Economics and Ethics

Have economists ignored clinical depression?

Mark D. White

A recent issue of Science (October 5, 2012) is a special issue on depression, and senior editor Peter Stern's introduction lays out the reason for it (emphasis mine):

Depression is a devastating disease. It affects not only the directly afflicted but also the people around them, their families, and their closest relations. It indiscriminately hits all strata of society, no matter one’s intellectual background, age group, or economic situation. There are many cases of highly successful and widely admired individuals who have been struggling with depression for years. Unfortunately, for reasons we still do not fully understand, this condition has been on the rise over the past decades. Considering its impact on an individual’s quality of life and subsequently on the economy and society in general, gaining an understanding of what causes depression and trying to develop effective therapies is of utmost importance. Hence, this year’s Neuroscience Special Issue is devoted to different aspects of depression.

I've long wondered why economists don't look more at both the microeconomic and macroeconomic effects of clinical depression. (I'm careful to add the modifier "clinical" because economists do, of course, spend a lot of time thinking about depressions, Great or otherwise.) Behavioral economists identify, quantify, and model the cognitive biases and dysfunctions that affect the choices of the average person, but have not yet (to my knowledge) looked into how depression affects decision-making. As Dr. Stern recognizes, choices affected by depression--given reported high rates of incidence of the disease--have potentially tremendous economic effects, not only on personal well-being but also on market outcomes, aggregate economic performance, and government policy.

There are many theories of depression in psychology, but one that seems extraordinarily well-suited to incorporating the effects of depression into economic models of choice is cognitive psychology, as typified by the work of Aaron Beck. Beck maintains “the individual’s problems are derived largely from certain distortions of reality based on erroneous premises and assumptions” (Cognitive Therapy and the Emotional Disorders, p. 3). Examples of this negative thinking include: dichotomous reasoning (everything is either black or white, failure or success), selective abstraction (focusing on failures and glossing over successes), and overgeneralization (exaggerating the importance and incidence of failures). In economic terms, these have obvious effects on beliefs and preferences, the foundation of decisions in the mainstream model of choice.

Depressives also report a lack of motivation or "paralysis of the will" that makes them less likely to act decisively to further their goals. In the mainstream economic model of choice, this can be be regarded once again as a result of distorted perceived benefits and costs (downplaying the former and emphasizing the latter) which result in a bias toward inaction (or at least decisional inertia).

This is just one possible framework, and there are many others. I believe that behavioral economists could work within such a framework to refine the cognitive and conative effects of depression on decision-making. Behavioral economists have already told us that we're "presumably irrational"--now it's time to turn to the members of society who are "presumably depressed."

Much (More) Ado about Happiness

Mark D. White

In this morning's Wall Street Journal, James Bovard pokes a little fun at the US government's plans for measuring gross domesic happiness (of which Nicolas Sarkozy was a leading advocate), pointing to how well they currently measure the myriad economic statistics regarding things that aren't entirely subjective. Many economists take this very seriously, however; as it happens, I'm currently working on several projects that, to some extent, deal with this issue (as is Deirdre McCloskey, if I remember correctly). The literature is recent but already vast: a marvelous summary and critique can be found in Daniel Hausman's 2010 Economics and Philosophy article, "Hedonism and Welfare Economics."

My take, in a nutshell, is that measuring happiness is neither feasible nor desirable. It is not feasible because happiness is irreconciliably multifaceted (along several dimensions) and inescapably subjective. It is not desirable because any official focus on happiness violates ideals of liberal neutrality and personal autonomy regarding persons' individual pursuit of the "good life," and the measurement of such can only lead to excessive government manipulation (if not paternalism) towards that imposed end (as Bovard describes). Rather, institutions should be established and maintained to ensure that person have the maximal capacity to make choices in pursuit of their own interests consistent with all others doing the same. Only such a system can ensure respect for persons' own interests and the choices they make towards them.

