Economists and Humanists need one another, argue Gary Morson, a professor of Slavic languages and literature and Morton Shapiro, a professor of economics, in their book, Sense and Sensibility (2017).  Here is what University of Regina economist Stuart Wilson thought of their book.

Cents and Sensibility:  What Economics Can Learn from the Humanities.  By Gary Saul Morson and Morton Shapiro.  Princeton, NJ:  Princeton University Press, 2017.  ISBN 978-0-691-17668-0

Review by Stuart Wilson for the Humanities Research Institute, March 9 2018

Much of our efforts are geared towards distilling information, reducing it to easily remembered points. We then try to apply those points to other events, experiences, and situations. Researchers and analysts spend much valuable time examining data and cases, gleaning insights and summarizing findings to help develop and implement policies and decisions. Students take notes from lectures in class and from textbooks, highlighting key points to help them remember the greater context of what was said or read; many even distill all their notes down to a few pages of highly concentrated points prior to exams. And then they try to apply those concentrated principles and notes to problems on assignments and tests, and then later in their careers.

The individual who has summarized the information withholds much for the sake of brevity, but has a richer understanding of the greater context. Readers of these summaries do not. Managers and administrators, with little available time to spare, want to be supplied with quick digestible updates and brief answers to questions to make decisions and implement policy; if an issue and a recommendation for action can’t be effectively summarized in one page or less, it won’t be read and the action won’t be pursued. But will an executive summary suffice to inform others on the advantages and disadvantages of a set of solutions to a problem or challenge? Can a student who attended class or read the text convey all of the meaning to another in a quick discussion or by passing on a short set of notes? Our tendency to summarize, reduce and present knowledge as simple bullet points, attention-grabbing headlines and soundbites, and twitter-ready feeds strips away crucial details and contexts.  Applying simplified principles to other environments may prove ineffective, or lead to unintended and tragic consequences. For a richer understanding, especially one to assist true learning and effective decision-making, a classmate’s notes or an executive summary are not sufficient; the reader needs exposure to the greater body of knowledge.

Economists and other social scientists attempt to summarize human behaviour and decision-making with models. These models are tools to help people take observations, outcomes and facts, and make inferences on the behaviour of individuals more generally; information is stripped of idiosyncrasies and is used to tell a greater unified and aggregate story, and that story is used to predict what may transpire in the future. Humanists, however, attempt to use and tell specific idiosyncratic and detailed stories to provide rich information – the thought processes and actions of characters,  resulting from experiences, and events, which very well may not line up with the summative aggregate story provided by models. These two different approaches have important complementary value. And this admittedly simplified message is at the heart of Cents and Sensibility:  What Economics Can Learn from the Humanities. It is my hope that this review will stimulate and encourage the reader to consider making the investment to read the book itself, and then to consider making subsequent investments, as the text itself serves as a distillation of other work.

Cents and Sensibility is a call for a dialogue between disciplines, for a deeper, richer shared meaning, so that this greater shared meaning can more effectively inform decision-makers and the interested public. Cents and Sensibility is a warning against simplistic summaries of issues, of bombastic pronouncements by those who claim to have uncovered universal rules of behaviour and/or to have found the answers to big questions based on limited information or after stripping away idiosyncrasies. Cents and Sensibility is a call for an investment to learn about human experiences, behaviours, cultures, and differences, a call to recognize our complexity. This requires an interdisciplinary dialogue.

Gary Morson, a professor of languages and literature, and Morton Shapiro, a professor of economics, share with the reader examples where singular approaches to complex issues may lead to inferences based on incomplete or disregarded information and inappropriate or unrealistic assumptions, which ultimately lead to poor decisions. Paul Ehrlich, an expert on butterflies, contended that the population of the world had surpassed the ability of the world to feed it in his 1968 bestseller, The Population Bomb, and that a billion people would die by starvation in ten years. Many economists replied to Ehrlich’s assertions by stating that he had made unrealistic and improbable assumptions, and that the economic keys of technological progress and discovery, and price mechanisms would ensure that his predictions would be wrong. Paul Ehrlich had a singular viewpoint, with strong assumptions, whose predictions proved grossly inaccurate.

