I don’t mean to give you the full Dierdre McCloskey treatment, but economists are social scientists, and the first word of that phrase implies that the humanities have something to teach our field. Let’s lay aside all of the great quotes in this short book – my favorite is that complete economic satisfaction when man has nothing to do “but sleep, eat gingerbread, and worry about the noncessation of world history” – and consider an argument running through the text which is directly applicable to economic methodology.
Economics, inherent in its methodology, is a normative science. Even when an econ article is deliberately positive – “if people act as if they have a utility function, then the following choices will result” – the overwhelming majority of articles make assumptions such as “utility is increasing in money”. These types of assumptions are not controversial within the class of rationalist theories of human action. Indeed, many economists, famously Savage, considered deviations from rationalism, such as dynamic decisionmaking which does not respect Bayes’ Law, to be mistakes when they occur, and further to be mistakes which ought be cured with better education.
Notes from the Underground famous suggests an alternative, existential argument for human action: the very existence of a rational utility function which might be maximized causes people to act contrary to that function. There is a great word in German expressing this sentiment: Weltschmerz, literally “world-ache”, or the ennui which sets in when a person feels that their actions are too intentional, too preordained. Here’s the relevant quote from Dostoevsky, understanding “profit” to mean what we economists mean by “utility”:
“What is to be done with the millions of facts testifying to how people knowingly, that is, fully understanding their real profit, would put it in second place and throw themselves onto another path, a risk, a perchance, not compelled by anyone or anything, but precisely as if they did not want the designated path, and stubbornly, willfully, pushed off onto another one…And what if it so happens that on occasion man’s profit not only may but precisely must consist in sometimes wishing what is bad for himself, and not what is profitable?” (Part I, Section VII)
I don’t mean to endorse an existentialist view of social science here (I’m fully onboard with the analytic school), but merely wish to note that economics takes a number of very strong philosophical positions; in this case, that people are intentional, that they are intentional in a way consistent with maximizing some goal, and that they ought be so.
http://www.gutenberg.org/ebooks/600 (Project Gutenberg free ebook version; there are nicely formatted free versions for Stanza on your smartphone, as well as for ebook readers)
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