business (Smith, 1950: 17).

True, the quote is about specialisation in work, which is the
consequence of human ‘trucking’ and ‘bartering’ behaviour. But the
underlying assumption is that specialised products are produced by
individuals (of course later included in larger industries). Another
important presupposition is that originally work is for self-sustenance,

6 In fact, this kind of individualism still reigns in large sections of neo-liberal

managerialism. It creates a new hierarchy for management. The assumption seems

to be that a team cannot, by interaction, take responsibility for a process of

production. A team always needs a manager to co-ordinate. This means that

individuals in the team are not in the first place accountable towards one another,

but to management. This is why, within the business model of the university, the

centuries old collegial model of management is eroded and eliminated by managers.

There is no understanding of inter-individual accountability among equals.

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and only the surplus is exchanged for whatever else one may want.
But, of course, as exchange grows, (producing your own) self-
sustenance is replaced by exchange in the market.

Thus Smith comes to interpret the interaction and interdependence
of human beings, which he clearly recognizes, not in terms of structural
community relationships, but rather as a typical market interaction -
since I do not produce everything that I need myself, in fact, since my
own production is specialised in a very small area and most of the
things I need have to be obtained by exchanging my own specialty for
products made by other specialists, interdependence, and therefore a
social community, comes into being because of the (mutual) economic
needs of specialists:

In civilized society he stands at all times in need of the co-operation and

assistance of great multitudes, while his whole life is scarce sufficient to

gain the friendship of a few persons. In almost every other race of animals

each individual, when it is grown up to maturity, is entirely independent,

and in its natural state has occasion for no other living creatures. But man

has almost constant occasion for the help of his brethren, and it is in vain

for him to expect it from their benevolence only. He will be more likely to

prevail if he can serve their self-love in his favour, and shew them that it is

for their own advantage to do for him what he requires of them (Smith,

1950: 16).

As the human being moves away from pure animality, interdependence
comes about, but this can only function through contractual means, in
which the self-interest of each individual is of prime importance. The
idea that an individual can produce his/her own individual self-
sustenance all alone through calculative technology and rational (self-
interested) behaviour, was well established as a narrative of modern
economics, through the enormously successful novel of Defoe, Robinson
Crusoe (and possibly also his other novel, Moll Flanders) (cf Berthoud,
1995: 61ff; Roets, 1996: 9ff).

One has also to note that the link between ‘civilized’ society and the
dialectic of distance-in-contract (individualistic mutual
interdependence), which has become so acute in our own times, is
almost explicit in the quote above. Being ‘civilized’ here means being
‘civil’, being a member of bourgeois society, in which all are free and
equal in ability for self-care. In such a society one is an individual, first
and foremost – one is at a distance from all other individuals: intimacy
of relationships is not in the forefront. But rather than fighting it out
for food and terrain, like brute animals, one agrees to mutual service
by entering into contracts. The distance is bridged in two ways:

i) by the contract itself and its execution, and

ii) by the instruments of contracting: the divisible means to
equalise the values, i.e. money.

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This kind of societal bond, with its dialectic of interdependence versus
means-bridged distance, was not as clear in the times of Adam smith
as it is now, where the new means of communication has made
contracting over very large distances possible. And the contracting
itself, as bonding, implies its own dialectics of competitive contracting.

The central ideas of liberal capitalism, of which interdependence is
one, are condensed in the general narrative of economic theorists,
derived from the physiocrat, Turgot:

Two savages meet in the desert, one carrying a bag of fish, the other one

some leather skins from which he can make clothes and a tent. Both have

surplus stock. They swap, and both are better of, for each has gotten rid of

his surplus, and each has acquired something he needs (Berthoud, 1995:

62) - the classic example of a ‘win-win’ situation. Thus Halévy in 1901

characterised the idea of exchange as the foundational idea of political

economy and Bastiat,  the well-known 191h century economist, said,

‘exchange is society’ (Berthoud, 1995: 63).

In saying that we obtain the greater part of good ‘offices’ (not material
goods) by contractual bartering, this totalitarianism of the market is
already implied in Smith’s discourse too.

Hidden in all of this, are four interconnected beliefs:

1. The belief that the barterers are equal with regard to trade (they
are equal in power and each has complete information about
the other’s product) while all barterers are honest. (Of course, if
one analyses the Turgot narrative, this belief is spurious: the
seller of the fish is probably in a weaker position than the seller
of skins, for he has to sell fast before his product becomes rotten;
and his problems will increase if there is competition from other
fish traders).

2. The belief in necessary progress through competition or conflict
(cf. Venter, 1992; Venter, 2002b). The nucleus of this belief is
that although competition/conflict is in itself a bad thing, this is
only temporary, for the more we pressurise one another, the
faster we progress. Competition even includes threatening the
other’s life, for this stimulates technological advance.

3. The belief that material production or wealth creation is the
necessary and only condition for cultural progress. This was the
beginning of the base versus superstructure model, which has
become so well known through the writings of Karl Marx. We
can, however, already find it in Turgot and Adam Smith (Venter,
2002a). Adam Smith’s famous book is aimed at improving the
material base of cultural progress, therefore it is entitled: ‘An
enquiry into the nature and cause of the wealth of the nations’.
This title is reminiscent of Turgot’s little work, Reflexions sur la
formation et la distribution des richesses. But this implies a

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supreme value structured into the economic system: that of a
systematic striving for wealth, based on internal, individual, civil,
as well as national, and therefore international, competitive
contractuality. Equality and the power of the stronger will be
played out against one another.

4. The belief that labour acquired is a measure of wealth. Market
fundamentalists sometimes make fun of Adam Smith’s theory of
the value of a product as if he had said that the amount of labour
invested in the product is the measure of value of the product.
He was somewhat more nuanced though: he thought of the
evaluation of the buyer, rather than the seller, as the labour
value of the product. This he transferred to his idea of wealth:
the amount of other people’s labour that can be acquired indicates
the wealth of the buyer. (Smith was not the first to propose this
theory - see Cannan’s introduction, footnotes 1 and 2 on the
origins of these ideas.)

