Philosophy of Economics Crash Course 11 – Thou Shalt Philosophize


Dr. Alexander X. Douglas‘s biography states: “I am a lecturer in philosophy in the School of Philosophical, Anthropological, and Film Studies at the University of St. Andrews. I am a historian of philosophy, interested in the philosophy of the human sciences, particularly from the early modern period. I am interested in theories of human reasoning, desire, choice, and social interaction – particularly work that questions the foundations of formal theories in logic and economics from a humanistic perspective. I am particularly interested in the thought of Benedict de Spinoza, which continues to inspire alternatives to the dominant paradigm in economics and social science. My first book, Spinoza and Dutch Cartesianism, proposed a new interpretation of Spinoza, situating him in the context of debates within the Dutch Cartesian tradition, over the status of philosophy and its relation to theology. I am completing a book manuscript, which aims to introduce and develop Spinoza’s theory of beatitude. This is the culmination of Spinoza’s theory of desire, since it describes the condition of ultimate satisfaction. Although Spinoza saw the revelation of true beatitude as the ultimate goal towards which his philosophy reached, there are few interpretative works devoted primarily to this theme. Spinoza’s theory of beatitude is, in my view, the keystone that holds together diverse parts of his philosophy – his theory of desire and the emotions, his metaphysics of time, his theory of human sociability, and his philosophy of religion. These are often studied separately; my introduction to beatitude aims at helping readers understand Spinoza’s philosophy as a unified whole. I have also published a book examining the concept of debt from the perspective of language, history, and political economy. I’m interested in the philosophy of macroeconomics, which receives considerably less attention from philosophers than microeconomics. I am a member of the Centre for Ethics, Philosophy, and Public Affairs, the Executive Committee of the Aristotelian Society, the Management Committee of the British Society for the History of Philosophy, and a Research Scholar at the Global Institute for Sustainable Policy.”

In this series, we discuss the philosophy of economics. For this session, we come back after some time with session 11 on ‌fundamental‌ ‌premises‌, ‌utility-maximization‌ ‌automata, ‌a‌choice, ‌Dr.‌ ‌Carolina‌ ‌Christina‌ ‌Alves‌, ‌human‌ ‌behaviour‌, ‌a metaphysical‌ ‌theory‌ ‌of‌ ‌fundamentally‌ “rational”‌ ‌human‌ ‌nature, ‌normative‌ ‌stance‌ ‌or‌ ‌ethic‌ ‌reflective‌ ‌of‌ ‌ ‌ideology, ‌political‌ ‌examples‌ ‌of‌ ‌Optimal‌ ‌Control‌ ‌Theory, ‌‌profit-motive‌ ‌examples‌ ‌of‌ ‌Optimal‌ ‌Control‌ ‌Theory, ‌understanding‌ ‌colonial‌ ‌narratives‌, and ‌the‌ ‌pretense‌ ‌of‌ ‌“control.”

Scott‌ ‌Douglas‌ ‌Jacobsen:‌ ‌Here’s‌ ‌something‌ ‌following‌ ‌from‌ ‌something‌ ‌else‌ ‌in‌ ‌session‌ ‌9,‌ ‌we‌ ‌talked‌ ‌about‌ ‌this‌ ‌“objective‌ ‌trait‌ ‌of‌ ‌human‌ ‌nature‌ ‌assumed‌ ‌in‌ ‌the‌ ‌framework”‌ ‌(quoting‌ ‌myself)‌ ‌and‌ ‌this‌ ‌“maximization‌ ‌fo‌ ‌preferences”‌ ‌(quoting‌ ‌you)‌ ‌or‌ ‌‘people‌ ‌choosing‌ ‌what‌ ‌they‌ ‌most‌ ‌prefer,‌ ‌given‌ ‌known‌ ‌constraints’‌ ‌(paraphrasing‌ ‌you).‌ ‌Okay,‌ ‌neat,‌ ‌fine,‌ ‌great,‌ ‌there‌ ‌are‌ ‌so‌ ‌many‌ ‌intelligent,‌ ‌and‌ ‌super‌ ‌smart,‌ ‌people‌ ‌in‌ ‌economics‌ ‌working‌ ‌today,‌ ‌and‌ ‌in‌ ‌the‌ ‌past.‌ ‌But‌ ‌if‌ ‌they‌ ‌plug‌ ‌in‌ ‌not‌ ‌necessarily‌ ‌the‌ ‌wrong,‌ ‌but‌ ‌imprecise‌ ‌and‌ ‌poor,‌ ‌assumptions‌ ‌for‌ ‌premises,‌ ‌or‌ ‌hidden‌ ‌premises‌ ‌rather,‌ ‌in‌ ‌this‌ ‌manner‌ ‌of‌ ‌looking‌ ‌at‌ ‌the‌ ‌world,‌ ‌they‌ ‌come‌ ‌to‌ ‌seemingly‌ ‌correct‌ ‌estimations‌ ‌about‌ ‌human‌ ‌psychology‌ ‌based‌ ‌on‌ ‌output‌ ‌–‌ ‌the‌ ‌6.2%‌ ‌vs.‌ ‌6.3%‌ ‌example.‌ ‌Yet,‌ ‌it’s‌ ‌a‌ ‌house‌ ‌of‌ ‌cards‌ ‌from‌ ‌an‌ ‌old‌ ‌water-soaked‌ ‌deck.‌ ‌The‌ ‌whole‌ ‌thing‌ ‌simply‌ ‌collapses‌ ‌on‌ ‌some‌ ‌more‌ ‌critical‌ ‌analysis‌ ‌of‌ ‌this‌ ‌supposed‌ ‌armature‌ ‌of‌ ‌utility-maximization.‌ ‌That’s‌ ‌all‌ ‌a‌ ‌long-winded‌ ‌way‌ ‌to‌ ‌call‌ ‌utility‌ ‌analyses‌ ‌wrong‌ ‌at‌ ‌root,‌ ‌and‌ ‌right‌ ‌in‌ ‌some‌ ‌loose‌ ‌approximation,‌ ‌maybe‌ ‌good‌ ‌for‌ ‌some‌ ‌introductory‌ ‌theory‌ ‌in‌ ‌economics‌ ‌if‌ ‌I‌ ‌am‌ ‌gathering‌ ‌the‌ ‌right‌ ‌analysis‌ ‌from‌ ‌you,‌ ‌while‌ ‌inadequate‌ ‌in‌ ‌its‌ ‌fundamental‌ ‌premises‌ ‌of‌ ‌endeavouring‌ ‌to‌ ‌understand‌ ‌human‌ ‌psychology‌ ‌and‌ ‌behaviour‌ ‌‌en‌ ‌masse‌.‌ ‌

Dr.‌ ‌Alexander‌ ‌Douglas:‌ ‌‌Yes,‌ ‌I‌ ‌think‌ ‌that’s‌ ‌right.‌ ‌There‌ ‌are‌ ‌some‌ ‌incredibly‌ ‌clever‌ ‌ways‌ ‌that‌ ‌people‌ ‌have‌ ‌found‌ ‌to‌ ‌explain‌ ‌how‌ ‌an‌ ‌observed‌ ‌social‌ ‌outcome‌ ‌can‌ ‌be‌ ‌represented‌ ‌as‌ ‌a‌ ‌balance‌ ‌of‌ ‌rationally‌ ‌self-interested‌ ‌forces‌ ‌-‌ ‌an‌ ‌equilibrium.‌ ‌But‌ ‌there‌ ‌is‌ ‌a‌ ‌very‌ ‌big‌ ‌step‌ ‌from “can‌ ‌be‌ ‌represented‌ ‌as”‌ ‌to‌ ‌“is‌ ‌in‌ ‌fact”,‌ ‌and‌ ‌I‌ ‌really‌ ‌haven’t‌ ‌seen‌ ‌the‌ ‌justification‌ ‌for‌ ‌taking‌ ‌that‌ ‌step,‌ ‌at‌ ‌least‌ ‌not‌ ‌in‌ ‌most‌ ‌cases.‌ ‌

