When I dip my toes in other people's oceans*

Something I wrote in my MSc Dissertation, submitted a couple of weeks ago:

“… individuals try to maximize their utility, subject to budget constraints. For such economic agents, the optimal action is always the one that yields the maximum net present value – the economic value discounted over time. It is relating this proposition with the biological and ecological reality that proves complicated.”

Note the power of language: absolutely pacific acceptance of the concept of the utility-maximizing homo economicus. That a psychologist should write such things should cause little surprise: we deal with a lot of theories that look at individuals’ thought processes as “black boxes”, and aren’t less efficient in describing behaviour for that. But the fact is we know such models are limited to simple situations, simple problems – and simple solutions. You could ask yourself if neo-classical economics isn’t simply the economic sciences’ equivalent of behaviourism in psychology.

More people seem to think so. I just came across the argument, while reading Clive L. Spash’s “Social Ecological Economics”**, that it’s necessary for ecological economics to drop the self-interest, utility-maximizing models of human behaviour and invest in the study of lexicographic preferences, including attitude-behaviour approaches and the role of social norms. Instinctively, this sounds great, and just up my alley.

Question is, will I last more than 5 minutes inside the Department if I start speaking psychology-esque? Probably not. And I’m not sure I want to, anyway.

Punchline: The question of value looms in the distance. That’ll probably be the make-or-break topic of my PhD.

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* Kaiser Chiefs, Heat Dies Down

** Which I got from Rob Elliott’s excellent Globalisation and the Environment.

individualsNe try to maximize their utility, subject to budget constraints. For such economic agents, the optimal action is always the one that yields the maximum net present value – the economic value discounted over time. It is relating these proposition with the biological and ecological reality that proves complicated.