5. 2 Labour as ‘value’

In labour as a measure of the value of a product, Adam Smith thus
includes a characterisation of wealth: The amount of somebody else’s
(specialised) work, which my own work (through its specialised
products) can acquire in the market. However, this ‘value’ is given a
more explicit content:

Every man is rich or poor according to the degree in which he can afford to

enjoy the necessaries, conveniencies, and amusements of life (Smith, 1950:

32;.

The practical logic of this definition is that as the ‘necessaries’ are
increasingly met in a ‘successful’ economy, more resources are going
to be allocated to the ‘conveniencies’ and the ‘amusements’.

It is of necessity a class logic, in the sense that the rich will be the
ones who control and enjoy the ‘amusements’, and shift investment
away from the ‘necessaries’, while of course the allocation comes from
the full resources of society (its stock of ‘labour’). In Smith’s case, this
logic is not only intended for the internal relationships within one
state, for his work is aimed at the ‘wealth of the nations’. It thus has
consequences for the allocation of resources on the international level
also. (The implication of this is happening practically in our present
global economy: note the play with the weaker currencies on the money
markets, and the vast offering of entertainment all over the globe.)

In his defence against Mandeville’s cynical idea that vice is the basis
of wealth, Smith follows exactly the mentioned practical logic, arguing
that the vanity and spend thriftiness of the rich keep the country’s

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economy and culture afloat. (In fact, he gives an early formulation of
the belief in the ‘trickle through effect’ - the market increases wealth
for everybody; Smith, 1950: 68).

The market facilitates the division of labour. Thus we find a clear
division between skilled toolmakers and ‘philosophers’ or ‘men of
speculation’. The first may improve their machines through ingenuity
and trade skill; but the philosophers are also practicalists in the sense
that they may also succeed in technological improvements by virtue
of skilled observation and creative combination of ‘the most distant
and dissimilar objects’ (Smith, 1950: 12). The market, through
specialization, is even the cause of the difference in talents (genius).7

Smith pre-formulates the population principle, expanded later by
Malthus, Ricardo, and Marx. This guarantees the worker wages at
least enough to sustain himself as worker, and to bring up a family
large enough to replenish the workforce, while it determines the
numbers of workers (Smith, 1950:82).

The more specialisations there are the more extensive social wealth
becomes:

7 The difference in natural talents in different men is, in reality, much less than we

are aware of; and the very different genius which appears to distinguish men of

different professions, when grown up to maturity, is not upon many occasions so

much the cause, as the effect of the division of labour. The difference between the

most dissimilar characters, between a philosopher and a common street porter, for

example, seems to arise not so much from nature, as from habit, custom, and

education .... But without the disposition to truck, barter, and exchange, every

man must have procured to himself every necessary and conveniency of life which

he wanted. All must have had the same duties to perform, and the same work to do,

and there could have been no difference of employment as could alone give occasion

to any great difference of talents (Smith, 1950: 17-8). ‘According to Cannan’s footnote

this is an idea derived from Hume (in the essay: ‘Original contract’ in the work,

Essays Moral and Political) and may have been directed against Harris’ treatise

Money and coins, I,ii. Smith’s idea was copied by Marx and built into the

superstructure: genius (such as Raphael’s artistic talent), he says, is the consequence

of supply and demand (i.e. market processes), which again depends upon the

capitalist division of labour and its unequal distribution of wealth (cf. Marx, 1977:

189). I do think that Smith and Marx have not been completely on the wrong path:

the children of richer people have more access to socially preferred experiences

than the children from the working class, and success on the intellectual front is

among others to some extent the product of financial investment in specialised

programmes. The idea that we are the products or our environment has its limitations

in view of visible differences in talent and intellectual abilities. However, it is not a

museum piece, we still find it in revised form in the works of the behaviourists,

radicalised into absurdity.

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It is the great multiplications of the productions of all the different arts, in

consequence of the division of labour, which occasions, in ‘a well-governed

society, that universa1 opulence which extends itself to the lowest ranks of

people. Every workman has a great quantity of his own work to dispose of

beyond what he himself has occasion for; and every other workman being

exactly in the same situation, he is enabled to exchange a great quantity of

his own goods for a great quantity, or, what comes to the same thing, for the

price of a great quantity of theirs. He supplies them abundantly with what

they have occasion for, and they accommodate him as amply with what he

has occasion for, and a general plenty diffuses itself through all the different

ranks of society (Smith, 1950: 13).

The quote goes back to Turgot’s narrative, but this time for the
collective. The large number of specia1isations makes a bartering or
contractual network possible, because every worker can exchange
different units of his product to many different other workers producing
other things. Specialisation increases production and improves the
products, and thus things become cheaper in real terms, which is to
the advantage of even the lowest classes of workers.

Specialisation is to the advantage of the whole, since ‘what improves
the greater part can never be regarded as an inconveniency to the
whole’, for no society can be ‘flourishing and happy of which the far
greater part of members are poor and miserable’. And, very importantly,
for Smith it is really a question of equity that those who supply the
basic needs (‘feed, cloath and lodge’) of the whole body of the nation,
should receive such a share of the common good that they are ‘tolerably’
well-provided with those needs (Smith, 1950: 80). Smith apparently
assumes that at least the head of every household is able and does
produce a surplus of something marketable. This, of course, still
assumes that in some sense the worker in a capitalist industry is
(supposed) to retain that section of his/her work which gives him/her
that tolerable life, and sells that section of his/her product which he/
she does not need.

This is the contradiction to which view a rural, barter-oriented view of
the formal market (a distinctively urban entity) leads: it assumes the
worker owns his/her own products, and produces it, as if on a farm,
to fulfil basic personal needs, while selling the surplus. Both Turgot
and Smith forgot that specialisation exactly meant that one does not
produce for own needs, but rather to sell almost every unit of the product
and buy the needed in stead8 .

Some brief notes on Smith’s theory of prices is necessary. A number
of factors determine price:

� the work needed to supply the basic needs for a tolerable
life would determine the overall level of desired income from
work;

� the amount of work a product requires determines the value

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of the product9 ;

� in capitalism, however, the input is more than just labour
- so the rent of land, the price’ of labour, and the profits of
stock determine the price asked, i.e. the ‘natural price’,
which will be the price to which the market tends;

� But, in reality, it is the market which determines the price:
supply under competition, and demand under competition
allows the price to ‘gravitate’ (Smith, 1950: 62) towards an
equilibrium, which may be above, or below, but over time
tends to equal the ‘natural price’.

