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« Book Sales/Audiobook Sales | Main | Book Publishing »

April 08, 2004

Happiness? Evolution Don't Need No Stinkin' Happiness

Michael:

What’s the deal with happiness, anyway? ‘Happiness’ science seems to keep popping up wherever I go these days.

I checked out the link you provided to the talk/essay by Harvard Professor Daniel Gilbert (which can be read here) on why people are not very good at predicting what will make them happy. It contained the following remarks:

If you actually looked at the correlates of happiness across the human population, you learn a few important things. First of all, wealth is a poor predictor of happiness. It's not a useless predictor, but it is quite limited. The first $40,000 or so buys you almost all of the happiness you can get from wealth. The difference between earning nothing and earning $20,000 is enormous—that's the difference between having shelter and food and being homeless and hungry…

On the [one] hand, once basic needs are met, further wealth doesn't seem to predict further happiness. So the relationship between money and happiness is complicated, and definitely not linear. If it were linear, then billionaires would be a thousand times happier than millionaires, who would be a hundred times happier than professors. That clearly isn't the case. On the other hand, social relationships are a powerful predictor of happiness—much more so than money is. Happy people have extensive social networks and good relationships with the people in those networks. What's interesting to me is that while money is weakly and complexly correlated with happiness, and social relationships are strongly and simply correlated with happiness, most of us spend most of our time trying to be happy by pursuing wealth. Why?

Why indeed? Well, one way of interpreting that apparently irrational behavior is to assume, as Professor Gilbert does, that people are happiness maximizers, but they are pretty inefficient at it: "Most of us spend most of our time trying to be happy by pursuing wealth. Why?" He suggests that people are either ignorant about what makes them happy or are unfortunately susceptible to deceptive stimuli (like advertising) that persuades them to make questionable lifestyle choices. Hence they waste their lives overworking and overspending, when they should be hanging out with their friends.

I really have to question this conclusion for several reasons.

First, the methodology of ‘happiness’ science seems more than a bit spotty. (Professor Gilbert doesn’t discuss the whole topic of methodology, but I assume for the following discussion that his approach is similar to that of other workers in the field—to wit, he’s measuring happiness by the extremely sophisticated approach of asking people how happy they are.)

How accurate is self-reported happiness as a measure of well, anything? How much credibility would you give to self-reported data on the quality of people’s sex lives? (Especially if the question were phrased this way: “Do you think your sex life is (1) poorer than that of an average member of your high school graduating class, (2) equal to that of an average member of your high school graduating class, or (3) better than that of an average member of your high school graduating class?” Do you really think you'd see a nice bell-shaped curve of responses centering on answer #2? Ha, ha.)

I noted in my recent posting on A Visit to the Land of the Optimists that Daniel Kahneman, the Nobel Laureate, tried for years to devise a reliable and repeatable method of self-reporting happiness...and failed. One must ask: are all the lessons of ‘happiness research’ just an artifact of a questionable data-collecting methodology? (A small digression: with technology like functional magnetic resonance imaging machines hanging around, isn’t it possible today to come up with a more ‘objective’ measure of happiness than self-reporting? And if a brain scan for measuring happiness isn’t in the cards, then can’t we come up with something relating more to observable behavior? Like a bounce in the step? Singing in the rain? Swinging from lampposts like Gene Kelly?)

And even if self-reporting is an accurate methodology, I can imagine all sorts of other ‘technical’ issues that would seem to throw doubt on these so-called 'correlates of happiness across the human population.' What if people’s behavior isn’t aimed at maximizing their long-term ‘average’ happiness but is motivated by the desire to avoid transient-but-repeated moments of dissatisfaction? For example, what if you are intermittently but painfully bothered by your failure to accomplish your life-agenda? Could you convey such important but intermittent moments of unhappiness via a self-reported happiness survey? I could be wrong, but I doubt it.