There’s‌ ‌also‌ ‌the‌ ‌issue‌ ‌of‌ ‌modelling.‌ ‌We’ve‌ ‌had‌ ‌a‌ ‌pretty‌ ‌stark‌ ‌example‌ ‌of‌ ‌the‌ ‌dangers‌ ‌of‌ ‌depending‌ ‌too‌ ‌much‌ ‌on‌ ‌modelling‌ ‌human‌ ‌behaviour‌ ‌recently.‌ ‌The‌ ‌UK‌ ‌government‌ ‌repeatedly‌ ‌claimed‌ ‌to‌ ‌be‌ ‌“following‌ ‌the‌ ‌science”‌ ‌in‌ ‌handling‌ ‌the‌ ‌pandemic,‌ ‌but‌ ‌many‌ ‌scientists‌ ‌were‌ ‌troubled‌ ‌by‌ ‌how‌ ‌completely‌ ‌it‌ ‌was‌ ‌depending‌ ‌on‌ ‌modelling‌ ‌-‌ ‌even‌ ‌the‌ ‌scientists‌ ‌building‌ ‌the‌ ‌models.‌ ‌And‌ ‌terrible‌ ‌mistakes‌ ‌were‌ ‌made.‌ ‌Care‌ ‌homes‌ ‌were‌ ‌modelled‌ ‌as‌ ‌being‌ ‌shielded,‌ ‌so‌ ‌long‌ ‌as‌ ‌visits‌ ‌were‌ ‌controlled.‌ ‌That‌ ‌turned‌ ‌out‌ ‌to‌ ‌be‌ ‌wrong.‌ ‌There‌ ‌were‌ ‌open‌ ‌channels‌ ‌into‌ ‌the‌ ‌care‌ ‌homes.‌ ‌They‌ ‌weren’t‌ ‌in‌ ‌the‌ ‌models,‌ ‌because‌ ‌nobody‌ ‌put‌ ‌them‌ ‌there.‌ ‌The‌ ‌problem‌ ‌with‌ ‌depending‌ ‌entirely‌ ‌on‌ ‌models‌ ‌is‌ ‌that‌ ‌there‌ ‌is‌ ‌no‌ ‌model‌ ‌to‌ ‌tell‌ ‌you‌ ‌what‌ ‌to‌ ‌put‌ ‌in‌ ‌the‌ ‌model.‌ ‌

There’s‌ ‌a‌ ‌lesson‌ ‌here‌ ‌for‌ ‌economics. ‌Dani‌ ‌Rodrik‌ ‌says‌ ‌that‌ ‌choosing‌ ‌models‌ ‌is‌ ‌the‌ “art” ‌of‌ ‌economics, ‌whereas‌ ‌building‌ ‌models‌ ‌is‌ ‌the‌ ‌“science.” ‌But‌ ‌there‌ ‌is‌ ‌no‌ ‌clear‌ ‌method‌ ‌for‌ ‌this‌ “art”, ‌no‌ ‌quality-control, ‌nothing‌ ‌but‌ ‌instinct‌ ‌-‌ ‌and‌ ‌we‌ ‌shouldn’t‌ ‌want‌ ‌to‌ ‌live‌ ‌by‌ ‌the‌ ‌instincts‌ ‌of‌ ‌people‌ ‌who‌ ‌are‌ ‌experts‌ ‌on‌ ‌building‌ ‌models‌ ‌but‌ ‌amateurs‌ ‌on‌ ‌everything‌ ‌else. ‌

Jacobsen:‌ ‌What‌ ‌seem‌ ‌like‌ ‌symptoms‌ ‌of‌ ‌a‌ ‌“false‌ ‌psychological‌ ‌theory”‌ ‌or,‌ ‌rather,‌ ‌a‌ ‌false‌ ‌mass‌ ‌psychology‌ ‌theory?‌ ‌Is‌ ‌there,‌ ‌in‌ ‌some‌ ‌sense,‌ ‌an‌ ‌assumed‌ ‌idea‌ ‌of‌ ‌human‌ ‌beings‌ ‌in‌ ‌groups‌ ‌as‌ ‌automata,‌ ‌utility-maximization‌ ‌automata?‌ ‌As‌ ‌someone‌ ‌who‌ ‌has‌ ‌loved,‌ ‌i.e.,‌ ‌received‌ ‌and‌ ‌given‌ ‌deep‌ ‌love‌ ‌in‌ ‌intimate‌ ‌settings,‌ ‌this‌ ‌purported‌ ‌framework‌ ‌of‌ ‌“utility-maximization”‌ ‌hardly‌ ‌captures‌ ‌its‌ ‌contours‌ ‌–‌ ‌let‌ ‌alone‌ ‌fine‌ ‌details‌ ‌–‌ ‌if‌ ‌at‌ ‌all.‌ ‌

Douglas:‌ ‌‌What ‌you’ve‌ ‌brought‌ ‌up‌ ‌is,‌ ‌I‌ ‌think,‌ ‌that‌ ‌human‌ ‌actions,‌ ‌choices,‌ ‌feelings,‌ ‌preferences‌ ‌-‌ ‌they‌ ‌all‌ ‌have‌ ‌‌meanings‌.‌ ‌The‌ ‌action‌ ‌of‌ ‌pulling‌ ‌out‌ ‌the‌ ‌reproductive‌ ‌organs‌ ‌of‌ ‌plants,‌ ‌carrying‌ ‌them‌ ‌somewhere,‌ ‌and‌ ‌then‌ ‌depositing‌ ‌them‌ ‌isn’t‌ ‌an‌ ‌expression‌ ‌of‌ ‌love‌ ‌in‌ ‌itself.‌ ‌It‌ ‌becomes‌ ‌one‌ ‌under‌ ‌the‌ ‌description‌ ‌of‌ ‌picking‌ ‌flowers‌ ‌for‌ ‌your‌ ‌beloved.‌ ‌But‌ ‌meanings‌ ‌are‌ ‌by‌ ‌definition‌ ‌excluded‌ ‌from‌ ‌economic‌ ‌explanations.‌ ‌The‌ ‌explanatory‌ ‌models‌ ‌are‌ ‌mathematical‌ ‌models,‌ ‌whose‌ ‌variables‌ ‌range‌ ‌over‌ ‌various‌ ‌things‌ ‌that‌ ‌affect‌ ‌and‌ ‌are‌ ‌affected‌ ‌by‌ ‌human‌ ‌behaviour‌ ‌-‌ ‌prices,‌ ‌for‌ ‌instance.‌ ‌What‌ ‌doesn’t‌ ‌appear‌ ‌in‌ ‌the‌ ‌models,‌ ‌and‌ ‌therefore‌ ‌isn’t‌ ‌relevant,‌ ‌is‌ ‌the‌ ‌descriptions‌ ‌under‌ ‌which‌ ‌the‌ ‌human‌ ‌actions‌ ‌fall,‌ ‌and‌ ‌therefore‌ ‌their‌ ‌meaning.‌ ‌

Jacobsen:‌ ‌You‌ ‌stated,‌ ‌“Economists‌ ‌can‌ ‌only‌ ‌avoid‌ ‌having‌ ‌it‌ ‌falsified‌ ‌by‌ ‌adding‌ ‌so‌ ‌much‌ ‌noise‌ ‌into‌ ‌the‌ ‌environmental‌ ‌factors…”‌ ‌It’s‌ ‌a‌ ‌choice.‌ ‌It‌ ‌looks‌ ‌as‌ ‌if‌ ‌a‌ ‌choice:‌ ‌From‌ ‌the‌ ‌dehumanizing‌ ‌language‌ ‌to‌ ‌the‌ ‌false‌ ‌mass‌ ‌psychology‌ ‌theory‌ ‌to‌ ‌‌ad‌ ‌hoc‌ ‌‌terminology‌ ‌to‌ ‌the‌ ‌complex‌ ‌mathematical‌ ‌models‌ ‌to‌ ‌the‌ ‌implied‌ ‌metaphysical‌ ‌theory.‌ ‌Why‌ ‌do‌ ‌these‌ ‌professionals‌ ‌make‌ ‌these‌ ‌choices?‌ ‌Why‌ ‌have‌ ‌they‌ ‌consistently‌ ‌made‌ ‌these‌ ‌choices?‌ ‌

