Talking Dollars and Sense

Question: Do people make moral decisions using economic calculations?

Dale Jamieson: Well, my suspicion is that people are not really, at least in all cases, more motivated by economic concerns than other concerns. What I suspect is that people think they have to talk in economic terms, they have to provide economic justifications for things that they actually want to do, for other sorts of considerations.

And I'll give you a few examples of that; there's really a bag of examples. People did not go into the streets, ultimately, to overthrow communism in 1989 in Eastern Europe because they did some kind of benefit cost analysis and decided that the risk of being run over by a Soviet tank was somehow less than the benefit they might gain if there was a transition to a capitalist economy. They did this out of a sense of idealism, out of a sense of the dignity of individual people that was being trampled in these kinds of societies, and out of a vision of what a better world could be. They didn't do it in economic terms.

Similarly today, in the last decade in American society, there are people who favor a policy, that I very much disagree with, that's known as the war on drugs. The war on drugs is not an economically rational policy. And even people who support the war on drugs would not argue for it in economic grounds. They argue for it on moral grounds, that's it wrong for people to take drugs, it's wrong for a society to send a message that it's okay to do that.

So I think, generally, we do still often act out of non-economic motives. It's just that, like those people in the 16th Century, somehow we think we need to defend those actions now on the basis of economics than on the basis of religion.

I think one of the hopeful signs is that President Obama is beginning to bring back a richer and fuller and ultimately what I think is a more realistic and more human kind of rhetoric to our political debates.

Question: Is economic rationalism wrong about human nature?

Dale Jamieson: There are many issues in American public life that divide people in interesting and somewhat unpredictable ways. So there are people, often people associated with the political right, you say that we should only do things that makes sense economically, and what is all this nonsense that environmentalists want to do to lock up wilderness areas and so on. But then when it comes to issues like outlawing drugs, outlawing abortion, a range of other issues, they're the ones who are taking moral positions, they're not taking hard-headed sort of Libertarian positions based on economic realities.

None of us are rational economic men, as we're supposed to be portrayed in economic theory. We're mixes of passions, of desires, of moral principles, of self-deception, of altruism, of concern of others, of concerns for ourselves and an interest in our bank accounts.

And social policies have to be responsive to the complexity of who we are as people or else, like the war on drugs, they're simply going to fail.

Question: Why do we privilege economic justifications for action?

Dale Jamieson: I think one reason we fetishize economics is because we have to come to think that it is essentially connected to well-being, about what it is to have a good life.

And in fact, there's very little psychological evidence for this being a very strong relationship. If you look at the works psychologists have done about individual reports of well-being, what happens is that if you're poor, you are not happy.

But once you achieve a certain level of material satisfaction, then income has very little correlation with people's reported states of happiness. Things like climate matter more, things like the culture of the country in which you're raised matter more. Let's face it, like individual temperament matter more than these things.

And so once we see that economics is, to a very great extent, detached from what it is that really give us quality of life. That can be a very liberating sort of insight because what that means is, and this may sound very unpopular at this moment, but an economic downturn with all of the real damage that that creates, may not make us as unhappy as we might imagine. And indeed, it might create opportunities for new ways of life, for new forms of happiness, for new ideas of quality of life that we simply would not have seen when we were in the world of getting richer and richer and richer and richer without any reflection whatsoever.

Now, the millennium development goals are important, both morally and economically, because much of the world's population, maybe as much as a third of the world's population, hasn't yet reached the level of economic development where we begin to get a dissociation from people's economic status and their reports about personal happiness. So we really do need to do much more and much more effectively in order to give everyone the kind of basis for which they can have good vibes.

Recorded on: April 15, 2009.


Philosopher Dale Jamieson discusses the role of economics in decision making and human nature.

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