Lead us Not into Temptation
Over at my other day-job, Comment magazine, I have written a review of Samuel Bowles’ recent book The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens. You can find it here.
Below are a few more thoughts that I snipped from the review for reasons of length. I include them here simply as additional observations, but also to keep myself honest.
The first is to express exasperation with the myopia and self-importance of the discipline of economics. How else can you explain the fact that a book that says what so many others have been saying for so long gets plaudits from Nobel Prize winners and the bigwigs at the world’s largest corporation, and gets published by an influential press? What does that say about the discipline?
In many ways, I think it says a lot. To some extent, the book reads as an internal memo from a member of the class that finds itself at the very top of an edifice of its own making and wants to stay there. Economists have long had outsized cultural influence—leading economists are routinely pulled in by governments to shape policies, and heretofore they have done so with, a touch of disdain for those soft, non-scientists, who have called for consideration of things (like morality) which are less easily measured via econometrics. Yet, now that the old model appears lacking, Bowles encourages his field to take up these questions in earnest—but only if it can be explained in the language of economics! One might beg forgiveness for seeing this as, well, self-interested.
But those two concerns are fairly easy to overcome. It’s better to come to understanding of the importance of morality for public life late than never. And if the ruling elites suddenly start taking Aristotle and other moral philosophy seriously, would we be worse off than we are now? On the contrary. Hell, they might even end up picking up Thomas Aquinas, or this tome, along the way. I could think of worse things for elites to consider as they shape public policy. And I could think of worse things than for moral philosophers and theologians to take seriously attempts to see how things work in real life.
But Deliver us from our Priors
The biggest temptation, though, comes from the fact that this book confirms almost all of my priors. I am tempted to give an easy ride to the book because, well, it agrees with me, instead of asking hard questions. And there are, I think, hard questions to be asked of the book. Russ Roberts, of EconTalk fame, recently published a short piece entitled “What do Economists Really Know” advising caution with the use of econometric methods to achieve certainty. On things ranging from minimum wages to trade with China there “is never a clean empirical test that ultimately settles these issues.” I think the same is true for Bowles’ thesis. It’s well argued, and a lot of the data is quite good, but it’s also true that a lot of the social experiments he uses to make his case don’t really come close to reflecting reality. Game theory is nice, but it’s not real life. It simply can’t fully account for the vast soup of conflicting interests and motivations that are at play when, say, the firefighter in the Bronx makes decisions about whether he’s going to work through his sniffles, or take the day off sick.
This is not to say that we should dismiss the book or its findings, but healthy skepticism about drawing broad points from a small range of tightly constrained experiments and one or two broader experiments should apply even to those books that come to a conclusion you agree with. Consistency demands that if we question the methods of econometrics that affirm the vision of homo economicus, we should launch the same questions when it’s used to undermine that vision.
My final concern is linked to this. Despite the book’s overall undermining of the dominant narrative of the discipline of economics, it is still very much a book of econometric data that wears its political theory clothes, well, a little uncomfortably. Despite all of its excellent analysis, it doesn’t really provide the reader with a coherent way forward on governing because it, like any other book of econometrics, doesn’t really have a thick conception of justice. Or, if it does, it’s not coherent. And it’s not coherent because Bowles doesn’t really articulate a theory of justice other than to assume that some behaviours—cooperation and so on—are good. One might ask: why? It’s not even that Bowles’ doesn’t articulate a coherent political theory, it’s that he doesn’t even provide a moral grounding for why we should care about the proper place of markets and when, why, and where, it is appropriate to have the norm of thrift be the dominant mode of action in a given relationship. I, for one, would hate to see this book used as a means to undermine the good that free markets and proper incentives can do for people, for firms, and for societies. To do that, you would need a rich, coherent theory that takes seriously both economic and political norms, and makes the case for when, how, and why they overlap. The guild needs more thinking in this space.
The Moral Economy, for all of its many temptations, is a good book that should be on the reading list of all Econ 101 classes. It might not be perfect, but it is a small step, from within the guild, of removing the moral cataract that has been in the eye of a discipline for ages.