Douglas:‌ ‌‌I’m‌ ‌not‌ ‌sure‌ ‌it‌ ‌is‌ ‌a‌ ‌choice,‌ ‌exactly.‌ ‌The‌ ‌profession‌ ‌has‌ ‌ended‌ ‌upon‌ ‌following‌ ‌the‌ ‌path‌ ‌you‌ ‌describe.‌ ‌I‌ ‌guess‌ ‌at‌ ‌every‌ ‌stage‌ ‌there‌ ‌was‌ ‌a‌ ‌choice,‌ ‌and‌ ‌the‌ ‌combined‌ ‌choices‌ ‌led‌ ‌to‌ ‌where‌ ‌we‌ ‌are‌ ‌now.‌ ‌But‌ ‌I‌ ‌don’t‌ ‌know‌ ‌if‌ ‌anyone‌ ‌would‌ ‌have‌ ‌chosen‌ ‌in‌ ‌advance‌ ‌to‌ ‌go‌ ‌down‌ ‌the‌ ‌whole‌ ‌path.‌ ‌One‌ ‌thing‌ ‌philosophy‌ ‌is‌ ‌quite‌ ‌good‌ ‌at,‌ ‌as‌ ‌a‌ ‌discipline,‌ ‌is‌ ‌taking‌ ‌a‌ ‌broad‌ ‌view‌ ‌of‌ ‌how‌ ‌it‌ ‌has‌ ‌developed‌ ‌over‌ ‌time‌ ‌and‌ ‌reflecting‌ ‌on‌ ‌whether‌ ‌it‌ ‌might‌ ‌have‌ ‌done‌ ‌better‌ ‌to‌ ‌take‌ ‌a‌ ‌different‌ ‌road.‌ ‌Economics‌ ‌has‌ ‌been‌ ‌much‌ ‌less‌ ‌successful‌ ‌at‌ ‌doing‌ ‌this.‌ ‌Generally,‌ ‌economists‌ ‌are‌ ‌taught‌ ‌a‌ ‌set‌ ‌of‌ ‌techniques‌ ‌and‌ ‌then‌ ‌succeed‌ ‌by‌ ‌pushing‌ ‌those‌ ‌techniques‌ ‌further.‌ ‌To‌ ‌be‌ ‌honest,‌ ‌I‌ ‌think‌ ‌philosophy‌ ‌is‌ ‌less‌ ‌good‌ ‌at‌ ‌broad-view‌ ‌self-reflection‌ ‌than‌ ‌it‌ ‌used‌ ‌to‌ ‌be.‌ ‌Maybe‌ ‌it’s‌ ‌something‌ ‌to‌ ‌do‌ ‌with‌ ‌the‌ ‌current‌ ‌institutional‌ ‌structure‌ ‌of‌ ‌research.‌ ‌But‌ ‌the‌ ‌result‌ ‌is‌ ‌that‌ ‌nobody‌ ‌seems‌ ‌to‌ ‌be‌ ‌choosing‌ ‌to‌ ‌take‌ ‌the‌ ‌approach‌ ‌they‌ ‌take:‌ ‌you‌ ‌sign‌ ‌up‌ ‌to‌ ‌do‌ ‌economics,‌ ‌or‌ ‌philosophy,‌ ‌and‌ ‌then‌ ‌they‌ ‌tell‌ ‌you‌ ‌how‌ ‌to‌ ‌do‌ ‌it.‌ ‌You‌ ‌can‌ ‌get‌ ‌into‌ ‌the‌ ‌big‌ ‌journals‌ ‌and‌ ‌have‌ ‌a‌ ‌career,‌ ‌or‌ ‌you‌ ‌can‌ ‌do‌ ‌things‌ ‌your‌ ‌own‌ ‌way‌ ‌as‌ ‌an‌ ‌amateur‌ ‌blogger.‌ ‌

Jacobsen:‌ ‌In‌ ‌reference‌ ‌to‌ ‌Joan‌ ‌Robinson‌ ‌in‌ ‌session‌ ‌9,‌ ‌Dr.‌ ‌Carolina‌ ‌Christina‌ ‌Alves‌ ‌is‌ ‌the‌ Joan‌ ‌Robinson‌ ‌Research‌ ‌Fellow‌ ‌in‌ ‌Heterodox‌ ‌Economics‌ ‌at‌ ‌Girton‌ ‌College‌ ‌at‌ ‌the‌ ‌University‌ ‌of‌ ‌Cambridge,‌ ‌where‌ ‌readers‌ ‌can‌ ‌expect‌ ‌an‌ ‌intriguing‌ ‌educational‌ ‌series‌ ‌on‌ ‌Heterodox‌ ‌Economics‌ ‌in‌ ‌this‌ ‌same‌ ‌publication‌ ‌as‌ ‌Philosophy‌ ‌of‌ ‌Economics‌ ‌and‌ ‌Heterodox‌ ‌Economics‌ ‌seem‌ ‌to‌ ‌complement‌ ‌one‌ ‌another‌ ‌nicely.‌ ‌Without‌ ‌proper‌ ‌means‌ ‌by‌ ‌which‌ ‌to‌ ‌make‌ ‌precise‌ ‌demarcations,‌ ‌is‌ ‌orthodox‌ ‌economics‌ ‌left‌ ‌in‌ ‌the‌ ‌muck‌ ‌–‌ ‌so‌ ‌to‌ ‌speak‌ ‌–‌ ‌without‌ ‌the‌ ‌recourse‌ ‌to‌ ‌simplicity‌ ‌or‌ ‌parsimony‌ ‌available‌ ‌to‌ ‌the‌ ‌pure‌ ‌mathematician‌ ‌or‌ ‌the‌ ‌particle‌ ‌physicist?‌ ‌Simply‌ ‌put,‌ ‌there’s‌ ‌too‌ ‌many‌ ‌confounds‌ ‌for‌ ‌legitimate‌ ‌alternative‌ ‌theorizing‌ ‌in‌ ‌many‌ ‌directions.‌ ‌

Douglas: ‌‌I’m‌ ‌glad‌ ‌you’re‌ ‌speaking‌ ‌with‌ ‌Carolina. ‌She‌ ‌has‌ ‌a‌ ‌very‌ ‌interesting‌ ‌insider’s‌ ‌perspective‌ ‌on‌ ‌this, ‌which‌ ‌I‌ ‌don’t‌ ‌have, ‌and‌ ‌she’s‌ ‌worthy‌ ‌of‌ ‌the‌ ‌great‌ ‌Robinson‌ ‌legacy. ‌

Yes,‌ ‌I‌ ‌think‌ ‌that’s‌ ‌a‌ ‌good‌ ‌way‌ ‌of‌ ‌putting‌ ‌it.‌ ‌Economics‌ ‌goes‌ ‌off‌ ‌in‌ ‌so‌ ‌many‌ ‌different‌ ‌directions,‌ ‌even‌ ‌within‌ ‌the‌ ‌“orthodox”‌ ‌space.‌ ‌When‌ ‌you‌ ‌question‌ ‌economists‌ ‌about‌ ‌gaps‌ ‌in‌ ‌their‌ ‌theory,‌ ‌it‌ ‌feels‌ ‌a‌ ‌bit‌ ‌like‌ ‌being‌ ‌run‌ ‌around‌ ‌a‌ ‌bureaucracy.‌ ‌You‌ ‌get:‌ “oh,‌ ‌my‌ ‌model‌ ‌doesn’t‌ ‌have‌ ‌money‌ ‌in‌ ‌it;‌ ‌that’s‌ ‌for‌ ‌macroeconomists/monetary‌ ‌economists”;‌ ‌“oh,‌ ‌experimental‌ ‌economists‌ ‌work‌ ‌on‌ ‌that”;‌ “oh,‌ ‌that’s‌ ‌something‌ ‌behavioural‌ ‌economists‌ ‌work‌ ‌on”;‌ ‌”oh,‌ ‌that’s‌ ‌a‌ ‌problem‌ ‌for‌ ‌social‌ ‌choice‌ ‌theory”;‌ ‌“there’s‌ ‌probably‌ ‌some‌ ‌game-theoretic‌ ‌explanation‌ ‌for‌ ‌that”,‌ ‌et‌ ‌cetera‌ ‌ad‌ ‌nauseum.‌ ‌With‌ ‌many‌ ‌of‌ ‌the‌ ‌special‌ ‌sciences,‌ ‌you‌ ‌get‌ ‌these‌ ‌piecemeal‌ ‌snapshots,‌ ‌like‌ ‌the‌ ‌images‌ ‌from‌ ‌an‌ ‌MRI‌ ‌machine.‌ ‌You‌ ‌can‌ ‌then‌ ‌run‌ ‌them‌ ‌all‌ ‌together‌ ‌into‌ ‌a‌ ‌solid‌ ‌picture.‌ ‌With‌ ‌economics,‌ ‌it‌ ‌feels‌ ‌like‌ ‌the‌ ‌snapshots‌ ‌are‌ ‌all‌ ‌at‌ ‌different‌ ‌angles,‌ ‌and‌ ‌cut‌ ‌across‌ ‌each‌ ‌other‌ ‌in‌ ‌baffling‌ ‌ways.‌ ‌If‌ ‌you‌ ‌run‌ ‌them‌ ‌together,‌ ‌you‌ ‌get‌ ‌a‌ ‌pure‌ ‌tangle.‌ ‌

