U.S. Markets closed

Toward a Caring Economy

Matthieu Ricard

Originally published by Matthieu Ricard on LinkedIn: Toward a Caring Economy

The world has enough for everyone’s need, but not enough for everyone’s greed. — Gandhi

The economy must exist to serve society, not for society to serve the economy. It must also benefit society as a whole.

Without condoning the imposition of sterilizing constraints on the spirit of enterprise, innovation, and prosperity, economic regulation must prevent those driven solely by self-interest from taking advantage of the intricacies of the financial system to siphon off a disproportionate amount of resources by comparison with their contribution to the whole. As the French writer Daniel Pennac said,

“Individual happiness must have collective results, failing which society is just a predator’s dream.” [1]

The State must protect the weak, guarantee that everyone’s work is fairly remunerated, and ensure that the privileged and the wealthiest do not exert their power to influence political decisions in their favor.

An economy becomes dysfunctional when those who have made a negative contribution to society are those who reap the most reward. An example would be the autocrat who becomes immeasurably rich by seizing ownership of his country’s natural resources, or even the banker who receives colossal bonuses even though his actions have placed society in a precarious situation.

A healthy economy must not give way to disproportionate inequality. This does not refer to the natural forms of disparity that are manifest in any human community, but rather extreme inequality that derives not from people’s actual dispositions, but from the economical and political systems which are skewed to promote this iniquity.

None of this is inevitable, and it is entirely possible to set things on a different course, provided there is a popular and political will to do so. Even in the world of economics, the respect for human values exemplified by altruism is not an idealistic dream but a pragmatic expression of the best way to achieve a fair economy and long-term harmony. To be harmonious, the pursuit of prosperity must accommodate an aspiration for the well-being of all citizens and respect for the environment. Economists might argue that it is not their job to be altruistic or compassionate, but if they say that they don’t “care” for society, it is no longer acceptable. This is why we need a more caring economy.

Homo Economicus, Rational, Calculating and Selfish

The concept of the “economic human”, Homo economicus, appeared at the end of the nineteenth century as a critical response to John Stuart Mill’s writings[2] on political economics. This involves a theoretical representation of the relationships between humans, identifying them as selfish agents capable of making rational choices that optimize their chances of satisfying their own preferences and promoting their own interests.[3]

This conception of economics is at once simplistic and erroneous. As the Nobel laureate and Harvard professor Amartya Sen writes:

“Taking universal selfishness as read may well be delusional, but to turn it into a standard for rationality is utterly absurd.” [4]

Any theory of economics that excludes altruism is fundamentally incomplete and diminished. Most of all it is at odds with reality, and as such is bound to fail. Essentially the complex mathematical models created by neoclassical economists to try to explain human behaviors are based on presuppositions that are for the most part false, since the majority of people are not entirely selfish.

Emotions, motivations, and value systems undeniably influence economic decision-making. Since this is the case, it is best for these emotions to be positive and their motivations to be altruistic. Why not then introduce the voice of care into the economy, instead of satisfying ourselves with the voice of reason, a necessary but insufficient voice on which economists place too much importance?

Excerpt from Altruism by Matthieu Ricard


[1] Pennac, D. (1997). La Fée carabine. Gallimard.

[2] Persky, J. (1995). Retrospectives: the ethology of Homo economicus. The Journal of Economic Perspectives, 9(2), 221–231.

[3] Based on their preferences, they are meant to maximize their satisfaction by using the resources available, calculating both costs and benefits. Q.v. Gary Becker’s 1976 book The Economic Approach to Human Behavior. Chicago: University of Chicago Press. This is one of the most representative works of this line of thinking.

[4] Sen, A. (1993). Éthique et économie. PUF, p. 18. Cited by Lecomte, J. (2012). La Bonté humaine. Op. cit.