Or, to put it mathematically, exactly what measurement of happiness is being 'correlated' by Professor Gilbert here? Average happiness? Mean happiness? Peak happiness? Minimum happiness? Marginal happiness? Trailing average happiness? Anticipated future happiness? The list can go on and on. Have all these variants really been thoroughly 'correlated'? Can Mr. Gilbert's measurement apparatus even distinguish between them?

Also, doesn’t our knowledge of the mechanisms of addictive behavior suggest strongly that people are motivated by far more specific stimuli than something super-general like ‘happiness’? I don’t know about you, but it doesn’t look to me as if alcoholics or drug addicts are aiming to maximize their long-term happiness level per se. And if they aren’t, what is that about? And what does it say about the motivational mechanisms of the rest of us, which probably differ more in degree than in kind from those of addicts?

And, finally, I question when anybody explains a wide-spread social trend (like how people spend their time between work and a social life) by saying, "Advertising makes us do it." I do a certain amount of advertising in my business, and I can assure you that noboby ever did anything they didn't want to do because they were advertised into it. If people are spending more time working and less time socializing than you think makes sense, it is because you don't understand their motives as well as you think you do.

Of course, to me all these questions suggest a different hypothesis. To wit, that people aren't, fundamentally, happiness-maximizers. I will grant that they try to maximize happiness around the margins, but it is by no means their central motivation and happiness maximization is constantly being overridden by other factors. Let's face it, such a hypothesis is an immensely better fit for the disjuncture between behavior and what ‘happiness research’ tells us than Professor Gilbert’s hypothesis that advertising and ineptitude make us incompetent happiness maximizers.

Just looking at life from a Darwinian point of view, I don’t see the centrality of happiness to the overall model. Nothing wrong with it, of course, but nothing central, either. If the goal, so to speak, is gene immortality, what is the importance of whether the ‘survival machines’ that encase the genes (i.e., you and me) are happy or not, as long as they do what their genes need them to? And it’s not only possible but likely that the imperatives of reproduction would mandate activity that doesn’t maximize the happiness of the individual links (i.e., you and me) in the chain of life. Your genes may well have wired your brain to encourage activity that serves their needs but that makes you tired, cranky, afraid or--heaven forbid--even gets you involved with a sexually attractive but high-maintenance reproductive partner.

Hey, I’ve seen many surveys that indicate that childless people are happier than people with kids. And not by a little bit, either. That comes as no surprise to me (as a parent). After all, the little rug-rats are quite a chore, soak up all sorts of money and free time, to say nothing of making you worry about who they're dating and what college they’ll get into. So why do a majority of people choose to have kids? This would seem to be another form of inexplicable behavior from a happiness-maximizing standpoint, but it is exactly what would be predicted from a Darwinian standpoint.

As for people's tendency to focus ‘irrationally’ on work, well that might not be so irrational--assuming that we have goals other than maximizing our happiness. If staying alive until one can not only reproduce personally but can also help one’s offspring successfully reproduce is a useful biological goal, then I can see that we might well be incentivized by our genes to imitate the ant rather than the grasshopper in the fable—and work, work, work until we drop. After all, what do we matter in the (hopefully) infinite chain of life?

Granted, in modern society, people might do better to spend less money ‘keeping up with the Joneses’ and put more effort into piling up savings to pass on to Junior, but throughout the vast majority of human existence such ‘banking’ arrangements were non-existent. Working extra hours to buy a Mercedes might seem wasteful, today, but working extra hours to ensure a more-than-barely adequate supply of food might have been a really useful way to spend your spare time in the Upper Palaeolithic era…particularly from the standpoint of your child. And who knows, maybe ‘keeping up with the Joneses’ has some kind of long-term survival benefit all its own—like making it more likely that your children will mate with the offspring of similar high-genetic-quality workaholics?

Again, I repeat the notion that I advanced some time ago—evo bio seems to mandate that we re-think a lot of our ideas about life, including the notion that humans are happiness- (or utility-) maximizing machines. And that has consequences for the social sciences that have so far not been widely accepted or thought through.

