The Self-Imposed Poverty of Economics

By Machan, Tibor R.; Brown, David M. | Ideas on Liberty, December 2000 | Go to article overview

The Self-Imposed Poverty of Economics

Machan, Tibor R., Brown, David M., Ideas on Liberty

Life is more than a game, and human beings are more than rule-bound strategists. Moral values are possible. Authentic allegiance to such values is possible.

Too obvious a point to debate, you think? Maybe not. In The New Republic (June 5, 2000), the very bright and philosophically astute Professor Peter Berkowitz of George Mason University Law School reviewed Eric A. Posner's interesting book, Law and Social Norms (Harvard University Press, 2000). Posner's book is essentially a rendering into economic language of the ethical and political issues of human life. Posner sets out to show that, using the tools of scientific economics alone (or even more narrowly, of game theory), we can explain why people act as they do. Why, for example, do people sustain their commitments to others even despite opportunities to "advance" their interests "by means of what game theorists call 'defecting' or `opportunistic behavior,' and what ordinary people call lying, cheating, and stealing"?

The analysis by Berkowitz is insightful, largely setting forth, rather adeptly, oftenheard complaints against economic reductionism. He explains that there is really more to ethics and politics, at their best, than merely the working out and following of narrow strategies for realizing what one desires in life. "In so far as we are small," he concludes, "game theory may explain what we do; but we are not only small."

Economists, like other social scientists, are always seeking some comprehensive and unitary explanation of human behavior, one that mimics the natural sciences, especially physics. What they want is surefire predictability of regular phenomena, a basic motive or drive to explain why people do what they do; and that explanation, once arrived at, is expected to be exhaustive. Usually the favored motive is the desire to prosper, even though the content of prosperity may vary tremendously from person to person, age to age, and region to region around the world. Indeed, just to make sure he covers everything, the economist tends to define prosperity as the getting of what one desires to get. Every sought goal is thus ipso facto an economic goal.

Posner proposes that the explanatory scheme he draws from economics and game theory can make complete, comprehensive sense of ethics and politics. Ethics and politics may not seem equivalent to straightforward economic thinking and behavior, but in fact they are just differing expressions of the same motivation: people do the right thing because it will get them what they want, fulfill their concrete desires, whether over the short run or the long run. Laws and social norms are but common practices that help us get our way; they are strategies for living. Actions that seem to supply evidence of moral commitment are really, according to Posner, just "behavioral regularities" undertaken "to show that they are desirable partners in cooperative endeavors. Defection in cooperative endeavors is deterred by fear of reputational injury... People who care about future payoffs not only resist the temptation to cheat in a relationship; they signal their ability to resist the temptation to cheat by conforming to styles of dress, speech, conduct, and discrimination. The resulting behavioral regularities, which I describe as `social norms,' can vastly enhance or diminish social welfare."

Plausible-as far as it goes. Certainly human action is purposeful, at least; we do pursue ends and deploy means to achieve those ends. But as Berkowitz observes, Posner seems not only to be rather gratuitously translating the "wisdom of the ages" into the language of economic theory, but also to be claiming, "With Machiavelli, that it is more important to appear good than to be good." A corollary claim seems to be that morality is either a mirage or, in Berkowitz's words, "at least a discourse that is reducible to something more fundamental and thoroughly nonmoral."

With deep moral commitment banned from the picture, so are its obvious incarnations; thus Posner, Berkowitz writes, can perform "the remarkable feat of writing an entire chapter on marriage and the family without ever mentioning love. …

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