Economists Rarely Say “Nothing But”

Imagine someone said:

Those physicists go too far. They say conservation of momentum applies exactly at all times to absolutely everything in the universe. And yet they can’t predict whether I will raise my right or left hand next. Clearly there is more going on than their theories can explain. They should talk less and read more literature. Maybe then they’d stop saying immoral things like Earth’s energy is finite.

Sounds silly, right? But many literary types really don’t like economics (in part due to politics), and they often try to justify their dislike via a similar critique. They say that we economists claim that complex human behavior is “nothing but” simple economic patterns. For example, in the latest New Yorker magazine, journalist and novelist John Lanchester tries to make such a case in an article titled:

Can Economists and Humanists Ever Be Friends? One discipline reduces behavior to elegantly simple rules; the other wallows in our full, complex particularity. What can they learn from each other?

He starts by focusing on our book Elephant in the Brain. He says we make reasonable points, but then go too far:

The issue here is one of overreach: taking an argument that has worthwhile applications and extending it further than it usefully goes. Our motives are often not what they seem: true. This explains everything: not true. … Erving Goffman’s “The Presentation of Self in Everyday Life,” or … Pierre Bourdieu’s masterpiece “Distinction” … are rich and complicated texts, which show how rich and complicated human difference can be. The focus on signalling and unconscious motives in “The Elephant in the Brain,” however, goes the other way: it reduces complex, diverse behavior to simple rules.

This intellectual overextension is often found in economics, as Gary Saul Morson and Morton Schapiro explain in their wonderful book “Cents and Sensibility: What Economics Can Learn from the Humanities” (Princeton). … Economists tend to be hedgehogs, forever on the search for a single, unifying explanation of complex phenomena. They love to look at a huge, complicated mass of human behavior and reduce it to an equation: the supply-and-demand curves; the Phillips curve … or mb=mc. … These are powerful tools, which can be taken too far.

You might think that Lanchester would support his claim that we overreach by pointing to particular large claims and then offering evidence that they are false in particular ways. Oddly, you’d be wrong. (Our book mentions no math nor rules of any sort.) He actually seems to accept most specific claims we make, even pretty big ones:

Many of the details of Hanson and Simler’s thesis are persuasive, and the idea of an “introspective taboo” that prevents us from telling the truth to ourselves about our motives is worth contemplating. … The writers argue that the purpose of medicine is as often to signal concern as it is to cure disease. They propose that the purpose of religion is as often to enhance feelings of community as it is to enact transcendental beliefs. … Some of their most provocative ideas are in the area of education, which they believe is a form of domestication. … Having watched one son go all the way through secondary school, and with another who still has three years to go, I found that account painfully close to the reality of what modern schooling is like.

While Lanchester does argue against some specific claims, these are not claims that we actually made. For example:

“The Elephant in the Brain”… has moments of laughable wrongness. We’re told, “Maya Angelou … managed not to woo Bill Clinton with her poetry but rather to impress him—so much so that he invited her to perform at his presidential inauguration in 1993.” The idea that Maya Angelou’s career amounts to nothing more than a writer shaking her tail feathers to attract the attention of a dominant male is not just misleading; it’s actively embarrassing.

But we said nothing like “Angelou’s career amounts to nothing more than.” Saying that she impressed Clinton with her poetry is not remotely to imply there was “nothing more” to her career. Also:

More generally, Hanson and Simler’s emphasis on signalling and unconscious motives suggests that the most important part of our actions is the motives themselves, rather than the things we achieve. … The last sentence of the book makes the point that “we may be competitive social animals, self-interested and self-deceived, but we cooperated our way to the god-damned moon.” With that one observation, acknowledging that the consequences of our actions are more important than our motives, the argument of the book implodes.

We emphasize “signalling and unconscious motives” because is the topic of our book. We don’t ever say motives are the most important part of our actions, and as he notes, in our conclusion we suggest the opposite. Just as a book on auto repair doesn’t automatically claim auto repair to be the most important thing in the world, a book on hidden motives needn’t claim motives are the most important aspect of our lives. And we don’t.

In attributing “overreach” to us, Lanchester seems to rely most heavily on a quick answer I gave in an interview, where Tyler Cowen asked me to respond “in as crude or blunt terms as possible”:

Wait, though—surely signalling doesn’t account for everything? Hanson … was asked to give a “short, quick and dirty” answer to the question of how much human behavior “ultimately can be traced back to some kind of signalling.” His answer: “In a rich society like ours, well over ninety per cent.” … That made me laugh, and also shake my head. … There is something thrilling about the intellectual audacity of thinking that you can explain ninety per cent of behavior in a society with one mental tool.

That quote is not from our book, and is from a context where you shouldn’t expect it to be easy to see exactly what was meant. And saying that a signaling motive is on average one of the strongest (if often unconscious) motives in an area of life is to say that this motive importantly shapes some key patterns of behavior in this area of life; it is not remotely to claim that this fact explains most of details of human behavior in this area! So shaping key patterns in 90% of areas explains far less than 90% of all behavior details. Saying that signaling is an important motive doesn’t at all say that human behavior is “nothing more” than signaling. Other motives contribute, we vary in how honest and conscious we are of each motive, there are usually a great many ways to signal any given thing in any given context, and many different cultural equilibria can coordinate individual behavior. There remains plenty of room for complexity, as people like Goffman and Bourdieu illustrate.

Saying that an abstraction is important doesn’t say that the things to which it applies are “nothing but” that abstraction. For example, conservation of momentum applies to all physical behavior, yet it explains only a tiny fraction of the variance in behavior of physical objects. Natural selection applies to all species, yet most species details must be explained in other ways. If most roads try to help people get from points A to B, that simple fact is far from sufficient to predict where all the roads are. The fact that a piece of computer code is designed help people navigate roads explains only a tiny fraction of which characters are where in the code. Financial accounting applies to nearly 100% of firms, yet it explains only a small fraction of firm behavior. All people need air and food to survive, and will have a finite lifespan, and yet these facts explain only a tiny fraction of their behavior.

Look, averaging over many people and contexts there must be some strongest motive overall. Economists might be wrong about what that is, and our book might be wrong. But it isn’t overreach or oversimplification to make a tentative guess about it, and knowing that strongest motive won’t let you explain most details of human behavior. As an analogy, consider that every nation has a largest export commodity. Knowing this commodity will help you understand something about this nation, but it isn’t remotely reasonable to say that a nation is “nothing more” than its largest export commodity, nor to think this fact will explain most details of behavior in this nation.

There are many reasonable complaints one can make about economics. I’ve made many myself. But this complaint that we “overreach” by “reducing complexity to simple rules” seems to me mostly rhetorical flourish without substance. For example, most models we fit to data have error terms to accommodate everything else that we’ve left out of that particular model. We economists are surely wrong about many things, but to argue that we are wrong about a particular thing you’ll actually need to talk about details related to that thing, instead of waving your hands in the general direction of “complexity.”