Despite‌ ‌the‌ ‌plurality‌ ‌of‌ ‌approaches,‌ ‌I’m‌ ‌not‌ ‌convinced‌ ‌that‌ ‌economics,‌ ‌at‌ ‌least‌ ‌orthodox‌ ‌economics,‌ ‌can‌ ‌tell‌ ‌us‌ ‌much‌ ‌about‌ ‌what‌ ‌we‌ ‌really‌ ‌want‌ ‌to‌ ‌know.‌ ‌Economists‌ ‌can‌ ‌go‌ ‌on‌ ‌their‌ ‌instincts‌ ‌about‌ ‌a‌ ‌fair‌ ‌wage,‌ ‌a‌ ‌fair‌ ‌level‌ ‌of‌ ‌inequality,‌ ‌etc.,‌ ‌and‌ ‌how‌ ‌we‌ ‌might‌ ‌get‌ ‌there.‌ ‌But‌ ‌I‌ ‌don’t‌ ‌see‌ ‌any‌ ‌‌scientific‌‌ ‌approach‌ ‌to‌ ‌answering‌ ‌these‌ ‌questions‌ ‌emerging.‌ ‌The‌ ‌models‌ ‌can‌ ‌do‌ ‌things‌ ‌like‌ ‌determine‌ ‌a‌ ‌wage‌ ‌level‌ ‌assuming‌ ‌a‌ ‌certain‌ ‌distribution‌ ‌of‌ ‌income,‌ ‌but‌ ‌that’s‌ ‌assuming‌ ‌the‌ ‌most‌ ‌contentious‌ ‌thing.‌ ‌As‌ ‌a‌ ‌layperson,‌ ‌I‌ ‌probably‌ ‌like‌ ‌institutional‌ ‌economics‌ ‌the‌ ‌best,‌ ‌but‌ ‌perhaps‌ ‌that’s‌ ‌because‌ ‌large‌ ‌parts‌ ‌of‌ ‌it‌ ‌resemble‌ ‌social‌ ‌anthropology‌ ‌and‌ ‌other‌ ‌hermeneutic‌ ‌disciplines.‌ ‌

Jacobsen:‌ ‌Why‌ ‌does‌ ‌human‌ ‌behaviour‌ ‌seem‌ ‌non-algorithmic?‌ ‌

Douglas:‌ ‌‌Because‌ ‌it‌ ‌has‌ ‌meaning.‌ ‌Algorithms‌ ‌can‌ ‌be‌ ‌represented‌ ‌by‌ ‌mathematical‌ ‌equations.‌ ‌Can‌ ‌you‌ ‌represent‌ ‌what‌ ‌somebody‌ ‌‌does‌‌ ‌mathematically?‌ ‌Sure‌ ‌-‌ ‌you‌ ‌can,‌ ‌e.g.,‌ ‌find‌ ‌an‌ ‌equation‌ ‌that‌ ‌tracks‌ ‌a‌ ‌person’s‌ ‌movement‌ ‌through‌ ‌space‌ ‌over‌ ‌time.‌ ‌But‌ ‌the‌ ‌meaning‌ ‌of‌ ‌her‌ ‌behaviour‌ ‌wouldn’t‌ ‌come‌ ‌out‌ ‌that‌ ‌way.‌ ‌You‌ ‌can‌ ‌describe‌ ‌the‌ ‌meaning‌ ‌of‌ ‌an‌ ‌action‌ ‌in‌ ‌words,‌ ‌or‌ ‌maybe‌ ‌in‌ ‌painting‌ ‌or‌ ‌music,‌ ‌but‌ ‌those‌ ‌only‌ ‌work‌ ‌because‌ ‌they‌ ‌conjure‌ ‌thoughts‌ ‌of‌ ‌meanings‌ ‌in‌ ‌our‌ ‌minds.‌ ‌Take‌ ‌the‌ ‌meaning‌ ‌out‌ ‌of‌ ‌words‌ ‌and‌ ‌they‌ ‌become‌ ‌grunts‌ ‌and‌ ‌scribbles.‌ ‌Take‌ ‌the‌ ‌meaning‌ ‌out‌ ‌of‌ ‌action‌ ‌and‌ ‌it‌ ‌becomes‌ ‌dead‌ ‌motion.‌ ‌R.G.‌ ‌Collingwood‌ ‌said‌ ‌that‌ ‌every‌ ‌rational‌ ‌human‌ ‌action‌ ‌expresses‌ ‌some‌ ‌sort‌ ‌of‌ ‌meaning.‌ ‌To‌ ‌study‌ ‌it‌ ‌algorithmically‌ ‌keeps‌ ‌the‌ ‌syntax,‌ ‌at‌ ‌best,‌ ‌and‌ ‌throws‌ ‌the‌ ‌semantics‌ ‌away.‌ ‌But‌ ‌meaning‌ ‌is‌ ‌everything‌ ‌in‌ ‌human‌ ‌life.‌ ‌

But‌ ‌look,‌ ‌even‌ ‌if‌ ‌you’re‌ ‌not‌ convinced‌ ‌by‌ ‌that‌ ‌point,‌ ‌the‌ ‌way‌ ‌that‌ ‌modern‌ ‌orthodox‌ ‌economics‌ ‌treats‌ ‌human‌ ‌behaviour‌ ‌leaves ‌out‌ ‌almost‌ ‌everything‌ ‌that‌ ‌people‌ ‌ought‌ ‌to‌ ‌care‌ ‌about‌ ‌in‌ ‌political‌ ‌economy.‌ ‌Marx‌ ‌made‌ ‌the‌ ‌point‌ ‌that‌ ‌”bourgeois”‌ ‌economics‌ ‌obscures‌ ‌relations‌ ‌among‌ ‌people‌ ‌behind‌ ‌relations‌ ‌among‌ ‌‌things‌:‌ ‌the‌ ‌prices‌ ‌at‌ ‌which‌ ‌things‌ ‌exchange.‌ ‌The‌ ‌trick‌ ‌here‌ ‌is‌ ‌to‌ ‌say‌ ‌that‌ ‌prices‌ ‌can‌ ‌be‌ ‌determined‌ ‌if‌ ‌we‌ ‌hold‌ ‌something‌ ‌else‌ ‌fixed:‌ ‌the‌ ‌preferences‌ ‌of‌ ‌individuals.‌ ‌But‌ ‌then‌ ‌prices,‌ ‌especially‌ ‌wages‌ ‌and‌ ‌profits,‌ ‌determine‌ ‌the‌ ‌incomes‌ ‌of‌ ‌individuals.‌ ‌Others‌ ‌might‌ ‌not‌ ‌feel‌ ‌as‌ ‌strongly‌ ‌as‌ ‌me‌ ‌that‌ ‌our‌ ‌desires‌ ‌and‌ ‌preferences‌ ‌are‌ ‌determined‌ ‌by‌ ‌our‌ ‌social‌ ‌situation,‌ ‌but‌ ‌few‌ ‌would‌ ‌deny‌ ‌that‌ ‌our‌ ‌desires‌ ‌and‌ ‌preferences‌ ‌are‌ ‌determined‌ ‌by‌ ‌our‌ ‌income‌.‌ ‌The‌ ‌only‌ ‌way‌ ‌the‌ ‌neoclassical‌ ‌models‌ ‌work‌ ‌is‌ ‌if‌ ‌we‌ ‌assume‌ ‌that‌ ‌people‌ ‌have‌ ‌some‌ ‌hard‌ ‌core‌ ‌of‌ ‌unvarying‌ ‌preferences‌ ‌that‌ ‌remain‌ ‌unmoved‌ ‌by‌ ‌all‌ ‌changes‌ ‌in‌ ‌income‌ ‌and‌ ‌social‌ ‌position.‌ ‌That’s‌ ‌a‌ ‌strong‌ ‌dose‌ ‌of‌ ‌philosophical‌ ‌anthropology‌ ‌to‌ ‌take‌ ‌as‌ ‌an‌ ‌axiom.‌ ‌