Cheers,

Friedrich

posted by Friedrich at April 8, 2004




Comments

I've proposed getting rid of "utility" and "happiness" and instead using "life-is-worth-living" units. That at least leaves it up to the person how he/she defines it. Maybe, for Person X, that'd involve drinking herself into oblivion and dying young. Who am I to condemn such a life-arc? None of my damn business. And maybe Person Y decides to have a dozen kids and work himself until he drops at 90. Seems fine too.

Suits me that it's up to each person to make his/her own definition of what makes life worth living. Also seems to allow for mistakes, revisions, etc. Of course, all that might mean that it's so squishy there's no way to make any use of it at all. But I confess I kinda like that too.

What's your response to behavioral econ generally? I'm glad they're at least opening the field up to registering how people actually behave, instead of limiting themselves to interpreting all behavior in one way.

My fave passage in Gilbert's talk is this:

We've studied numerous elections over the last few years, and voters invariably predict that if their candidate wins they're going to be happy for months, and if their candidate loses they'll be unhappy for months. In fact, their happiness is barely influenced by electoral outcomes.
Posted by: Michael Blowhard on April 8, 2004 05:56 PM



Oh, that's just 'cause you're so religiously non-political. But I'll grant you, the quote is kinda funny. Actually, I was thinking the other day about how politics is really, really a form of entertainment. If electoral office was handed out by lot and you actually had a chance of serving in some important role, it would be serious. But for most people, most of the time, it's a form of high-level video game.

Posted by: Friedrich von Blowhard on April 8, 2004 06:00 PM



I've often wondered why some enterprising economist didn't take a semi-positive view of showbiz and symbolism, and instead of asking why we aren't behaving more "rationally" (in his terms, of course), instead ask how much we're generally willing to throw away on symbolism, entertainment and showbiz. I wonder whether the percentage would always be more or less the same. Lower in wartime and among poor people? Or higher?

Occurs to me as well to wonder about the happiness thing. Maybe, as some have suggested, happiness becomes important once survival has been assured, at least relatively so. Maybe the evo-bio explanations hold best under conditions of scarcity, while maybe happiness (or some other life-is-worth-living concern) starts to become relatively more important under conditions of surplus.

Posted by: Michael Blowhard on April 8, 2004 06:19 PM



I also wonder if the good professor's surveys treat all people as an undifferentiated mass or if he segments the population. My guess would be that if he did segment the population, he would find that certain subgroups value prestige, power, money, etc. far more highly than others, and would derive genuine happiness (or, perhaps more to the point, avoid genuine un-happiness) by possessing these attributes. And since my guess is that this subgroup constitutes the socially dominant group in society, most other people go trailing along in their wake. In short, I question the very generality of the statements the 'happiness science' community make about how to be happy in life, as if there were only one set of tastes. One book claimed that it was a waste of time to be highly educated from a happiness point of view. And it may be for most, but I think there is a small group of genuinely intellectually curious people who might be far less happy with no outlet for their curiousity.

Posted by: Friedrich von Blowhard on April 8, 2004 07:59 PM



Michael,
I like your "live is worth living" units. I'd also add the "gratitude" units, too. Perhaps gratitude is the bridge between what you need to survive and receiving the gift of happiness. I submit the gratitude units rise with age, and so happiness, whether enjoying a friend or a cup of coffee alone on a Saturday morning or enjoying the sunrise from your yacht might have a lot to do with a simple realization of gifts that might not have been had certain events in one's life taken another course.

Posted by: bridget on April 9, 2004 10:43 AM



Wonder why we are so bad at predicting what will make us happy. MBlowhard says, well, if some people are made happy by having eight kids, more power to them. But that seems to be beside the point of the post. There are people who have eight kids and then figure out that wasn't what was going to make them happy at all. The post says we do things and choose things every day which ultimately don't have the payoff we thought they would. I don't think that people do things which they think will make them unhappy. They THINK they are pursuing happiness. So, the fundamental question is: why are we as creatures so bad at figuring out what it is that will "make us happy."

