Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-25T04:53:51.508Z Has data issue: false hasContentIssue false
  • English
  • Français

THE EARLY MODERN ORIGINS OF BEHAVIORAL ECONOMICS

Published online by Cambridge University Press:  07 January 2021

Richard Boyd
Richard Boyd*
Affiliation:
Government, Georgetown University, USA
Get access Rights & Permissions [Opens in a new window]

Abstract

For all the recent discoveries of behavioral psychology and experimental economics, the spirit of homo economicus still dominates the contemporary disciplines of economics, political science, and sociology. Turning back to the earliest chapters of political economy, however, reveals that pioneering figures such as Francis Bacon, Thomas Hobbes, and Adam Smith were hardly apostles of economic rationality as they are often portrayed in influential narratives of the development of the social sciences. As we will see, while all three of these thinkers can plausibly be read as endorsing “rationality,” they were also well aware of the systematic irrationality of human conduct, including a remarkable number of the cognitive biases later “discovered” by contemporary behavioral economists. Building on these insights I offer modest suggestions for how these thinkers, properly understood, might carry the behavioral revolution in different directions than those heretofore suggested.

Keywords

Behavioral psychologyhistory of economicsrational choiceearly modern philosophyFrancis BaconThomas HobbesAdam Smithcognitive biases
Type
Research Article
Information
Social Philosophy and Policy , Volume 37 , Issue 1 , Summer 2020 , pp. 30 - 54
Copyright
© Social Philosophy & Policy Foundation 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Earlier versions of this essay were presented to audiences at Bard College-Berlin and the IPE and Public Policy Workshop at the London School of Economics. The author thanks Ewa Atanassow, James Morrison, Israel Waichman, the other contributors to this volume, and an anonymous referee for criticisms and suggestions that greatly improved the essay.

References

1 Green, Donald P. and Shapiro, Ian, Pathologies of Rational Choice (New Haven: Yale University Press, 1994).Google Scholar

2 See especially Friedman, Jeffrey, ed., The Rational Choice Controversy: Economic Models of Politics Reconsidered (New Haven: Yale University Press, 1996).Google Scholar

3 Amadae, S. M., Rationalizing Capitalist Democracy: The Cold War Origins of Rational Choice Liberalism (Chicago: University of Chicago Press, 2003).Google Scholar

4 Finifter, Ada, ed., Political Science: The State of the Discipline (Washington, DC: American Political Science Association, 1983)Google Scholar; David Ricci, The Tragedy of Political Science (New Haven: Yale University Press, 1984); Raymond Seidelman and Edward Harpham, Disenchanted Realists: Political Science and the American Crisis (Albany: State University of New York Press, 1985); Dorothy Ross, The Origins of American Social Science (Cambridge: Cambridge University Press, 1991).

5 Friedman, Milton, “The Methodology of Positive Economics,” in Essays in Positive Economics (Chicago: University of Chicago Press, 1953), 3–30.Google Scholar

6 Hirschman, Albert, “Against Parsimony: Three Easy Ways of Complicating Economic Discourse,” Economics and Philosophy 1 (1985): 7–21.CrossRefGoogle Scholar

7 Sen, Amartya, “Rational Fools: A Critique of the Behavioral Foundations of Economic Theory,” Philosophy and Public Affairs 6 (1977): 317–44.Google Scholar

8 Kahneman, Daniel, Slovic, Paul, and Tversky, Amos, eds., Judgment under Uncertainty: Heuristics and Biases (Cambridge: Cambridge University Press, 1982)CrossRefGoogle Scholar; Kahneman, Daniel and Tversky, Amos, eds., Choices, Values and Frames (Cambridge: Cambridge University Press, 2000)CrossRefGoogle Scholar; Smith, Vernon, Papers in Experimental Economics, 1962–1988 (Cambridge: Cambridge University Press, 1991)Google Scholar; Thaler, Richard, Misbehaving: The Making of Behavioral Economics (New York: Norton, 2016).Google Scholar

9 Ariely, Dan, Predictably Irrational: The Hidden Forces that Shape Our Decisions (New York: Harper Collins, 2008).Google Scholar

10 Green and Shapiro, Pathologies of Rational Choice.

11 Crick, Bernard, The American Science of Politics: Its Origins and Conditions (Berkeley: University of California Press, 1959)Google Scholar; Collini, Stefan, Winch, Donald, and Burrow, John, That Noble Science of Politics: A Study in Nineteenth Century Intellectual History (Cambridge: Cambridge University Press, 1983)CrossRefGoogle Scholar; Farr, James, “Political Science and the Enlightenment of Enthusiasm,” American Political Science Review 82 (March 1988): 51–69CrossRefGoogle Scholar.

