Today in microeconomics, we covered the classic model of the Robinson Crusoe economy. But when it came time for the professor to tell the story, they did not even know the title of the Defoe novel from which our dear friend Robinson emerged. It was a bit embarrassing when a student had to explain that the title is in fact the character’s name, Robinson Crusoe. Of course, many critiques have been made of this metaphor (what about Friday?); but for me, it reinforced a point made earlier that economists don’t generally read, and reminded me of a wonderful passage in an essay by Philip Mirowski that discusses exactly this issue:
This account can be found in nearly every textbook: it is the story of Robinson Crusoe. In the middle of indoctrination of the tyro into our science, we find this story, this artful narrative, of what it means to be a neoclassical rational actor. The isolated individual, alone confronting scarcity on his island with his scant endowments, deliberates as to the appropriate combination of goods to maximize his well-being, imposing order upon the primaeval chaos of Nature. As I have intimated before, economists generally don’t read, but they think they know this story cold. The English hosier in the eighteenth century and the American academic in the twentieth understand each other perfectly, describing the inherent transcendental logic of their own system as it spreads across the face of the globe.
But economists don’t generally read, and therefore they don’t generally realize that the actual Defoe novel does not underwrite their convictions to any appreciable extent. The man who wrote the following might resist being dragooned into the neoclassical cause:
“The most covetous griping miser in the world would have been cured of the vice of covetousness, if he had been in my case; for I possessed infinitely more than I knew what to do with. I had no room for desire, except it was of things which I had not, and they were but trifles… I learned to look more on the bright side of my condition and less upon the dark side and to consider what I enjoyed rather than what I wanted; and this gave me sometime such secret comforts that I cannot express them; and which I take notice of here, to put those discontented people in mind of it who cannot enjoy comfortably what God has given them because they see and covet something He has not given them.” (Defoe, 1941, pp. 126-7)
They don’t read Adam Smith either. “The invisible hand” metaphor appears only once in Adam Smith’s Lost Legacy. and in any context of foreign trade that suggests it is the the basis of free market capitalism, as many economists who don’t read erroneously suppose. See Gavin Kennedy’s work on debunking misunderstandings and misrepresentations of Smith. He blogs at Adam Smith’s Lost Legacy.
Check this out from Arnold Kling, too.
How an Irrational Fad Became Entrenched
Kasey, not only is your professor not aware of the literary Robinson Crusoe; they’re also probably not aware of the many critiques of the Robinson Crusoe story—starting with Marx and continuing with radical economists, like Stephen Hymer, and feminist economists, such as Ulla Grapard and Gillian Hewitson. . .
Robinson Crusoe is more tractable for modeling. In my economics training, the implicit reasoning seemed to be “We must study in this way, because we can. What we cannot model, we needn’t study.” The interdependence of individual action, as well as the emergence of individuals from society and history, are less amenable to quantification. Therefore, they are less relevant.
And self-serving calculation can only apply when the purpose for acting is settled. Once again, assuming the conflict between motives has been resolved makes for easier modeling.
It is that sick, compulsive circularity, where everything is so clear because so much of human life has been assumed away. It drove me away, after earning my undergraduate degree in economics, from the profession. Still, I never lost my interest in the actual subject.
In the spirit of sharing links, here is an amusing classic from Frank Knight:
http://www.cooperativeindividualism.org/knight_ethics.html
I suspect his primary targets at the time were Marxists. However, the Freakazoids of today fare no better.
I found your blog by chance some months ago … I read something tha called my attention specially when I realised that you were in the USA
I just want to let you know (Kasey and Nick ) that you have a reader in Madrid.
Thanks for Defoe´s quote. It´s great!
Glad to know that there is someone who thinks and feels out there!
Rgds,