The 20th century was a difficult century for the utopian vision — the quest for an ideal society free from humanity’s chief miseries. The Communist revolutions in Russia and China were supposed to usher in egalitarian utopias where all social needs were met by benevolent state planning. Instead these Communist revolutions produced brutal authoritarian regimes where privileged bureaucracies ruled over the masses and lagged far behind the advanced West in meeting social needs.

In the advanced West, social democrats pursued a gentler utopian ideal that envisioned an egalitarian society of abundance with social control of the economy and enhanced democracy in the workplace and throughout society. But the welfare state model ran into troubles starting in the 1970’s as economic growth slowed and the inefficiencies of the system became ripe targets for conservative political forces. Support for the socialist ideal began to falter. The coup de grace was administered by the fall of the Soviet Union and the Eastern European states. Socialist societies turned their backs on the idea and embraced capitalism with gusto. Even Western European parties that still called themselves socialist abandoned any pretense that they were seeking to create an actual socialist society.

There was also a utopian impulse in America, though it had its roots in the more diffuse political traditions of liberalism and progressive reform. The idea here was that society could gradually perfect itself through a process of continuous reform that would weed out injustice and deliver prosperity for all. That idea came to a head with the Great Society of the 1960’s but sputtered out soon thereafter, battered first by counter-cultural and political radicalism and then by a nascent conservatism fueled, as in Europe, by economic problems that exposed underlying governmental inefficiencies. Over time, the liberal movement backed far away from the Great Society and its expansive vision of social justice and became resolutely focused on maintaining American social programs or, at best, their modest expansion.

Counter-cultural and political radicalism had their own utopian impulse of course. In the 1960’s, visions of society ranging from participatory democracy (Students for a Democratic Society) to communal bliss (hippies) to endless Marxist-Leninist revolution (Maoists) danced in the heads of young radicals. But such hubris did not survive the grimmer atmosphere of the 1970’s, not to mention the pressures of the life-cycle as these young radicals entered their thirties and forties.

As the Left’s utopian dreams faded, surging conservatives attacked vigorously. They argued that all of the left’s failings and especially its visions of a future society were attributable to their fundamentally unrealistic beliefs about human nature. People were selfish and acquisitive, not cooperative and solidaristic as the Left mistakenly believed. Therefore, the vision of society we should all strive for is a society without government and taxes where selfishness would be unleashed and individuals could shape their own destiny free of the oppressive hand of the state. This Ayn Rand-style libertarian utopia became an inspiration to legions of conservative activists.

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In a previous post, I wrote about the emerging view of human nature as fundamentally cooperative and group-oriented rather than simply self-interested as most conservatives believe.  I noted that this paradigm shift has important implications for progressives in a political sense.  We should not shy away from appeals to cooperative instincts and the common good because they are “fuzzy” and “soft”.  Instead they should be front and center because they touch something deep within our basic nature.

But that’s not all the implications of these new findings.  There are also very important implications for economic policy.  Start with middle class economics.  This school of thought, associated with progressive economists like Robert Reich, Joseph Stiglitz, Paul Krugman and progressive institutions like (ahem) the Center for American Progress, ties progressive policy proposals directly to the interests and capabilities of the middle class. Since the middle class as a group embraces a huge swathe of American society, this is a very promising framework for a group-oriented appeal.

The new theory of human nature also casts considerable doubt on the standard model of economics, based around neoclassical assumptions that people are solely motivated by self-interested concerns.  As we have just seen, they aren’t, which poses a rather fundamental problem for mainstream economics.  The problem deepens when the other key part of the standard economic model is recalled: people rationally, efficiently and effectively pursue that self-interest at all times, carefully calculating probabilities and assessing costs and benefits so they can get the best possible deal for themselves—like a sort of self-interested Mr. Spock.  People aren’t like that either, as the evolving science of behavioral economics has clearly established.

Behavioral economics has found, based on observation of actual people making decisions, that people don’t understand probability, under- and over-estimate risk, respond heavily to how choices are framed and generally fail, in a wide variety of contexts, to “rationally” pursue their goals.  These results, now widely accepted even within mainstream economics, have been well-summarized by Cass Sustein and Richard Thaler in their book Nudge and by Daniel Kahneman in his book Thinking Fast and Slow.

So we’re not purely self-interested and we do a spotty job of pursuing that self-interest when we try.  What does this say about standard models of the economy based on aggregating the assumed efficient, self-interested actions of millions and “proving” that everything works out for the best if those efficient, self-interested individuals are left alone?  Nothing good.

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She was wrong.

A broad breakdown in societal trust has undermined the idea of a common good that can be served by the collective disposition of resources. Voters trust neither government nor most individuals in society to fairly pursue the common good. Instead, they see both government and individuals as fundamentally selfish and out for themselves, not others.

This view of human nature has been a consensus until recently. That consensus can be traced back to the 1957 publication of Atlas Shrugged by Ayn Rand, a 1,200 novel that, in essence, advocated the unfettered pursuit of self-interest as the organizing principle for society. Despite the fact that the book became a best-seller, not many critics and intellectuals took it or its thesis seriously at the time. Who could possibly believe that a society based strictly on selfishness could work?

That skepticism was obliterated in the next several decades. One of the key blows was struck by evolutionary biologist Richard Dawkins, whose 1976 book, The Selfish Gene, argued that the gene is the fundamental unit of natural selection and has only one imperative: successfully reproducing itself in competition with other genes. We (and other animals), as bearers of these “selfish” genes, will therefore carry those traits — and only those traits –that help these genes reproduce. Dawkins implied that was all you needed to know to understand human nature, an idea that quickly led to an explosion of selfish gene-based explanations for every aspect of human behavior.

Then, in 1980, Milton Friedman, with his wife, Rose, published Free to Choose, a no-holds-barred polemic in favor of self-interested individuals making “rational”, unregulated decisions and against anything that interfered with this process, especially government action. So, in a powerful conjunction of economics and evolutionary biology, Ayn Rand’s glorification of selfishness gained the imprimatur of serious science. Being selfish was just human nature and should not be fought. Indeed, any attempt to do so was bound to do more harm than good. Thus was the original reaction to Atlas Shrugged turned on its head. Who could possibly believe that a society based on anything other than selfishness could work?

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