Imperialism, the highest stage of neoclassical economics

Gary Becker’s recent death has provoked widespread praise (for example, from Peter Lewin through Justin Wolfers to Amita Etzioni) for his role in initially creating and then extending “economics imperialism.”

The basic idea (as presented on Wikipedia, by Edward P. Lazear [pdf], and in this interview with Becker himself) is that economics imperialism refers to an “economic analysis of seemingly non-economic aspects of life,” such as crime, law, the family, racial discrimination, tastes, religion, and war.*

Actually, that’s wrong. Economics imperialism is not the economic analysis of supposedly noneconomic behaviors and institutions; it’s the extension of neoclassical economics to those domains. Economics imperialism is, in this sense, the highest stage of neoclassical economics.

There are lots of different ways of making sense of the economic dimensions of our individual and social lives. What Becker and his followers set out to do was to analyze various aspects of individual decisionmaking and social institutions through the lens of neoclassical theory. This has meant reducing those decisions and institutions to individual, rational, self-interested calculations of costs and benefits, under conditions of scarcity, such as to arrive at efficient, equilibrium solutions.

The imperialist extension of neoclassical theory to supposedly noneconomic phenomena was predicated on the formation of a neoclassical monopoly within the discipline of economics. Once that monopoly over teaching, research, publications, and funding was achieved within the traditional domain of the discipline in the postwar period, it became possible to branch out and colonize the rest of the space of social theory. (I should note that the monopoly of neoclassical theory within the discipline was never complete, and has been contested throughout the postwar period.) That’s what economics imperialism was all about: to attempt to create a theoretical monopoly across the social sciences by exporting the methods of neoclassical economics to other domains. This is what made it different from the previous period, when it was the conclusions of neoclassical economics that were exported to other disciplines; now, it was the method that was being exported.

The result, of course, was not to unify social theory across the disciplines but to create new divisions within the disciplines. It’s no longer a battle between, say, economists and sociologists but, instead, between neoclassical economists and sociologists, on one hand, and non-neoclassical economists and sociologists, on the other. Much the same is true in political science, anthropology, psychology, and so on. And it’s not just a battle over the use of some of the key concepts and tools closely identified with neoclassical economics (such as mathematical modeling, rational choice, equilibrium, and so on) but over the actual entry points of social analysis. Because, in the end, that’s what Becker’s neoclassical analysis privileges: the reduction of the social space to the decisions and actions of individual subjects.

The real challenge to economics imperialism—inside and outside the discipline of economics—is, as Louis Althusser put it, the idea of a process without a subject.

 

*What I didn’t remember, or perhaps never knew, is that Becker understood his work to be a critique of and an alternative to Marxism (or at least what he took to be Marxism). It’s right there at the beginning of his Nobel lecture [pdf] and the interview with Religion and Liberty:

R&L: You are sometimes called an “economic imperialist.” What is meant by this?

Becker: That refers to my belief that economic analysis can be applied to many problems in social life, not just those conventionally called “economic.” The theme of my Nobel lecture, based on my life’s work, is that the horizons of economics need to be expanded. Economists can talk not only about the demand for cars, but also about matters such as the family, discrimination, and religion, and about prejudice, guilt, and love. Yet these areas have traditionally received little attention in economics. In that sense, it’s true: I am an economic imperialist. I believe good techniques have a wide application. Adam Smith and many others believed that as well.

On the other hand, my economic imperialism doesn’t have anything to do with crude materialism or the view that material status is the sum total of a person’s value. That view has much more in common with Marxist analysis.