Money, Means, and Content: Thoughts on Economics and Desire
“He that wants money, means, and content is without three good friends.” — Corin, As You Like It, Act 3, Scene 2.
What is economics? After undergraduate and professional training in Economics and Finance for some time this question still provides frustrations for me and is still bound to generate unique answers depending on who you’re asking. Adam Smith called it ‘an inquiry into the nature and causes of the wealth of nations’, Alfred Marshall said it was the ‘study of man in the ordinary business of life’, and Lionel Robbin answered ‘the science which studies human behavior as a relationship between ends and scarce means which have alternative uses’.
More precise definitions and explanations can be found in the works of the Austrian Economist Ludwig Von Mises and his arch-rival John Maynard Keynes.
Mises, for his part, defines it generally as ‘the action of men to satisfy their desires, and, specifically, with the process of exchange of goods as a means for each individual to “produce” satisfactions for his desires’ (MisesWiki).
Further, economics does not concern itself with values or ultimate ends, it avoids judgments of value. Science doesn’t tell us how to act, it shows us how we need to act to influence causes to effect the ends desired.
Keynes for his part has a more complicated definition: “Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world… The object of a model is to segregate the semi-permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking about the latter, and of understanding the time sequences to which they give rise in particular cases… In the second place,… economics is essentially a moral science and not a natural science. That is to say, it employs introspection and judgments of value.”
It seems that in many ways these are roughly analogous definitions, they both concern means and ends and should involve value judgments about those means and ends. For our purposes this is sufficient and does not concern any further contentions between the two world-views.
Much has been said about the inappropriateness of ultimate ends as a question for economics, yet for a fuller scope and view of economics it is necessary to integrate and discuss the human motivation and desire that lead to human action and the selection and performance of economic means.
Because better knowledge of ultimate ends may lead to better knowledge of appropriate means, the analysis of ends and the vagary’s of human decision making under uncertainty are a necessary component of a complete picture of economic life.
Because there are consistent elements of human desire and satisfaction, these too may be considered as ‘motivational laws’ or ‘psychological laws’ that may explain or support the ‘economic laws’ derivative of them.
Now our study of economic life can fall into roughly two categories: (1) The study of desire and satisfaction in human life (ultimate ends), and
(2) The study of action and means.
If we take the Austrian view of action we accept action as an attempt to substitute a more satisfactory state for a less satisfactory one and we call this substitution exchange. A less desirable condition is bartered for a more desirable one. The result sought by an action is called its end, goal, or aim (or an intermediate goal). A means is what serves to the attainment of that end.
We normally construct some sort of scale for values that basically says that man can only do one thing at a time so he must choose one thing among a large set of opportunities to do. This scale reveals itself in action and has no real existence outside of actual behavior. Value is the importance we place on ultimate ends. Further, means are valued derivatively according to their ability to help us attain our ends.
It is often noted that while psychology should study the internal events and phenomena that might lead to a definite action, economics (praxeology) should restrict itself to analysis of action as such.
“The ultimate goal of human action is always the satisfaction of the acting man’s desire.” — Ludwig Von Mises
The idea that we should consider mental models that combine ideas from both psychology and economics probably makes Nassim Taleb’s blood freeze, but there seem to be some interesting insights.
What is Desire and where does it come from? This answer is largely given through the Interdividual Psychology of Rene Girard and Jean-Michel Oughourlian.
At root we say one thing, humans imitate the desires of others. We could go deep into Mimetic Theory and discuss internal and external mediation, scapegoating, etc. but for now I want to stick to the basic model of triangular desire. Girard posits that there are three nodes initially: (1) The Subject, (2) The Role Model, and (3) The Object.
We can then see that the desire that acting man seeks satisfaction for provides the ultimate ends. Acting man receives his desire from his neighbor. But what about means?
It is relatively easy to see that if our desire is imitated, our methods for obtaining our desire are imitated as well. What better way to obtain the object than to observe those successful at obtaining said objects?
If we consider the semiotic structure of narrative with tools given by Vladimir Propp and Algirdas Greimas we can utilize Actantial Models and Canonical Narrative Schemes to analyze the various narrative elements and world-views that provide role models for desire and methodology.
The structure explains stories whereby a subject is sent by a sender to obtain an object hindered by certain opponents and assisted by certain helpers along the way.
Often, the sender is missing in some way, which reflects human awareness of a purpose that comes from ‘above’ or ‘within’ or ‘beyond’. This can be extended to say that some subjects (and narrators) are under the delusion of the romantic lie or are following a theology of revelation.
When analyzing desire we run up against an infinite regress when we begin to consider the desire of the role model being an imitation of a still further role model, and so on. We can push this to genealogical limits or cultural limits and cosmology and so on but for the most part this can be done through an analysis of the broader pool of mimetic role models found in culture and world-views.
For the most part the culture is embedded within a worldview which contains a set of questions, stories, symbols, and practices which guide us from the time we are children up until we leave the nest and enter the wider world of shared circumstance and competing desires. This may also be called tradition.
World-views are very fundamental to human life, desire, and action. They have to do with pre-cognitive stages of a culture and provide the stories through which we construct our reality. Its characteristic expression is through narrative.
These stories and narratives go together to answer four basic questions: (1) who are we? (2) where are we? (3) what is wrong?, and (4) what is the solution?
All cultures in all places have a sense of environment, identity, and some problem with the structure of the world as it is today with a corresponding requirement to seek a solution in some great redemption arc. These stories are expressed in symbols including events and artifacts such as parties, dinners, and various other ritual acts that work as signifiers for insider/outsider status.
All of this goes into our way-of-being-in-the-world along with the various symbols, which are informed by the controlling narrative and reflect particular answers to the four worldview questions.
The impoverished Corin considers money, means, and content[ment] to be excellent aids, and they seem to accurately describe the focus and attention of the economists. Our stories impact us and we find ourselves living inside them to a greater degree than we might realize or allow ourselves to reflect on too often. In understanding exchange, currency, bitcoin, inflation, bubbles, or so-called ‘constant factors’ in economics, it is of great help to gain clarity on the source of our desires, our content, rather than waste away after money or one more tool on our tool-belt.