In turn, there have also been some very prominent economists who have made striking predictions and inferences, while disregarding viewpoints and the understanding of individuals from other disciplines. The widely cited economist Gary Becker has made bold claims when applying economic principles to explain many types of human behaviour, from marriage decisions, to criminal behaviour.  A fundamental assumption in economics is that agents act rationally. Economists have extended models of rational choice to explain how individuals may choose partners, marry, divorce, have children, and sell body parts including kidneys. The simple forms of these models treat “love” (or hook-ups), children, and organs as commodities or investments, consumable, disposable, tradable or replaceable.  How much should parents invest in children for their own benefit in the form of future services? If someone has two healthy kidneys, could it be mutually beneficial to trade one kidney to someone whose kidneys have both failed? Why shouldn’t adults be freely allowed to trade sexual services?  There are economic arguments for all of these questions, with both buyer and seller making potentially sizeable gains from the trade. There are individuals, markets (legal, illegal and underground, and “red light” districts) that trade in these types of services. However, there are deep moral and ethical concerns with these types of trade.

Novelists and humanists may provide valuable insights, pointing to the complexities of the human experience and the importance of cultural norms. Does society view these services as ethically tradable? Are there cases of these types in which some parties are not willing participants, unable to appropriately consent? Novelists and humanists may provide rich examples, fictional and actual, to counter purely economic arguments. On markets for body parts and prostitution, humanists may also contend that “people do not own themselves, they are themselves,” and that, “they are custodians of the humanity residing within them” (p.161).

Adam Smith presented the principle of rational choice in the 1776 classic The Wealth of Nations, which was further developed and hailed by many neoclassical economists as the only principle to describe behaviour. However, Adam Smith did not believe that people always acted rationally. Smith wrote another classic, The Theory of Moral Sentiments (published in 1759), which argued that people were strongly guided by passions, sense and feeling; “subtle psychological analysis, designed to show that human nature cannot be reduced to a single principle of rational self-interest, recurs in Smith” (p.247). Smith was pointing to the complexity of the human experience, to the value of feeling and learning about the unique experiences of others, and pointing implicitly to the value of the great novels.

The great novelists present characters facing difficult and complex moral questions, help the reader experience and feel events through characters, and to understand the motives of and to identify and empathize with their characters. The reader is presented with a richness that may not be conveyed quickly, that requires hundreds of pages, not a few soundbites. The great novelists help us experience and gain emotional understanding. This kind of understanding comes through narrative, not through mathematical modeling. Jane Austen provided her readers with such insights in her classic novels, with Emma and Pride and Prejudice as prime examples. Models often used by economists and social scientists offer summative abstractions and unemotional treatments of events and behaviours. Becker’s simple model of criminal behaviour would lead an individual to commit a crime if the potential benefits outweigh the potential costs. Dostoevsky, in Crime and Punishment, has characters follow similar utilitarian reasoning when considering the great benefits of murdering a rich “horrid old woman” and taking her wealth to do good deeds and help other to benefit the lives of many others. Dostoevsky shows that such reasoning leads to perverse ends when moral and ethical considerations are excluded.

Two economists, in particular, are among those praised in the book for their inclusion of other viewpoints. Richard Easterlin examined the demographic transition of nations from states of high fertility and mortality to states of low fertility and mortality, by using economic principles in combination with the insights from experts in other disciplines, including historians, sociologists, anthropologists and biologists, and providing a rich interdisciplinary treatment.  Joel Mokyr examined economic change and modern growth and contended that modernization is dependent upon many different factors and may follow many different paths. For Mokyr, culture, ideas and beliefs play a central role, and growth processes are complex, unpredictable, and subject to timing and contingency. Western growth patterns cannot be easily replicated elsewhere, a theme examined in Anna Karenina where a character is unsuccessful adopting British farming practices and learns from another how to innovate and adapt to the local environment.

In sum, economists and humanists need each other. “Economists could learn from humanists the complexity of ethical issues, the need for stories, the importance of empathy, and the value of unformalizable good judgment. But humanists could also learn from economists how to think about scarce resources, about the nature of efficiency, and the importance of rational decision making” (p.261).

I am an economist. I have personally enjoyed the novels of Austen and Eliot and their characters and experiences. Given I am professionally engaged in research on crime and corrections, I have been moved to add Dostoyevsky’s Crime and Punishment to my reading list. I am also inspired to revisit Smith’s works firsthand. I hope to learn from and contribute to a growing interdisciplinary dialogue.

SW