Posted by: annette on April 9, 2004 10:53 AM



Bridget -- I like your idea of "gratitude" units! Certainly seems to play a larger role as the years go by, doesn't it?

Annette -- I think that's a good question too. Do you have any hunches about it? I find myself thinking that maybe one explanation for why we overestimate how big a diff a certain decision or action might make in our lives is that if we didn't make too big a deal out of things, maybe we wouldn't bother making decisions and taking actions at all. Maybe if we were really realistic, maybe we'd just shoot ourselves now. So maybe we have to gussy things up with fantasy and glitter to make it all seem like it might be worthwhile. (Actually, I have a small hunch that that's one of the roles art plays for us -- to make life seem a more attractive, pleasant and enjoyable thing, to kinda seduce us back into life.) Something similar hit me when I was recovering from surgery a few years ago. Very interesting to spend some weeks with zero energy. I found myself reflecting about ego, and the role it plays, and the way it's sometimes seen as an obstacle or problem, or maybe as something we'd be better of without. And here I was, all gruesome and ego-less, and of course incapable of doing just about anything for myself. So I found myself thinking, Hmm, maybe one of the roles of ego (and especially male ego) -- that kind of inexplicable swagger, the cockiness -- is that without it, we'd (at least we guys) would do nothing whatsoever. Admitting fully that male ego can be a pain and get everyone in a lot of trouble, maybe it also has its uses. I found myself thinking, gee, those people who would wish an ego-less existence on us are really awful, they'd have us all doing zilch, in fact barely living at all. So maybe our tendency to be overoptimistic and self-dramatizing, while it can obviously get us in trouble, maybe it serves a similar helping-us-get-through-the-day purpose.

Posted by: Michael Blowhard on April 9, 2004 11:07 AM



Annette:

I think the problem is easier to understand if you give up on the assumption that people are trying to be happy. I mean, for one thing, happiness is an almost impossibly hard star to steer by, as our subjective feelings of happiness vary from minute to minute and things refuse to work out as planned--at least, happiness-wise. But I also think that our decision-making loop simply doesn't have happiness (by which, I guess, we are talking about long-term average happiness)as its primary goal. I think we try (and succeed) at avoiding hunger, at avoiding pain, at hooking up with sex partners, at dulling the pain with drugs and alcohol, at all sorts of things, but I don't think much of a case can be made that we do so to maximize happiness, per se. It's sort of like assuming that the economy exists in order to accomplish full employment. As opposed to assuming that the economy exists to help us all eat our next meal, and way, way down the list is the notion that it would be a better world if everyone were gainfully employed. I think we are confusing a secondary goal with a primary one when we focus on happiness as the key 'driver' of behavior.

Posted by: Friedrich von Blowhard on April 9, 2004 11:16 AM



FvB -- Are the behavioral-econ folks suggesting that "happiness" is the Ultimate Motivator? I have no idea, not being more than a distant observer of the field. If they are, that's a problem, for the good reasons you spell out. But what if they aren't? What if they're just suggesting that it might be a good idea to take people's pursuit of happiness units into account if we want to understand their economic behavior? I don't have any trouble with that, do you?

Posted by: Michael Blowhard on April 9, 2004 12:41 PM



"Maybe if we were really realistic, maybe we'd just shoot ourselves now."

With that alternative, I think you are right! We're all a version of Blanche Du Bois ("I don't want reality. I want magic!") after all.

"I think the problem is easier to understand if you give up on the assumption that people are trying to be happy."

See...and I think people do all kinds of things telling themselves it will make them happy. That IS the reason they say they do it. Interesting if people were raised to believe they were doing things because evolution programmed them to. And interesting to see what might happen if, becoming concious of that---that what they think is the "happiness" button is actually the "1,000-years-of-evolution" button--might change people's choices. Where that old phrase "free will" comes in. But it is only free will if one understands the forces that are pulling them in a particular direction.

