Philosophy of Economics

This will be very brief, unlike my usual posts. Over the past week, I have realized just how much economists assume for the sake of their models and many times I have found myself questioning their validity. So for those of you who enjoy philosophizing, here are a few issues and questions to think about. I would love to hear your opinions (so please post them) and I may offer some of my own as time goes on. Along with the assumption, I will try to briefly explain why it is needed.

Assumption 1 - pleasure is the best way to measure utility - economists use this idea ALL the time to measure how much a person values some goods or choices or anything really. It is absolutely fundamental to economics. My question regards its implications about human nature. Does it make sense even in the case where people do something out of goodwill to their own financial or even physical detriment? Do people really get pleasure by choosing to be ascetic or taking a bullet? Essentially, many economists would argue that every choice is founded on hedonism, even those done for the good of others. They say that rational people would only give to charity, for instance, if it made them feel good. Therefore, all charity and generosity is based on selfishness. It's all about me. Hmm.

Assumption 2 - knowledge is infinite - certain growth models incorporate a variable that essentially says that as people's knowledge increases, they are able to become more efficient and innovate more, and it becomes possible to permanently increase an economy's growth rate. However, the models also assume that as the world's total knowledge increases (not each individual's knowledge, the total sum of all things known), it becomes easier to make new innovations. The idea is that, for example, if I know algebra, calculus will be a lot easier for me to learn than before I knew algebra. So the more that is known, the more can be discovered. However, if knowledge were finite, if there were a point when everything was known (even if it was really far away), then more knowledge would mean it was harder to make new discoveries. If you are searching for 100 hidden marbles in a field and 99 have already been found, the chances of finding a new marble are much lower than if all 100 were still out there. Hmm again.

As a note on that one, it is also insanely difficult to measure knowledge as a value since it takes so many forms and all knowledge is not as productive as other knowledge (the 'discovery' of the computer chip was more productive than the 'discovery' of the electric razor). That makes things interesting. I have a very strongly held belief about the infinity or finity (which is not a word but should be) of knowledge, but I will withhold it for now.

That's all for now. I might put more up as time goes on depending on the response to the post. Hope you all enjoy philosophizing; or I at least hope you find the questions somewhat interesting. If not, don't tell me. I'm very fragile.

4 comments:

APW said...

Point 1: You should really read "Desiring God" by John Piper. It's all about delighting in doing good and how seeking pleasure is a Biblical mandate. That should answer your first question as to how sacrificing your life, finances, and other things are actually in the service of your own pleasure (and how that's not a bad thing, nor does it somehow make your actions less 'good' because you find they bring you joy).

Point 2: I've already told you my views on this.

Point 3: I love you and I think you are the best husband in the whole world!!!

pedauque said...

Assumption 1: I have wondered about this, too. Do people do everything out of a sense of pleasure? First I'd like to define pleasure as a feeling of satisfaction greater than what a person would consider a normal feeling. Then, I think of the things I do for pleasure--like eating at Barbaritos for lunch instead of going home and making my own food. That is obviously pleasure motivating me. But, then there are tricky moments--like being exceedingly poor myself but still giving food/money/time to the homeless people. Things like that I do more out of a sense of obligation, I think. I do not necessarily feel better after them than my average feeling, but I do feel better than the way I would feel if I had not done anything. It is a fear of feeling terrible and an avoidance of that fear that makes me do those things. In that respect, I would say it is a type of pleasure, a sense of satisfaction greater than the normal feeling--the normal feeling in this case being the product of encountering a situation and doing nothing about that situation. However, that is using a broader sense of the word pleasure than usually used--perhaps there is a better word for it.

Assumption 2: The concept of infinity is one that astounds me--as it should, I think. There literally is no way to wrap one's head around it--if you could, then it wouldn't be infinity. The concept of nothing, of 0, also astounds me. That there could be Nothing... Not an absence of something, but just 0, an absence of everything. Nothing is Not There--if it was there it would be something. There is even a sense of paradox in giving the concept of nothing a name--trying to define something that isn't there by definition. However, the point of that little digression is that these two concepts are just that, concepts. I can't help but think that they might not be there at all--"we can't measure infinity, we can't measure the universe, thus the universe is infinite" is not necessarily a valid argument.

So, the conclusion I would draw is if there is infinity, then the potential accumulation of knowledge would also be infinite. Simply because knowledge is a human understanding of things and being a finite human leaves us unable to grasp infinity.

