Tuesday, January 6, 2015

Christina McRorie — The Emptiness of Modern Economics: Why the Dismal Science Needs a Richer Moral Anthropology

It’s tempting to conclude that Piketty understands and delivers what the public wants from economics: a return to classical political economy. More than a few reviews of his work make this exact claim; he’s been hailed as the Smith, Mill, or Marx the twenty-first century has been waiting for. 
If only it were true. Or, to be fair, completely true. Piketty’s work is certainly a welcome step in the right direction, but it doesn’t make him the new Adam Smith. Empirical attention to the sweep of history was not the only thing that enabled the grand theorists of classical political economy to make sense of market life for their readers. The other half of what made political economy—the forerunner of economics—so compelling was its ability to take on “big questions” by connecting economic matters with moral and philosophical concerns, often by way of what might be called moral anthropology. 
For those longing for a revival of political economy in the tradition of Smith, even Piketty’s remarkable turn to richer data doesn’t fully satisfy their hunger for a fully worked out exploration of the connection between economics and larger philosophical and moral questions. These questions are about more than mere markets and politics; they pertain directly to the moral dimensions of economic life.

Because early economists such as Smith (1723–90) were also moral philosophers, they took up such questions naturally. They assumed that theories of justice and normative reflections on society were inseparable from their theories about pricing, the distribution of resources, and national wealth. They assumed that their field could advance only if all such concerns were part of a seamless whole.
 
This may seem a surprising history for a discipline that has long been known as the “dismal science,” on the grounds that its business is to make gloomy statistical predictions backed with the authority of science. The little-known origin of the phrase, however, had to do precisely with philosophical arguments over anthropology, and nothing at all to do with statistics. Nineteenth-century historian Thomas Carlyle used the term in a pro-slavery essay to attack the profession of political economists such as John Stuart Mill, who supported slave emancipation on the basis of their egalitarian beliefs about human nature.2 It’s a mark of how much economics has changed that—rather than serving as a badge of honor—the title now generally conveys a sarcastic commentary on the discipline’s total lack of philosophical, or humanistic, aspirations.…
Are humans intrinsically self-interested or selfish? And if so, does this nature participate in some larger order—either spontaneous or divinely planned—in which self-interest invariably redounds to public benefit? Can we be described, without remainder, as rational utility-maximizing actors? Or does this characterization fail to capture, in some real manner, the complicated way in which our selves are morally constructed, and the complicated ways in which our behavior develops? And, inching toward more modern issues, is it really the case that interpersonal utility comparisons are impossible to make, and fruitless besides?

We can’t push these questions aside. Nor should we. They float around, behind, and beneath most of our conversations about market orders, wealth inequality, and the future of capitalism. And this is so precisely because the discipline of economics cannot avoid being about human nature and human behavior. As much as a century after Adam Smith, economists still took this for granted. In 1890, economist-philosopher Alfred Marshall opened his famous textbook,Principles of Economics, with the claim that
Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing. Thus it is on the one side a study of wealth; and on the other, and more important side, a part of the study of man.26
 
The fact that economics today has largely set aside the big questions proper to this study—both empirical and normative—has left it with a gaping hole of meaning at its center. Piketty’s remarkable work begins to fill the void by returning attention to big-picture questions about real peoples’ lives. But even Capital in the Twenty-First Century fails to restore fully the humane breadth of the earliest discussions of political economy. Surely, such breadth is called for as we try to talk together about the common good and the future of our economic arrangements.
Nice article by an ethician that is familiar with the literature of economics as it relates to the big picture and the big issues that conventional economics assumes away and the world suffers for it. While economists bears some of the blame, it is a result of the compartmentalism of knowledge that has taken place since liberal education as education for life was replaced by practical education as preparation for a career in a field. Definitely worth a read.

The Hedgehog Review | VOL. 16 NO. 3 (FALL 2014)
The Emptiness of Modern Economics: Why the Dismal Science Needs a Richer Moral Anthropology
Christina McRorie
ht Mark Thoma at Economist's View
Christina McRorie is a fellow of the Institute for Advanced Studies in Culture and a doctoral candidate in the Department of Religious Studies at the University of Virginia. Her research focuses on ethical issues raised by the global economy and consumer society.

No comments: