A Review of The Fair Society: The Science of Human Nature and the Pursuit of Social Justice, by Peter Corning
“Seeing every man, not only by Right, but also by necessity of Nature, is supposed to endeavor all he can to obtain all that is necessary for his conservation, he that shall oppose himself against it, for things superfluous, is guilty of the war that thereupon is to follow.” — Thomas Hobbes
In order to churn the sale of houses on Main Street and securities on Wall Street, thereby gobbling commissions and fees, investment bankers, mortgage lenders, rating agencies, real estate agents and insurance companies conspired to inflate a highly profitable housing bubble by peddling risky sub-prime mortgages and then bundling them with other mortgages, in order to create high yield residential mortgage-backed securities (RMBS) – later packaged as collateralized debt obligations (CDOs) – for Wall Street’s investors.
Perhaps “conspiracy” is too strong a word. Let’s just say that Adam Smith’s “invisible hand” was at work. As Smith wrote in The Wealth of Nations, “Man is… led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.”
Unfortunately for millions of Americans, this was one of those supposedly infrequent times when the unbridled self-interest of a few was worse for the “society that was not part of it.” In fact, it was disastrous for the entire country.
When a sufficient number of homeowners defaulted on their mortgages, the housing bubble collapsed. So did the stock market, bringing a massive loss of paper wealth in its wake. The collapse precipitated an economic death spiral which included a run on banks, a freezing of credit, a drastic reduction in consumer spending that caused a downturn in business activity that caused massive job losses that resulted in even less consumer spending, less business activity and more layoffs ad nauseam. The death spiral starved states, cities, townships, and schools of essential tax revenue.
Lacking revenue, public sector jobs were eliminated and an ugly political assault was launched on labor unions and public sector benefits by politicians pandering to the misplaced resentment of private sector employees. Resentment? Yes, having permitted private sector executives to eviscerate their defined benefit pensions over the past thirty years, these poor bastards were not about to pay higher taxes to allow public sector employees to keep theirs. (Sixty-nine percent of private sector employees had defined benefit pensions in 1979, seven percent have them today.)
As anyone living in this predatory parasitic plutocracy might have expected, both political parties and U. S. Presidents from both parties saw fit to use taxpayer money to bail out the plutocrats. Today, the latter are thriving as they unrepentantly suck up of more of America’s wealth, secure in the knowledge that they always can pocket their profits, while occasionally shifting their losses – especially if they are huge – to the public. (In 2009, for example, “nine of the big banks that received a total of nearly $175 billion in taxpayer bailout money…subsequently awarded themselves $32.6 billion in bonuses” [p. 125])
Sitting at home, collecting my comfortable, well-deserved defined benefit pension that allows me the leisure to read, think and write, I’ve been waiting to see whether a mentally disturbed member of our country’s massive sub-population of gun “enthusiasts” would attempt to fulfill Thomas Hobbes’s aforementioned prediction by declaring “war” on Wall Street.
Don’t get me wrong. As one who deplores gun violence and who would never own a gun, I’m gratified to see that gun violence has yet to bring down a single Wall Street “malefactor of great wealth.” But, I’m also in full agreement with that anonymous Senate staffer who suggested that all of Wall Street’s predatory activity would come to a screeching halt the minute one of its Masters of the Universe was sent to a real jail for his crimes and was forced to become another prisoner’s “bitch” (repeatedly taking it in the ass).
Nevertheless, I can’t avoid the suspicion that the only reason war has not come to Wall Street is because all of the deranged gun “enthusiasts” who normally would be all-too-willing to exercise their second amendment rights are either too stupid or too enthralled by the rich (or by capitalism in general) to properly identify the source of their misery. Recall that Adam Smith also wrote: “The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness.”
Moreover, the people smart enough to realize precisely who fleeced the country are generally not the people who own guns, let alone people who contemplate settling scores with guns. Such people are inclined to seek redress through the ballot box or the courts – knowing all the while that the malefactors of great wealth have tilted the scales of both.
It’s not fair. But, in fact, nothing in America has been fair since its exploitation by European invaders. Predators – whether they were Indian-killing, disease-carrying conquistadors, New England’s religious zealots who believed that the improvement of land automatically conferred ownership rights, slave-owning, plantation-exploiting racists, Indian-displacing whites oozing across the continent, captains of industry, robber barons and (especially) today’s mutant investment bankers – have prevented the creation of a “fair” society in either Colonial America or the United States.
