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Why Philosophers Hate Economists
I can’t be the first person on Ricochet to have noticed that philosophers and economists don’t always get along. The tension between the two bears some resemblance to the tension between conservatives and liberals. As the old trope goes, conservatives believe that liberalism is wrong, while liberals believe that conservatism is evil. Similarly, when economists and philosophers disagree, the economists believe it’s because the philosophers aren’t making sense, while the philosophers believe it’s because the economists are morally bankrupt.
Do you have a theory about this? I do. Here goes:
Perhaps the main reason philosophers hate economists is because philosophers and economists both use the same word to mean very different things. To be fair, philosophers used the word first (philosophers existed way before economists). But you’d think philosophers would have no problem understanding that some words are simply semantically overloaded, and this word is one of them.
If you haven’t guessed what the word is by now, it is “rational” (along with its sister word “rationality”). My understanding of philosophy is somewhat on the shaky side, but it seems to me that philosophers generally consider a rational actor to be one who is both self-aware and capable of discursive reasoning.
To an economist, being a rational actor requires neither self-awareness nor discursive reasoning. Rather, being rational in the economic sense simply means responding fairly predictably to incentives. By this logic, even trees could count as rational actors, as Milton Friedman hypothesized:
Let us turn now to another example, this time a constructed one designed to be an analogue of many hypotheses in the social sciences. Consider the density of leaves around a tree. I suggest the hypothesis that the leaves are positioned as if each leaf deliberately sought to maximize the amount of sunlight it receives, given the position of its neighbors, as if it knew the physical laws determining the amount of sunlight that would be received in various positions and could move rapidly or instantaneously from any one position to any other desired and unoccupied position.
Now some of the more obvious implications of this hypothesis are clearly consistent with experience: for example, leaves are in general denser on the south than on the north side of trees but, as the hypothesis implies, less so or not at all on the northern slope of a hill or when the south side of the trees is shaded in some other way. Is the hypothesis rendered unacceptable or invalid because, so far as we know, leaves do not “deliberate” or consciously “seek,” have not been to school and learned the relevant laws of science or the mathematics required to calculate the “optimum” position, and cannot move from position to position?
Clearly, none of these contradictions of the hypothesis is vitally relevant; the phenomena involved are not within the “class of phenomena the hypothesis is designed to explain”; the hypothesis does not assert that leaves do these things but only that their density is the same as if they did.
Despite the apparent falsity of the “assumptions” of the hypothesis, it has great plausibility because of the conformity of its implications with observation. We are inclined to “explain” its validity on the ground that sunlight contributes to the growth of leaves and that hence leaves will grow denser or more putative leaves survive where there is more sun, so the result achieved by purely passive adaptation to external circumstances is the same as the result that would be achieved by deliberate accommodation to them.
Most likely, a philosopher’s gut reaction is that calling a tree a rational actor debases the very concept of rationality.
Hopefully, his second reaction is that different disciplines may use the same word in different ways without debasing each others’ concepts, but I doubt many philosophers get that far. Not because philosophers are unusually obtuse, but because our own conception of rationality is so bound up in our self-identity that we instinctively want to defend “our” definition of the word in order to defend who we are:
Being human means being a motivated reasoner, even when you’re a philosopher.
Philosophers might find some consolation in the fact that good economists do indeed know how weak the economic notion of rationality is. As Ronald Coase (an economist so insightful that he won a Nobel prize for work that included no calculations beyond simple arithmetic) put it,
The rational utility maximizer of economic theory bears no resemblance to the man on the Clapham bus [the British equivalent of the man on the street] or, indeed, to any man (or woman) on any bus. There is no reason to suppose that most human beings are engaged in maximizing anything unless it be unhappiness, and even this with incomplete success…
[W]hatever makes men choose as they do, we must be content with the knowledge that for groups of human beings, in almost all circumstances, a higher (relative) price for anything will lead to a reduction in the amount demanded. This does not only refer to a money price but to price in its widest sense.