I have argued above that Smith propagated an economy of wealth
creation, and that wealth is measured in terms of the degree in which
the ‘necessities, conveniencies and amusements of life’ can be afforded.
But Smith wants to determine wealth according to the labour theory
of the value of the product. This is surprising: apparently he falls back
on the ‘original’ situation, where rents and profits did not yet come
into the equation. But he does include the market, for value is the
amount of the other’s labour purchased. This amount is the measure
of wealth, since the division of labour makes it impossible to produce
the ‘necessities, conveniencies and amusements of life’ all by oneself:

The far greater part of them he must derive from the labour of other people,

and he must be rich or poor according to the quantity of that labour which

he can command, or which he can afford to purchase (Smith, 1950: 32).

Economists who puzzle about the strange discrepancy between ‘market
value’ and ‘labour value’, should remember two things:

1) In the 18th century progress is dialectically related to the
state of nature, thus although we move away from nature,
nature belongs to our human essence (and thus the
‘natural’ price expresses itself in the bargaining which
establishes itself as the ‘market’ price); but

2) Smith (as mentioned above) does not say that the amount

8 Once one understands this, Marx’s theory of alienation becomes easier to

understand. Marx adopts from Smith the idea of selling one’s labour. However, he

views the situation from the other side: it is not the worker who has the power to

retain what he needs and sell the surplus, but it is the capitalist who has the power

to enforce the selling of the labour, and by minimising the needs of the worker to a

survival-and-reproduction wage, increases the ‘surplus’ at no extra cost - thus he

profits from an increase of that which would not have willingly been included in the

surplus by the worker himself.

9 The value of any commodity, therefore, to the person who possesses it, and who

means not to use or consume it himself, but to exchange it for other commodities,

is equal to the quantity of labour which it enables him to purchase or command.

Labour, therefore, is the real measure of exchangeable value of all commodities.

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of the worker’s labour which has been invested in the
product, determines the value of the product, as Marx did;
he rather includes the bartering process and specialisation
(the ‘market’) by saying that the value of a product is the
same as the amount of somebody else’s labour which it
can acquire.

Smith is clearly conscious of the problem of measuring labour value,
for the labour bought he measures against the labour exchanged for
it, and these two may be incomparable. But he believes that the
‘haggling and bargaining of the market’ produces a ‘rough equality’ of
values, which makes it ‘sufficient for carrying on the business of
common life (Smith, 1950: 33).

Implicitly power and leisure also become determining values of the
Smith society, for the more labour I am able to purchase, the more
power I have over those who do the work10 , and the less I have to work
myself (of course assuming that a stock of ‘labour’ – in commodity
form - can be accumulated by some). In brief: Smith’s points of
departure are:

1) the specificity of the human being as a se(f-interested,
contractualist, barterer;

2) the market (the process of competitive bartering) as the
‘place’ of exchange of the specialised products of labour;

3) material progress as the necessary base for superstructural
cultural progress;

4) wealth creation (including power and leisure) as the
supreme aim of society (in casu the nation state);

5) labour purchased as the measure of product value (as well
as the potential for power and leisure = wealth);

6) implicitly a hierarchy of needs/wants: (a) necessities of life;
(b) conveniences; (c) ‘amusements’.

Smith firmly believed that ‘nature’ would take care of justice through
the market processes, and that interference with such processes was
really ‘original sin’. He anticipated Veblen’s theory of the leisure class
with his idea of wealth and the higher needs at which the economy
aims. He tended to overlook the ability of the worker to be creative,
and he could no more see the possibility of a non-market form of
labour in caring for oneself.

10 Wealth, as Mr. Hobbes says, is power (Smith, 1950: 33).

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In fact, like Mandeville, he could almost not imagine that anybody
would want to care for others for free. And thus he was unable to
appreciate the economic meaning of non-waged work.

But we must note that Smith still showed some appreciation for work
- in fact it is work which creates (economic) value. And wealth is the
amount of work one can acquire from the piled up stock of work which
one possesses.

Through this lens he at least still sees the worker as economic agent,
negotiating for the value of his/her work (possibly in livelihood terms)
with those who buy his/her labour. Unfortunately he does not take
his realisation that wealth is power into account when discussing the
negotiating position of the worker in market terms. His view of the
human being as by nature a barterer allows the market side to
dominate - this is the urban economy.

Smith tends to remain in the area of the descriptive, with some
normative lamentations. Thus he describes the possibilities of progress
for the worker through the division of labour under the discipline of
the market, and laments the exploitation of the workers. But he does
not take note of the fact that the fragmentation of work under these
conditions of exploitation reduced the quality of work while expanding
its load. Reducing the quality of work means diminishing the dignity of
the human being doing the work.

Smith notes that in the original situation the human being owned all
of his work, while under capitalism the major part of the work is owned
by the capitalist entrepreneur. But he is so excited about the progress
- in terms of output brought about by specialisation, that he does not
see the serious qualitative difference between work in its supposed
original sense - creative self-sustenance - and the fragmented toiling
of the urban market economy. It remained for the early Marx to point
out that what the worker lost was not simply the ownership of his/her
work, but that (s)he lost him/herself – or from my point of view:
something of him/herself - as creative producer. It is not that Smith
did not care about the plight of the worker; he was clearly concerned
about the treatment of workers under capitalism. But within the
context of his view of prices and the workings of the market, he could
not find an argument for easing that plight.

5.3 The economy caught in the prison of deductive theory.

The macro-market society with its realize-your-own-rights attitude is
becoming reality. Neither the competing ‘other’, nor anybody else, cares
or is supposed to care about your rights. One’s rights are protected in
a bill - the assumption being that the self-interested individual now

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152

has a legal base to care for his/her own interest. The universal win-
win representation about self-interested exchange - the moral of the
economists’ lasting narrative (Berthoud, 1995: 63) - now encompasses
all social situations. Three presuppositions underlie the win-win
representation:

i) negotiating parties are equal,

ii) processes are transparent, and

iii) competition guarantees improved quality.

