Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
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.
Published in General
I’ll have to confess that as a philosophy major there is paradox in the matter of a philosopher writing a book that makes the assertion words have no meaning. For the economists there is the matter of Paul Krugman taking home a Nobel Prize for economics.
Duly noted. On the other hand, “but harder sciences, like theology and math…” seems to put theology and math on roughly the same plane of hardness, and that makes theology sound pretty hard.
Now, I’m like the last person to insist that math be considered a hard science in the same way the actual physical sciences are. Physical sciences have to deal with evidence, and math doesn’t. There can be an element of fantasy in mathematics lacking in disciplines that actually, you know, have to deal with real data from the real world.
Damn, I wish I’d said that. Of course, in the future I will, and pretend it was my line.
Excellent point.
We’ve seen real world experimentation (real examples of competing rights enforcement agencies rather than insurance companies that are inapplicable examples because they are part of a larger justice system and so don’t have the motivations that a rights enforcement agency would have); the results don’t seem to be the kind of free and functioning world that Friedman envisions.
The more fundamental flaw in Friedman’s thinking, though, is that all of his theorizing rests upon this shaky soft foundation: “I imagined a world where …..”. So did John Lennon; no country, no religion, no possessions. Sure, Lennon’s imagined world is much different than Friedman’s, but they’re both unrealistic fictions that will never exist because they both get fundamental human nature and rational incentives radically wrong. He calculates that peaceful settlement is preferable or more rational, and I agree as far as the not-powerful are concerned. However, for the powerful he overestimates the aversion to violence and the rationality of property rights, and underestimates how much simpler it is for the powerful to simply take what they want and impose their will rather than to be honest brokers of a service. As far as I know, Friedman doesn’t claim to know how to get to his imagined world anyway; so there is no obvious path to this world even if one accepts the possibility of it functioning as he describes. What is the value to studying what he has to say on the matter then?
Are only those worlds that are possible to obtain worth studying? Would you say the same about the world that Christ envisioned? It’s impossible to get there so why study what He has to say on the matter?
Well, orthodox Christians do expect some pretty apocalyptic stuff to go down at some point. The second coming, the “new heaven and new earth”… A time when “the kingdom of this world is become the kingdom of our Lord, and of His Christ” as the Hallelujah Chorus puts it. So we don’t see it as impossible to get there.
But it is impossible for us to get there (God has to do it), so I see what you mean.
And we’d lose out in many disciplines if we didn’t bother to consider impossible worlds occasionally (such as a frictionless world in physics).
I’m assuming you meant “The Locust Effect” as the book (there were several options)? How does it compare to DeSoto’s “Mystery of Capital”? Are the property rights of the poor not protected because there is so much violence, or is there so much violence because the property rights of the poor aren’t protected?
As for “why bother with David Friedman’s thinking”, I find his idealized approach does indeed have something very practical to recommend it: it can help people see existing law in a new and (I think) informative light.
At least, reading his “Law’s Order” did that for me. In fact, “Law’s Order” contains the only accessible introduction I’ve ever found as to why patent and copyright laws are what they are.
I don’t think it’s impossible to get there – otherwise what was the point of God made man dying and resurrecting?
I figured you didn’t, but many disagree. Do you at least see my point about studying abstract idealized worlds having the potential to offer benefits even if they aren’t realizable? Even if God’s ideal happens someday it’s not here yet, and studying it isn’t necessarily going to get us there, but many people derive benefits and insight simply by studying it.
I do see the point, in general. My question was pretty specific, though: why should we study what Friedman theorizes about this particular made up world (I’m not sure it is ideal)? What specific benefits and insight are derived from it?
A frictionless world isn’t ideal, in the sense of ideal as desirable. If we didn’t have friction, a lot of very desirable things would be impossible. It is, however, an idealized world.
As for the specific benefits derived from David Friedman’s world, they are on fairly good display in his book “Law’s Order”. PM me your mailing address, and I will send you a paper copy, if you like. It’s also available free in a web format here.
As I said in a previous comment, Friedman’s ideas are useful for exploring law as it already exists.
Right. Math relies entirely upon reason, while theology has a firmer grounding in revelation. We are warned not to trust too highly in even relatively basic mathematics by Ezra 2 and Nehemiah 7. I intended only to make the (relatively) uncontroversial argument that theology was harder than economics and philosophy, and I think it only partly true of math (there are some softer parts of theology, along with many philosophers who are not true, Scottish, theologians).
