Friday, October 25, 2013

A Little Apparent Erudition Can Be Misleading

Saranya Kapur posts, surely tongue-in-cheek, non-sense: “Studying Economics Can Turn You Into A Horrible Person” on Business Insider (Australia) HERE
Self-interest motivates Adam Smith’s invisible hand, but economists may be taking it way too seriously.
A blog post by Adam Grant in Psychology Today explores how economics majors are, on average, awful human beings. Grant quotes a study by three Cornell professors which provides evidence that economists are less charitable, more deceitful and less likely to be concerned with fairness.
From the post:
“Along with directly learning about self-interest in the classroom, because selfish people are attracted to economics, students end up surrounded by people who believe in and act on the principle of self-interest. Extensive research shows that when people gather in groups, they develop even more extreme beliefs than where they started. Social psychologists call this group polarization. By spending time with like-minded people, economics students may become convinced that selfishness is widespread and rational ― or at least that giving is rare and foolish.”
So it’s not really the economists’ fault. Spending hours debating the pros and cons of an economic theory will just do that to a person.”
Reading the cited reference HERE I found it  hard to recognise Adam Smith in Saranya Kapur’s presentation in her piece, though I have reservations about the source quoted, which interestingly concludes:
These observations do not challenge the obvious importance of self-interest as a human motive. But they do suggest the need for a richer model of human behavior, one that explicitly recognizes that people who hold cooperative motives often come out ahead.
The modern idea of self-interest, particularly in the “selfish” mode, is quite different from Adam Smith’s writings in both Moral Sentiments and Wealth Of Nations to which I refer regularly on Lost Legacy. 
See TMS and various references and accounts of how people conduct their discussions associated with the behaviour of persuasion as an essential element of inter-personal relations and to WN I.ii in reference to Smith’s original and still highly relevant ideas on bargaining.
Self-interest, to repeat a regular feature on Lost Legacy. Is not about selfishness.  The idea of economics self-interest being about selfishness got widely repeated due to Paul Samuelson conflating self-interest as selfishness in his now classic textbook, “Economics: an analytical introduction” (McGraw-Hill, 1948), recently reaching 19 editions in 2010, the year that Samuelson died after a distinguished academic career at the top of theoretical economics (winner of a Nobel Prize), and crucially, as the first, and probably the best, modern economics textbook author too.
Close to 5 million readers were introduced to economics using his textbook (myself included in 1965) and his conflation of selfishness and self-interest is now endemic and worse, it is not often examined, except regularly on Lost Legacy, of course.


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