And how come, dammit, nobody teaches this stuff? I mean, really, what's the use of a lot of other stuff without understanding this? Harumph.

Posted by: annette on April 9, 2004 01:24 PM



"Like a bounce in the step? Singing in the rain? Swinging from lampposts like Gene Kelly?"

PS---I like this measure of happiness the best. :)

Posted by: annette on April 9, 2004 01:35 PM



Michael, Friedrich & Annette,
Somewhere in our kit of survival tools is our imagination. Imagination gathers possibilities, among them, happiness. What do we imagine will make us happy? Of all the possilities out there, we chose what we believe we can have. I cannot have a beautiful singing voice although having one, I think, would make me very happy. And it does make me Unhappy that I don't have a good singing voice, but in this case I have no choice. I imagined that having a 1971 Plymouth Barracuda would make me happy. I was right. I drove my absolute favorite car in the entire world for years. I could and did achieve that and I was continually aware that not everyone in the world had the chance to drive their favorite car in the world - every day. It helped that I could afford my favorite car. Happiness feels good. Happiness has to be equal parts Id and Ego - ego to discern what and how to acquire a particular happiness and the Id to be so happy one cannot speak words.

Posted by: brid on April 9, 2004 01:39 PM



Maybe Brid is just better at knowing what will generate happiness than many others are. Interesting to scan Brid's brain, vs., say, Pete Rose's brain, and see the difference.

Posted by: annette on April 9, 2004 01:44 PM



While it's true economists can be philistines upon occasion, I don't think you all disagree with the economics profession as much as you think you do.

First, many economists would agree with a lot in Friedrich's post, particularly the part about self reported happiness data being worthless. In fact, mainstream economics holds that you can't meaningfully compare happiness levels across different people at all.

Second, utility *is* something that each person defines for himself. I'd say that, intuitively, "utility" means "a person's priorities, as revealed by his behavior". While it's fair to say most economists believe utility is the same as welfare, this is more out of a libertarian-style belief that your welfare consists in doing what you want, than any presciptivist belief that people's priorities are going to conform to our idea of their welfare.

Third, the sense in which economists use "rational" is not its common English sense. For example, Gary Becker (a main stream, Nobel laureate) has a widely cited theory of "rational addiction". Basically we use "rational" to mean that your behavior does in fact reveal a set of priorities. This is why behavioral economics is taking so long to catch on - it's pretty much impossible to prove that people's behavior isn't just reflecting an unexpected set of priorities. (E.g. Why don't people plan their estates properly? Well, maybe those who don't ...just like paying taxes! Even not wishing to face mortality would count as a rational reason, in the economic sense.)

Fourth, I'm not exactly sure what Michael means by his comments about symbolism and show biz, but I wonder if Virginia Postrel's "Style of Substance" might address his concern. For what it's worth, I'm not aware of any economist who is puzzled by expenditures on entertainment.

Posted by: Anne on April 9, 2004 01:57 PM



Whatever it is that gives Brid her composure, I want some.

Anne -- Many thanks for the helpful points. FvB and I are both big econ-thinking fans, actually -- this posting's just one of many where we're having a good time wrestling with it. (And we certainly think more artsies should learn a bit more about it.) I'd be curious to hear your reflections about a couple of my (probably woolly-headed) questions:

* What does the standard econ world make of mistakes, changes of heart, and self-defeating behavior? (Or even bad and stupid purchases?) I'm happy to agree that "priorities as revealed by behavior" are important. I'd argue though that a fair amount of life, as I've experienced it, just seems to get stumbled into. How does econ account for that? And if it doesn't, why not? It's certainly a big element in life.