An [imagined] ideal world is underwritten by these presuppositions.
They were initially needed to construct a mathematically deductive
social science able to predict and ‘engineer’- on the basis of
[constructed] laws. Such engineering was needed to speed up - no
more was supposed to be possible - the inevitable, law-regulated,
closing of the gap between evolving ‘nature’ and trans-historical rational
ideal.11

However, deep down lurks the Modern ideal of the mastery of ‘nature’
(Descartes and Kant; cf. Venter, 2001), which includes the human
being and society as ‘nature’ (the early Comte, Marx, Skinner, and
others; cf. Venter, 2002a). In post-Enlightenment economic theorising
the method used to create a quasi-physical ‘experimental’ situation,
was either (1) stereotyping or (2) idealisation. In both cases productive
agency - quality productive involvement and self-expression in work -
was lost from sight.

1) David Ricardo worked with stereotypes: the capitalist always
competes, the landlord always increases the corn price;
the worker always procreates (cf Heilbroner, 1955: 77ff;
Ekelund & Hebert, 1983: 124ff). Having established the
stereotypes, it was easy to derive laws in terms of the supply
and demand of food, work, and capital under competitive
market conditions. Although Ricardo thought of the
capitalist entrepreneur as creative, he actually has no room

11 This contrast cannot be formulated simply as the concrete (nature) versus the

abstract (ideal). A complete idealist (Hegel) retains ‘reality’ (Sein) and ‘concreteness’

as attributes for the rational Idea; ‘nature’(both its emanation and its opposite) has

only ‘abstract existence’ (Dasein). Naturalists (Feuerbach) invert this: ‘nature’ is

concrete reality, passion is knowledge; the Ideal is human super-maximal self-

projection. In critical idealism (Kant) ‘nature’ as mover and ‘reason’ as imposer of

the rationally ideal, are both concretely real but in historical tension.

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for any economic agent. For him there are only
anthropomorphic machines that relate to one another in
regular ways.

2) The alternative to stereotyping was idealisation.
Experiments, as used by Galilei, Boyle, and others, were
constructed as maximally ideal situations. The regularities
Galilei deduced were supposed to be valid in a physical
vacuum, and Boyle constructed the air pump exactly
to create such an ideal situation. Of course fully ideal
conditions are always only assumed to be ... Once
economists and other human scientists model their
work after the quantitative natural sciences, they are
faced with a much more difficult situation: since the
scientist is ‘inside’ the reality he/she hopes to study,
predict and control, it is not possible to set up experiments.
You have to experiment in abstracto by means of idealising
assumptions. One has, firstly, to assume that social
processes proceed analogically to physical processes. Thus
bookkeeping - balancing the books - is transformed into
equilibrating processes - the books are assumed to balance
themselves,  analogical to the entropy processes in
thermodynamics or the balance scale. (This goes back to
the development of bookkeeping and the accompanying
algebra during the Renaissance.)

To construct such an ideal reality, requires assumptions which express
the ‘perfection’ of that ‘reality’. Thus the economist idealises through
the means of abstract assumptions. In the tradition of Edgeworth
(1825-1926), one has to assume:

i) perfect rationality,

ii) perfect individual independence,

iii) perfect freedom of choice,

iv) perfect mobility,

v) perfect communication,

vi) perfect information, and

vii) perfect divisibility of wants and products.

In combination these assumed ideal factors constitute a perfect market,
which can be used as ‘ideal  reality’ in economic analysis. Idealised

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perfection12  - or ‘the ideal perfect being’ (whether it concerns ‘God’ or
the ‘cosmic law’ or a fusion of the two) is teleological – the ‘ideal being’
is the unified focus point of the striving of a diversity-in-evolution.

The ontology of perfectionism accepts that what we normally call ‘laws’
(both so-called ‘natural’ and ‘moral’ laws), are the unified super-eminent
counterparts of the less perfect aspects of our environment. It is a
teleological ontology of striving for an excellent reality which is ‘same-
yet-other’ (the antinomy of analogia entis). It is not the same as, for
example, identical with the Genesis ontology of a sovereign ‘Let be ...
‘ and ‘Thou shallt (not) ... ‘ It is rather a strange tension-ridden mixture:
what ought to have been normative bookkeeping, becomes mechanical
balance and yet remains an ideal towards which engineering can take
place ...

Using an ontology of [striving for] perfection in a Modern context,
allowed Edgeworth to harmonise conflictual naturalism, the faith in
progress, and calculated, predictive, technical rationality. The logic of
human social perfectionism is one of maximisation of pleasure, and
Edgeworth’s ‘Mathematical Psychics’ aims at plotting and revealing
the necessary and sufficient conditions of this maximisation (1881: 3)
This, he feels, is analogical to the calculation of energy maximisation
in physics. It is in fact more than just analogy: Edgeworth accepts a
real parallelism between the physical and the psychical: ‘Man is a
pleasure machine’ (1881: 15ft).

Thus he constructs a double mathematical calculus of pleasure,
consisting of

1) an economic calculus investigating the ‘equilibrium of a
system of hedonic forces tending to maximum individual
utility’ (deductive economics), and

2) a utilitarian calculus, investigating ‘the equilibrium of a
system in which each and all tend to maximum universal
utility’ - a deductive social mechanics.

12 The argument from idealised perfection has its origins in Xenophanes of Colophon’s

criticism of the deficiencies of the tribal view of the divine, which he replaced by one

idealised, unmoved moving consciousness. Plato used this as basis for an idealised

view of the law as primary reality - into which he included idealised mathematical

forms. In the Middle Ages the Law-God was conceived of in terms of idealised

perfection - note especially the works of Anselm of Canterbury and the analogia

entis theory of Thomas Aquinas. In Modern times, especially in those thinkers who

had their orientation in a mathematical universe, idealised perfection remained a

prime way of conducting scholarship (e.g. Husserl).

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The two calculi represent the traditional opposition between egoism
and altruism, but Edgeworth believes that evolution has left us
somewhere in between. Even if anyone adopted pure altruism as his
life policy, he will still kiss his wife for his own individual pleasure,
without keeping the general interest in mind (1881: 102ff). Of course
Edgeworth is blinkered here into an exposition of his views in the
frame of a very specific opposition: that between the individual and
the social or general. (In this case a more appropriate opposition would
have been ‘I’ versus ‘the other’,  for the individual-social opposition
fuses the variety of inter-individual relations into a vague ‘social’ or
‘general’ concern, which is misleading.)