Jacobsen:‌ ‌You‌ ‌said,‌ ‌“I‌ ‌find‌ ‌that‌ ‌the‌ ‌scholarly‌ ‌literature‌ ‌often‌ ‌presents‌ ‌it‌ ‌as‌ ‌a‌ ‌‘black‌ ‌box’‌ ‌whereas‌ ‌textbooks‌ ‌suggest‌ ‌that‌ ‌we‌ ‌really‌ ‌do‌ ‌think‌ ‌and‌ ‌act‌ ‌according‌ ‌to‌ ‌the‌ ‌economist’s‌ ‌definition‌ ‌of‌ ‌rationality…‌ ‌rationality,‌ ‌on‌ ‌the‌ ‌economist’s‌ ‌conception,‌ ‌seems‌ ‌to‌ ‌involve‌ ‌some‌ ‌normative‌ ‌element.‌ ‌Being‌ ‌rational‌ ‌is‌ ‌something‌ ‌to‌ ‌be‌ ‌proud‌ ‌of;‌ ‌being‌ ‌irrational‌ ‌is‌ ‌something‌ ‌to‌ ‌be‌ ‌ashamed‌ ‌of.”‌ ‌It‌ ‌comes‌ ‌out‌ ‌in‌ ‌colloquial‌ ‌phrases‌ ‌of‌ ‌non-academic‌ ‌culture‌ ‌too:‌ ‌“You’re‌ ‌being‌ ‌irrational”‌ ‌or‌ ‌“that’s‌ ‌irrational.”‌ ‌It’s‌ ‌saying‌ ‌they’re‌ ‌temporarily‌ ‌wrong‌ ‌in‌ ‌the‌ ‌head.‌ ‌In‌ ‌that,‌ ‌it‌ ‌sort‌ ‌of‌ ‌gives‌ ‌part‌ ‌of‌ ‌the‌ ‌social‌ ‌game‌ ‌away,‌ ‌and,‌ ‌in‌ ‌turn,‌ ‌may‌ ‌hint‌ ‌at‌ ‌some‌ ‌of‌ ‌the‌ ‌same‌ ‌instant‌ ‌filler‌ ‌happening‌ ‌in‌ ‌academic‌ ‌economics‌ ‌circles.‌ ‌To‌ ‌make‌ ‌the‌ ‌normative‌ ‌charge,‌ ‌“You’re‌ ‌irrational.”‌ ‌It‌ ‌is‌ ‌to‌ ‌say‌ ‌that‌ ‌they’re‌ ‌not‌ ‌precisely‌ ‌conforming‌ ‌to‌ ‌some‌ ‌abstracted‌ ‌ideal‌ ‌human‌ ‌being‌ ‌who‌ ‌would‌ ‌act‌ ‌rational‌ ‌in‌ ‌such‌ ‌a‌ ‌circumstance,‌ ‌where‌ ‌this‌ ‌“irrational”‌ ‌individual‌ ‌is‌ ‌failing‌ ‌to‌ ‌achieve‌ ‌this‌ ‌idealized‌ ‌state.‌ ‌It‌ ‌hints‌ ‌at‌ ‌the‌ ‌‌faux‌‌ ‌precision‌ ‌of‌ ‌the‌ ‌mathematical‌ ‌modelling‌ ‌and‌ ‌the‌ “metaphysical‌ ‌theory”‌ ‌that‌ ‌you‌ ‌talked‌ ‌about‌ ‌before.‌ ‌A‌ ‌metaphysical‌ ‌theory‌ ‌of‌ ‌fundamentally‌ “rational”‌ ‌human‌ ‌nature.‌ ‌

Douglas:‌ ‌‌Yes,‌ ‌in‌ ‌the‌ ‌medieval‌ ‌and‌ ‌early‌ ‌modern‌ ‌period‌ ‌rationality‌ ‌was‌ ‌often‌ ‌understood‌ ‌in‌ ‌terms‌ ‌of‌ ‌this‌ ‌abstract,‌ ‌ideal‌ ‌human‌ ‌being;‌ ‌it‌ ‌was‌ ‌even‌ ‌argued‌ ‌that‌ ‌since‌ ‌rationality‌ ‌is‌ ‌a‌ ‌specifically‌ ‌human‌ ‌trait,‌ ‌the‌ ‌ideal‌ ‌human‌ ‌would‌ ‌be‌ ‌purely‌ ‌rational.‌ ‌But‌ ‌I‌ ‌think‌ ‌there’s‌ ‌a‌ ‌sleight-of-hand‌ ‌here.‌ ‌People‌ ‌make‌ ‌it‌ ‌look‌ ‌as‌ ‌if‌ ‌they‌ ‌start‌ ‌from‌ ‌the‌ ‌idea‌ ‌of‌ ‌rationality‌ ‌and‌ ‌then‌ ‌derive‌ ‌an‌ ‌ideally‌ ‌rational‌ ‌agent‌ ‌from‌ ‌that.‌ ‌I‌ ‌think‌ ‌what‌ ‌really‌ ‌happens‌ ‌is‌ ‌that‌ ‌they‌ ‌start‌ ‌with‌ ‌their‌ ‌conception‌ ‌of‌ ‌an‌ ‌ideal‌ ‌agent‌ ‌and‌ ‌then‌ ‌define‌ ‌rationality‌ ‌in‌ ‌terms‌ ‌of‌ ‌what‌ ‌approaches‌ ‌that‌ ‌exemplar.‌ ‌Spinoza‌ ‌explains‌ ‌this‌ ‌in‌ ‌the‌ ‌Preface‌ ‌to‌ ‌Part‌ ‌Four‌ ‌of‌ ‌his‌ ‌‌Ethics‌.‌ ‌

Hume‌ ‌came‌ ‌in‌ ‌with‌ ‌this‌ ‌idea‌ ‌that‌ ‌what‌ ‌is‌ ‌rational‌ ‌for‌ ‌you‌ ‌is‌ ‌purely‌ ‌subjective‌ ‌-‌ ‌relative‌ ‌to‌ ‌your‌ ‌passions‌ ‌and‌ ‌desires.‌ ‌Reason‌ ‌is‌ ‌just‌ ‌the‌ ‌“slave-hand”;‌ ‌it‌ ‌works‌ ‌out‌ ‌how‌ ‌to‌ ‌satisfy‌ ‌your‌ ‌desires‌ ‌and‌ ‌cater‌ ‌to‌ ‌your‌ ‌passions,‌ ‌but‌ ‌it‌ ‌doesn’t‌ ‌determine‌ ‌them.‌ ‌Thus,‌ ‌you‌ ‌might‌ ‌think,‌ ‌there‌ ‌is‌ ‌no‌ ‌abstract‌ ‌ideal,‌ ‌and‌ ‌Hume’s‌ ‌notion‌ ‌is‌ ‌in‌ ‌line‌ ‌with‌ ‌Enlightenment‌ ‌liberalism.‌ ‌But‌ ‌this,‌ ‌again,‌ ‌is‌ ‌deceptive.‌ ‌Christine‌ ‌Korsgaard‌ ‌has‌ ‌a‌ ‌thought‌ ‌something‌ ‌like‌ ‌this:‌ ‌suppose‌ ‌that‌ ‌I‌ ‌passionately‌ ‌want‌ ‌an‌ ‌ice-cream,‌ ‌am‌ ‌happy‌ ‌to‌ ‌pay‌ ‌for‌ ‌one,‌ ‌know‌ ‌that‌ ‌there‌ ‌is‌ ‌an‌ ‌ice-cream‌ ‌van‌ ‌nearby,‌ ‌and…‌ ‌stand‌ ‌there‌ ‌doing‌ ‌nothing.‌ ‌Even‌ ‌on‌ ‌Hume’s‌ “slave-hand”‌ ‌conception,‌ ‌I’m‌ ‌being‌ ‌very‌ ‌irrational.‌ ‌Reason‌ ‌is‌ ‌failing‌ ‌as‌ ‌the‌ ‌instrument‌ ‌of‌ ‌my‌ ‌desires.‌ ‌But‌ ‌what‌ ‌does‌ ‌it‌ ‌mean‌ ‌to‌ ‌say‌ ‌that?‌ ‌Either‌ ‌it‌ ‌means‌ ‌nothing‌ ‌at‌ ‌all,‌ ‌or‌ ‌it’s‌ ‌somehow‌ ‌normative:‌ ‌I’m‌ ‌not‌ ‌being‌ ‌as‌ ‌I‌ ‌‌ought‌‌ ‌to‌ ‌be;‌ ‌I’m‌ ‌falling‌ ‌short ‌of‌ ‌an‌ ‌ideal‌ ‌version‌ ‌of‌ ‌myself.‌ ‌But‌ ‌then‌ ‌you‌ ‌see‌ ‌that‌ ‌Hume‌ ‌is‌ ‌pushing‌ ‌an‌ ‌ideal‌ ‌after‌ ‌all:‌ ‌the‌ ‌Enlightenment‌ ‌ideal‌ ‌of‌ ‌the‌ ‌unrepressed,‌ ‌self-possessed‌ ‌agent‌ ‌who‌ ‌follows‌ ‌his‌ ‌passions‌ ‌and‌ ‌does‌ ‌what‌ ‌he‌ ‌desires.‌ ‌This‌ ‌is‌ ‌just‌ ‌the‌ ‌moderate‌ ‌hedonist‌ ‌of‌ ‌that‌ ‌‘commercial‌ ‌society’‌ ‌Hume‌ ‌so‌ ‌admired.‌ ‌You‌ ‌find‌ ‌the‌ ‌same‌ ‌ideal‌ ‌type‌ ‌painted‌ ‌and‌ ‌explicitly‌ ‌celebrated‌ ‌in‌ ‌Sterne’s‌ ‌‌Sentimental‌ ‌Journey‌.‌ ‌So‌ ‌it‌ ‌turns‌ ‌out‌ ‌that‌ ‌Hume,‌ ‌in‌ ‌defining‌ ‌rationality,‌ ‌was‌ ‌defining‌ ‌a‌ ‌type‌ ‌after‌ ‌all‌ ‌-‌ ‌a‌ ‌type‌ ‌that‌ ‌was‌ ‌needed‌ ‌for‌ ‌the‌ ‌sort‌ ‌of‌ ‌society‌ ‌he‌ ‌wanted‌ ‌to‌ ‌promote.‌ ‌Later‌ ‌economists‌ ‌do‌ ‌the‌ ‌same‌ ‌thing.‌ ‌

