Journaltalk - From an Individual to a Person: What Economics Can Learn from Theology About Human Beings

From an Individual to a Person: What Economics Can Learn from Theology About Human Beings

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Author
  • Pavel Chalupníček
Volume Number 11
Issue Number 2
Pages 120-126
File URL From an Individual to a Person: What Economics Can Learn from Theology About Human Beings
Publication year 2014

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Publisher INST SPONTANEOUS ORDER ECONOMICS
Grouping social sciences
Categories economic, economics

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2 comments

  1. “Bouckaert argues that they implicitly worked within a framework of “economic
    personalism,” which for him means “normative economics that does not
    simply reconstruct the problem of efficient allocation as an individual or social
    problem of utility, but in the first instance as a problem of human dignity and
    social justice.” Moreover, he suggests, the distinction between “positive” and “normative”
    does not make sense from a personalist viewpoint, because “to reduce the
    problem of human choice to a problem of subjective utility is in itself a far-reaching
    normative standpoint.” In other words, standard neoclassical models (and their
    underlying anthropology) also have normative assumptions and implications.”

    True, economics’s use of surplus maximization is normative and relies on satisfaction of people’s desires, but the concept of imperfect information addresses that. As the article’s footnote says, a person may be too malnourished to know that he needs education. For the Christian, this has big implications. A person may be too blinded by sin to know that he needs redemption. The implication for government policy in the malnourishment case might be that the person should be forced to be educated; the implication in the Christian case, that he be forced to attend church. The difference is that enough people believe education is good that they will vote for the government to impose it, but only a minority of people nowadays believe that church is important enough to force people to attend (or that forcing them to attend would have any effect on their probability of salvation). Or perhaps I have personalism wrong. It might be the opposite—- that the state should be libertarian, and let people satisfy their personal desires as they wish, without any regulation, even if the regulation would help them satisfy their desires better, because regulation would infringe on their dignity. Which is it?

    posted 31 May 2014 by Eric Rasmusen

  2. Thanks for your comment, Eric! Let’s stick with the education example (discussing sin might take us too far from the original point): I think the concept of imperfect information solves the problem only partly.

    Would you agree there is difference between a state ignorance in which “I know that I don’t know” (type 1) and a state of ignorance where “I don’t know I don’t know” (type 2)?

    I think traditional economics deals only with the first type – people are rationally ignorant, because they decided they will not obtain further information on a certain problem. However, in the second case (type 2, “I don’t know that I don’t know”) one never makes such a decision – one is ignorant without knowing that one is ignorant (which will be the case of the malnourished person).

    So, the point here is that an economist looking at the problem of an ignorant person would assume ignorance of type 1 (because his models do not allow for any other type), while in reality the person would suffer from ignorance type 2. And the policy conclusions will be different in each case: while in the first case, adding more information (in form of education) would not improve the situation of the (rationally) ignorant person, in the second case such improvement is possible.

    Is the point clearer now?

    posted 05 Jun 2014 by Pavel Chalupnicek

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