12 MacIntyre, Alasdair, After Virtue (Notre Dame, IN: University of Notre Dame Press, 1981)Google Scholar; Michael Sandel, “Procedural Republic and the Unencumbered Self,” Political Theory 12 (1984): 81–96; J. B. Schneewind, The Invention of Autonomy: A History of Modern Moral Philosophy (New York: Cambridge University Press, 1997); Charles Taylor, Sources of the Self: The Making of the Modern Identity (Cambridge, MA: Harvard University Press, 1989).

13 Farr, “Political Science and the Enlightenment of Enthusiasm,” 57–62.

14 Holmes, Stephen, Passions and Constraint: On the Theory of Liberal Democracy (Chicago: University of Chicago Press, 1995).Google Scholar

15 Holmes, Passions, 54.

16 Holmes, Passions, 45.

17 Flathman, Richard, Thomas Hobbes: Skepticism, Individuality and Chastened Politics (Lanham, MD: Rowman and Littlefield, 2002)Google Scholar; Richard Boyd, “Thomas Hobbes and the Perils of Pluralism,” Journal of Politics 63 (2001): 392–413.

18 Ashraf, Nava, Camerer, Colin, and Lowenstein, George, “Adam Smith, Behavioral Economist,” Journal of Economic Perspectives 19 (2005): 131–45.CrossRefGoogle Scholar

19 Rossi, Paolo, Francis Bacon: From Magic to Science (Chicago: University of Chicago Press, 1968), 12Google Scholar; Ronald S. Crane, “The Relation of Bacon’s Essays to His Project for the Advancement of Learning,” in Essential Articles for the Study of Francis Bacon, ed. Brian Vickers (Hamden, CT: Archon Books, 1968), 272–92.

20 Fish, Stanley, Self-Consuming Artifacts: The Experience of Seventeenth-Century Literature (Berkeley, CA: University of California Press, 1972).Google Scholar

21 Blumenberg, Hans, The Legitimacy of the Modern Age (Cambridge, MA: MIT Press, 1983), 383–90.Google Scholar

22 de Saint Simon, Henri, Selected Writings on Science, Industry and Social Organization, ed. Taylor, Keith (London: Croom Helm, 1975), 106.Google Scholar

23 On Bacon’s growing skepticism about the possibilities of a political science along the lines of a natural science, see Ian Box, “Bacon’s ‘Essays’: From Political Science to Political Prudence,” History of Political Thought 3, no. 1 (1982): 31–49.

24 Bacon, Francis, The New Organum: True Suggestions for the Interpretation of Nature, ed. Jardine, Lisa and Silverthorne, Michael (Cambridge: Cambridge University Press, 2000), Aphorism XXXIX, p. 40.CrossRefGoogle Scholar

25 Bacon, New Organum, XLI, 41.

26 Ibid.

27 Ibid.

28 Ibid.

29 Bacon, New Organum, XLII, 41.

30 Bacon, New Organum, XVI, 43.

31 Ibid.

32 Bacon, New Organum, XIII-XIV, 35.

33 Bacon, New Organum, LXIII, 51–52.

34 Bacon, New Organum, XLVI, 43.

35 Ibid.

36 Ibid.

37 Ibid.

38 Lewis, Michael, The Big Short: Inside the Doomsday Machine (New York: Norton, 2011).Google Scholar

39 Bacon, New Organum, XLVII, 43–44.

40 Tversky, Amos and Kahneman, Daniel, “Extensional Versus Intuitive Reasoning: The Conjunction Fallacy in Probability Judgment,” Psychological Review 90 (1983): 293–315.CrossRefGoogle Scholar

41 Bacon, New Organum, LII, 46.

42 Oppenheimer, Joe, “Rational Choice Theory,” in Sage Encyclopedia of Political Theory, ed. Bevir, Mark (Thousand Oaks, CA: Sage, 2010), 1148–58.Google Scholar

43 Gauthier, David, The Logic of Leviathan: The Moral and Political Theory of Thomas Hobbes (Oxford: Clarendon, 1969)Google Scholar; Jean Hampton, Hobbes and the Social Contract Tradition (Cambridge: Cambridge University Press, 1986).

44 Neal, Patrick, “Hobbes and Rational Choice Theory,” Political Research Quarterly 41 (1988): 635–52.Google Scholar

45 Holmes, Passions and Constraint; Mary Dietz, “Hobbes’s Subject as Citizen,” in Dietz, ed., Thomas Hobbes and Political Theory (Lawrence, KS: University Press of Kansas, 1990); Baumgold, Deborah, Hobbes’s Political Theory (Cambridge: Cambridge University Press, 1988)Google Scholar; S. A. Lloyd, Ideals as Interests in Hobbes’s Leviathan (Cambridge: Cambridge University Press, 1992).

