Sunday, March 23, 2008

Economists Require Help in Understanding the Evolution of Value

In the introduction to my ‘Adam Smith: a moral philosopher and his political economy’ (Palgrave Macmillan, in press for July 2008), I include this observation about the state of modern economics:

Adam Smith was much more than the contents of the five books of Wealth Of Nations, significant and profound as they are; he composed an integrated theory of society, recognisable today by anthropologists, sociologists, evolutionary psychologists, linguists, historians and philosophers, who are not normally avid readers of economics. If economists abandon large swathes of territory on what are regarded as distant and unrewarding frontiers of our discipline, we ought not to be surprised if they become peopled by migrants from other disciplines, who bring not just their energies but also their insights, and a willingness to incorporate into their own frontiers what economists neglect and leave fallow. It has been ever thus with declining ‘empires’.”

Something like his theme is often commented upon within and outwith the profession. I have been arguing thus for over ten years. In 1997, I was following up an interest in the history of bargaining from my professional work in negotiation training and consultancy (based on the conditional proposition outline by Adam Smith in Book I of Wealth Of Nations) by reading a few general articles on the behaviours of primates, such as Chimpanzees and Baboons, and I was struck by comments by their authors about dominance, alpha males and females, coalitions, hostility to intruders from other bands, and the exchange of rare sexual favours for the meat of recent kills.

This took up the best part of a year or two up to 2000, from which I turned to the descent of hominids and humans from the common ancestor. (I had been sidelined from professional work by a small stroke episode and had time on my hands for many months, fortuitously). The outcome was an unpublished manuscript, ‘The Pre-History of the Deal’, which fell between the marketing comment of several publishers that nobody was interested in a book by an economist on social-evolution, anthropology and primate behaviour, because specialists wouldn’t read it, nor would economists because they did not do such subjects.

In the intervening years, having returned to work, I have noticed several books (for example: The Company of Strangers) covering precisely this territory, and, as an economist, I also know that the few economists who have taken notice of bargaining quickly slid off into game theory and mathematics, which are pretty lifeless about the real world of bargaining with which I am familiar – those that teach the maths do not do real bargaining, except in short games for petty stakes.

Since retirement in 2005, I have been working on Adam Smith’s corpus, and it is not accidental that I have come full circle in respect of Adam Smith’s close interest in how society evolved through his four ages, from Hunting, Shepherding, Farming and Commerce, how languages evolved, how philosophy evolved and how history and political economy evolved. Indeed, Adam Smith, as Jim Otteson showed in his ‘Adam Smith’s Market Place of Life’ (Cambridge University Press, Cambridge, 2002), wrote his entire series of Works using a common theme of the unintended order of social life, an assessment with which I concur. I recommend you read Jim Otteson’s excellent book to open your mind to the real political economy of the real world.

This month, Paul J. Zak (editor), publishes articles by fifteen scholars, who work at and across the abandoned frontiers of economics from various related disciplines: Moral markets: the critical role of values in the economy, Princeton University Press, Princeton, New Jersey, and Oxford, England.

I am working my way through it and I am well pleased overall (of course, I see some small areas of contention, but nothing too serious). The book is divided into five parts: ‘Philosophical foundations of values’; ‘Nonhuman origins of values’; ‘The evolution of Values and Society’; ‘Values and the law’; and ‘Values and the economy’.

I have complete Book I and shall complete the other books over the next few weeks (I am busy with other projects too – who said that in retirement you get bored with too much time doing nothing?).

Amazingly, economists write about ‘value’ and demonstrate confusion of what they mean by value, which leads to dense fogs of confusion, as I know from compiling a paper on ‘Adam Smith’s Theory of Bargaining’ for the History of Economic Society’s 35th Annual Conference in Toronto this June (which readers may wish to consider attending - details from here.

I shall write sections of a review here, and look for other reviews of Paul J. Zak’s collection in Blog land.


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