I was in the business program in university and although my concentration was on accounting, I essentially minored in economics, a field I desperately wanted to be really awesome at. I probably studied harder for my economics classes than I did accounting, and despite all the studying, I was only ever average at it. Eventually I realized it was because I was treating economics as a proxy for the English lit classes my practical (and scaredy cat) self had opted out of. I zoned out at the charts and equations and instead daydreamed about the metaphors of economics. Micro vs. macro. The concept of quantifying utility. Efficient markets. We touched on the economics or love and marriage in one class and I think I flipped out a little. I loved this stuff, the language of it, the concept of mapping all of our messy, human traits onto a grid. Anyway, I graduated and most of my real economics education evaporated away, leaving me with the superficial poetry of its nomenclature rather than the weight of real knowledge. But I was reminded of my interest in economics this morning reading this article by Elizabeth Kolbert in the New Yorker that talks about “behavioural economics”. The concluding paragraph summarized the flaw with projecting human behaviour onto economic theory:
If there is any consolation to take from behavioral economics—and this impulse itself probably counts as irrational—it is that irrationality is not always altogether a bad thing. What we most value in other people, after all, has little to do with the values of economics. (Who wants a friend or a lover who is too precise a calculator?) Some of the same experiments that demonstrate people’s weak-mindedness also reveal, to use a quaint term, their humanity. One study that Ariely relates explored people’s willingness to perform a task for different levels of compensation. Subjects were willing to help out—moving a couch, performing a tedious exercise on a computer—when they were offered a reasonable wage. When they were offered less, they were less likely to make an effort, but when they were asked to contribute their labor for nothing they started trying again. People, it turns out, want to be generous and they want to retain their dignity—even when it doesn’t really make sense.