Jacobsen: ‌Following‌ ‌from‌ ‌the‌ ‌Joan‌ ‌Robinson‌ ‌point‌ ‌before, ‌what‌ ‌is‌ ‌the‌ ‌ideology‌ ‌behind‌ ‌this‌ ‌“metaphysical‌ ‌theory‌ ‌of‌ ‌fundamentally‌ ‘rational’‌ ‌human‌ ‌nature” ‌as‌ ‌an ‌normative‌ ‌stance‌ ‌or‌ ‌ethic‌ ‌reflective‌ ‌of‌ ‌the‌ ‌ideology? ‌

Douglas:‌‌ ‌Robinson‌ ‌said‌ ‌that‌ ‌one‌ ‌self-appointed‌ ‌task‌ ‌of‌ ‌economics‌ ‌is‌ ‌to‌ ‌“justify‌ ‌the‌ ‌ways‌ ‌of Mammon‌ ‌to‌ ‌man.”‌ ‌That‌ ‌means‌ ‌justifying‌ ‌the‌ ‌status‌ ‌quo‌ ‌-‌ ‌after‌ ‌all,‌ ‌the‌ ‌status‌ ‌quo‌ ‌must‌ ‌be‌ ‌what the‌ ‌wealthy‌ ‌approve‌ ‌of,‌ ‌or‌ ‌they‌ ‌would‌ ‌have‌ ‌paid‌ ‌to‌ ‌stop‌ ‌it.‌ ‌Well,‌ ‌one‌ ‌easy‌ ‌way‌ ‌to‌ ‌justify‌ ‌the‌ ‌status‌ ‌quo‌ ‌is‌ ‌to‌ ‌present‌ ‌it‌ ‌as‌ ‌the‌ ‌outcome‌ ‌of‌ ‌fairly‌ ‌rational‌ ‌choices‌ ‌by‌ ‌fairly‌ ‌rational‌ ‌agents.‌ ‌Now‌ ‌that‌ ‌we‌ ‌know‌ ‌that‌ ‌”rational”‌ ‌really‌ ‌just‌ ‌means‌ ‌”ideal‌ ‌according‌ ‌to‌ ‌some‌ ‌model”,‌ ‌we‌ ‌see‌ ‌how‌ ‌this‌ ‌becomes‌ ‌an‌ ‌endorsement.‌ ‌

Of‌ ‌course,‌ ‌we‌ ‌need‌ ‌to‌ ‌accept‌ ‌the‌ ‌ideal‌ ‌model‌ ‌in‌ ‌the‌ ‌first‌ ‌place.‌ ‌This‌ ‌is‌ ‌worked‌ ‌at‌ ‌subtly.‌ ‌The‌ ‌”typical‌ ‌household”‌ ‌in‌ ‌an‌ ‌economic‌ ‌model‌ ‌maximizes‌ ‌consumption,‌ ‌lifetime-income,‌ ‌perhaps‌ ‌intergenerational‌ ‌income.‌ ‌In‌ ‌other‌ ‌words,‌ ‌it‌ ‌is‌ ‌a‌ ‌household‌ ‌that‌ ‌works‌ ‌hard,‌ ‌saves‌ ‌carefully‌ ‌for‌ ‌the‌ ‌future,‌ ‌and‌ ‌prudently‌ ‌enjoys‌ ‌the‌ ‌rewards‌ ‌of‌ ‌its‌ ‌labour.‌ ‌This‌ ‌is‌ ‌the‌ ‌same‌ ‌“hard-working‌ ‌family”‌ ‌that‌ ‌the‌ ‌politicians‌ ‌are‌ ‌always‌ ‌parading‌ ‌before‌ ‌us.‌ ‌The‌ ‌point‌ ‌isn’t‌ ‌merely‌ ‌description,‌ ‌nor‌ ‌is‌ ‌it‌ ‌merely‌ ‌praise;‌ ‌it’s‌ ‌an‌ ‌instruction:‌ ‌‌be‌ ‌like‌ ‌this‌.‌ ‌There’s‌ ‌really‌ ‌a‌ ‌double‌ ‌meaning‌ ‌in‌ ‌the‌ ‌notion‌ ‌of‌ ‌an‌ ‌“economic‌ ‌model”:‌ ‌the‌ ‌model‌ ‌consumer,‌ ‌model‌ ‌household,‌ ‌even‌ ‌model‌ ‌government‌ ‌is‌ ‌something‌ ‌for‌ ‌us‌ ‌to‌ ‌be‌ ‌like,‌ ‌an‌ ‌exemplar‌ ‌of‌ ‌our‌ ‌nature.‌ ‌Economics‌ ‌is‌ ‌like‌ ‌a‌ ‌sort‌ ‌of‌ ‌Confucianism.‌ ‌It‌ ‌tells‌ ‌us‌ ‌which‌ ‌model‌ ‌to‌ ‌emulate,‌ ‌and‌ ‌then‌ ‌justifies‌ ‌emulation‌ ‌in‌ ‌terms‌ ‌of‌ ‌the‌ ‌greatness‌ ‌of‌ ‌the‌ ‌model.‌ ‌

Jacobsen: ‌What‌ ‌are‌ ‌some‌ ‌political‌ ‌examples‌ ‌of‌ ‌Optimal‌ ‌Control‌ ‌Theory? ‌

