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History
of Economic Doctrines Session 2 Alternative Theories of Human Behavior (See Behavioral Economics for substantial elaboration.) RELIGION: Our purpose on Earth is to do God’s will. Examples: medieval scholastics [Albertus Magnus and Thomas Aquinas]. Fundamentalist versions of
Christianity, Islam, Orthodox Judaism, and numerous sects, … .
BIOLOGY Evolution and
Adaptation Charles Darwin
– Survival of the Fittest [Inspired by Malthus?] Stephen Jay Gould – Adaptation and Mutation ANTHROPOLOGY: Issue: nature v. nurture: Are we hard-wired? How much of behavior is environmentally determined? How much is attributable to genetics? Nurture: Cultural
Anthropologists Franz Boaz believed differences were a result of culture. Margaret Meade- wrote Coming of Age in Samoa; found societies where, e.g., women were the aggressive warriors while men cooked and tended children. This bolsters the nurture argument. Joseph Campbell: Myths, Rituals, and Symbols Nature: Eugenics Francis Galton (1822-1911) a statistician/philosopher who studied intelligence and contributed the word “regression” to the lexicon of statistics, originated eugenics as a serious movement. The term regression comes from Galton; as in “regression to the mean” (e.g., parents with above average IQs have children closer to the mean and parents with below average IQs have children with IQs closer to the mean). Eugenicists propose that breeding be limited to “superior” people, based on the argument that our behavior is determined more by nature [our genes] than by nurture. Some 1920's eugenicists studied family trees and concluded that (1) we shouldn’t allow members of certain families to breed [ex: Jukes and Kallikak families were dominantly petty criminals and on welfare] because it is bad for society, and (2) some people should be encouraged, perhaps. [Ex: the Lowell and Holmes families that generated numerous writers and prominent judges, etc., in New England.] Eugenicists were briefly successful in getting a few states to enact laws requiring sterilization for some welfare recipients or those deemed mentally incompetent, but between the 1940s and 1970s, eugenics became equated with Nazism and racism, and so it fell into disrepute. Aside: Eugenicists tried to generalize from parts of Charles Darwin: Origin of Species. Darwin’s theory of evolution, in turn, draws heavily from parts of Thomas Malthus’ theory of population [àsociobiology?] Nature: IQ
Testing and Eugenics In The Bell Curve [1994], Richard J. Herrnstein and Charles Murray studied IQ testing. They found that IQ correlates positively with social and economic success (education, income, etc.), and negatively with behavior usually viewed as anti-social (ex: criminal records) or detrimental to the individual (ex: unemployment rates, birth rates to unmarried women, being on welfare). In IQ tests that compared race and gender, the overlaps of these functions were extremely high, but the averages were slightly higher for Asians than whites, and slightly higher for whites than for blacks. Their very deterministic and controversial study was intended to bolster the nature argument.
RTB Note: The original IQ testing by the military of new military personnel during WW I found Jews > Swedes > Italians > Anglo-Saxons > Slavs > Irish, etc. Also, electricians > bricklayers > carpenters > assembly line workers > cooks > long distance truckers > short distance truckers > mechanics > farmers > laborers. The fact that these ethnic differences seem to have largely disappeared in more recent studies suggests that these “IQ differences” were largely cultural. SOCIOBIOLOGY (aka: Evolutionary
Psychology) Issue:
Is procreation
our ultimate purpose? The ultimate purpose of all organisms (including humans) is to ensure
the survival of our genes. Sociobiologists believe human conflict is often a competition about breeding rights. Aside:
Sociobiologists use the fact that women cannot have as many children as men
can to explain some of the differences between the sexes. Ex: Women tend to
be more conservative than men, and less promiscuous. Some studies indicate
that women investors tend to generate higher
rates of return on their portfolios than men, on average, because they are
more risk adverse, trade less frequently, and incur lower transaction costs
than male investors. Richard Dawkins: The Selfish Gene. E. O. Wilson (1929- )– Sociobiology: The
New Synthesis [1975] Robert Ardrey African Genesis: The Territorial Imperative: Territory is necessary to pass on our genes. Among other things, Ardrey asserts that nations engage in wars primarily because people want space for breeding. Issue: Are
muscles and brains and physical symmetry mere sex symbols? Is society based
on a power struggle about breeding possibilities? Are our abilities to reason
and read, or to construct buildings or manipulate organizations mere
mechanisms by which we signal the desirability of our genes? PSYCHOLOGY Internal determinants of thought and action. Freudians Sigmund Freud [1856 – 1939]: Behavior is largely driven by unconscious urges, primarily sexual. Sex and Unconscious (dream symbols) … primitive urges from id, ego, and super-ego. Cure for behavioral problems? Understanding through psychoanalysis. Behaviorists: Conditioning -we are all programmed in certain ways … very deterministic. Ivan P. Pavlov (1849 – 1936) Pavlov's dogs salivated when a bell rang so dogs associated bell with food. B.F. Skinner (1904-1990) Representative experiment: every time child touched a white rat, a loud noise went off. The child began to cry when a rat approached. Ultimately, the child associated all white animals to the loud noise and thus did not like white animals. Cure for behavioral problems? Reconditioning? Physical Psychologists: The Power of Organic Chemistry? Starting point may be DNA: Krick and Watson? Many behavioral problems (ex: schizophrenia, depression, bipolar disorder) reflect flawed brain chemistry. Remedies? Pharmaceutical (ex: thorazine, Prozac, or lithium) or, ex., electroshock or lobotomy? Humanistic
Psychologists:
Evolutionary
Psychologists: See Sociobiology (above). Economics Some
Alternative Views Adam Smith: [Wealth of Nations, 1776] A benevolent Newtonian “Invisible Hand” makes the market system both stable and desirable. Karl Marx: - people are deterministically driven by “class interest.” Milton Friedman: Modern economist. - Capitalism maximizes freedom. Standard Economic
Theory: Motives and Decisionmaking
Scarcity:
The Basic Economic Problem Issue: Is any activity or phenomenon devoid of economic
content? Probably NOT! Economics is about (a) scarcity (unlimited wants and limited resources) and (b) decisionmaking and its consequences. Even historical events or the far reaches of outer space or the nature of subatomic particles involve economics because we devote resources to try to learn about these things, and research absorbs resources. Even contemplation of a question absorbs a resource – our time, which could be devoted to other activities. Scarcity occurs because resources and technology are limited and cannot accommodate all of our unlimited wants. [People are assumed insatiable.] Scarcity è forces us to make choicesèchoices involve cost. The opportunity
cost of any good or activity is the value of the next best alternative foregone,
and is also known as alternative costs or economic cost. Thus, economics is ultimately about choices and costs, and the consequences of our decisions. The opportunity set
is a “budget” (broadly construed) and is the aggregate of all the
choices from which an individual may choose, as bounded by the constraints of
income, interest rates, wealth, information, time, health, environment,
genetic endowments, and laws and regulations. Issue:
Some views of earlier economic thinkers
that we will study seem quaint from today’s perspective. Other sets of
views will seem completely mistaken. Will economists five hundred years from
now view our standard tools (ex: supply and demand) as hopelessly uninformed
and primitive? [The answer is a very tentative, “probably.”] |
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These web pages are significantly edited and elaborated versions of
student notes based on lectures by Ralph Byrns, 2002-2006.
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