Perspective: "Animal spirits," spirituality, and the economic crisis

In Brief: 
  • Economists increasingly study psychological factors, dubbed "animal spirits"
  • The spiritual reality underlying human nature must also be considered
  • The Bahá'í writings offer distinctive spiritual insights into economic issues
  • Among them is that human beings are not wholly driven by self-interest

Events over the course of the last year have made economics a prime topic everywhere, from the global commons to the village square.

Traditionally, economics has been a dry subject. Defined as a social science, its practitioners have largely sought to reduce forces that govern the material well-being of human society to mathematical formulas.

The prevailing view was that economic behavior was driven by an "invisible hand" that stemmed from a rational human response to incentives.

More recently, however, economists have increasingly examined the psychological, sociological, and other "human" factors that drive economic processes.

The current crisis - with its excesses of debt, risk, and selfishness - has only accelerated this examination. As New York Times columnist David Brooks put it recently, how was it that "so many people could be so stupid, incompetent and self-destructive all at once?"

The idea that rational self-interest is not the only factor in describing economic behavior was long ago discussed by John Maynard Keynes. In the 1930s, he used the term "animal spirits" to describe emotions or factors beyond self-interest that affect economic behavior, such as optimism.

But as experts and laymen alike ponder the new directions in economic science - not to mention the causes of and remedies to the current crisis - it may be helpful to give extended consideration to yet another factor: the spiritual side of economic reality.

Bahá'ís understand that virtually all aspects of human behavior and interaction are in part governed by the fact that human nature has two aspects: a material side and a spiritual side.

Commonly referred to as the soul or spirit, the spiritual aspect of human nature is that within us that seeks to know and to love, that engenders bonds of affection and cooperation, and that encourages self-sacrifice and other kinds of altruistic behavior that are, in fact, at the foundation of successful human society.

Such ideas are found in virtually all of the world's religions - and those religions have often sought to apply them to the economic sphere, in ways that range from Islamic teachings on the charging of interest to Christian teachings on charity.

Yet, among the independent world religions, the Bahá'í Faith is distinctive for the degree to which its sacred writings offer manifold and often quite specific teachings on economics and economic concerns.

Foremost, is the Faith's emphasis on global interdependence - a subject that has been extensively written about on these pages. Like so many of the problems facing humanity, the economic crisis demonstrates once again the overriding interconnectedness of all peoples and nations.

Not just self-interest

Another teaching that relates to economics is the idea that human beings are not wholly driven by self-interest.

"It is in the glorification of material pursuits… that we find the roots which nourish the falsehood that human beings are incorrigibly selfish and aggressive," wrote the Universal House of Justice in 1985. "It is here that the ground must be cleared for the building of a new world fit for our descendants."

The Bahá'í writings offer hope that altruistic or other socially minded impulses can be brought to bear in encouraging material well-being - and that such impulses can be encouraged through spiritual practices, such as prayer, reflection, and community service.

"The supreme need of humanity is cooperation and reciprocity," wrote Abdu'l-Bahá. "The stronger the ties of fellowship and solidarity amongst men, the greater will be the power of constructiveness and accomplishment in all the planes of human activity. Without cooperation and reciprocal attitude the individual member of human society remains self-centered, uninspired by altruistic purposes, limited and solitary in development…."

But more than just broad principles, the Bahá'í writings also offer concrete suggestions about how to bring such ideals into practice.

One example is the idea that work should be elevated to the level of worship.

Bahá'u'lláh writes: "We have graciously exalted your engagement in such work to the rank of worship unto God, the True One. Ponder ye in your hearts the grace and the blessings of God and render thanks unto Him at eventide and at dawn. Waste not your time in idleness and sloth. Occupy yourselves with that which profiteth yourselves and others."

This designation is unique in religious scripture and has manifold economic consequences. It affirms, for example, that motives beyond material self-interest must be considered - and can be encouraged. As well, the idea that excellence in one's work or craft is also a means for spiritual growth in many ways more effectively addresses problems of quality, output, or corruption than regulation or other "materialistic" incentives and methods.

The Bahá'í writings also promote profit-sharing between the owners and the workers in any enterprise. Again, that such an idea is encouraged in the sacred writings of a religion elevates it to a new social and spiritual level, opening the door to greater cooperation and harmony not only in the field of labor relations but in society generally.

Economists have already observed that profit-sharing and employee ownership not only create more justice in the workplace but also result in improved business performance. Elevating it to a matter of spiritual principle gives the employers a new incentive to share corporate success with their employees.

A further issue is how moral values and practices affect economic decisions. The Bahá'í writings - like those of all the world's major independent religions - stress the overriding importance of trustworthiness, honesty, justice, and purity of motive.

Lack of morality at heart of crisis

Indeed, economists have also long acknowledged that issues of trust, integrity, and fairness are at the foundation of efficient transactions - and their absence lies at the heart of the current crisis.

In their recent book Animal Spirits: How Human Psychology Drives the Economy, and Why it Matters for Global Capitalism, economists George Akerlof and Robert Shiller argue that issues of corruption and fairness - among other psychological and sociological factors - are far more important to economics than is widely acknowledged, and that such factors are hugely responsible for the current economic crisis and must be understood to effect a full recovery.

Research has shown, they say, that an individual's concern for fairness has a major effect on his or her economic decision-making, beyond the simple monetary value of a particular transaction.

"Considerations of fairness are a major motivator in many economic decisions and are related to our sense of confidence and our ability to work effectively together," write Akerlof and Shiller.

Other economic ideas promoted in the Bahá'í writings include advocacy of a single global currency and unfettered international trade. They stress moderation in all things, including the charging of interest on loans.

It is important to point out that Bahá'ís don't interpret their sacred writings as offering some kind of new economic system. Rather, they believe that application of spiritual principles to economic systems can provide critical insights in adjusting economic relationships in the world.

Beyond the realm of economics, the Bahá'í writings offer a broad vision of how to create a just, prosperous and sustainable future for all of humanity.

They emphasize the importance of economic justice, stressing the spiritual necessity of working to eliminate extremes of wealth and poverty. They also outline a new system of global governance that takes the welfare of all humanity into account, stress the importance of efforts to promote moral leadership at all levels, and emphasize the need to eliminate prejudice against women and minorities, which beyond their innate injustice are an economic drag on everyone.

The way out of the economic crisis, then, might be summarized by this quote from Bahá'u'lláh: "Let your vision be world-embracing, rather than confined to your own self."