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LOVE OR MONEY (VINOD ANAND)
Vinod Anand | 20 Jan 2012

We have discussed about gender in my earlier papers. The one more thing about gender I would like you to think about a little is perhaps the most embarrassing word to economists, and especially to men economists: love. The word is 'about gender' only because women think about it more than men do, so there's a large gender difference in its valuation for the science. I mean think about it, not need: we all need it, but for a thoughtful analysis you'll probably do better talking to your sister than to your brother. Not always, but usually.

BY LOVE I mean Aristotle's third and highest form of friendship, the part that cannot be explained in turn by interest alone. The other two are friendship for pleasure and friendship for utility (we would now combine them). The third kind is friendship for the friend's own sake. I do not claim that such love is always a good thing. After all, Hitler loved Germany, but look what his love did to it. People don't always know what?s best for their friends.

It is pointed out that love may have a comparative advantage in small scale rather than in large, a mother's love rather than German nationalism or Russian socialism, two recent excesses of large-scale experiments in love.The word is embarrassing to a profession dominated by men. A male economist once called economics the 'science of conserving on love,' by which he meant that society must depend mainly on prudence, not altruism, in the style of Paul Samuelson's prudent maximizer or Gary Becker's loveless 'family.' It was not always so in the science of scarcity. Economics drops love early, but not as early as you may think. It?s customary to think of Adam Smith as a sort of neoconservative in knee britches, but he in fact wrote two books in his lifetime, and only The Wealth of Nations celebrated Prudence.

The other book, which I think most economists must not have heard of, much less read, was The Theory of Moral Sentiments. It celebrated Love. (Well, at least it mentioned it, along with the other four virtues of a complete human personality: in truth the book celebrated Temperance.)Here's what Smith would say about the numero uno, country club Republicanism that elevates Prudence Alone to a philosophical axiom: 'though, perhaps, it never gave occasion to more vice than what would have been without it, at least taught that vice, which arose from other causes, to appear with more effrontery, and to avow the corruption of its motives with a profligate audaciousness which had never been heard of before? Now, of course, certain low-status groups, such as women and Christians, have long talked about love, urging economists to bring love into their ken and to stop encouraging vice.

But economists after Bentham have kept love out 0f it. Like other men after t8oo (before it was quite different), they think of love as sentimentality, an inability to face facts. They regard talk of love as preaching, in the sense that a teenager regards her Aunt Deirdre's wise suggestions about how to handle boys and homework as preaching. And the economists, of course, preserve their simple view of the word by never ever listening to experts on love, such as anthropologists or theologians (two exceptions are the Dutch economist Arjo Kiamer, who does listen to anthropologists on social solidarity, and the American economist Robert Nelson, who does listen to theologians on spiritual love, as in his amazing book Reaching for Heaven and Earth).

Keeping love out of it has been fun in a little-boy way. It has been fun to try to find a prudent reason for everything, from the provision of one?s dinner by the butcher or the baker all the way to a genetic predisposition to altruism itself. Running economics without love continues to pose puzzles that economists delight in shocking the bourgeoisie by solving. You thought it was the love of social solidarity that explained why one businessperson is polite to another, but look at the incentives and notice that in long-term relations people are more polite. You thought that crime was a matter of passion, but look at how it, too, follows the law of supply. And on and on through the Theory of Price and the Applied Theory of Price. It's like a little boy showing off his magic tricks to a family audience.But after all, some aunt remarks, when you come right down to it people also do love each other. In the men's way of thinking the aunt?s remark is supposed not to matter (and after all a woman said it).

The men rely unconsciously on an unproven separation theorem, which says that in a world in which, admittedly and unfortunately, love is a complication; nonetheless you can strictly ignore the love for economic purposes. Prudence doesn't explain everything this even the average male economist will admit but in doing an analysis based on Prudence, there is no need to bring in the fact of love. I don't think the separation theorem is correct. So I don't think you can leave out the love. Often you can't do the prudential analysis correctly without love. To use another mathematical analogy, there is sometimes a large cross-partial derivative between the two.

Or another, statistical analogy: they are not orthogonal.For example, what is the effect of aid to dependent children? It depends on the context of love in which the unwed mother finds herself. The state?s intervention can make the mother behave like an asocial monad and undermine the love. I repeat that love is not always wonderful, and so here. It may be good social p6uicy to free the mother from her own mothering love, or it may not. But in any case the point is that you can't get the economics of charity even approximately right without including the non-state, non-organized charity of loving relations and how it is affected by and affects the aid.Or take the age gap between men and women (the love I have in mind includes any passion, good or bad - thus the bad passion for a workplace segregated by gender). Yes, yes: I agree, some of the gap is explained by human capital.

But Claudia Goldin, among other students of the matter, notes that not all of it is explained. Looking back on her work, she remarked: ?The strictly economic framework had to be bent to fit the historical reality. We economists still don?t know how to incorporate changing norms, and I was researching a subject in which norms played a major role? The attempt to run social science without love goes way back. One might call the central-puzzle-to-be-amusingly-solved The Hobbes Problem, in honor of the person who was first obsessed by it. The English political philosopher, who with Machiavelli and Mandeville brought the economistic sin into the world, and all our woe, asked essentially this: Will a group of solitary, nasty brutes (short, too) form spontaneously a civil society?

We now call his answer the prisoner?s dilemma: No, not without the compulsion of a Leviathan state. The economists (with single-mindedness in the public choice literature that strikes outsiders and especially women outsiders as a trifle cracked) have been pursuing the Problem ever since, trying to show on a blackboard that civil society can arise without any Love at all. Jim Buchanan, whom I admire extravagantly as an economist (more people like him and Gordon Tullock and Ronald Coase and Armen Aichian, and we'll get back to doing economics instead of fourth-rare non-applied math), has this one fault, that he simply loves the Hobbes Problem.The Hobbes Problem, a woman economist would say, is off the subject. Like a lot of what economists do these days (Jim has a wonderful collection of essays called What Should Economists Do? that makes the point), it?s like the drunk searching under the lamppost because the Light is better there, even though he lost his keys in the dark, It's off the subject because the subject is actual societies, of already socialized men and women, not a collection of un-socialized brutes.

The already socialized people have bonds of affection that radically alter how they react to the prisoner?s dilemma thus recent experimental findings or the way (as Klamer has noted) that Washingtonians at a crucial, un-posted junction on Connecticut Avenue during rush hour have fallen into a convention of alternating from the left and from the right, even though the right-hand always has the official, Leviathan right-of-way. The change that love makes in the prisoner's dilemma is not simple. It requires analysis. It requires, in fact, economic analysis but an economic analysis of people, not of blackboard phantoms.If love is such a good thing to have in the analysis, why did it drop out of economics? I have a couple of simpleminded theories. One is that the Devil made us do it.

The Devil is Jeremy Bentham, who for reasons I do not understand was able to seize the intellectual agenda in economics and drive love out of it, even though his disciples were sometimes evangelical Christians in love with God?s love. Another theory is, to return to my current obsession is that, for reasons I now understand a little better, the men have always run economics and since 1800 have fled from a ?feminine? love (before 1800, I repeat, no man had trouble with the word or emotion of love: the modern embarrassment is unique in the history I know). Thus socialism, a secularized Christianity at its birth filled with love, becomes in Marx?s hands toughened and 'masculine' and loveless.The historical puzzle is why Adam Smith and other men of the eighteenth century had less trouble than their nineteenth-century and twentieth-century followers in keeping love in the analysis. We women can only hope that the men of the twenty-first century will get a little more relaxed about it, in that urbane eighteenth-century way. It will make for better men, and better economics.