Beyond MaxU

Posted: 28 April 2010 in Uncategorized
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René Magritte, "The False Mirror" (1928)

Much of contemporary neoclassical economics remains wedded to an analytical approach based on utility-maximizing individuals. And, as Nick Krafft discovered, neoclassical economists just don’t want to give it up.

Notwithstanding all the criticisms of the idea of MaxU over the years, including the exceptions to utility-maximizing behavior discovered by behavioral economists, the official line is “don’t throw out the baby with the bathwater.” Why? Because they just can’t imagine doing economics without rational, self-interested, utility-maximizing economic subjects. The fact is, letting go of MaxU probably involves moving beyond neoclassical economics but it certainly doesn’t mean the end of economic analysis.

One exception is the work of Deirdre McCloskey, who has, in the name of Bourgeois Virtues, attempted to expand the concept of the individual, beyond utility-maximization. And, of course, she remains firmly rooted in neoclassical economics (what she considers to be old-style Chicago economics, as against Samuelsonian versions of neoclassical theory).

But there are two other alternatives. One is to produce a different concept of the individual economic subject, a nonunitary subject, for which there are many possibilities: the no-self self (as in Buddhist thought), multiple selves (as discussed by Paul Bloom, in “First Person Plural”), the decentered self (favored by postmodern theorists), the Lacanian self, and so on. Each and every one of them would give rise to a distinctly non-neoclassical form of economic analysis—but still an approach to economics grounded in the human subject.

The second alternative is to decenter economics from the subject. This would involve analyzing economic events and institutions without grounding such analysis on a given concept of the human subject. It is, in other words, a post-humanist economics—or, in Louis Althusser’s famous phrase, an economics based on a “process without a subject.”

I can’t take the time here to spell out what such different economic theories look like. My only point is, both approaches—the decentered subject and the decentering of economics from the subject—offer viable alternatives to MaxU and neoclassical economics. And that’s the problem Nick encountered in stubborn resistance to his question: moving beyond MaxU does (with the exception of McCloskey) involve throwing out the neoclassical baby with the dirty bathwater.

Comments
  1. Tom Hickey says:

    Exactly. The matter boils down the concept of the self. I would argue as a philosopher that the concept of the self providing the foundation for neo-liberalism is deficient.

    Indeed, it’s logical extension is found in Ayn Rand’s Objectivism. Few people realize that Rand modeled John Galt on a serial killer whom she admired as an ideal because she regarded him to be absolutely devoid of altruism.

  2. Jonatan says:

    Soviet Union established outposts on the shores of Northern Ocean, and opened public schools and cultural centers for local Esqimo tribes. The best culturally intergrated natives won a trip to Moscow. Upon the return they were invited to share the experience. “Well” they said, “you know that slogan, “All for The Man” we hang for May celebration? So, when we were in Moscow, we’ve seen that man!”

  3. […] Paraphrasing that nineteenth-century critic of political economy, we might say that “economic decision-making appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.” We might credit Thaler and other behavioral economists, then, for having taken a first step in challenging the traditional neoclassical account of rational decision-making. But they stop far short of examining the perverse incentives that are built into the current economic system or the alternative rationalities that would serve as the basis for a different way of organizing economic and social life. And, in terms of economic theory, they appear not to be able to imagine another way of thinking about the economy, as a process without an individual subject. […]

  4. […] Paraphrasing that nineteenth-century critic of political economy, we can say that economic decision-making appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties. We might credit Thaler and other behavioral economists, then, for having taken a first step in challenging the traditional neoclassical account of rational decision-making. But they stop far short of examining the perverse incentives that are built into the current economic system or the alternative rationalities that could serve as the basis for a different way of organizing economic and social life. And, in terms of economic theory, they appear not to be able to imagine another way of thinking about the economy, as a process without an individual subject. […]

  5. […] Học theo lối diễn giải của một nhà phê phán kinh tế chính trị thế kỉ XIX [Karl Marx], chúng ta có thể nói rằng việc ra quyết định kinh tế, ngay từ cái nhìn đầu tiên, là một điều rất tầm thường, và dễ hiểu. Việc phân tích nó cho thấy rằng, trên thực tế, đó là một điều rất kì dị, bao trùm trong những điều tinh tế có tính siêu hình và những chi tiết thần học. Chúng ta có thể thừa nhận vai trò của Thaler và các nhà kinh tế học hành vi khác vì đã có một bước đi tiên phong trong việc thách thức cách trình bày [kinh tế học] tân cổ điển truyền thống về việc ra quyết định duy lí. Tuy nhiên, họ ngừng nghiên cứu những sự khuyến khích ngược được đưa vào hệ thống kinh tế hiện tại hoặc những tính duy lí thay thế khác có thể làm nền tảng cho một cách thức tổ chức cuộc sống về mặt kinh tế và xã hội khác. Và, xét về mặt lí thuyết kinh tế học, họ dường như không thể tưởng tượng được một cách tư duy khác về nền kinh tế, như là một quá trình không có chủ thể (process without an individual subject). […]

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