But Edgeworth is an individualist - he maintains that individual
happiness is preponderant. Using war talk he interprets the heritage
of Adam Smith in a social Darwinist sense:

‘The first principle of economics is that every agent is actuated only by self-

interest (1881: 16).’

Smith limited the competitive processes to contractual interactions.
Edgeworth, however, distinguishes between:

� ‘war’: realising self-interest without the consent of others;
and

� ‘contract’: realising it with consent.

A contract spells out the amount of sacrifice demanded from each
partner, and the principle of distribution. But note: economic
competition is both ‘contract’ and ‘war’: peace during contract, and
war when some of the contractors re-contract without the consent of
the others. Competition is both war and peace: under contract it is
peaceful, but as soon as the contract expires and one party re-contracts
elsewhere, or as soon as the auctioneer turns away for the last bidder
to re-contract with a higher bidder, it becomes war! Even ‘with reference
to contracts’ there is a field of warlike competition, consisting of ‘all
the individuals who are willing and able to recontract about the articles
under consideration’ (1881: 17).

Edgeworth’s discourse anticipates present-day managerial talk in terms
of survival strategies:

A general, or fencer making moves, a dealer lowering price, without consent

of rival ... (1881 : 17).

Philosophically a deep militarism is embedded in economic discourse,
and taken over by present-day ‘competitiveness’ proponents. To this
Edgeworth added a discriminatory elitism: there are different capacities
for pleasure (p. 64), and those that already have most pleasure, have
the highest capacity for more (and therefore the world machine will

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favour them). The same goes for education: those that are most
advanced, have the most capacity for further education and should
receive more, for universal education is unaffordable13 . He also does
not hesitate to advocate the eugenetic substitution of bad parents
with good ones (p.68-70).14

Edgeworth’s hidden basis is the faith in progress with conflict as its
mechanism, going back to Turgot and Kant. All of these characterised
conflict as bad, yet also ‘perceived’ it as the necessary cause of a
continuous rise in cultural level and rationality, with an eventual
utopian outcome (Kant’s ‘eternal peace’; cf. Venter, 1992; 1997; 1999a).

Note two aspects:

1) The hedone, which according to Adam Smith is the highest
step on the hierarchy of needs, is here the only positive
element; and

2) ‘Utility’ is defined in terms of maximum pleasure and
minimum pain.

This was Edgeworth’s heritage from Bentham. True: their hedonism
was not the crude one of indulgence in food, alcohol, sex, and leisure
which we have today. But in this tradition already power, wealth, and
leisure are ‘pleasures’ (utilities) while labour is a ‘pain’.

In the case of Edgeworth economic competition, and social relationships
for that matter, are conceived of as warlike. This means the loser is
‘naturally’ inferior. Once one thinks in this way there is no revisiting of
the issue of active economic agency, especially through work. There is
no investigation of the possibilities of transforming denigrating
fragmentary work under industrial capitalism into a creative situation.
There is no interest in the nature of the human being as producer,
maker, innovator, for work itself has been disqualified as a ‘pain’.
Neither is it important to investigate any form of economic agency as
such, for the human being is viewed as a pleasure machine: it avoids
pain automatically while the economy balances itself equally
automatically through the interaction in the war of self-interest. And

13 On this point Edgeworth shows himself in line with the elitist rationalism of Hobbes,

Rousseau, Kant, Hegel, Comte, and Marx. The point made here is (a) that the Modern

categories of rational versus subrational is sustained; (b) that at this stage of history

the subrational is usually in charge, yet on occasion reason, usually peace fit/ and

altruistic (cf. also Turgot and Kant) shows its might; (c) that in any case Hobbes,

Smith, and Edgeworth are already firstly rational people, sometimes preaching the

sovereignty of their science.

14 I suspect that natural selection is here combined with the Aristotelian model of

potentiality moving in the direction of its form, but for some the ceiling occurs

earlier.

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the elite will move forward ...

It is in this context that one has to appreciate the work of the early
Marx. It is too easy to dismiss him for having used ‘the labour theory
of value’. He may not even have appropriated it completely. In fact his
analyses of value have always had an oppositional flavour. He loved to
play around with the dialectics of capitalist theory; the latter struggling
to cope with the relationships between production costs and market
price.

His contribution lies in the fact that as a materialist, he focussed on
and reduced the human being to a self-sustaining organism, while,
dialectically, as a humanist, he was prepared to accept the tension of
insisting also on the typically human side of work, and on the self-
expression which is at the root of this.

Marx’s theory of the worker as a productive being, and work as self-
sustaining expression of the individual-social essence, is difficult to
catch in simple phrases. He was probably too fixated on the analysis
of the capitalist form of denigrating work, to really get much further
than the rejection of all specialisation in Die Deutsche Ideologie.
However, in this rejection are hidden norms:

1) That the boundaries of divided labour ought not to become
the boundaries of making a living or producing. I would like
to understand it in this way: self-care ought not to be
systematically funnelled into meaningless repetitive toil -
this is not creative transcendence of present
circumstances.15

2) And secondly, almost as if giving a parody on the age old
adage that what has dignity has no price, Marx - without
using the term ‘human dignity’ - writes that alienated labour

15 What constitutes the externalization of labour? First, it is the fact that labour is

external to the labourer that is, it is not part of his nature - and that the worker

does not affirm himself in his work but denies himself, feels miserable and unhappy,

develops no free physical and mental energy but mortifies his flesh and ruins his

mind. The worker therefore feels at ease only outside work, and during work he is

outside himself. He is at home when he is not working and when he is working he

is not at home. His work, therefore, is not voluntary, but forced labour. It is not the

satisfaction of a need but only a means to satisfy other needs. Its alien character is

obvious from the fact that as soon as no physical or other pressure exists, labour is

avoided like the plague ... In religion the spontaneity of human imagination, the

spontaneity of the brain and the heart, acts independently of the individual, as an

alien, divine or devilish activity. Similarly, the activity of the worker is not his own

spontaneous activity. It is the loss of his own self. (Marx, 1967: 292).

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means that the human being has acquired a price and that
the price is falling with the rate of increase of the
fragmentary output.16

Edgeworth is not a museum piece in the history of economic thought.
The ideal of an economics which gives us structures or laws or patterns
according to which we can predict and control - for example in
Friedman’s economics. And when one lives under the regime of inflation
targeting, privatisation, and balanced budgets imposed by the World
Bank and the IMF (ask the Latin Americans and the Africans), one
realises that the doctrines of Friedman and the Neo-Classical
economists have much more influence at the moment than those of
Alfred Marshall ort J M Keynes.

