How to be an economics and philosophy major and not suck
I’ve stumbled into a topic I know a little too much about. It’s not that I’m overly defensive of my choice in majors; rather, it’s that I’m quite offensive about the unique practicability of an economical and philosophical intersection. The two complement each other quite well — Adam Smith and Saint Thomas Aquinas are two examples. So I want to take a few paragraphs to expound a little about how I view the intersection, why it gets such a bad reputation and how to reconcile both an economical and philosophical approach to life’s problems. Let’s begin.
First, let’s flesh out the intersection. At their core, economics and philosophy are doing the same thing. They’re both attempts to explain and, to an extent, regulate human behavior. I’d put more emphasis on the former in terms of economics and the latter in terms of philosophy. One discipline is built much better to explain, while the other is built much better to inform. I use the term “built” because that’s what any good discipline is — a construct of formulations that bend and shift over time but that hold some sort of central thesis. In the same way that a decrepit 19th-century home can be remodeled to meet 21st-century needs, the disciplines of economics and philosophy can be reconstructed to better meet the growing complexities of the world.
Philosophy, in its nebulas of ethical conundrums and definitions of what is good and bad, right and wrong, roots itself firmly in the future. This is the central thesis of philosophy; the discipline can use history, as it does often, but it will always use history to paint a picture of an idealized future. Very rarely do you see seminal articles or books in philosophy that are exclusively reinterpretations of historical arguments. Rather, philosophers tend to move their discipline by using historical contexts to inform some normative argument.
Take, for instance, contemporary debates about the role Artificial Intelligence should play in the lives of human beings. Philosophers of Greek antiquity, renaissance continentalism or eastern communitarianism have nothing to say about a field they could have never known would exist. It’s the job of philosophers to take the writings of, say, Confucius on self-cultivation, and apply them to how Artificial Intelligence may trick humans into a false sense of self that is not based off tradition but instead is based off a fragmented, artificial reality. Writings abound that take this form. Type “Plato on artificial intelligence” into Google and you’re presented with a number of articles speaking to the subject. “What would Plato have to say about A.I.?” asks one writer.
Philosophy then takes these considerations and turns them into arguments about what we should or should not do with A.I. or other areas of life. At its core the philosophical discipline is a discipline of arguments, whether it be in the form of dialogue or geometrical proofs.
Economics uses a different model. Instead of trying to argue for what should or should not be, economics seeks to explain and then to predict. Economists will say, “The U.S. Gross Domestic Product rose 7.2% in 1984. Huh. I wonder why that is. Let’s go and try to explain it.” It will take certain variables that may or may not affect G.D.P., toss them into a model and see how they correlate. If there’s a negative correlation between amount of imports and G.D.P. growth, but the correlation is relatively weak, we might say that imports have a negligible effect on G.D.P. relative to other variables (this is not the case).
Economics can expand this look-and-explain approach to any number of unique circumstances in life, whether or not they are tied to traditionally economic-sounding areas. As nearly as economists will say, “A growth in G.D.P. is caused by …” they might just as nearly say, “The selling of wives at open auctions in Industrial-era England can be explained when we consider the prohibitively high costs of leaving a marriage via divorce or flight and the dismally low amount of rights given to women during that time. So, if a woman wanted out of a marriage, the most efficient way of executing the split is by selling the rights of the woman to a different man who she would be happier with.”
This is a crude example, but highlights the way economists can use certain tools — transaction costs, contractual agreements, marginal value — to explain any type of phenomenon. In certain cases these tools, when employed often and in various different contexts, can be used to predict certain outcomes. “If rights are set up in this way and if contracts are difficult to enforce, we would expect this outcome to follow given the presence of these two parties.” What economists won’t use their tools to do is to say what outcome should happen, in a normative sense. They don’t have the tools for that. Saying “X variable has a positive effect on G.D.P.” can allow those with the normative tools to craft policy or advocate for different measures that promote some variable, if, for instance, growing G.D.P. is a beneficial goal to achieve. Maybe it’s not. Economists can’t say.
If philosophy is interested in what should be, and if economics is interested in what has and what is, then the two form a natural relationship. In a perfect world a philosopher-economist can use the tools of economics to make an accurate prediction about what will happen if some change is made, and then they can further deliberate about the relative ethical merit of making that change. This is the type of analysis that fuels policy making, that drives think-tanks — the type of combined analysis that occurs when economists say “this is what we can expect” and philosophers say “this is what we should do.”
I know, I hate (most) policy-making and think-tanks too. That’s where the defensive part of the intersection comes in, and where I hope to pull us out of the stinking mud of bureaucracy and into the enlightened clouds of economical philosophy.
It’s an Aristotelian notion that wisdom comes from the ability to reason well. The wise person is the person who can not only understand the relevant facts of a situation, but can use those facts to arrive at an ideal decision. Reasoning well, if we apply it to the two distinct economical and philosophical approaches laid out above, is the natural consequence of applying both disciplines in combination.
Let’s take a college-specific case study: Whether or not certain student government members should be appointed or democratically elected. To start, we can gloss the philosophical history of the two approaches to governance. We could find support for either side, but most notable philosophical support would lean into a democratic model. “Give the people a voice!” philosophers would cry, falling upon The Republic and Two Treatises of Government as their argumentative bulwarks. Continuing, we can look at particular instances of shifts in government models. The French Revolution may be the most notable example here, although the data with which to carry out a thorough economical analysis may be lacking. We could instead turn our attention to more specific instances, such as when the Rock Island, Illinois’ city council wanted to sell its sewer system to a private company and citizens voiced their concern, leading to a public referendum. Or when certain other cities have shifted their own government structures from appointments to elections. Anyway, the specifics don’t matter here. Rather, we know this data and these examples exist out there somewhere if we look hard enough. With this data and these examples, we can find the effects of appointments versus elections by tracking a number of variables over time, such as the quickness of policy passage, amount of policies passed or voter engagement before and after the switch to the alternative model. Then, as a final step in this process of reasoning, we can combine our two initial steps and come to a decision. If the benefits of democracy, as gleaned through a philosophical interpretation of the matter, are greater than the possible downsides to electing leaders, we would want to institute a democratic system. We would want to elect our student government members democratically.
The opposite could just as easily be true. The economic analysis could show that appointments are actually more efficient in terms of policy passage and constituent satisfaction. Then, although the philosophers would favor democracy under strong ethical grounds, we may want to favor a more efficient system that would follow from appointments.
This is just one example of the economics-philosophy intersection in practice. Other examples abound. Most involve well-trodden issues, but as the world becomes more complicated — as the surface area of our collective knowledge base expands — there becomes more opportunities to apply such an approach to more topics. We could return to Artificial Intelligence and see how radical shifts in technological efficiency have impacted job growth, unemployment, exports, etc., while simultaneously interpreting whether an easier, more efficient approach to solving problems, removed from human consideration, is preferable.
The approach is not perfect. When you try and combine two rather complicated disciplines into one sort of mega-discipline, things may fall through the cracks. You may miss some niche historical argument that would have compelled you to prefer a different outcome, or you may have excluded some relevant data that would have predicted a higher correlation in a different model. Putting everything under one umbrella may not be, and often simply is not, the best way forward for solving issues.
However, I remain an advocate for the intersection in its ideal form. I think there is no better way to apply prognoses with values to reach a sound decision. Consulting economics and philosophy, carrying out the two approaches together, allows one the capacity to reason well. Where economics brings in all the relevant facts, philosophy applies its comprehension to dictate the best course forward based on those facts. Where economics is perception, philosophy is understanding. The two go together like an umbrella and rain.