Call for papers: Well-being in Contemporary Society

Mark D. White

International Conference on the Philosophy and Science of Well-being and their Practical Importance

Location: University of Twente, Enschede, Netherlands

Date: July 26-27, 2012

Program Chair:                 
Philip Brey (University of Twente)

Organising committee:                
Johnny Hartz Søraker (University of Twente)
Pak-Hang Wong (University of Twente)
Jan-Willem van der Rijt (University of Amsterdam)
Jelle de Boer (University of Amsterdam)

About the Conference

In recent years, well-being has enjoyed a renaissance in philosophical discussions, as well as in fields like psychology, economics, development studies and sociology. Although these approaches share a common goal – to better understand what well-being is and how it can be enhanced – these developments have led to a great diversity in philosophical and scientific approaches to the analysis of well-being. Despite the increasing amount of research, most of the work on well-being is also performed at a highly abstract level. This is especially true in philosophy, but relatively little work has been devoted to the application of theories of well-being also in other fields, in particular when it comes to an understanding of life in contemporary society. Developments such as globalization, consumerism, and the rapid innovation and use of new and emerging technologies, all exert significant impact on the well-being of people living today, and we need a better understanding of their consequences for well-being.

Contemporary society requires that well-being researchers examine these problems – and, if possible, propose solutions to address them. This international conference aims to bring together researchers from various disciplines, including, but not limited to, psychology, economics, sociology, philosophy and development studies, in order to examine the practical role of well-being in contemporary society.

Potential Topics

We are looking for contributions that examine the notion of well-being in the context of contemporary society. The conference particularly welcomes papers that employ a notion of well-being to address social, political and ethical issues in present-day society. Suggested topics for the workshop include, but are not limited to:

• Theoretical developments and approaches in the philosophy and science of well-being in relation to contemporary society, culture and life.
• Well-being in social and political philosophy and/or in policy studies
• Positive psychology (and related research fields) and its practical applicability
• New and emerging technologies and well-being
• Intercultural and interpersonal comparisons of well-being
• Reliability, validity and applicability of well-being measures
• Other specific practical issues pertaining to well-being in contemporary society

The workshop will include both invited papers and an open call for papers. For the open call, we invite extended abstracts (1500-2000 words).  Please anonymise the abstract, and include title, name and address in the accompanying email. The abstract, and any questions you may have about the conference, should be sent to wics2012@utwente.nl. Your abstract should be submitted before February 15^th 2012, and will be subject to blind peer review.

Publication

Following the conference we aim to publish the papers, subject to a blind review process, in either an edited volume or a special issue of a relevant journal. We did so successfully with our previous conference, Good Life In a Technological Age, from which select papers were published as book in the prestigious Routledge Studies in Science, Technology and Society series, and will be available in February 2012.

Important Dates

Abstract Submission Deadline: February 15. 2012
Notification of Acceptance: March 1, 2012
Conference Dates: July 26-27, 2012

I may suck, but not as much as you

Mark D. White

Please excuse the flippant title, and get ready for a bit of a rant. (Listen--it's almost Friday, and it's been a rough couple of weeks.)

I'll start with a old joke: Two campers are in the woods when they spot a bear heading toward them. One camper starts running while the other bends down to carefully tie his shoes. The first camper yells back to his friend, "do you really think that will help you outrun the bear?" The second camper yells back, "I don't need to outrun the bear--I just need to outrun you."

I was reminded of that joke when reading a Real Time Economics blog post at The Wall Street Journal's site a couple weeks ago about a recent study on "last-place aversion." In the paper (available here), the authors report on experiments in which the participants were found more likely to take gambles that might boost their social ranking (rather than certain payoffs of equivalent expected value), and to forego costless action to help those worse off than themselves, the lower in the ranking they were to begin with. The authors use these results to support individuals' aversion to being at the bottom of the social ranking, preferring to have at least one person or group to look down upon.

