This is an interesting discussion about the Neo-Liberal myth of the Self-Made Man. The myth is not unlike the myth of the Adam Smithian Barter Savage myth that Polanyi critiques in his criticism of Neo-Liberal ideology. The common thematic thread the two myths share is that these myths are designed to provide ideological justification and therefore acceptance of wealth inequality and commodifization of money in a self-regulating economy.
Ren mentioned an important aspect of ideological justification of this particular kind of Smithian market capitalism:
The argument is part of modern day economics, which was supposed to be a scientific endeavor to explain the underlying scientific principles behind this concept, and Adam Smith is credited with being the perpetrator of this so-called science. Because it's considered a science, it fits with the classical liberal trend towards rationalism, which is given credence as being the basis for an advanced society, towards which some people see humanity moving in a progressive fashion.
Science plays an important role in laying the foundations of Neo-liberalism ideology so as to be accepted as true by society, and to resist criticism when markets fails. Polanyi examines another important myth which combines the concepts of self-regulation, and competition that are the submerged assumptions of the Self-Made independent individual myth. Polanyi recounts Joseph Townsend’s belief that political economy should be based on human science: specifically, the theorem of the goats and dogs.
Townsend’s Dissertation, ten years afterward, centered on the theorem of the goats and the dogs. The scene is Robinson Crusoe’s island in the Pacific Ocean, off the coast of Chile. On this island Juan Fernandez landed a few goats to provide meat in case of future visits. The goats had multiplied at a biblical rate and became a convenient store of food for the privateers, mostly English, who were molesting Spanish trade. In order to destroy them, the Spanish authorities landed a dog and a bitch, which also, in the course of time, greatly multiplied, and diminished the number of goats on which they fed. “Then a new kind of balance was restored,” wrote Townsend. “The weakest of both species were among the first to pay the debt of nature; the most active and vigorous preserved their lives.” To which he added: “It is the quantity of food which regulates the number of the human species.” We note that a search* in the sources failed to authenticate the story. Juan Fernandez duly landed the goats; but the legendary dogs were described by William Funnell as beautiful cats, and neither dogs nor cats are known to have multiplied; also the goats were inhabiting inaccessible rocks, while the beaches—on this all reports agree—were teeming with fat seals which would have been a much more engaging prey for the wild dogs. However, the paradigm is not dependent upon empirical support. Polanyi, Karl (2001-03-28). The Great Transformation: The Political and Economic Origins of Our Time (pp. 117-118).
Townsend constructs a paradigm, or ideological model of the behavior of animals to provide a “scientific” explanation of how human beings behave in a self-regulated market.
But on the island of Juan Fernandez there was neither government nor law; and yet there was balance between goats and dogs. That balance was maintained by the difficulty the dogs found in devouring the goats which fled into the rocky part of the island, and the inconveniences the goats had to face when moving to safety from the dogs. No government was needed to maintain this balance; it was restored by the pangs of hunger on the one hand, the scarcity of food on the other. Hobbes had argued the need for a despot because men were like beasts; Townsend insisted that they were actually beasts and that, precisely for that reason, only a minimum of government was required. From this novel point of view, a free society could be regarded as consisting of two races: property-owners and laborers. The number of the latter was limited by the amount of food; and as long as property was safe, hunger would drive them to work. No magistrate was necessary, for hunger was a better disciplinarian than the magistrate. To appeal to him, Townsend pungently remarked, would be “an appeal from the stronger to the weaker authority.”... The paradigm of the goats and the dogs seemed to offer an answer. The biological nature of man appeared as the given foundation of a society that was not of a political order. Thus it came to pass that economists presently relinquished Adam Smith’s humanistic foundations, and incorporated those of Townsend. Malthus’s population law and the law of diminishing returns as handled by Ricardo made the fertility of man and soil constitutive elements of the new realm the existence of which had been uncovered. Economic society had emerged as distinct from the political state. ... Since the emerging society was no other than the market system, human society was now in danger of being shifted to foundations utterly foreign to the moral world of which the body politic hitherto had formed part. The apparently insoluble problem of pauperism was forcing Malthus and Ricardo to endorse Townsend’s lapse into naturalism. (Ibid.,pp. 119-121)
Not only does the myth of the goats and dogs provide a perceived “scientific” justification of minimizing the role of government in protecting society against the vicissitudes of market imbalances like unemployment, hunger, and poverty, but the mythos “naturalizes” these inhuman conditions by argument of analogy, “The laws of commerce were the laws of nature and consequently the laws of God.” (Ibid., 122). Neo-Liberalism posits that society is to be organized according to this myth of zoological determinism!
