1. Richard Doczy 07-Mar-07 at 10:50 am

    If as so many economists seem to believe that, to quote Stigler, “Man is eternally a utility-maximizer–in his home, in his office (be it public or private), in his church, in his scientific work–in short, everywhere.” (Lecture II, Tanner Lectures, Harvard University, April 1980. Quoted in Richard McKenzie, The Limits of Economic Science [Boston: Kluwer-Nijhoff Publ., 1983], p. 6.), are they not fully determined to act as they will, no choice in the matter at all? What is the alternative conception of human conduct economists will consider?

  2. Steve Ziliak 08-Mar-07 at 11:00 am

    That is right: the students of Frank Knight, and particularly George Stigler, turned rational economic man into a non-deliberating animal. Bentham’s model was in a generation transformed into a fact. Knight, I am not alone in suspecting, would hardly approve. Likewise few biologists, psychologists, ethicists, or historians could agree with Stigler’s stricture. No matter the price incentive we won’t sell our children. No matter the odds of getting caught we will not burgle the church sacristy. We are ill-informed. We make mistakes. We don’t know who we are. Many are he who pursue glory at any cost. Et cetera. Hirschman, Sen, and the philosopher Harry Frankfurt have brought deliberation back into the choice model by way of meta-preferences. But I think — as do Deirdre and Arjo — that meta-preferences do not do justice to the choice set and values of for example homo ethica, homo ludens, or homo rhetorica, an economic agent who moves and is moved by words and symbols.

  3. Deirdre McCloskey 27-Mar-07 at 8:41 am

    Geagte Dr. Doczy:

    (I’m in amazing South Africa at the moment, and can’t help using the pathematically small amount of Afrikaans I know!)

    You’ve hit the nail on the head. What “choice” is there in a mechanical representation of choice. Jim Buchanan makes a similar point in his old presidential address to the Southern, “What Should Economists Do?” And Aristotle—yes, as long ago as that—makes the same point, in the opening pages of his Nichomachean Ethics (make sure you don’t use the internet translation: wretched; get the book!). Choice in Aristotle is, as it is in life (I speak from some serious personal experience!) hard and painful and one might say “rhetorical,” a matter of internal argument. The argument uses all the resources of human discourse: stories, metaphors, facts, logic, authority, etc.

  4. Jeffrey Turner 16-Jun-07 at 10:49 pm

    Anyone who knows real people understands that they don’t behave as the “economists” models of prudent and rational beings would have them behave. Prudence and rationality are not common sense, they are gross over simplifications – idealizations, really – of the behavior of human beings in an economic setting. If people made decisions rationally then it wouldn’t matter if storekeepers put impulse purchase items at the cash register or just in the aisle with their type. How economists can deny that human behavior is SO often irrational is beyond me – except that they are indoctrinated or paid to reach other conclusions. As the “free market” system is heavily biased in favor of the wealthy, it is not difficult to see how this might happen.

  5. Deirdre McCloskey 09-Jul-07 at 7:46 pm

    Dear Mr. Turner,

    I have at length, after resisting it for 20 years, come to agree with you. Actually, a small but lively group of Samuelsonians like Bob Frank and George Akerlof agree, too.

    The way I would put it, though (and do in The Bourgeois Virtues: Ethics for an Age of Commerce, U of Chicago Press, 2006) is that Prudence is ONLY ONE of the virtues. The problem with Samuelsonianism is its reductions of EVERYTHING to Prudence Only.

    So what we need in thinking about the economy is ALL the virtues—and vices—in view. Not good old Max U and his Prudence.

    But the free market system is by no means biased towards the wealthy. The poor—-your ancestors and mine—have grown prosperous with markets. In countries with badly functioning markets—China under Mao, Russian under Stalin, Zimbabwe under Mugabe—the poor suffered horribly. The worst famine in human history happened under anti-market, anti-bourgeois Mao. Income distribution improved 1800-1975.

    Regards,

    Deirdre

  6. Jeffrey Turner 16-Jul-07 at 10:31 am

    I should point out that markets are an ancient human institution. If markets brought prosperity then every locale from Tahiti to Mogadishu would, with hundreds of years head start, far outstrip the United States. But we can see how “mucking about” with the “free market” can improve things right here in the U.S.

    http://www.thenation.com/doc/20070611/hayes

    [David] Card, a highly esteemed economist at the University of California, Berkeley, caught flak for his heresy not on trade but on the minimum wage. In 1994 he conducted a study to see whether an increase in the minimum wage in New Jersey had the negative effect on employment that basic neoclassical theory would predict. He found it didn’t. In fact, his regression analysis showed that, controlling for other factors, New Jersey gained fast-food jobs after increasing its minimum wage, compared with Pennsylvania, which hadn’t raised wages.

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