It is like that proof--if point A is some distance from point B, then one must cross the bisecting midpoint, C, to get from A to B. But, then, from C one must cross the next midpoint, D, and from D one must cross the next midpoint, E, and from E, one must cross F, and from F, one must cross G, and so on an so forth. From that logic, a person can never get to B, because there are an infinite number of points between A and B. We, as humans, start at A, on the journey to All Knowledge, B, but there are an infinite number of points between, so B can logically never be achieved.

Some Greek came up with that proof, but I don't remember which one... It is easier to draw and explain than to write, so I hope it illustrated my point clearly...

Interesting questions! I'm curious as to your views on the question of knowledge's infinity.

Peace,
Suzannah

danielwaldroup said...

Point 1: I agree with Ashley's comments about how things don't become any less "good" just because they are pleasurable. Further, I disagree with the way you characterize the assumptions of economists -- I think many economists' view of utility is a lot richer than your description implies. Utility isn't just "pleasure" in the sense we normally think of that word, it is anything that brings me satisfaction and fulfillment. Further, remember that economists don't say that people DO maximize utility, merely that they TRY to. There is plenty of room in the economic ivory tower for people to live miserable lives because they made stupid decisions that they, at the time, thought were good decisions. Take drug addicts for instance. They normally always end up being miserable and regretting their choices. But when they started, they at some level believed that the drugs would be somehow beneficial to them.

In terms of selflessness, an economist would not say that Mother Theresa was irrational. Her life was hard and full of suffering and most people would hardly characterize it as pleasurable, but she was living the life in which she found the most meaning. From her perspective, she was maximizing her own utility. Seeking and serving God by helping people was what she thought was her calling, and I bet if you'd asked her she would have said that she was doing the very thing she wanted to be doing. You ask, "Does it [the idea of utility] make sense even in the case where people do something out of goodwill to their own financial or even physical detriment?" My answer is "yes." Mother Theresa could easily have done something else, but she chose not to. Why? Because she was dumb? No -- she had considered her choices and had decided she was exactly where she WANTED to be.

Point 2: I don't really understand what you are arguing that economists believe here. Are you saying that they think knowledge is finite or that it is infinite? I think you are saying the latter, but the heading in the first sentence confused me. Further, define "knowledge." Are we talking about knowledge of a particular topic, or knowledge of all possible topics/people/places/things/relationships? Further, if eternity is infinite, aren't there an infinite amount of topics? And if there are an infinite amount of topics (and we can hardly even scratch the surface when it comes to our knowledge of one -- as Einstein said, "we don't know one tenth of one percent about anything"), wouldn't knowledge also be infinite?

Those are my thoughts for now. What do you think?

JP Waldroup said...

may i start by saying that i am most pleased that you have made my blog a little forum for discussion. that makes me happy, and i enjoy you're philosophizing, so do continue.

as for my beliefs, i believe both assumptions are reasonable, though i am still concerned about the first one and will continue to ponder it. my questions are difficult to formulate at the moment, though, so i will skip that one.

as for knowledge being infinite, let me redefine what i meant for clarity's sake. i mean the total quantity of all things known. so if you take what i know and what you know, and what i can find in an encyclopedia or any other source, plus everything someone else in the world knows and add it all together, that is the knowledge that economists assume to be infinite. i do think it is infinite, (and by the way, suzannah, i do like the greek proof) but not because of eternity, since i think it is impossible to prove eternity on areligious grounds. the reason i think knowledge is infinite is because humans are capable of creating knowledge that they themselves are unaware of. probably the best example regards philosophical knowledge. when a writer writes a novel, as we all know, he intends to convey some message, but people may often get some factoid of knowledge out of it that the author never intended. when i read beowulf, i learned that i loved medieval things, thereby adding knowledge to the universe (though very small and inconsequential) even though the writer(s) of beowulf never intended to make me learn that about myself. so they created knowledge that they did not know themselves. also, i can write a book about something and it may spawn an idea i had not thought of that may change the world. so since i think it is possible for us to create knowledge that we ourselves are unaware of, there is always the potential to do that again. even if we thought all knowledge were known, we could then write something in our omniscience in which someone else could discover something new, thereby rendering knowledge bigger than it was.

this of course has holes and i do not pretend to defend them.

i think a religious proof is much simpler:

jesus calls himself truth, jesus is god, god is infinite, therefore, since god is truth, truth is infinite. there is at least one piece of knowledge per truth (namely, the truth itself), therefore knowledge is infinite.

in fact, since i would bet most truths have more than one piece of knowledge, knowledge is probably infinite to an even higher degree, which of course, is impossible.

so there's what i think. i may post more about the first assumption later when i have thought it through better.