Beyond Capitalism/Socialism to Partnerism
Neither capitalist nor socialist theory recognized that a healthy economy and society require an economic system that supports optimal human development. By contrast, partnerism recognizes that the development of high quality human capital – that is, of human capacities – is (in addition to a healthy ecosystem) the most valuable component of a successful economy. ~ Riane Eisler, The Real Wealth of Nations: Creating a Caring Economics
Adam Smith’s, Karl Marx’s, and Friedrich Engel’s theories made enormous contributions to our understanding of economics. But because they came out of societies that had only moved a few steps toward a partnership system, the scope of what they examined and proposed did not go far enough. Indeed, their analyses perpetuated a much too narrow view of economics.
- The free market envisioned by Smith was never realized. Smith’s assumption that competition would counter self-interest did not factor in the emergence of ferocious financiers, men like J.P. Morgan and Cornelius Vanderbilt, who ruthlessly used chicanery, bribery, and force to smash both competitors and union organizers.
- Smith’s picture of how markets function assumed a free market of small entities. He painted an idealized picture of markets as a kind of deux ex machina that would ensure fairness and prosperity. And he basically ignored the interaction between social and economic institutions.
- The socialism envisioned by Marx and Engels was also never realized. Instead of a just an egalitarian system, what emerged was a system controlled by ruthless men from the top.
- Marx and Engels recognized the relationship between economic institutions and the larger social system, but they largely saw this as a one-way street in which who controls the means of production is the primary factor.
- Marx’s treatises on economics primarily focused on a critique of capitalist markets, and his solution of a socialism controlled from the top by a “dictatorship of the proletariat” never turned into the ideal communist society he envisioned.
Neither Marx’s and Engel’s nor Smith’s economic theories achieved their goal of creating an economy that works for the greater good of all. Nor could this goal have been achieved in the context of societies still largely orienting to the domination system, where social and economic structures as well as cultural values maintain top-down rankings of domination and inhibit caring practices and policies.
As history demonstrates, it’s not enough to change who controls the means of production. If control is exercised within the parameters of a domination system, one kind of top-down control will replace another, as happened in the Soviet Union when Bolshevik overlords took control of Russia’s assets. Neither is it enough to focus on the mechanics of the market. To move beyond the inhumanities and irrationalities that cause so much suffering and devastation, we have to consider all economic sectors as well as the interaction between economics and the larger social system.
Economic systems both reflect and perpetuate the underlying social structure and values, in a constantly interactive process. If the social structure and values orient to the domination system, so will economics. But at the same time, as Marx and Engels recognized, how economic systems are structured plays a huge role in what kind of social structures and values we have. This is why we urgently need a new story of what economics is and can be.
A key part of this story is a new theory for economics: one that includes the partnership elements of capitalism and socialism, but goes beyond both to ensure human needs and capacities are nurtured and our natural habitat is conserved.
I call this evolving new economic theory partnerism. It is a theory in progress that will require the input and creativity of many of us. Indeed, a fully formed partnerist economic paradigm probably won’t emerge until we loosen the grip of dominator traditions further. But we can – and must – shift to new ways of thinking about economics if we are to more effectively addresses our unprecedented global challenges.
Neither capitalist nor socialist theory recognized what is becoming evident as we move into the postindustrial information economy: that a healthy economy and society require an economic system that supports optimal human development. By contrast, partnerism recognizes that the development of high quality human capital – that is, of human capacities – is (in addition to a healthy ecosystem) the most valuable component of a successful economy. As Amartya Sen notes, the ultimate goal of economic policy should not be the level of monetary income per person, but developing the human capabilities of each person.
The Importance of Caring in Economics
These earlier economic theories also failed to recognize the importance for human development of what economists call “reproductive labor”: giving life and caring for life. Today, we know from both psychology and neuroscience that the quality of care children receive directly impacts the degree to which adults develop their full capabilities.