As Ralph Waldo Emerson observed in 1841: “[T]he general system of our trade…is a system of selfishness; is not dictated by the high sentiments of human nature; is not measured by the exact law of reciprocity; much less by the sentiments of love and heroism, but is a system of distrust, of concealment, of superior keenness, not of giving but of taking advantage….”
Yet, we have lionized these predators in high school history textbooks and continue to lionize them in what passes for the political theory of today’s conservatives, libertarians and Ayn Rand cultists – thus perpetuating America’s moral corruption. They should be forced to recall that it was their darling, Adam Smith, who observed: “The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect, persons of poor and mean condition…[is]…the great and universal cause of the corruption of our moral sentiments.”
As the late Tony Judt demonstrated (in Ill Fares the Land) the United States is perversely exceptional. Compared with other developed countries, the U.S. is literally off the charts when it comes to extreme economic inequality and the social pathologies it generates. By a wide margin the U.S. has: (1) more economic inequality and homicides per million of population, (2) more economic inequality and mental illness and (3) more economic inequality and health/social problems than any other “developed” country in the world. As Professor Judt put it: “There is a reason why infant mortality, life expectancy, criminality, the prison population, mental illness, unemployment, obesity, malnutrition, teenage pregnancy, illegal drug use, economic insecurity, personal indebtedness and anxiety are so much more marked in the U.S. and the UK than they are in continental Europe.” [Judt. P. 18]
In 2006, 1% of Americans received 21.3% of the nation’s income. The next 19% received 40.1% and the bottom 80% of Americans received 38.6% of the nation’s income. In 2007, 36 million Americans suffered food deprivation, including 17 % of all children. It’s what we might call “Judt’s law:” “The wider the spread between the wealthy few and the impoverished many, the worse the social problems.” [Ibid.]
Thus, we hardly need Professor Corning to tell us that capitalism has failed in the United States. Failed? Yes, even after the Reagan-Bush era of deregulation and tax cuts for the rich — which Corning calls our closest approach ever to the capitalist ideal — capitalism has failed in its basic (utilitarian) promise to enhance the “greatest good of the greatest number.” [p. 118] Worse, capitalism in America “is in denial (or at least obtuse) about our basic survival needs. It rejects the very principle of distributive justice.” [p. 126]
“As one digs deeper into the national character of Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?” Alexis de Tocqueville
“The purely economic man is indeed close to being a social moron.” Amartya Sen
Just what is a fair society? According to Professor Peter Corning, a fair society takes into account and balances the needs, interests, and rights of all parties. [p. 16]
In addition to countries like Sweden, which Corning calls “capitalism with a social conscience,” fair societies have existed in the past and exist in remote corners of the world today. Called hunter-gatherer societies, they have exhibited “a consistent pattern of close cooperation, sharing and reciprocity.” They also exhibited “relatively few differences in material possessions.” [p.39] As such, they powerfully demonstrate “that the value system of modern market capitalism does not reflect ‘human nature.’” [Ibid.]
Nevertheless, with the gradual domestication of agriculture and the emergence of horticultural and, then, agricultural societies, a food surplus was generated that allowed permanent settlements and, thus, an accumulation of goods. Such food surpluses also fostered the emergence of specialists – political, religious, military and craft specialists – who delivered their services and goods in exchange for part of the farmers’ surplus food.
Unfortunately, but perhaps naturally, a few of the specialists employed their skills to seize more than their fair share of the surplus. According to Bruce Trigger (writing inUnderstanding Early Civilizations): “A defining feature of all early civilizations was the institutionalized appropriation by small ruling groups of most of the wealth produced by the lower classes.” [p. 375] (The best book on the subject of the appropriation of surpluses and the rise of exploiting classes in horticultural, agricultural and industrial societies is Gerhard E. Lenski’s Power and Privilege: A Theory of Social Stratification.)
Yet, notwithstanding the proliferation of unfair societies, Professor Corning notes that as many as twenty research domains in ten academic disciplines have shed light on the essential role that a sense of fairness still plays in human behavior.
In the research domain of experimental and behavioral economics, for example, the results coming from experiments called “ultimatum games” are especially persuasive. As Corning describes them, “In the typical ultimatum experiment, two players have different assignments. One player is given a quantity of money and is directed to share a portion of it at his or her discretion with the other player, subject only to the proviso that, if the recipient thinks the percentage split is too low, he or she can reject the offer and then both participants will lose out on the reward.”