46 Johnston, David, The Rhetoric of Leviathan (Princeton, NJ: Princeton University Press, 1989).Google Scholar

47 Hobbes, Thomas, Leviathan, ed. Curley, Edwin (Indianapolis, IN: Hackett, 1994), chap. 29, p. 210.Google Scholar

48 Hobbes, Leviathan, chap. 46, pp. 453–68.

49 Hobbes, Leviathan, chap. 6, p. 32; chap. 11, p. 60.

50 Hobbes, Leviathan, chap. 11, p. 60.

51 Evrigenes, Ioannis, Images of Anarchy: The Rhetoric and Science of Hobbes’s State of Nature (Cambridge: Cambridge University Press, 2014).CrossRefGoogle Scholar

52 Hobbes, Leviathan, chap. 13, p. 75.

53 Ibid.

54 Hobbes, Leviathan, chap. 11, p. 61.

55 Hobbes, Leviathan, chap. 18, p. 118.

56 Hobbes, Leviathan, chap. 15, p. 97.

57 Hobbes, Leviathan, chap. 17, p. 109.

58 Hobbes, Leviathan, chap. 15, p. 97.

59 Ibid.

60 Guth, Werner et al., “An Experimental Analysis of Ultimatum Bargaining,” Journal of Economic Behavior and Organization 3 (1982): 367–88.CrossRefGoogle Scholar

61 Camerer, Colin F., Behavioral Game Theory: Experiments in Strategic Interaction (Princeton, NJ: Princeton University Press, 2003), 11Google Scholar; Ernst Fehr and Urs Fischbacher, “Why Social Preferences Matter: The Impact of Non-Selfish Motives on Competition, Cooperation, and Incentives,” Economic Journal 112 (2002): C1–33.

62 De Quervain, Dominique J. F. et al., “The Neural Basis of Altruistic Punishment,” Science 305 (2004): 1254–58.Google Scholar

63 Hoffman, Elizabeth, McCabe, Kevin, Schachat, Keith, and Smith, Vernon, “Preferences, Property Rights, and Anonymity in Bargaining Experiments,” Games and Economic Behavior 7 (1994): 346–80.CrossRefGoogle Scholar

64 Hobbes, Leviathan, chap. 15, pp. 97–98.

65 Ashraf, Nava, Camerer, Colin, and Lowenstein, George, “Adam Smith, Behavioral Economist,” Journal of Economic Perspectives 19 (2005): 131–45.CrossRefGoogle Scholar

66 Smith, Vernon, “The Two Faces of Adam Smith,” Southern Economic Journal 65 (1998): 1–19.CrossRefGoogle Scholar

67 Smith, Vernon and Wilson, Bart, Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century (Cambridge: Cambridge University Press, 2019).CrossRefGoogle Scholar

68 Amos Tversky and Daniel Kahneman, “Judgment Under Uncertainty: Heuristics and Biases,” Science 185 (1974): 112–31; cf. Frank H. Knight, Risk, Uncertainty, and Profit (Boston: Houghton Mifflin, 1921).

69 Hume, David, Essays: Moral, Political, and Literary (Indianapolis, IN: Liberty Press, 1987), 42.Google Scholar

70 Hume, Essays: Moral, Political, and Literary, 253–80.

71 Smith, Adam, Wealth of Nations, ed. Cannan, Edwin (Chicago: University of Chicago Press, 1976), Bk. IV, ii, 478.Google Scholar

72 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 120–21.

73 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 115–19.

74 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 119.

75 Ibid.

76 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 119–20.

77 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 119.

78 Taleb, Nassim, Fooled by Randomness (New York: Random House, 2004), 20–21.Google Scholar

79 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 119.

80 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 120.

81 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 120–21.

82 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 121.

83 Ibid.

84 Ibid.

85 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 122.

86 Ibid.

87 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 122–23.

88 Smith, Wealth of Nations, Bk. I, Chap. x, Pt. 1, 124.

89 Ibid.

90 Ibid.

91 Ibid.

92 Smith, Wealth of Nations, Bk. IV, Chap. II, 478.

93 Thaler, Richard and Sunstein, Cass, Nudge: Improving Decisions About Health, Wealth, and Happiness (New York: Penguin, 2009).Google Scholar

94 Ordeshook, Peter, “The Development of Contemporary Political Theory,” in Political Economy: Institutions, Competition, and Representation, ed. Barnett, William A., Hinich, Melvin J., and Schofield, Norman (Cambridge: Cambridge University Press, 1993), 76.Google Scholar