There’s a remarkable post up today at Marginal Revolution on the general theme of what you might call the “alleged imperialism of economics” (link)—remarkable in that it gives some high-saliency opportunities to explore this (perhaps shopworn?) topic. Let me quote at length:
1. I cherish my consumer surplus. I value most of the stuff I buy way more than what I have to pay for them; vanilla ice cream makes me happy beyond belief, and the same is true for the music of Dream Theater and the (soon to be purchased) Apple iphone. And what am I asked to pay for them? Peanuts.
2. I cherish my producer surplus. I am getting paid way, way more than the salary that would make me indifferent between supplying labour and staying at home.
3. I never have regrets: I did the best I could given the information available to me at the time. Judging I could have done better using information I acquired at a later date makes as much sense as regretting the existence of gravity. On a related topic, I understand the irrelevance of sunk costs.
4. While I do care for my welfare in relative terms, my welfare in absolute terms looms large in my utility function - and, boy, look how its value has been growing.
5. The selfishness of my fellow human beings does not make me anxious or depressed. Adam Smith (or was it Mandeville?) taught me that humans, selfish as they are, can make happy societies. And perhaps more to the point, they can make me happy.
Note that these are offered not just as “general” propositions, or even as “economic” propositions, but as evidence of why “economics” should make us “happier” (bear with me on all those quotation marks).
There are so many ways you could go with this, but let me see if I can limit myself to two. First, the question whether and to what extent the knowledge (wisdom? Insight?) here imparted is “economics” and to what extent it is “just stuff.” Example: I agree that I enjoy a lot of “consumer surplus.” But I learned years ago that one should always be more alert to what fate has granted than what it has denied (I have heard it attributed to Gratian, but I can’t pin it down). Similar with “producer surplus.” I thank heaven every day that I don’t get paid what I’m worth—or more generally, thank heaven there is no justice in the world. Somewhat similar with selfishness. Over a long and not very corrupt life, I have indeed learned that people are not quite as nice as I thought they were when I basked in the benign Christian socialism of my childhood. Mandeville (and Smith) may have given particular bite to the idea—but recall that neither Mandeville nor Smith was an “economist,” in that economics had not been invented yet.
So much for ## 1, 2 and 5. ## 3 and 4 are a bit more complicated. First, three:
3. I never have regrets: I did the best I could given the information available to me at the time. Judging I could have done better using information I acquired at a later date makes as much sense as regretting the existence of gravity. On a related topic, I understand the irrelevance of sunk costs.
Well—sure. This is perhaps a sensible way to behave. The interesting fact is that there are many people – economists and others—who believe it in a general way, and yet have regrets. The really interesting question is what triggers people to sustain those regrets even when they, ahem, “know better.”
Similar with #4:
4. While I do care for my welfare in relative terms, my welfare in absolute terms looms large in my utility function - and, boy, look how its value has been growing.
Sure, fine. But how hard (apparently) it is for people to think that way, and how persistent (apparently) they are in thinking otherwise. The interesting task is not simply to declare the proposition more loudly, but to inquire into the source of the resistance.
Which brings me, perhaps, back for a second swipe at #5: “The selfishness of my fellow human beings does not make me anxious or depressed.” As others wiser than I have noted, this is not, strictly speaking, an empirical proposition. If I believe it is okay to be selfish, then I may become more selfish—which my foreclose any inquiry into a world where selfishness does not prevail.
I don’t know where all this leaves me except to say that the outer marches of economic imperialism are a poorly charted and mysterious frontier. Let me end with two quick offerings, perhaps the same offering in two different forms.
· One, I was having lunch with my friend Emma when she was talking about the “non-economic” content of social theory. I remarked that the economists were beginning to believe that there is no non-economic content; that it is all explainable in terms of their models.
“No, no,” said Emma, “you’ve got it backwards. It is the economics that is being swallowed by everything else.”
· And two, a line I remember reading somewhere in the work of Jean Piaget: it may be that psychology will someday come to look like mathematics, but if so, then both psychology and mathematics will look different from what they look like today.
No comments:
Post a Comment