Douglas:‌ ‌‌Optimal‌ ‌Control‌ ‌Theory‌ ‌is‌ ‌a‌ ‌branch‌ ‌of‌ ‌mathematics‌ ‌that‌ ‌was‌ ‌used‌ ‌in‌ ‌engineering,‌ ‌to‌ ‌solve‌ ‌various‌ ‌sorts‌ ‌of‌ ‌optimization‌ ‌problems,‌ ‌such‌ ‌as‌ ‌trying‌ ‌to‌ ‌set‌ ‌the‌ ‌right‌ ‌throttle-response‌ ‌in‌ ‌an‌ ‌engine‌ ‌to‌ ‌maximize‌ ‌fuel‌ ‌efficiency.‌ ‌Macroeconomists‌ ‌took‌ ‌it‌ ‌over‌ ‌in‌ ‌sort‌ ‌of‌ ‌a‌ ‌weird‌ ‌way:‌ ‌they‌ ‌wanted‌ ‌to‌ ‌represent‌ ‌the‌ ‌economy‌ ‌as‌ ‌a‌ ‌set‌ ‌of‌ ‌sectors‌ ‌simultaneously‌ ‌solving‌ ‌different‌ ‌optimization‌ ‌problems:‌ ‌e.g.,‌ ‌the‌ ‌government‌ ‌trying‌ ‌to‌ ‌maximize‌ ‌some‌ ‌social‌ ‌welfare‌ ‌function,‌ ‌households‌ ‌trying‌ ‌to‌ ‌maximize‌ ‌lifetime‌ ‌consumption,‌ ‌and‌ ‌firms‌ ‌trying‌ ‌to‌ ‌maximize‌ ‌profits.‌ ‌Stitching‌ ‌the‌ ‌different‌ ‌problems‌ ‌together‌ ‌involves‌ ‌an‌ ‌odd‌ ‌mathematical‌ ‌trick:‌ ‌you‌ ‌solve‌ ‌each‌ ‌one‌ ‌assuming‌ ‌that‌ ‌the‌ ‌others‌ ‌are‌ ‌solved,‌ ‌and‌ ‌then‌ ‌in‌ ‌the‌ ‌end‌ ‌you‌ ‌have‌ ‌a‌ ‌circular‌ ‌justification‌ ‌for‌ ‌your‌ ‌assumptions.‌ ‌Brian‌ ‌Romanchuk‌ ‌tells‌ ‌the‌ ‌story‌ ‌of‌ ‌how‌ ‌Optimal‌ ‌Control‌ ‌Theory‌ ‌fell‌ ‌out‌ ‌of‌ ‌favour‌ ‌with‌ ‌engineers‌ ‌-‌ ‌‌.‌ ‌In‌ ‌effect‌ ‌it‌ ‌has‌ ‌to‌ ‌assume‌ ‌a‌ ‌certain‌ ‌model‌ ‌of‌ ‌a‌ ‌system‌ ‌without‌ ‌knowing‌ ‌that‌ ‌it‌ ‌is‌ ‌the‌ ‌correct‌ ‌model.‌ ‌It’s‌ ‌interesting‌ ‌to‌ ‌reflect‌ ‌on‌ ‌how‌ ‌it‌ ‌has‌ ‌received‌ ‌a‌ ‌second‌ ‌life‌ ‌at‌ ‌the‌ ‌hands‌ ‌of‌ ‌macroeconomists.‌ ‌

Jacobsen: ‌What‌ ‌are‌ ‌some‌ ‌profit-motive‌ ‌examples‌ ‌of‌ ‌Optimal‌ ‌Control‌ ‌Theory? ‌

Douglas:‌ ‌‌It‌ ‌was‌ ‌used‌ ‌by‌ ‌engineers‌ ‌in‌ ‌response‌ ‌to‌ ‌the‌ ‌profit-motive:‌ ‌I‌ ‌guess‌ ‌it‌ ‌was‌ ‌hoped‌ ‌that‌ ‌it‌ ‌would‌ ‌be‌ ‌useful‌ ‌for‌ ‌getting‌ ‌the‌ ‌best‌ ‌results‌ ‌at‌ ‌the‌ ‌lowest‌ ‌cost‌ ‌when‌ ‌producing‌ ‌complex‌ ‌equipment.‌ ‌There’s‌ ‌some‌ ‌significance‌ ‌in‌ ‌the‌ ‌fact‌ ‌that‌ ‌something‌ ‌with‌ ‌such‌ ‌a‌ ‌clear‌ ‌commercial‌ ‌application‌ ‌is‌ ‌then‌ ‌used‌ ‌to‌ ‌model‌ ‌the‌ ‌entire‌ ‌economy.‌ ‌Modelling‌ ‌the‌ ‌economy‌ ‌as‌ ‌an‌ ‌engineering‌ ‌problem‌ ‌means‌ ‌you‌ ‌get‌ ‌a‌ ‌picture‌ ‌where‌ ‌everyone‌ ‌is‌ ‌looking‌ ‌for‌ ‌economies‌ ‌and‌ ‌efficiencies‌ ‌all‌ ‌the‌ ‌time;‌ ‌if‌ ‌they‌ ‌aren’t,‌ ‌they’re‌ ‌failing‌ ‌at‌ ‌their‌ ‌purpose.‌ ‌Again,‌ ‌reality‌ ‌starts‌ ‌to‌ ‌converge‌ ‌to‌ ‌the‌ ‌model.‌ ‌Even‌ ‌organisations‌ ‌that‌ ‌aren’t‌ ‌really‌ ‌pursuing‌ ‌efficiency‌ ‌are‌ ‌always‌ ‌frantic‌ ‌to‌ ‌‌look‌ ‌‌as‌ ‌if‌ ‌they‌ ‌are:‌ ‌universities‌ ‌are‌ ‌a‌ ‌clear‌ ‌example.‌ ‌Being‌ ‌exploited‌ ‌for‌ ‌the‌ ‌profit-motive‌ ‌is‌ ‌bad‌ ‌enough,‌ ‌but‌ ‌public-sector‌ ‌employees‌ ‌are‌ ‌exploited‌ ‌as‌ ‌a‌ ‌sort‌ ‌of‌ ‌performative‌ ‌ritual,‌ ‌to‌ ‌appease‌ ‌the‌ ‌gods‌ ‌of‌ ‌the‌ ‌Model.‌ ‌

Jacobsen: ‌How‌ ‌is‌ ‌understanding‌ ‌colonial‌ ‌narratives‌ ‌important‌ ‌for‌ ‌the‌ ‌comprehension‌ ‌of‌ ‌the‌ ‌emergence‌ ‌of‌ ‌ideology-laden‌ ‌disciplines, ‌including‌ ‌orthodox‌ ‌economics, ‌and‌ ‌the‌ ‌ethics‌ ‌incorporated‌ ‌into‌ ‌them‌ ‌connected‌ ‌to‌ ‌the‌ ‌terminology‌ ‌and‌ ‌metaphysical‌ ‌theories‌ ‌of‌ ‌them, ‌too? ‌

Douglas:‌ ‌‌I‌ ‌know‌ ‌that‌ ‌Carolina‌ ‌has‌ ‌looked‌ ‌at‌ ‌this,‌ ‌and‌ ‌I’m‌ ‌sure‌ ‌she‌ ‌has‌ ‌more‌ ‌interesting‌ ‌things‌ ‌to‌ ‌say‌ ‌than‌ ‌I‌ ‌do.‌ ‌But‌ ‌there‌ ‌might‌ ‌be‌ ‌an‌ ‌analogy‌ ‌with‌ ‌philosophy.‌ ‌I‌ ‌recently‌ ‌taught‌ ‌a‌ ‌very‌ ‌interesting‌ ‌article‌ ‌by‌ ‌Kirstie‌ ‌Dotson,‌ ‌called‌ ‌“How‌ ‌is‌ ‌this‌ ‌Paper‌ ‌Philosophy.”‌ ‌She‌ ‌links‌ ‌a‌ ‌certain‌ ‌perception‌ ‌that‌ ‌philosophy‌ ‌is‌ ‌a‌ ‌”white‌ ‌man’s‌ ‌game”‌ ‌with‌ ‌the‌ ‌intense‌ ‌boundary-policing‌ ‌that‌ ‌can‌ ‌go‌ ‌on‌ ‌at‌ ‌philosophy‌ ‌events.‌ ‌People‌ ‌are‌ ‌asked‌ ‌to‌ ‌justify‌ ‌how‌ ‌their‌ ‌work‌ ‌counts‌ ‌as‌ ‌philosophy,‌ ‌and‌ ‌this‌ ‌requires‌ ‌pointing‌ ‌to‌ ‌what‌ ‌Dotson‌ ‌calls‌ “a‌ ‌set‌ ‌of‌ ‌commonly‌ ‌held,‌ ‌univocally‌ ‌relevant,‌ ‌historical‌ ‌precedents.”‌ ‌Now‌ ‌we‌ ‌know‌ ‌that‌ ‌those‌ ‌historical‌ ‌precedents‌ ‌developed‌ ‌in‌ ‌an‌ ‌age‌ ‌of‌ ‌colonialism,‌ ‌the‌ ‌aggressive‌ ‌assertion‌ ‌of‌ ‌a‌ ‌dominant‌ ‌culture,‌ ‌and‌ ‌the‌ ‌exclusion‌ ‌of‌ ‌many‌ ‌voices.‌ ‌Thus‌ ‌if‌ ‌your‌ ‌intellectual‌ ‌heritage‌ ‌runs‌ ‌back‌ ‌to‌ ‌the‌ ‌excluded‌ ‌voices‌ ‌rather‌ ‌than‌ ‌the‌ ‌dominant‌ ‌ones,‌ ‌you’ll‌ ‌struggle‌ ‌to‌ ‌stand‌ ‌up‌ ‌to‌ ‌the‌ ‌boundary-policing.‌ ‌In‌ ‌trying‌ ‌to‌ ‌protect‌ ‌a‌ ‌conception‌ ‌of‌ ‌genuine‌ ‌philosophy,‌ ‌the‌ ‌discipline‌ ‌ends‌ ‌up‌ ‌preserving‌ ‌the‌ ‌intellectual‌ ‌legacy‌ ‌of‌ ‌colonialism.‌ ‌People‌ ‌who‌ ‌aren’t‌ ‌of‌ ‌the‌ ‌“right”‌ ‌heritage‌ ‌are‌ ‌thus‌ ‌discouraged‌ ‌from‌ ‌entering‌ ‌the‌ ‌discipline,‌ ‌and‌ ‌the‌ ‌problem‌ ‌compounds.‌ ‌