I don't doubt the findings or the interpretation, but they sadden me. In fact, the entire concept of relative preferences and well-being disturbs me and always has. The idea that many (perhaps most) people base their feelings of satisfaction and happiness on what the folks next door have rather than on their own needs and desires--assuming they even have their own needs and desires--is ironically and tragically counterproductive in the aggregate. (On this I agree with Robert Frank, though not on his policy recommendations based on it.)

Maybe this unconscious desire to one-up our peers has an evolutionary basis--it would certainly seem to inspire a striving for material (and thereby reproductive) success--but it also seems to vary widely on cultural grounds (being much more pronounced in the U.S. than in Europe, for instance). (I thank Dr. Maryanne Fisher for her insights on this point.) But just because it's natural doesn't make it good or right--thank you, G.E. Moore--and just as we strive to counter other hardwired inclinations toward prejudice and oppression toward others, I would hope we would reject those which represent an attitude of disrepect toward ourselves.

It strikes me as horribly inauthentic to subsume your own standards of well-being, happiness, and satisfaction for other people's, especially if it leads to a counterproductive "race to the top" in which no one's intrinsic preferences are satisfied. I said as much here about two years ago (focusing on status goods like Starbucks coffee, which I now drink regularly, thanks to the same Dr. Fisher), so I won't rehash those arguments. Nonetheless... argh.

Don't get me wrong, researchers in psychology and economics do us a great service in highlighting these unconscious dispositions. But where are the voices crying out to restrain them, to orient our decision-making more towards activities that will satisfy our desires rather than simply make us feel good compared to our neighbors? Dr. Frank decries what Thorstein Veblen termed conspicuous consumption, certainly, but he focuses policy changes such as steeply progressive tax rates to "solve" the problem. This is to treat the symptoms rather than the disease (as behavioral economists are wont to do). Once we recognize our flaws we don't have to take them as given--but we have to make the effort.

And we shouldn't want for the people next door to do it first.

When economics and philosophy divorced...

Mark D. White

In a recent "The Shrink and the Sage" piece in the Financial Times Magazine, Julian Baggini (prolific popularizer of philosophy) and Antonia Macaro discuss the pursuit of happiness, which is very interesting in itself, but I was particularly amused by how Baggini started his half of the discussion:

When psychology and philosophy filed for divorce about 100 years ago, they faced the common dilemma of how to divide the book collection. In the end, psychology left most of the volumes on happiness and the good life with philosophy, which dutifully left them to gather dust. Now that psychology has returned to the subject with gusto, there is an urgent need to dig them out again.

Of course, economics and philosophy had their own break-up, perhaps a little earlier, so it may be fun to ask: how did they divide their book collection? Some speculation...

• Economics only took one Adam Smith book--but didn't read it--and philosophy lost the rest for years.
• Economics was more than happy to take the Bentham, but forgot the Mill (both the philosophy and economics).
• Most tragically, economics chose to take the calculus books rather than Kant--and we all know how that turned out.

Any others?

New book: Julia Annas, Intelligent Virtue

Mark D. White

I was very excited today to receive the new book from Julia Annas (and Oxford University Press), Intelligent Virtue, in the mail:

Intelligent Virtue presents a distinctive new account of virtue and happiness as central ethical ideas. Annas argues that exercising a virtue involves practical reasoning of a kind which can illuminatingly be compared to the kind of reasoning we find in someone exercising a practical skill. Rather than asking at the start how virtues relate to rules, principles, maximizing, or a final end, we should look at the way in which the acquisition and exercise of virtue can be seen to be in many ways like the acquisition and exercise of more mundane activities, such as farming, building or playing the piano. This helps us to see virtue as part of an agent's happiness or flourishing, and as constituting (wholly, or in part) that happiness. We are offered a better understanding of the relation between virtue as an ideal and virtue in everyday life, and the relation between being virtuous and doing the right thing.