I meant The Locust Effect. A weak criminal justice system is a generally separate but related cause of poverty to land rights for the poor. Education is another. Infrastructure is handy. Healthcare helps. There’s a lot of things that need to happen to turn $600/ year areas into $60,000/ year areas. They all feed into each other. Essentially, those are all luxury public goods with frequently powerful returns on investment.
Creating hypotheticals is useful, but only where those hypotheticals are compatible with the data. I’m not surprised that his IP work was superior.
Why should it not surprise you that his intellectual-property work was superior? I’m very curious.
Should I read “The Locust Effect”? I can order it through Amazon Prime fairly easily. Have you read “The Mystery of Capital”? (I’m guessing you’re likely to have, based on what you said, but I thought I’d ask.)
Who are these true, Scottish theologians of whom you speak? (As far as I know, Adam Smith wasn’t a theologian, so I don’t think it’s him.)
There are plenty of benefits that can be achieved through the use of speculation. The proof of this is that all reforms are speculation, and it seems difficult to deny that some reforms are positive.
That said, we can generally predict the effects of reforms more accurately if we have data, either because the reforms are limited in scope, or because similar reforms have taken place in other jurisdictions.
To my mind, one of the clearer condemnations of libertarianism lies in its tendency to treat science fiction as a serious source for ideas, often the chief source. In science fiction, you get to imagine that your policies all work well, while ideological opponents fail utterly, with no serious risk of contradiction.
Hayek understood what the Fathers understood; we can’t really understand/ imagine the radical improvements of our final Utopia.
It was a callback to your earlier true Scotsman fallacy reference. I like my theology to be heavy with scripture and patristics, and get irritated with people who call themselves theologians, but whose books contain essentially zero references to authority. I thought I should flag up that I understood that limiting “theology” to “hard” theology was a cheat given the context.
I read a few chapters for a class, but I haven’t read the whole thing.
Oh, OK. As there was no mention of kilts, or what does (or doesn’t) go underneath them, your callback went right over my head :-)
Understandable.
You should read the whole thing. It’s a great book, and it’s about more than just land rights. It addresses how a state that doesn’t acknowledge how people are naturally inclined to handle their rights keeps ordinary people poor and involved in illegal activity.
How interested are you in criminal justice systems in developing countries? If the answer is “very”, then, yes, you should read it. It does flesh out the consequences of the failure of the justice system pretty well (it discourages education, prevents people from building commercial networks outside their family, the human cost of locking someone up for a decade before their trial etc. etc.), but it’s not in my top 50 must-read books.
Huh. I’ve met libertarians like this. But not all are like this, and I wonder whether it’s a fair characterization to call libertarianism itself like this.
Personally, I haven’t read much science fiction. It’s not that I dislike it so much as I never got around to it. I feel I should read more, as, being a science geek, many of my friends are science science geeks, and most of them have read a lot of science fiction (not that most of them are libertarians). Even the artsy-fartsy types are into stuff like Dr Who. I feel unable to relate to my fellow geeks culturally because of my deficiency.
What if you aren’t necessarily interested in criminal justice, but are interested why developing countries fail to develop? It sounds like it might make an interesting companion to “The Mystery of Capital”, which I loved.
Now that would be an interesting list.
If you ever compose this list of top 50 must-reads, you should share it with us.
Because he is forced to read a lot of material on IP in the real world. He can wish away the problems with private criminal justice because that isn’t a big issue in the libertarian economist/ lawyer world.
I was persuaded, and went to audible to buy it, and discovered that it is not available. While I do also read books in their medieval format, I’m much, much slower than with triple speed audio, and hence have a considerable backlog of stuff that I must read if I’m to maintain my dreams of getting an academic paper written on marriage licensing history.
Triple speed audio? How does that sound? If really makes everything three times as fast, including the sound waves themselves, the voices must sound roughly an octave-and-a-half above their normal pitch.
