Economists discover the human race

One of my favorite TCS writers is Arnold Kling, who teaches economics at George Mason University, not far from where I live.  His latest piece, “The Materialism Fallacy,” briefly recounts the latest discovery by economists:  the human race.

In the past, our species has sort of been blanked out of the dismal science, so that instead of live humans one could find all culture dismissed as “superstructure” or, alternately, all behavior performed by “rational actors.”

In this respect if in no other, Marx was typical of his kind:  he believed that production determined human relations.  To anyone with eyes to see, of course, it’s pretty obvious that human relations – a tolerance of innovation, for example, or an admiration of risk-takers – determine the quality and quantity of production.  Even human institutions, such as courts of law, ultimately depend for their effectiveness on some basic rules of behavior.

Latin American constitutions are famous for their generous spirit; Latin American societies tend to be harsh, predatory places.  Morality, all things being equal, trumps law and economics.

According to Kling, who cites a book-length study endorsed by the World Bank, economists now believe in the power of beliefs:  “People,” he writes, “behave differently based on what they believe.”  That’s a good beginning.  Human beings, to the everlasting distress of social scientists, aren’t billiard balls, whose path can be calculated by simple mechanics.  We believe weird stuff, and we behave accordingly.  The reason I enjoy reading Kling is that, for an economist, he appears singularly aware of the blinkers mandated by his profession.

Ironically, one of the most difficult beliefs to change is the belief that physical resources are the main causal factors in economics. From Karl Marx’s Das Capital to Jared Diamond’s Guns, Germs, and Steel, the materialist belief captures people’s imaginations. However, as the evidence for the intangible sources of wealth becomes more and more salient, our beliefs will adapt accordingly. When a book produced under the auspices of the World Bank challenges the materialist assumption, a broader change of beliefs may be imminent.

Here’s hoping.

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