While Friedman pretends to write a methodology of economics, he
produces an ontological separation between ‘what is’ (positive) and
‘what ought to be’ (normative; 1953: 4-5) - a separation often
propagated but never sustained. In Friedman’s case the separation
already collapses when he admits that his Edgeworth-like idealised
assumptions are aimed at predictive control and not description as such.
But to see the ontological complications clearly, it will be fruitful also
to look into his view of the relationship between ‘theory’ and ‘reality’:

16 We proceed from a present fact of political economy. The worker becomes poorer

the more wealth he produces, the more his production increases in power and

extent. The worker becomes a cheaper commodity the more commodities he

produces. The increase in value of the world of things is directly proportional to the

decrease in value of the human world. Labour not only produces commodities. It

also produces itself and the worker as a commodity and indeed in the same

proportion as it produces commodities in general. This fact simply indicates that

the object that labours produces, its product, stands opposed to it. as an alien

thing, as a power independent of the producer. The product of labour is labour

embodied and made objective in a thing. It is the objectification of labour. The

realization of labour is its objectification. In the viewpoint of political economy, this

realization of labour appears as the diminution of the worker, the objectification as

the loss of and subservience to the object, and the appropriation as alienation

(Entfremdung), as externalization (Entaeusserung). (Marx, 1967: 289.)

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TD, 3(1), July 2007, pp. 133-168.

A fundamental hypothesis of science is that appearances are deceptive and

that there is a way of looking at or interpreting or organising evidence that

will reveal superficially disconnected and diverse phenomena to be

manifestations of a more fundamental and relatively simply structure. And

the test of this hypothesis, as of any other, is its fruits - a test that science

has so far met with dramatic success. If a class of ‘economic phenomena’

appears varied and complex, it is, we must suppose, because we have no

adequate theory to explain them. Known facts cannot be set on one side; a

theory to apply ‘closely to reality’ on the other. A theory is the way we perceive

‘facts,’ and we cannot perceive ‘facts’ without a theory. Any assertion that

economic phenomena are varied and complex denies the tentative state of

knowledge that alone makes scientific activity meaningful ... The confusion

between descriptive accuracy and analytical relevance has led not only to

criticisms of economic theory on largely irrelevant grounds but also to

misunderstanding economic theory and misdirection of efforts to repair the

defects. ‘Ideal types’ in the abstract model developed by economic theorists

has been regarded as strictly descriptive categories intended to correspond

directly and fully to entities in the real world independently of the purpose

for which the model is being used. The obvious discrepancies have led to

necessarily unsuccessful attempts to construct theories on the basis of

categories intended to be fully descriptive (1953: 33-34).

Friedman wants a ‘positive’ economics, in which we strictly separate
‘that which is’ from ‘that which ought to be’ (i.e. what kind of economic
policies you have to follow). But once he is busy with his ‘positive’
economics, he relinquishes the description of ‘what is’ with the
statement that a ‘realistic’ descriptive science is impossible, since ‘facts’
are not separate from ‘theories’ - rather the latter is the way in which
we see facts. And the criterion for seeing well is the realising of one’s
aims - i.e. getting back into the normative sphere.

What is clear is that Friedman, although writing about the method of
economics, is here not spelling out procedures for finding new
knowledge or exact data in his discipline - he is rather busy with the
rationalising of a philosophy of power (cf. Venter, 1999: 181ff). Although
he searches for ‘explanations’ of phenomena, he assumes in advance
that such phenomena can always be included in a simple theory. The
assumption of simplicity is inherent in the tradition of abstract
quantitative science and a necessary assumption for all intended control.

Simplicity is also one of the most dangerous assumptions of science
aimed at control: it is needed to sustain the pretence of an overview of
reality which makes control possible (it is the rationalising assumption
of a scientific Archimedean point), but the simplification itself creates
the illusion of good control while leaving sensitivity for the damage by
human intervention outside the simplified perspective.

Friedman’s whole view of the ‘real’ is finally condensed into the simple
coherence of those few elements which are predictable if certain
assumptions are made.

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Some of these assumptions are ‘universal’’ (assumed, idealised,
generalities) such as

� that economic agents act ‘rationally’ (i.e. in their own
interest), and that

� they are ‘fully’ informed.

Such assumptions co-operate with ‘circumstantial’’ assumptions in
order to predict certain specific empirical outcomes.

If these outcomes are realised, then measures of control follow from
them. For example:

1) Assume that the mentioned universal assumptions hold.

2) We also add the specific hypothesis that a high rate of
expansion of the money supply will lead to a certain increase
in the inflation rate (and possibly vice versa).

3) Now we have a specific concrete situation where it is viable
to accept that both (1) and (2) will hold.

4) Then we can

a. predict that we can control the inflation in this case
by

b. controlling the money supply.

For Friedman it does not matter that the assumptions under (1) are
unrealistic. All that counts is whether the prediction under (4a) can
be made true by implementing (4b).

Although Friedman pretends not to take into account any norms and
rather rely on causal relationships, he is fascinated by the specific
‘causal’ relationships which determine inflation. Why is this? Because
he has a hidden triple norm:

1) He thinks inflation is bad, because

2) inflation is the product of government intervention in the
market, and such intervention is always bad;

3) therefore the growth of the money supply should be strictly
controlled by an independent banking authority.

I do suspect that Friedman will not feel at home in a metaphysical
approach, but the way in which he plays around with ‘is’ and ‘ought’,
‘ideal’ and ‘real’, the ‘predictable’ and the ‘simple’, and the ‘rational’,
surely has one leg over the metaphysical precipice. And together with
this comes his view of the human being: all human beings are self-
interested entrepreneurs. The bureaucratic and political entrepreneurs
will almost ‚necessarily‘ allow a high growth rate of the money supply

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TD, 3(1), July 2007, pp. 133-168.

in order to create the illusion of prosperity, which gives them excuses
to intervene in the only bastion of freedom and democracy: the ‘market’.
The market, he believes, is the root and guarantor of freedom.