Whether men are rational or not in deciding to walk across a dangerous thoroughfare to reach a certain restaurant, we can be sure that fewer will do so the more dangerous it becomes. And we need not doubt that the availability of a less dangerous alternative, say, a pedestrian bridge, will normally reduce the number of those crossing the thoroughfare, nor that, as what is gained by crossing becomes more attractive, the number of people crossing will increase.
It’s unfortunate, in retrospect, that “rationality” should be the economic shorthand for “responding fairly predictably to prices in their widest sense”. If economists had simply used a different word, I think they’d get a lot less hate from philosophers. Moreover, us ordinary folk would have one less overloaded term to deal with. It’s difficult to carry on a conversation when people use the same cluster of letters to refer to such wildly different concepts, especially when both concepts are intimately tied to human identity.
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I was being a bit facetious. But I’ve been told he was one of the highest angels and his sin was pride – that he thought he deserved to be higher, and what would be between the highest angels and God?
Anyhow, best not to think too hard about what Satan might think. I do think of Satan as the archetype of the out-of-control prosecutor, though.
Actually, this comment does have utility. It is James’s way of poking gentle fun at himself for the way he writes while also thanking someone. Coming from James, it is quite charming.
Wow, that was a lot of words. My comment was somewhat unrelated to Caplan’s point. I’m not trying to harp on you in particular, that statement just stood out to me. Caplan’s comment is more about mediocre minds (not anyone here) using overly verbose language in an attempt to make them appear more correct and intelligent than they really are. Those who are best at understanding and best and conveying are able to use the simplest language for even complex subjects. Think of it as “minimally complicated” rather than simple. There are often concepts which require higher words, which is why we have them, but they are best used in moderation if the goal is to convey your position rather than obfuscate or hide ignorance.
Often philosophers appear to engage in intellectual [urination] contests (though they are not unique in this respect) that are more about who can use the most fancy words/references rather than actually accomplishing something.
Well, then he accomplished his goal! It stood out to me because it was meant to.
If you are saying that for some people, price isn’t a factor because something else already constrains them, you still haven’t shown that “no price” fails to be a constraint. You raise the possibility that, for some people, “no price” is a redundant restraint, since they’ve already submitted themselves to some stronger (say, moral) constraint.
If I say, “Solve for x where x is greater than 2 and greater than 3”, I have given two constraints, one of which (“greater than 2”) happens to be redundant because the other constraint happens to be greater. (Even so, “greater than 2” is not always a redundant restraint. It is merely redundant in this particular situation.)
I would question whether “no price” is, in fact, as redundant a constraint as people would like to think. Economic rationality is often subconscious – people can respond to price-signals without realizing they’re do it, and even when they strenuously deny they’re doing it.
(1/2)
No, because economists are the ones who have to figure out the likely consequences of categorizing something as unsalable.
There are many people who, for various philosophical reasons, believe that, for example, education and health care should not be for sale. It is economists’ job to point out the likely consequences of declaring these items unsalable.
Of course, whether healthcare and education belong in the category “unsalable” is hotly contested, and we conservatives almost universally believe that they don’t belong in this category.
There is much more consensus about whether parental rights and organs belong in the category “unsalable”, but it is still economists’ job to point out the likely consequences of declaring these items unsalable.
Whatever your philosophy, living, breathing people have to live with its practical results if you apply it. Economics does, I think, at least to some extent, address these practical results.
Philosophy may take logical priority, but economics, I believe, takes practical priority. So I, for one, would declare it a wash and suggest that philosophers and economists treat each other as equals when addressing such questions.
(2/2)
All human knowledge is mediated through our subjective experience. Experiments are designed to create subjective experiences that may be replicated and shared. Philosophy should not be held to a lower standard. E.g., Moore’s wonderful proof for the existence of external objects in the world: “Here’s one hand, and here’s the other.”
Useful economics:
Socialized medical systems in other countries are cited in support of a claim that, if healthcare is treated as a right, a high level of care can be delivered to everyone. An economist studies the extent of medical innovation in the U.S. versus these other countries, and finds that U.S. innovation is far higher. Other systems import U.S. innovations, and are thus subsidized by the U.S. system. Restrictions on reimportation of medicines and medical devices allow global medical companies to price discriminate, further subsidizing these other systems.