“Now, classical economic (rational self-interest) theory would predict that the sharers will offer the lowest possible amount – maybe 10 percent or less – and that the recipients will accept whatever share they can get because it is better than nothing. But this doesn’t happen as a rule. Typically sharers will offer about half of the amount, and recipients will reject offers of 30 percent or less. In other words, both participants are operating out of a sense of fairness and, most surprising, recipients will altruistically sacrifice a reward in order to punish someone who acted unfairly.”
Thus, Professor Corning concludes: “The ultimatum research represents one of the most stunning confirmations we have that a sense of fairness is universal in the human species.” [p. 82]
Other studies, addressing individual personality differences, “showed that somewhere between 40 and 60 percent of study participants preferred reciprocity in their relationships, whereas 20 to 30 percent were highly self-centered and insensitive to the needs and rights of others.” [p. 124] Unfortunately, “the ‘free market’ capitalist system favors the one-third who are the most acquisitive and egocentric and the least concerned with fairness and justice.” [p. 125]
Thus, having produced evidence to demonstrate: (1) today’s predatory capitalism has failed most of American society and (2) the science of human nature indicates that most human beings prize fairness and the Golden Rule in their societies, Professor Corning then sets out to establish the precepts by which a future fair society would operate. He calls it the “biosocial contract.”
His first precept establishes absolute “equality” when it comes to meeting the basic needs of every member of society. As Thomas Hobbes put it, “we retain the right to self-preservation, which includes ‘the use of fire, water, free air, and a place to live in…[and] all things necessary for life.’” [p. 155]
Professor Corning identifies 14 basic needs which, if not met, inevitably result in personal harm, if not death. A fair society has an unqualified social obligation to satisfy these needs because “our basic needs are not a matter of free choice…Life is prior to liberty, and prior to property.” [pp. 154-55]
To live according to this first precept in the United States would require that much of the surplus currently appropriated by a few would be returned to the worst of the suffering many. As Mahatma Gandhi put it, “the rich must lead a simpler life so that the poor can simply live.”
Corning’s second precept builds upon the first by distributing the remaining surplus wealth to members of society on the basis of “equity.” Thus, like capitalism in its purest (almost always theoretical) form, people would be rewarded for risks taken and skills, talents, efforts, and capital invested. Thus, it explicitly recognizes the power of the invisible hand of self-interest to generate wealth in free markets.
Corning’s third and final precept would establish “reciprocity.” Every member of his fair society would be under an obligation to give something back to society for the benefits he has received. Without reciprocity, some members of society would become free riders, drones (if you will), who force other members to become “involuntary altruists.” [p. 160]
As Corning notes, “We are more grudging as a society about aiding the poor and their children because we know that many of them can contribute in various ways.” [p. 163] It’s up to our fair society to demand such reciprocity.
Unfortunately, as good as Corning’s precepts sound, his book is less persuasive when prescribing how Americans might transition from our highly unfair society to his fair society. Full employment at socially useful jobs at a living wage – even if the jobs are created by government — is “the single most important first step.” [p. 171]
After that, Corning advocates a tethering of the private sector to the “collective survival enterprise” of society and “lifelong public service obligations” (reciprocity) as the second and third legs of the stool that supports a fair society.
How do we go about creating the legs of the stool that support a fair society? According to Professor Corning: “What is needed is a collective (democratic) decision by the 70 percent who are fair-minded to impose the needed changes on the retrograde 30 percent, rather than allowing them to dictate the rules of the game.” [p. 190]
But, his prescription begs the question: “Why would the 70 percent decide to impose changes now, after failing to impose such changes for centuries?” For all their longings for fairness, that 70 percent appears to suffer from “Stockholm syndrome” in the thrall of the 30 percent. Nothing short of a complete social collapse or a show trial that puts one or more of Wall Street’s predators in a real jail – and subjects them to real buggery — will break that spell.
Walter C. Uhler is an independent scholar and freelance writer whose work has been published in numerous publications, including The Nation, the Bulletin of the Atomic Scientists, the Journal of Military History, the Moscow Times and the San Francisco Chronicle. He also is President of the Russian-American International Studies Association (RAISA).