The Malthusian law of population reflected the relationship between the fertility of man and that of the soil. In both cases the forces in play were the forces of Nature, the animal instinct of sex and the growth of vegetation in a given soil. The principle involved was the same as that in the case of Townsend’s goats and dogs: there was a natural limit beyond which human beings could not multiply and that limit was set by the available food supply. Like Townsend, Malthus concluded that the superfluous specimens would be killed off; while the goats are killed off by the dogs, the dogs must starve for lack of food. With Malthus the repressive check consisted in the destruction of the supernumerary specimens by the brute forces of Nature. (Ibid., pp. 130-131.)
Malthusian population law and the law of diminishing returns provide ideological justification for allowing a large part of society to starve without intervention because it is the “natural” state of things—the law of Nature that is built on a myth. Such is the power of ideological propaganda. What Malthusianism failed to take into account is that an increase in population not only is followed by an increase in the demand for food, but a parallel increase in productive labor power. Also, the accumulation of cultural knowledge in the arithmetical production of food can overcome the geometricalgrowth of population. Hunger in the market system often is the result of overproduction of food- market surplus- rather than market scarcity.
Within Ricardo’s system itself the naturalistic and the humanistic factors coexisted which were contending for supremacy in economic society. The dynamic of this situation was of overwhelming power. As its result the drive for a competitive market acquired the irresistible impetus of a process of Nature. For the self-regulating market was now believed to follow from the inexorable laws of Nature, and the unshackling of the market to be an ineluctable necessity.(Ibid., p. 132).
This perceived scientific and naturalistic myth is actually an irrational reified philosophy that distort experience. Society (Community) and the Subject (Individual) are distorted according to narrow political interests by subtracting the community’s complexity and history through ideological abstraction. I wrote earlier about this radical abstraction and how ideological systems can invert the relationship between market concepts and experience, “The upside-down relationship between society and this doctrine of self-regulating markets-placing markets above society- is a strong analogy in my mind with the debate during the early 1900’s of the epistemological status of mathematical logic in philosophy. Yes, there is a strong parallel with the Logical Absolutism of Husserl and Bertand Russell that understood mathematics and logic as referring to ‘some-thing.’” In Adorno’s “Negative Dialectics” he makes this same connection between the abstractions of logic and the abstractions of “vulgar” economic theory:
In full-blooded critical theory mode Adorno discerns parallels between Husserl's view of the status of logic and those of "vulgar economic thought" (ME 72/65). (1) Both logical absolutism and vulgar economic thought see an intrinsic significance in some particular thing-logical validity and the value of goods respectively-failing to realize that these significances have social origins (ME 72/65). (2) There is also the residuum parallel. In just the same way as the "value" of a commodity is what remains once all of the production costs are subtracted pure logical validity is what remains once the agency of subjectivity is factored out (ME 76/70).Brian O'Connor. Adorno's Negative Dialectic: Philosophy and the Possibility of Critical Rationality (Studies in Contemporary German Social Thought) (p. 137).
Adorno uses the language of Subject-Object epistemology to explain reification: the subject is the knower, and the object is the known. The subject is consciousness, and the object is external to the subject, but grasped by a concept. The concepts of the market, the individual, or freedom are a complex of multiple concepts unique to its cultural history. Cultural concepts are composed of a
...historically sedimented character: an accumulation of uses and meanings. The picture of objects that emerges from this idea of "sedimented history" is that of objects as a complex of concepts. These concepts are acquired and accumulated in the history of the object's position in what Adorno terms the social totality.... (Ibid,. p. 59).
Adorno take the idea(s) of freedom to show what he means by social totality of the concept of freedom:
To take an example of a purely conceptual object discussed by Adorno (ND 153-154/150-151), the concept of freedom is a human invention and it has various connotations. Clearly these connotations have arisen from the efforts of people-not least of philosophers-to articulate a theory of freedom: yet the notion of freedom, which comprises the complex of its various connotations, cannot be reduced to the intention of any individual. Ideas of freedom have arisen through the activities of subjects and they are sustained in the social totality as experientially independent of subjects.... By virtue of the significance of the object in the social totality its meanings necessarily transcend the individual subject.(Ibid.,(p. 60).
Yet, freedom in the reified theory of the self-regulated market is reduced to a “market view of society which equated economics with contractual relationships, and contractual relations with freedom.”(Polanyi, p. 266).
Reified concepts result in a reified intellectual life in which experience is distorted and impairs our ability to articulate the complexity of our own lives and world. Reification is radical objectivism that reduces the irreducible object to a limited false concept. Reification is a false consciousness that embraces a “Naive Realism” that gives epistemological validation to reified assumptions in which “the object is independent of subjectivity and is apprehended as it is in-itself. It presents the order of knowing as a fully given object being passively received by a subject.” (Adorno, p. 50.) Radical empiricism, or positivism, is distinguished as an epistemology of the passive subject, or passive knower that merely collects data. The reified consciousness cannot conceive of objects that are not reducible to pre-fabricated concepts.
More on the topic of reification see: