Romancing the Economist

My previous contributions to this blog were about the possibility of the institutional aspects of academic economics being liberal. But there is more to philosophy, politics, and economics than liberalism. Now, I want to ask if academic economics is romantic.

I want to begin this reflection with what seems to me to be an obvious observation: contemporary society has given romanticism a bad name. The diminishment of the term has come with its association with foolhardy love stories whose protagonists have lost the ability to think critically in the presence of their paramours. However, romance means much more than what we may find on the Hallmark Channel (even if its ultimate expression may indeed be a Christmas miracle). 

An unsatisfactory description of Romanticism is that it was a movement that emerged in the 19^th century as a reaction to the perceived reductionism associated with the Enlightenment and the Industrial Revolution. The Romantics sensed that Enlightenment rationalism brought about a disconnection between humanity and truth. Therefore, they looked to the past to find a means to reconnect society and reality. With this endeavor came a focus on emotion, nature, and the importance of individual experience. Eventually, the emergence of Realism led to a decline in Romanticism.

It is hard not to stumble across one of the many discussions over what exactly is wrong with Economics as a discipline. We seem to have been inundated with them since the 2008 recession. Still, most of the noise being made turned out to be more heat than light and most theorists and practitioners have not moved past wringing their hands. If one were to examine all these critiques, one of the main concerns would be the lack of correlation between Economics and the economy. Ultimately, there are claims being made about the realism of Economics as it currently is practiced and its effects on social welfare. Rather than defend or decry Friedman or the value of mental models, consider that the perceived error is not really about our means of understanding reality. Rather, debates over methods have become proxies for our disagreements about what is real.

Let us consider a fundamental concept of modern marginal economic theory: methodological individualism. While this concept most often is associated with the developments in social science from the various Enlightenment strands, it would be wrong to believe that Romanticism had no interest in the individual. Indeed, Romanticism placed great importance on individualism. However, the Romantics had a much different conception of the individual and the individual’s association with the social. For the Romantics, the individual was comprised both of its connections with nature and its association with others. Therefore, the individual was defined by its place within the collective rather than the collective being defined solely by the individuals of which it was comprised. One may recognize this language if one has any familiarity with Burkean conservatism or Catholic Social Thought.

Differences in understanding individuality do not just alter the usefulness of Economic tools. Those differences also alter our understanding of the underlying reality which the tools are intended to render intelligible. Where modern Economics sees individualism as the only means of understanding the complexities of society, Romanticism sees Enlightenment individualism as reductionist: The complexities of individual society become diminished and homogenized to that of the individual through the use of statistical science that only sees the value in the rational side of human behavior. Quickly the object of study is blurred between the human person and the statistical artifact.

With all this in mind, it becomes easier to understand the struggle Economics has faced with the contextualization of the entrepreneur and entrepreneurial activity within contemporary economic theory. To limit the entrepreneurial discovery process to one of the sheer search for profit opportunity is to ignore the less rational needs such as impulses for originality and creativity that we often read in memoirs and biographies. Of course, it may be possible to quantify the creative impulse to some degree, but is it possible to do so without impoverishing our understanding of the human imagination?

Consideration of the human imagination is of utmost importance. For the Romantics, it is through the imagination that we determine and experience the real. Not only is the imagination a gateway to understanding reality but it is also the pathway to progression. It is only through the imaginative process that humanity can ponder society and the world in a different configuration and consider alternative institutional arrangements. It is through the moral imagination that we identify what is True and make judgments about what is good and what we ought to do. The imagination also takes us out of time: It allows us to identify what was true and good in previous generations and what will remain so in the future. This allows humanity to perceive the social dilemmas which we face and grants the hope necessary to act such that there are solutions to those problems.

Discussion of the moral imagination may be irrelevant in the discourse of the daily practice of Economic study, but it is essential to the framework of economics as it is lived. Humans as imaginative creatures driven by various sentiments are the basis of classical economic study as formulated by Adam Smith. The reluctance to discuss or the perceived inadmissibility of the moral imagination within Economic science produces a genus of technological/ethical lock-in by which reform becomes impossible or increasingly difficult. Suddenly it appears that Adam Smith has more to do with Percy Shelley than your favorite villain in contemporary Economic thought.

Returning to the motivating question for this reflection, is academic economics romantic? I think we can answer this with a resounding no. What, then, has been lost? It is possible that the development path taken by economics has limited our social and individual development. The opportunity cost of our analytical tools may have been the many possible futures our imaginations could have created. To end this post with what may be an upsetting and controversial claim, the rational choice and symmetrical motivational postulates developed a political economy without romance which resulted in a society with a diminished imagination.