What if you aren’t necessarily interested in criminal justice, but are interested why developing countries fail to develop? It sounds like it might make an interesting companion to “The Mystery of Capital”, which I loved.It might be; how much have you read on developmental economics? The Locust Effect is quite good at hammering home some specifics, but it spends a lot of time talking about sex offenses, for instance, which do have all kinds of impacts but, apart from the slavery aspects, seem more geared to tug heartstrings than to make economic arguments. I might recommend Easterly’s Elusive Quest for Growth first, which came out about the same time as De Soto’s. He has a new book that I have not read, but am about to: The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor. I’d love to hear your views. It occurs to me, incidentally, that if you want to get back to the first guy to say that capitalism and the growth of the middle class depends on the rule of law and sound property rights, then our buddy Karl from earlier is really the seminal thinker.
Do you not use the Audible app? It’s been the biggest positive change in my life since I left Iraq, increasing my reading rate by more than an order of magnitude by increasing my incentive/ reward for reading and allowing me to combine it more easily with other activities (traveling, eating, etc.), and combining more easily with depression.
It’s very well designed, and does not result in a higher pitch. Mrs. Of England hates it, and maybe 1% of narrators need slowing down, and a further 2% need slowing down under difficult circumstances. It means you can, for example, read five good books on North Korea on a whim, in a way that I simply didn’t find myself doing before. I had never read the Bible start to finish. Reading great literature alongside commentaries on the literature had always been more an aspiration than reality. It makes reading the book less effort than seeing the film of the book.
” Tendency”, but there’s a reason that the Libertarian Party took its motto from Heinlein’s The Moon Is A Harsh Mistress. David Friedman uses Heinlein to define libertarianism here, and you can find more here. This isn’t unusual. I don’t think that Dr. Who is enormously Libertarian.
Libertarians who talk a lot about the state of nature are generally engaging in similar Rawlsian reality- ignoring question begging (if you assume that libertarianism is natural and ideal, then you’ll often imagine the state of nature to be natural and ideal). Both forms conform to the generally utopian views of self-labelled libertarians, the “we can’t even talk about charter schools until we’ve abolished welfare” approaches to politics.
David Friedman is also an enormous geek, with the same sort of background that a lot of non-libertarian geeks who love Heinlein have (PhD in physics, involvement in the Society for Creative Anachronisms, etc).
So… libertarianism seems to attract geeks. Alright. This doesn’t run counter to my experience. Question is, why does it attract them? Because they’re inquisitive? Because they like messing around with systematic ideas? Because they have no social skills?* Because they’re less likely to be religious?
Why matters. “Because they want to pretend real life is like science fiction” isn’t the only possible answer, and perhaps not even the most plausible.
_____________________________________________
* Except for Sal, who is suave and urbane, what with his nice cufflinks, fine scotch, and suchlike. Really, he should consider running for office someday.
Those books sound interesting. Will put in Amazon cart, and decide on purchase later.
Midge is a near-hopeless technophobe. Mr Rattler finally ordered me a smartphone as a surprise gift, and I’m currently dreading its arrival.
I should, however, start listening to audiobooks, if for no other reason than they would make both tidying the apartment and exercising much less boring. Especially tidying the apartment.
Combines more easily with depression? I would think it would combine more easily with the buoyant, active life of the non-depressed. For the depressed, paper books can be a pretty good escape…
Right. My point was not “David Friedman likes Heinlein”. It was “David Friedman treats Heinlein as a serious source for policy” and, more importantly, “David Friedman thinks that Heinlein’s thoughts are definitive of libertarianism”. Friedman knows a little about his movement, and he takes the latter stance because he’s talked to a representative sample of those who, like Fred Cole, find their political beliefs powerfully influenced by Heinlein and other SciFi authors (and also because it was Heinlein, not his father, who persuaded Friedman of anarcho-capitalist possibilities).
In Radicals For Capitalism, the standard work history of libertarianism, this role is frequently noted, but if you go to page 391 you will see a 1971 poll of Libertarians. The most popular personal influences are Rand (36%), Mises (23%) and Heinlein (16%).
You simply don’t get that with liberals or conservatives (Krugman is an outlier).
Edit: That links to Titan headphones. I should have linked to Titan 2.0. Sorry.
Do you have decent headphones? If not, I find these to be excellent, and that audio quality makes a surprising difference. Regarding depression, if one takes a Maslow sort of a pyramid approach, I think of reading a book as being one of the lower strata, but not the lowest. This is also true of audiobooks, but they reach further down. Listening at full speed is something that takes a little concentration, though, and can take a while to get used to. I think it to be a worthwhile use of the time. Different tasks allow for different levels of concentration, so I tend to have a half dozen books in progress at any given time, somewhat like bicycle gears.