Useless economics:
Restoring the progressivity of taxes to the levels of the 1950s will result in economic growth as the same rate as experienced in the 1950s.
The first example has a theory (free enterprise creates greater incentives for innovation which produce positive externalities) that may be tested. If true, it tells you a consequence of socialized medicine, but you may still find this consequence morally justified. The second example observes an economic correlation and assumes a causal relationship.
I was pointing out Socrates method, rather than defending his epistemology. It’s hard to see how any usefully philosophy would come from beginning with “Let’s ignore our subjective experiences.”
I read the link. Thanks. True, the good students are sometimes embarrassed to answer the easy questions. On the other hand, the easy questions count, too, and even people who are good at the hard stuff sometime benefit from improving their proficiency at the small stuff.
I learned to counter-signal in high school. Not doing their homework and still acing exams was simply what the smart kids did to show they were smart. But in retrospect, I could have benefited from learning the work habits and attention to detail that doing more homework would have taught me. Once you’re free of the artificial constraints of high school, and can challenge yourself to the limits of your intellectual capacity, it turns out that small stuff like work habits and attention to detail most likely will matter.
As the paper he mentioned put it:
This is, incidentally, yet another reason why the typical American high school sucks. By not challenging the bright students enough, the bright students learn to countersignal by developing bad habits.
Right, but knowing the likely consequences doesn’t tell us anything about the desirability of those consequences. And economics also certainly can’t tell us whether even desirable results should be suboordinated to other principles.
I’d have thought that both correctly identifying the consequences and correctly evaluating them were vital for arriving at the expected value of the decision. It also seems worth noting that philosophy and economics both seem unlikely to provide terribly reliable responses. When the two little brothers are done bickering, it’s time for the queen of sciences to step in and give us a definitive “on the one hand…., yet on the other….., let’s pray”.
I’m saying two things: 1) that price is either incidental to or subordinate to an antecedent decision – ie whether or not something should be sold, or whether or not other principles or factors are more important than utility, and 2) even when dealing with a salable good or service, but especially when dealing with something non-salable, price sometimes does not factor at all.
Suppose I desire to be paid $1 million to fly by flapping my arms vigorously. There is no market for such a thing. The lack of a market is still not what is constraining me from flying by flapping my arms vigorously or being paid for doing so. The lack of a market is incidental to the impossibility of flying by flapping my arms vigorously.
Or, consider murder for hire. There is a market for it, complete with prices. However, those price signals are irrelevant to my decision to not even consider such a thing – no matter how angry I get and no matter how cheap I can have it done in Florida.
Yes, I noticed what you were up to the first time, James. I wonder how many others have…
Economics can tell us how much people desire things. Philosophy attempts to find the things we should desire. Funny thing about economics is, even when people believe they know what they should desire, it rarely changes what they actually desire, as illustrated by the lack of a “market for less.”
I agree that an aversion to complexity can be a useful hermeneutic (I apologize for the language; I’m incorrigible). There are many, though, who take this way too far. There are plenty of subjects, where you need a grounding in multiplication before you can appreciate quadratic equations. Even on Ricochet, one will sometimes hear philosophers and legislators unfairly attacked for producing opaque work product.
People complain, for instance about lengthy statutes; some of this is grounded. They go further and say that this must be deliberate. I have in this room a number of RPGs, some of which contain rules longer than some very lengthy statutes, not because the designers hate their players, but because complex systems require verbose descriptions. Those urination contests exist, but I feel that we should be slower to believe we have found them. See also: conspiracies, racism (mostly on their side).
My understanding from the thread (and other experience too) is that the “expected value of the decision” is only comprehensible supposing a given view of value – a given that economics does not and can not provide.
I assumed that was what everyone meant by economics and philosophy being the same thing; they’re both subfields of theology dealing with the created world.
Right. I was saying that you need both accurate philosophy and accurate economics to arrive at an accurate expected value of the decision. That’s at least two reasons why such a value cannot be accurate, although the attempt may be more likely to bring us closer to the truth than to take us further away.
I believe I have with comments 98 and 99.