The Monetarists and the Neo-Classicals are at one in this respect:
they have bought into the tradition, coming from Adam Smith, that
all human beings are market animals, and that in fact society is one
large market. Yet Friedman, for all his insistence on freedom, gives us
an economics of pragmatic, but total control, as if there were an
Archimedean point from which this can take place. He is not interested
in employment, or in economic agency as such. He believes in the’
control of the system through the control of one supposedly central
process. He makes light of the fact that the theorist who predicts is
inside the system that he studies, and therefore not ‘out there’ where
one can have an overview of the total system - the only position which
makes control possible. He bargains on the assumed simplicity to
give him such an overview. This is impossible. For how can anybody
claim to have an overview of even a small nation’s economy (and this
within the global economy)?

Friedman’s principle is again an equilibrating process (supposedly)
predictable by good bookkeeping (balancing the books) – presupposing
again a set of mechanising stereotypes: the politician always acts in
one way, and the businessman in the opposite way. Some control
might, indeed, have been possible if our bookkeeping had been stable.
But simply the movements of the international money markets are
enough to upset national bookkeeping. And, importantly, the
bookkeeping does not take into account the masses of people who are
not reflected in the GNP. Many developing countries are not even sure
of the size of their populations, in spite of meticulous censuses. This
includes sophisticated ones, like South Africa. The question is then: if
market freedom is (really) the root form of freedom - will inflation
controls not affect the freedom of those at the bottom end of the
economy?

Von Hayek (of the ‘Austrian School’) shares this idea of freedom with
the Monetarists and the Neo-Classicals. They all assume that the
discipline of the market will make sure that business will behave (justly,
honestly, and patriotically), and that if we all live under competitive
circumstances, then surely we shall all behave. Von Hayek somewhere
goes as far as arguing that we ought to sacrifice some justice for the
sake freedom. He differs from the others in his rejection of an idealised
equilibrium model which [supposedly] automatically takes care of
justice, and he accentuates the concrete rivalry of real agents in
competition. Having seen the limitations of his training in the positivist
tradition, he rejected a mechanistic (physicalist), deductive,
quantitative approach in the human sciences. But he agrees with the
other schools in economics that competitiveness should be allowed

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free reign in all areas of social life. He does not even consider the
possibility that concepts like justice and freedom may be
‘transcendental’ (in the Medieval sense) - i.e. that they may imply one
another to a certain extent and therefore cannot/shouldn’t be managed
in a trade-off perspective ....

6. Conclusion - Competitiveness, the global market, and
local self-sustenance

There is no space here to argue my alternatives in full, thus I shall
give them in only a few theses.

1. There is the widespread belief that we are living happily in a
post- ideological era. Wrong: the propagation of the formal market
and its hedonism as the only way of living, the only source of
efficiency and freedom, is ideological, and is being promoted by
the theorists in the academe.

2. Human dignity has become a protected right after the practical
denial that human life is special by the Nazi’s and the Fascists
and apartheid South Africa.

3.  Among the famous, it belongs to Locke, Marx, and Alfred
Marshall, to have seen that human productive work is special,
and that making a living by honest work is an expression of
dignity, while not having a work constitutes the removal of dignity.
Importantly (with the possible exception of Marx), they may not
have seen the variety of work outside of the formal labour market.

4. Present-day conceptions of dignity are no more focussed in first
person rational behaviour, but on treating the ‘other’ as a ‘person’.
This implies positive inter-subjectivity: love and care, allowing
for justice, welfare, cultural self-expression, social inclusion, and
being able to sustain yourself in a relatively independent way. It
does not ask to be put in the position of a permanent loser in the
market (in a manipulated competition).

5. Economic theorists have over centuries preached that the only
meaningful economic activities are those measurable in terms of
supply and demand (exchange), and that the only way to look at
economic activity is through the lenses of mathematical
deduction, assuming idealised and stereotypical processes - and
leaving economic agency outside of perspective. Thus ‘work’ is
forgotten in capitalist economic theory - especially work that does
not register in the market, although it may serve self-sustenance
and contribute considerably to the GNP.

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TD, 3(1), July 2007, pp. 133-168.

6. The term ‚‘competition’’ has become very confusing. It runs
parallel with terms like ‘quality’ or ‘excellence’ - which are empty
terms, since there are no universal or even agreed standards for
them. They are terms that willy-nilly intimidate, for who can
argue against ‘excellence’ or ‘quality’? And what can be said
against ‘competition’? According to the Western tradition,
competition guarantees progress in quality and efficiency. All
too often economic or self-interested ‘competition’ is interpreted
as if it were akin to what happens in the transparent situation of
amateur sports. But where, in the global market, is the track,
the judges, the goalposts, and who controls it all?

7. From the traditions in economic theory we have imbibed certain
values:

a. becoming rich at the cost of others;

b. allocating large amounts of resources to unproductive
‘amusements’ or money trading;

c. having strong money supply controls (inflation
control) within a totally open, ‘free’, market, even if
people go hungry (in spite of the Keynesian alternative)
– creating a ‘lean’ and ‘mean’ economy;

d. privatisation is the answer to all our economic ails
(even if it costs the taxpayer more to keep the jobless
alive);

e. remunerating the powerful at an outrageous level,
and giving golden handshakes if they fail (while
locking up the lower ranks if they fail);

f. trading is (supposedly) always a win-win situation.

8. There are good signs and bad signs in certain areas. The ILO has
moved in the direction of labour standards and quality work.
The point is to be able to sustain yourself - inside or outside the
market - is to have dignity. In the neo-liberal setting it is again
assumed that the expansion of the market will have a trickle
through effect to the poor and underdeveloped. This implies that
the answer lies in industrialisation as such, and that national
wealth leads to individual satisfaction. The theory never worked
very well, and leads to mechanisation. Intermediate technology
would be a better approach.

9. We need urgent attention to, and support for, voluntary work.
Against the liberal doctrine one could say that it is not promoting
a religion when the state supports voluntary community work

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done by religious organisations. It is just getting things done by
‘core’ committed people (cf. Kuhn & Geis, 1988;156: 159), at a
very low price. A very brief survey of web pages on the net shows
that these voluntary care organisations are all committed to
dignity and respect.

