Ploys for Exaggerating the Scientific Status of Economics
Rationality and the neoclassical economist’s magic tricks
There’s a curious transition from the early economist’s assumption that economic activity is driven by rational selfishness, to the later one’s assumption that that activity is more open-ended, that it’s instrumentally rational but potentially altruistic.
The assumption of egoism in classical economics
Here’s what I mean. John Stuart Mill and Adam Smith were early modern economists who argued, respectively, that the scientific status of economics and the miracle of capitalism depend on assuming the rational selfishness of buyers and sellers.
Specifically, Mill said that economics presupposes “an arbitrary [idealized] definition of man, as a being who invariably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial with which they can be obtained in the existing state of knowledge.”
Moreover, economics or “political economy,” as it was called in the eighteenth century,
does not treat of the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is…