Interview with Daniel Hausman (and more) in Erasmus Journal for Philosophy and Economics

Mark D. White

In the latest issue of Erasmus Journal for Philosophy and Economics (4/1, Spring 2011), there is an interview with Daniel Hausman, in which he discusses his views on methodology (with a particular focus on Mill) and his upcoming book on preferences (of which his recent paper "Mistakes about Preferences in the Social Sciences" is apparently a preview). He also describes the path he took to studying the philosophy of economics and his early background--very interesting. (I also strongly recommend another recent paper of Dan's, "Hedonism and Welfare Economics," in which he critiques the use happiness as a measure of well-being.)

Also in the journal you'll find an exchange on critical realism between Simon Deichsel, Uskali Mäki, and Tony Lawson; Irene van Staveren's review of Economic Pluralism, edited by Robert Garnett (a contributor to Accepting the Invisible Hand), Erik Olsen, and (guest blogger) Martha Starr; and a review of Debra Satz’s Why Some Things Should Not Be for Sale: The Moral Limits of Markets by Joseph Heath (a contributor to The Thief of Time).

Much Ado about Happiness

Mark D. White

Carl Bialik at The Wall Street Journal has an article in today's edition and a blog post from last night, both very evenhanded, about the attempts by governments to measure the happiness of its citizenry, and the skepticism of some regarding the efficacy of this.

For a critical look at the theory behind happiness studies, I would recommend Dan Hausman's article "Hedonism and Welfare Economics" from Economics and Philosophy, 26(3), November 2010.

I have two significant problems with governments purporting to measure happiness (which are similar to my problems with libertarian paternalism), which I hope to explore at length elsewhere.

1) Happiness is too vague a notion, and multifaceted a concept, to be measured with any degree of accuracy, and any instrument that is developed to do so will inevitably reflect the policy preferences of the parties doing the measuring.

2) It is grossly inappropriate for governments to base any policy decisions on what it thinks makes its people "happy" (or wealthy or wise), when what they should do is enable (and respect) the widest range of choices the people can make in their own interests (to whatever extent these interests include happiness). It is not up to the government to decide that we should be "happy" (especially according to some artificial and contrived definition), nor to take measures to get us there.

(See also this older post of mine at Psychology Today, making a similar point about happiness, but in the context of personal happiness and positive psychology rather than political theory.)

Should Science Determine Our Values?

Jonathan B. Wight

David Hume be damned, the answer is "yes" according to Sam Harris, in The Moral Landscape: How Science Can Determine Human Values (Free Press, 2010). Harris argues that all values reduce to "facts" that science can provide.

Harris is a utilitarian, seeking to reduce "needless human suffering." In his view, science allows "us"—that is, well-educated liberal Westerners--to decide on the meaning of "moral progress." It should be clear, he argues, what human flourishing means and that we can adopt a definition and measurement using scientific methods. In short, there is an absolute moral standard of right and wrong, as illuminated by the "science" of human well-being.

Aside from Harris' arrogance, there is a huge dose of condescension. There is no fair conception here of what the human experience means in non-Western cultures. To Harris, the measure of human progress appears to be externally-driven by caloric intake and clothes (he rails against the "sacks" that Islamic women wear). I haven't read the book, but I am curious if Harris is aware of Nozick's Experience Machine that could make and keep us perfectly pleasured. Is that an ideal life? It would seem so to Harris.

If you don't want to buy the book, you can get the essence of his message in this TED talk.

Discipline and Paternalism in Parenting – Are these Virtues?

Jonathan B. Wight

Amy Chua’s fascinating article in the Wall Street Journal last week has been causing shock waves of cultural angst.

 “Why Chinese Mothers are Superior” argues that American-style parents are failing to teach their children proper discipline that is needed for success and self esteem.  Instead, American-style parents mistakenly promote a self esteem of low expectations, which becomes a vicious cycle downwards.

In addition, Chua (who is a professor at Yale Law School) also argues that parents MUST be strictly paternalistic toward their children, and substitute their own preferences for those of the prevailing culture of self indulgence.

For a counter-story to this, see this follow-up in the New York Times yesterday, “Retreat of the ‘Tiger Mother’”.

The bottom line is:  Virtues are good.  But virtue taken to the extreme becomes a … vice!