10. However, I still do want to defend an economics of self-sustenance
and self-care. This is the way to dignify people in interactive
subjectivity. Before the appearance of the formal market as we
know it, human beings did care for themselves. There was a
cultural tradition about this, with its own strengths and
weaknesses. Given that the market will for a long time not be
able to function as a locality for self-care (mostly communal, but
often individual), it is our duty to study such cultural formations
and to find their strengths. Very often their strengths would lie
exactly in the opposite direction of the highly technological market
society which we are trying to introduce. An example: in the
North of Namibia there is a local grain called ‘mahango’. Since
the seeds are really tiny, harvesting is very difficult. Yet its
nutritious value far outweighs that of maize, which is penetrating
the area through consumer markets at a fast rate. The people
are used to cultivating mahango. Why not develop easier methods
of harvesting, and improve the cultivars? This way, our technology
will harmonise with self-care: not disrupt it. The ‘market’ has no
respect for the creativity and culture of sustenance - ‘it’ prefers
profitable dependency rather than self-sustenance on the fringes
of the market. ‘It’ will rather introduce new consumer products
than draw on local expertise.).

11. We must remember that human dignity is situated

a. in acceptance within a social structure,

b. in the possibility to care for yourself and yet

c. develop those talents and abilities you have,

d. in the knowledge that you will be cared for when
unable to do so yourself, but

e. in such a way that your personhood, your subjectivity,
will be recognised, and

f. knowing also that whatever measures be taken by
society regarding your person, these measures will
always recognize you as a fellow human being of those
who take such measures.

12. Modernisation is probably inevitable in the long run. But it is
undignifying, in fact cruel and inhumane, to introduce modernity
in such a way that the individual is dumped in a situation of

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culture shock, totally unable to care for her/himself, subject to
alien measures of control which intrude into his/her sense of
being human, and becomes a foreigner in the context of the
functioning symbols and instruments of the innovated
environment. Modernisation caused by the market promotes the
use of goods for which not enough infrastructure has been
created.

Furthermore the Turgot narrative, and Adam Smith’s view of bartering,
suggest that marketing is a distribution of surplus not needed by the
producer. The ‘market’ does not function that way anymore. An
industry producing bolts and nuts does not calculate how many bolts
it needs for itself, and then sell those not needed. It sells all of the
output. In fact any economic system based on specialisation moves
away from surplus trading to the marketing of all production - and the
fast movements of money promotes this. Resources are therefore
allocated according to price/demand to those who have a lot more,
and away from the poor, simply as a consequence of specialisation
and currency trade. (Compare the use of water between rich and poor
in a modern setting, keeping in mind that in a traditional community
the personal energy needed to supply water may cause physical
hardship, but is not dependent upon the cash needed to tap into an
urban supply system.)

I am not simply and only questioning the shift from ‘basic needs’ in
the direction of non-productive ‘amusements’ (the entertainment
economy) as such, as well as the speculative high speed currency
trade which pushes local food prices up to the levels in the richer
countries. In the name of human dignity I am questioning the structure
of the value system itself. In even a humanist theory of human needs
(where one would expect the distinctively ‘human’ to go up front),
such as Maslow’s needs hierarchy, one finds the ‘human’ needs, such
as that of dignity and love, at the upper end of the hierarchy, and at
the later positions in the succession of realisation of needs. Structurally
this does not differ very much from Adam Smith’s hierarchy, and of
the base-superstructure models of Marx and some Neo-Marxists. The
Western debate about needs has structurally not moved much in the
past three centuries: it remains within the context of material needs
first and more complex needs later.

My issue would be that the position that material needs are the basic
and  the earliest ones is not sustainably defensible. For the so-called
‘higher’ needs ought not be assumed to be ‘later’ than the ‘material’
ones. In fact the needs work interactively in a cycle and cross-wise
over the circle. Assuming the means are available: one cannot imagine
a baby being well-cared for if it is not loved; neither is it defensible to
say that a baby is loved if it not well-cared for. One should not say
that amusements are higher needs of which the realisation is only for

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the rich. One should rather investigate the situation in a less well-off
rural farming community, or an agrarian tribal community. In such
communities there are no formal, separate, entertainment structures.
Leisure and work are integrated in such a way that they are almost
indistinguishable. Veblen’s theory of the leisure class may be the logical
consequence of Adam Smith’s value hierarchy, but it is empirically
untrue and normatively inhumane: those who should have leisure,
the upper classes, are very often the slaves of workaholism, and those
who have too much leisure would prefer to have food.

I am pleading for an economics of dignity, in which the material needs
and the higher order needs are considered equally basic. One can
have no development, no social upliftment, if it does not happen under
the guidance of dignity. And this means that the full ‘person’ should
be accepted as the economic agent, and has to be recognised as such.
The economic agent must work in a context of justice, quality of
production, enough independence to find positive ways of sustaining
himself/herself, have enough well-being and resources and freedom
to disclose own potential.

But then managers and economic theorists will have to abolish their

almost obsessive striving fro a quantitative deductive system with

predictive capabilities. It will have to analyse economic institutions,

social institutions, power relationships, and technological inversions

of the economic processes. And take account of the value system at

work in the economy as such - about which few words are said in any

economics textbook. Which means that the pretence of being a purely

descriptive, non-normative discipline, has to be relinquished. It will

have to become a humane human science again. Latouche (1995: 20-

21) and Caille (1995: 52-60) argue that the prize for the most ‘scientific’

among the social and moral sciences still goes to economics. Yet this

is grand bluff, because economics, in constructing itself as a rigorous

and coherent scientific system, has precisely abolished the moral and

political questions. Pretending to realize the greatest welfare for the

greatest number, economics has not only transformed human beings

into hats, as Marx accused it of doing, but both human beings and

hats into equations, and has thus become an inhuman science.

‘Political economy’, as it has traditionally been called, has become

both the most ‘scientific’ of all human sciences, and at the same time

Venter

17 The Ricardian naturalism, mechanism, and determinism made it possible to reduce

human activity and history to a vast machinery by postulating a machine-man;

the homo oeconomicus. An economic society made out of an ensemble of subjects/

individuals, which function as calculating automata, brings about an impressive

clockwork. The economist needed only to put these gears into equations. (Latouche,

1995: 21).



TD, 3(1), July 2007, pp. 133-168.

the least human of all social disciplines. (Cf. Venter, 2002b: 304ff.).17

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