* As for "showbiz," I should obviously be clearer about what I mean. I don't mean here entertainment or showbusiness in the usual sense, but symbolism. A lot of spending (government, biz, personal) is pretty absurd. It makes no sense except symbolically, as a sign that we care, or that we intend to get back to it later, or some such. Money just gets thrown around because someone feels it has to be. Sometimes we spend money just because we feel we ought to. An instance: why spend the extra money to make a town hall look dignified? (I'm a big fan of doing this, btw.) Another: isn't a lot of government-assistance money happening because ... well, because it made someone look good, and made voters feel good, and helped someone get elected, etc. And not because it serves any other purpose? ... In other words, there's some percentage of money that gets spent for no remotely-rational reason. I wonder if it's fairly constant, and I wonder how economists account for this?

Thanks in advance for any thoughts.

What I find interesting about the behavioral-econ crowd is that they seem to want to pay some attention to people's subjective experiences, and to what kinds of effects their subjective experience might have on their behavior. But I'm no economist, god knows -- do economists tend to think that's no business of theirs? Yet if attention isn't paid to these elements, then isn't the field steering itself into the "we only pay attention to what can be measured" trap? In which case, we who feel that subjective experience is an important part of life perhaps shouldn't pay much attention to econ?

Posted by: Michael Blowhard on April 9, 2004 02:18 PM



Anne:

I'm using a shotgun, argumentatively speaking, when I should be using a target rifle here. When I say that economics (or perhaps more accurately, political economics) needs to rethink its approach, I mostly mean that the discipline takes a studiously agnostic stance about human goals, and spends its time talking about ways to make everyone free to maximize their utility, etc., etc. (Although I think this neutrality is more apparent than real; I don't recall seeing many discussions of how people whose greatest pleasure is in serial murder could be accommodated more efficiently by society.) This neutrality allows economists to endorse certain ways of organizing human society that permit the kinds of flexibility needed to pursue multiple agendas, and to argue that everyone is better off with such flexible arrangements. Fair enough, as far as it goes.

But there still seems to me to be a sort of philosophical conflict between such a agnostic-about-goals intellectual system as utilitarian economics on the one hand and the theory of evolution and more specifically sociobiology on the other, which has posited rather more specific ideas about what drives human, animal & plant behavior. I would think that a sociobiologist would tend to think that some social arrangements would make more sense than others because they allow more efficient maximization of the goals that seem, on a deep level, to motivate people.

Granted all this gets mixed up in struggles between values, but I guess that's sort of what I'm getting at--I ain't so sure that studiously value-neutral systems (as utilitarian economics presents itself) aren't kind of an artifact of the Age of Nihilism (roughly 1850-1970) rather than a final way to deal with the knotty problem of deciding which values make more sense than other values. Which suggests to me that there's some rethinking to be done in future on these topics, although I don't claim in the slightest to have worked all this out.

Posted by: Friedrich von Blowhard on April 9, 2004 02:19 PM



Ah, a more succinct way of posing my question. And here's hoping Anne returns and is in the mood to indulge me.

What does economics do about the free-will and subjective-experience elements of life and behavior? Perhaps everything can indeed be modeled and interpreted in terms of behavior and money. Yet, yet ... Isn't the field awfully prone to move from taking-note mode into telling-us-what-to-do mode?

And isn't the reason we're seeing the Schillers, the post-Autistics, the Kahnemans etc around these days the fact that economists for years kinda overdid the "rational" (in a limited sense) thing? Although I might well be being naive here. Maybe it's all p-r...

Posted by: Michael Blowhard on April 9, 2004 02:39 PM



Annette, I hope I am getting better at knowing what will generate happiness. Wrong choices are awful at the time (but might cause much laughter later!) Perhaps that is why it is futile to quantify and box up happiness - one can get better at it, and it evolves. I keep hearing in my mind "life is not a dress rehearsal". I wish I heard that every day of my life from when I was, say ten years old. Maybe it wouldn't have made a difference. But it makes a difference now.

