The Economist's View of the World (an Introduction)
I plan to re-read The Economist's View of the World by Steven Rhoads this summer. First, an introduction.
The Economist's View of the World is among my favorite reads on economics. Originally published in 1985, Rhoads' reflections have aged well. His work is humanistic in the best sense of the word, pausing to consider nuances of the human experience that many other economists would ignore (Chapter 3, on marginalism, reflects on a Wordsworth poem at length). For Parts I and II of the book, Rhoads defends the discipline of economics against misguided critics. In Part III, though, he suggests that the "economist's view of the world" misunderstands key elements of human life and society.
The complaint that economists put too much faith in calculators and base their models on unrealistic assumptions about human nature is hardly unique to Rhoads -- it's been made frequently in books and think-pieces from all over the political and intellectual spectrum. The entire field of behavioral economics is based on a similar set of observations. Rhoads and other humanist critics, though, have a more profound set of questions for the discipline.
Behavioral economists like Daniel Kahneman and Richard Thaler, for instance, persuasively attack the homo economicus model at play in many models of human behavior. (This is the practice of assuming humans are perfectly rational and perfectly informed utility maximizers when modeling economies). Kahneman and others point out in response that humans are frequently irrational -- and irrational in predictable ways. Joe, like most Americans, is more likely to buy the same food in green packaging than in yellow packaging. ∴ Joe =/= homo economicus.
But where these economists draw on psychology to question economic axioms, humanist critics of the field ask deeper questions about human nature. Should policymakers/economists/neighbors pass judgment on Joe for spending his time and money on Clash of Clans microtransactions instead of King Lear? The simplest version of neoclassical theory tells us that Joe is the best judge of what will maximize his "utility." But does a human society that is glued to smartphones and neglects the arts and higher learning really "maximize utility"? Is "utility" the most appropriate measuring of flourishing? If our actions in this world have deep ethical and spiritual significance, how else should Joe analyze his economic behavior? We might call these type of questions "humanist economics."
I've obviously just scratched the surface here of "humanist economics," and I can imagine a careful economist rolling her eyes at several of these questions (which may also seem, at this point, totally unrelated). There are many tools in the modern economic toolkit which appear to adequately explain away this brand of concern about human complexity. Materialists or positivists may also want to exclude metaphysical considerations as a matter of procedure. If economics is a "science" in certain modern versions of the term, you'd better leave your philosophy books at the door to get past the bouncer.
Rhoads and others suggest that economics ought to take its place among the humanities, and that economists cannot escape what is perhaps the most enduring question of all: what does it mean to be human? One can find this observation in the work of Tomas Sedlacek, Marilynne Robinson, and Wendell Berry (among many others). And perhaps these sorts of questions are most appropriate to a discipline founded by men who viewed themselves as moral philosophers.
The Economist's View of the World is among my favorite reads on economics. Originally published in 1985, Rhoads' reflections have aged well. His work is humanistic in the best sense of the word, pausing to consider nuances of the human experience that many other economists would ignore (Chapter 3, on marginalism, reflects on a Wordsworth poem at length). For Parts I and II of the book, Rhoads defends the discipline of economics against misguided critics. In Part III, though, he suggests that the "economist's view of the world" misunderstands key elements of human life and society.
The complaint that economists put too much faith in calculators and base their models on unrealistic assumptions about human nature is hardly unique to Rhoads -- it's been made frequently in books and think-pieces from all over the political and intellectual spectrum. The entire field of behavioral economics is based on a similar set of observations. Rhoads and other humanist critics, though, have a more profound set of questions for the discipline.
Behavioral economists like Daniel Kahneman and Richard Thaler, for instance, persuasively attack the homo economicus model at play in many models of human behavior. (This is the practice of assuming humans are perfectly rational and perfectly informed utility maximizers when modeling economies). Kahneman and others point out in response that humans are frequently irrational -- and irrational in predictable ways. Joe, like most Americans, is more likely to buy the same food in green packaging than in yellow packaging. ∴ Joe =/= homo economicus.
But where these economists draw on psychology to question economic axioms, humanist critics of the field ask deeper questions about human nature. Should policymakers/economists/neighbors pass judgment on Joe for spending his time and money on Clash of Clans microtransactions instead of King Lear? The simplest version of neoclassical theory tells us that Joe is the best judge of what will maximize his "utility." But does a human society that is glued to smartphones and neglects the arts and higher learning really "maximize utility"? Is "utility" the most appropriate measuring of flourishing? If our actions in this world have deep ethical and spiritual significance, how else should Joe analyze his economic behavior? We might call these type of questions "humanist economics."
I've obviously just scratched the surface here of "humanist economics," and I can imagine a careful economist rolling her eyes at several of these questions (which may also seem, at this point, totally unrelated). There are many tools in the modern economic toolkit which appear to adequately explain away this brand of concern about human complexity. Materialists or positivists may also want to exclude metaphysical considerations as a matter of procedure. If economics is a "science" in certain modern versions of the term, you'd better leave your philosophy books at the door to get past the bouncer.
Rhoads and others suggest that economics ought to take its place among the humanities, and that economists cannot escape what is perhaps the most enduring question of all: what does it mean to be human? One can find this observation in the work of Tomas Sedlacek, Marilynne Robinson, and Wendell Berry (among many others). And perhaps these sorts of questions are most appropriate to a discipline founded by men who viewed themselves as moral philosophers.
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