Now‌ ‌economics‌ ‌is‌ ‌subject‌ ‌to‌ ‌similar‌ ‌boundary-policing.‌ ‌So‌ ‌I’m‌ ‌sure‌ ‌a‌ ‌similar‌ ‌thing‌ ‌happens.‌ ‌Economists‌ ‌could‌ ‌defend‌ ‌themselves‌ ‌by‌ ‌saying‌ ‌that‌ ‌they‌ ‌speak‌ ‌a‌ ‌culturally-neutral‌ ‌language‌ ‌of‌ ‌mathematics‌ ‌and‌ ‌empirics.‌ ‌But‌ ‌I‌ ‌hope‌ ‌I’ve‌ ‌shown‌ ‌how‌ ‌deep‌ ‌the‌ ‌implicit‌ ‌anthropology‌ ‌in‌ ‌economics‌ ‌runs:‌ ‌how‌ ‌rich‌ ‌it‌ ‌is‌ ‌in‌ ‌ideals‌ ‌and‌ ‌rituals‌ ‌and‌ ‌conceptions‌ ‌of‌ ‌what‌ ‌is‌ ‌right‌ ‌and‌ ‌normal.‌ ‌No‌ ‌disciplines‌ ‌need‌ ‌more‌ ‌of‌ ‌a‌ ‌cultural‌ ‌shake-up‌ ‌than‌ ‌philosophy‌ ‌and‌ ‌economics,‌ ‌in‌ ‌my‌ ‌view.‌ ‌

Jacobsen: ‌Why‌ ‌keep‌ ‌the‌ ‌pretense‌ ‌of‌ ‌“control,” ‌as‌ ‌in‌ ‌the‌ ‌case‌ ‌of‌ ‌computers‌ ‌by‌ ‌analogy, ‌with‌ ‌human‌ ‌beings? ‌All‌ ‌this‌ ‌sounds‌ ‌reminiscent‌ ‌of‌ ‌‌1984‌. ‌Is‌ ‌the‌ ‌vision‌ ‌that‌ ‌bleak‌ ‌of‌ ‌the‌ ‌utility-maximization‌ ‌economists? ‌

Douglas:‌ ‌‌I‌ ‌exaggerated‌ ‌for‌ ‌effect.‌ ‌But‌ ‌a‌ ‌key‌ ‌ambition‌ ‌of‌ ‌social‌ ‌science‌ ‌is‌ ‌to‌ ‌guide‌ ‌policy.‌ ‌And‌ ‌the‌ ‌way‌ ‌our‌ ‌political‌ ‌system‌ ‌works,‌ ‌that‌ ‌means‌ ‌making‌ ‌a‌ ‌calculation‌ ‌that‌ ‌your‌ ‌policy‌ ‌will‌ ‌deliver the‌ ‌right‌ ‌benefits‌ ‌to‌ ‌the‌ ‌right‌ ‌voters.‌ ‌There‌ ‌is‌ ‌the‌ ‌Enlightenment‌ ‌ideal‌ ‌that‌ ‌I‌ ‌cited‌ ‌from‌ ‌the‌ ‌Baron‌ ‌d’Holbach‌ ‌-‌ ‌that‌ ‌if‌ ‌we‌ ‌could‌ ‌just‌ ‌understand‌ ‌the‌ ‌laws‌ ‌of‌ ‌human‌ ‌behaviour,‌ ‌policymakers‌ ‌could‌ ‌move‌ ‌people‌ ‌around‌ ‌the‌ ‌way‌ ‌a‌ ‌scientist‌ ‌can‌ ‌move‌ ‌iron‌ ‌filings‌ ‌around‌ ‌with‌ ‌a‌ ‌magnet.‌ ‌The‌ ‌desire‌ ‌for‌ ‌that‌ ‌level‌ ‌of‌ ‌control‌ ‌is‌ ‌purely‌ ‌political;‌ ‌it‌ ‌doesn’t‌ ‌come‌ ‌from‌ ‌economics.‌ ‌But‌ ‌economics‌ ‌is‌ ‌happy‌ ‌to‌ ‌cater‌ ‌to‌ ‌the‌ ‌desire.‌ ‌It‌ ‌would‌ ‌be‌ ‌fine‌ ‌if‌ ‌people‌ ‌just‌ ‌wanted‌ ‌what‌ ‌they‌ ‌wanted,‌ ‌and‌ ‌the‌ ‌social‌ ‌scientist‌ ‌worked‌ ‌out‌ ‌the‌ ‌ways‌ ‌to‌ ‌optimally‌ ‌provide‌ ‌for‌ ‌everyone‌ ‌(though‌ ‌this‌ ‌would‌ involve‌ ‌determining‌ ‌how‌ ‌much‌ ‌income‌ ‌everyone‌ ‌should‌ ‌start‌ ‌with,‌ ‌in‌ ‌order‌ ‌to‌ ‌effectively‌ ‌signal‌ ‌their‌ ‌desires).‌ ‌But‌ ‌I‌ ‌strongly‌ ‌reject‌ ‌the‌ ‌assumption‌ ‌that‌ ‌human‌ ‌desires‌ ‌are‌ ‌”exogenous”‌ ‌in‌ ‌this‌ ‌way.‌ ‌

Our‌ ‌desires‌ ‌are‌ ‌shaped‌ ‌by‌ ‌what‌ ‌our‌ ‌community‌ ‌values‌ ‌-‌ ‌what‌ ‌models‌ ‌it‌ ‌holds‌ ‌up‌ ‌for‌ ‌emulation. ‌I‌ ‌don’t‌ ‌think‌ ‌policymakers‌ ‌should‌ ‌just‌ ‌mess‌ ‌around‌ ‌seeing‌ ‌how‌ ‌best‌ ‌to‌ ‌get‌ ‌us‌ ‌what‌ ‌we‌ ‌want. ‌Humans‌ ‌are‌ ‌not‌ ‌blank‌ ‌slates, ‌but‌ ‌we‌ ‌are‌ ‌incredibly‌ ‌susceptible‌ ‌to‌ ‌emulation. ‌We‌ ‌have‌ ‌to‌ ‌be‌ ‌careful‌ ‌what‌ ‌we‌ ‌are‌ ‌making‌ ‌ourselves‌ ‌into. ‌That’s‌ ‌my‌ ‌opinion. ‌

Jacobsen: ‌Thank‌ ‌you‌ ‌for‌ ‌the‌ ‌opportunity‌ ‌and‌ ‌your‌ ‌time, ‌Dr.‌ ‌Douglas. ‌

Douglas: ‌‌Thank‌ ‌you‌ ‌-‌ ‌great‌ ‌questions, ‌as‌ ‌always! ‌

Photo by Sharon McCutcheon on Unsplash

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