Imagination brings diversity to our chances of survival. That diversity has sometimes been intentionally lethal and sometimes intentionally life enhancing. The Gene Kelly lampost happiness test is perfect to define a "10" in happiness. We can have moments of undiluted happiness - but to attempt to quantify them seems useless. Some choices are trade-offs - no speeding tickets and no Barracuda.

Posted by: brid(get) on April 9, 2004 02:53 PM



I hope you don't mind a new voice jumping into this discussion. As an academic economist, with enough age on him to have seen many twists on this "are we rational 'utiity' maximizers?" debate, I agree that strong rational happiness-seeking does not seem to be a primary driver of human behavior. Today, this economic stronghold is crumpling, as suggested, by the work detailing non-ratonal behavior by psychologists like Kahleman and by "behavioral economics/finance folk like Richard Thaler. Both approches have considerable empirical support that the stronger view of rationality is wrong. (I digress little I hope in speaking of rationality because without this personal goal articulation and goal-seeking, you really can't say much about whether a person is seeking happiness.) But what really seems to be adding substance to the behavioral debate is evolutionary psychololgy's Darwinian notion that our genes are, in a sense, the ones seeking happiness so to speak (via replication) through various behaviors. John Toobes and Lisa Cosmedes have argued that understanding the underlying mental hardwiring does help us to understand what we (our genes) seek, even if it is through a glass darkly. That knowledge will be very helpful in our understanding of the world and...depending on your persuasions...doint something about it.

One interesting twist on the conscious pursuit of happiness question: It seems as we age that we are better at articulating such matters. This might be a consequence of our genes being through with us, so to speak--we're neither reproductively capable or perhaps much use as support for progeny who are. At that point (I think I'm closing in), one might no longer be hostage to the genetic voice within, and we see the world without the stridency of the young. Kind of a zen of aging...

Posted by: Doug Houston on April 9, 2004 04:30 PM



Hey Doug, Fascinating, many thanks for joining in. I've got an econ-journalist friend who tells me he thinks the field goes back and forth between emphasizing rationality in the stricter sense and then trying to take some note of chance/motivation/preferences/irrationality/etc. What with Thaler, Kahneman, etc, we seem to be in the middle of the latter swing, or so it would seem to hyper-amateur me. Shiller was emphasizing that too with "Irrational Exuberance," wasn't he? It's a funny, fascinating field, at least from my kindergarten chair: rather obsessed with being some kind of semi-hard science, yet stuck dealing with people, darn it, and all their goofiness. Seems to me that the mistake -- and aren't I the cheeky one here -- economists can sometimes make is to get too hard, or systematic; seems to me they'd be better off thinking of themselves as modeling open systems, rather than trying to encapsulate everything, a la physics.

But maybe I'm just being an English major here...

Posted by: Michael Blowhard on April 9, 2004 05:01 PM



I think there is some confusion between two opposite critiques of standard economic reasoning: 1) The theory is somewhat vacuous because almost anything can be rationalized (heh) as the outcome of some rational choice process. 2) The theory is wrong because it makes false predictions. These are not mutually exclusive, of course--it's possible that the theory is mostly vacuous but makes a few clearly wrong predictions. Nevertheless, 1) seems to be what Friedrich is complaining about (excessive neutrality and generality about human preferences in the face of evolutionary pressures) and 2) is what Michael worries about.

I don't worry too much about 1) because it is true of almost every good general theory about complex systems. You generally have lots of free parameters and degrees of modeling freedom. So I can (and have) shown how one could rationalize bank presidents setting their pants on fire as an equilibrium of a signalling game. The consistency requirements of economic theory, however, at least put some constraints on storytelling, unlike the sorts of tales often generated by, say, historians. One's first ideas about what is going on are often refuted by the consistency requirements of economic theory; the existence of multiple models to rationalize an outcome simply means that theory can only rule out some stories--others can only be falsified by empirical test or common sense.

Posted by: steve on April 12, 2004 06:35 PM






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