Claiming the individual – breaking the system: A shared tenet of economists and their critics

I was just hanging out around Dani Rodrik’s blog when I read this interesting post. In it he criticizes Naomi Klein for celebrating the collapse of the Argentinian economy.

Reading his comments, my own feelings, and NK’s comments I realised something – there is some level where we all agree. Fundamentally, we are all interested in maximising the welfare of individuals in a given situation.

Now, if we all agree on this noble aim, why is the view of Dr Rodrik and myself so different to Dr Klein’s?

Ultimately, I believe it is our construction of the individual that differs – and as a result, our conception of what constitutes the optimal outcome will differ.

In the case of Naomi Klein, she views individuals action as secondary to the gyrations of some holistic body – in her construction the market is not really free, because there are institutions and groups that hold some semblance of power.  Down playing individuals in this light makes them “passive” agents – with the perceived outcomes solely being driven (and in a non-transparent fashion may I add) by the factors the “she believes”.

On the other hand I view individuals as active agents as the primary driver of change – and as a result the lens I use tends to downplay, or sometimes even not recognise, the importance of institutional structure for shaping outcomes.

I believe that, for someone providing conclusions, Naomi Klien focuses to little on the individuals and individual actions – and too much on structural changes that are driven by some form of handwaving.  She places responsibility for actions too heavily on the groups that she deems the “cause” – without objectively trying to separate correlation and causation.

However, if my view was to be used in analysis, we would not have enough understanding of the structural elements of society.  As a result, I am liable to make implicit value judgments on institutional structure – say with a “status quo” bias.  Some tacit assumptions I may make (such that no-one has power over institutional structure with their choices) would be patently false – and as a result, any conclusion I reach would suffer from the same deficiencies.

By setting an assumption equal to zero – I am still assuming a value for it, this is something that we all need to remember when discussing issues.

Claiming the individual

There is one main reason why I can see everyone trying to “claim the individual” – we are trying to sell our ideas to individuals.  It is in our interest as social scientists to convince people that our ideas explain the situation best, and will provide the best outcomes for individuals.

All social science is built on a desire to achieve the best outcomes for individuals – however, differing beliefs surrounding the behaviour and beliefs of individuals lead us to wildly different conclusions.

We become so trapped in the idea that what WE think is best is best that individual social scientists begin to believe that other groups have been captured by interest groups – this is what Naomi Klein believes about economists, and implicitly this is what economists believe about other social sciences.

Given this, surely the way forward must involve a transparent, extremely general, social science framework with no empirical content – combined with rigorous debate surrounding value judgments.

I would like to see the differing social sciences within a university find out what they have in common and list it down – before erupting into a chorus of hefty debate 😛