Not the same thing. I did so impishly, you did so persuasively. I was self indulgent (not the only time this thread, sorry again), while you contributed an important point. Your clarity was such that no one could pat themselves on the back for noticing and understanding it.
That my comment drew more response can chiefly be attributed to Gresham’s law applying to comments as well as to currency; we add to the imperfect, and the greater the imperfection the greater the addition that can be made.
At least that’s what I tell myself when I feel like I’ve made a profound, but apparently unnoticed contribution.
Oh yes: I was patting myself on the back and it felt good. Profound? I wouldn’t go nearly that far, but I won’t stop you from doing so.
More important point: I think you can take your thumb out of Mike H.’s eye now.
There is also a market for security against murder. There may, in fact, be a market for law. Certainly, many people have noticed that people, especially corporations, behave as if there is a market for law by choosing jurisdictions carefully.
Our very own Ricochet member iWc theorized that what has made Western law so good is that in Medieval times, people could choose to try cases in competing courts.
He knows what he’s talking about much better than I, so PM him if you’re curious.
(Sorry about the lateness of this comment, I had an unexpected internet poop-out right as I was composing it several hours earlier.)
Impish humor can be persuasive, too. Also, impish humor can be mercifully short :-)
But more to the point, James just went ahead and called theology one of the hard sciences. That’s what I was noticing. That takes guts. I wouldn’t care to make the case for theology as a hard science.
You have my attention, James. How would you back this one up?
Man, I go to work and ya’ll go to town…
While I, too, like to call Theology the Queen of the Sciences, I am reluctant to say that it is “above” philosophy, unless we are going to engage in some serious re-allocation of the components of the disciplines. (Like James I cannot use a small word where large words will do, though I at least recognize the flaw and try to break it in my students).
Good theology will make use of logic, analysis, and observation -which are properly thought of as part of Philosophy. Philosophy, however, cannot provide the axioms necessary to carry itself along. Even Descartes fell back on the need for a God who was good in order make epistemology possible (and I disagree with James here, MFR, you should at least read Discourses on Method. It’s not long, and you could get away with just reading parts IV-VI).
It’s cliche, and I hate cliche, but there is something to the thought that revelation and reason are like shoes -you get further with both than with one. I prefer co-reigning monarchs. Strangely, both queens, and I shall think no further on that.
I said “harder”, not “hard”. Theologians have a significant body of data to work with. Philosophers are used to being able to pull things out of the air. It is very frustrating to some philosophers and economists when you respond to “why do you believe x” with “God has given us to know x, as shown by [citation block]” because there simply isn’t an equivalent bedrock for the softer humanities. I distinguish between hard and harder because I recognize that most theological efforts focus on areas where we understand which ideas God wishes us to believe less clearly.
This sounds like a “yes, and…” rather than a refutation. Which of my points are you agreeing to? That price is sometimes a non-factor? That price is incidental to or subordinate to other considerations?
In criminal law, we always had a somewhat limited flexibility. In commercial law, we still have a lot of flexibility. If you are afraid of being sued, and have no solid arbitration clause, you may be able to sue in a country that lacks prompt courts (Italy is the classic example). Obviously, if you have an arbitration clause, you have complete flexibility.
For criminal law, though, you need to move into the developing world before private justice becomes common. Assuming you don’t want the sorts of freedoms that come with that (relatively consequence free slavery, rape, etc. for the powerful), it seems suboptimal. This book is quite good.
OK, I listened to the full speech, and his final example showing that private criminal justice would work is the existence of car insurance companies; because they don’t litigate every case, which he terms the expensive way of resolving disputes to analogize it to armed violence, he thinks that criminal cases can be settled in a similar manner.
Competing rights enforcers are described at the opening of the first Godfather film, when Bonasera explains that the government did not give him the result he desired. Had his daughter’s boyfriend been powerful, the reciprocity that works with car insurance would not work; there would be no mechanism under which he would have been attacked. Had the daughter been Don Corleone’s, the boyfriend and his friend would be dead. Private criminal justice and competing rights providers have been experimented with, and their elimination is one of the primary advantages of living in a developed country.
This isn’t to disagree with iWc, incidentally, whose view has much merit.