Neuroscience shows that the development of our brains is profoundly affected by our early experiences. As neuropsychiatrist Bruce Perry writes, “It is during these times in life, when social, emotional, cognitive and physical experiences will shape neural systems in ways that influence functioning for a lifetime.” This scientific knowledge calls for a reconceptualization of economic theory that takes into account the importance of caring and caregiving as a requisite for an optimally productive economy.
Once we recognize the importance of caring in economics, we also see that many of our social and environmental problems are the result of economic rules, practices, and policies that promote, and often even require, lack of caring. That most economists don’t mention caring is appalling. It is, however, understandable, since the two theories that shaped modern economics came out of times when most people accepted the superiority of men over women, and with this, the devaluation of anything considered “feminine” rather than “masculine” – including caring and cargiving.
- While Smith expected women to selflessly care for others, he saw this “women’s work” as unproductive, and considered women’s subordination natural.
- Marx and Engels did condemn male dominance, but they relegated the work of caregiving done largely by women in the home to “reproduction” rather than “production.” And since their focus was on who controls the means of production, this work was not of much significance in their economic analysis.
As for nature, neither Smith nor Marx factored its life-sustaining activities into their theories. For them, nature was there to be exploited by men for food, shelter, and raw materials for manufacturing.
Because they failed to recognize the importance of life-supporting activities – whether in households, the unpaid community economy, or nature – these theories are based on an incomplete model of economics. They only take into account part of the activities required for economic functioning and sustainability.
Not only that, these theories are based on an incomplete model of human needs. They only take into account our need for material survival – perhaps understandably, considering the widespread hunger and poverty in the Europe of their times. They failed to factor in that we humans have basic needs that go beyond material subsistence.
As we see all around us, current economic structures, policies, and practices are not adequately meeting humanity’s material needs, much less our needs for personal dignity, meaning, caring connection, and freedom from violence. To develop systems that better meet both these sets of needs, we need an economic theory based on a more complete understanding of evolution and our place in the unfolding drama of life on this Earth.
This theory must recognize that in the course of evolution both men and women developed an enormous capacity for caring, creativity, and consciousness – and that rules and practices that encourage rather than inhibit this capacity are foundational to an economic system that works for all. This is a very practical issue if we are to build economic systems that support the expression and development of those capacities that make us fully human: our great capacities for caring, consciousness, and creativity.
Including Short- and Long-Term Considerations
Moreover, we urgently need an economic theory that shows policy makers that they must take into account more than just short-term considerations. Many current economic rules, such as the U.S. Security Exchange Commission’s requirement of quarterly corporate reports, pressure businesses to focus only on the short term. Yet it’s clear that long-term planning is essential to protect our increasingly fragile ecological systems, that we need to consider the long-term effects of new technological breakthroughs, and that our children and grandchildren will suffer greatly unless we think further ahead. Long-term planning is also essential if societies are to make the necessary investment in the human capital needed for the post-industrial economy. And this investment, in turn, is a key factor in building a more equitable, less violent world for ourselves and generations to come.
To properly calibrate the value of economic activities, we also have to take into account their time-horizon. Economists use equations to determine value, and this time-horizon has been a missing factor in their theories and calculations. This is beginning to be recognized in relation to the enormous costs of running the current criminal justice system as compared to the costs of preventing crime through support for good caring and education. A partnerist economic theory must factor in the long-term consequences of every economic activity, both its actual costs (including human and environmental costs that are today “externalized” and borne by society) and the opportunity costs of lost potential (for example, in the case of crime, what a person could have contributed had there been more caring support).
A partnerist economic theory must also take into account what we are today learning about systems-self organization, and how economic rules and structures are in a constantly interactive feedback loop. It must explore what kinds of economic structures are both effective and equitable. It must also explore how the structure of economic institutions is related to the structure of other institutions such as families and governments. In short, a new economic theory must recognize that without changing the economic and social structures that lie behind uncaring policies, rules, and practices, we cannot expect a system that promotes long-term economic health, environmental sustainability, and equitable relations across the board.
Excerpted from The Real Wealth of Nations: Creating a Caring Economics by Riane Eisler