The Moral Dimension: Toward A New Economics by A. EtzioniReview by: G. BrennanSocial Choice and Welfare, Vol. 7, No. 3 (September 1990), pp. 275-278Published by: SpringerStable URL: http://www.jstor.org/stable/41105959 .

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Soc Choice Welfare (1 990) 7 : 275-278 Ζ ΓΤ™ Ι Social Choice © Springer-Verlag 1990

Book Review A. Etzioni: The Moral Dimension: Toward A New Economics. Free Press Macmillan, New York 1988. 314 pages

I have examined Amitai Etzioni's photograph on the back dust-jacket of this book. After careful consideration, I cannot imagine that he in the least resembles Helen of Troy. Yet, his is a book that has launched a thousand minds. There can be very few works, after all, that a mere year or so after their publication have a professional Society dedicated to the advancement of their ideas - a Society already into its second annual meeting (scheduled, perhaps not entirely incidentally, to clash with the Public Choice Society's Meeting, some fifteen hundred miles away). An uncharitable mind might wonder whether this extraordinary rise to academic prominence owes as much to Etzioni's entrepreneurial flair as to the quality of his book. And that lack of charity might extend to noting that the very last paper in the forthcoming meeting of the Society-for-the- Advancement-of-Socio-economics has a deliciously relevant (if over-long) title: "Advertisers do not Persuade Individual Consumers - Rather, They Create A Society around the Advertised Brand in Order to Gain Power in the Marketplace". This is, perhaps, a paper that Professor Etzioni has no need to read.

But even the most uncharitable mind would have to concede, I think, that the programme for S-A-S-E's forthcoming meeting is extremely interesting, that it involves an impressive array of good people, and that the book which, in one way or another, began it all deserves to be taken very seriously.

The central object of the book is to launch an attack on the "entrenched utilitarian, rationalistic-individualistic neoclassical paradigm", that is used extensively in, but by no means restricted to, mainstream economics. Etzioni is a little coy about just how total this attack is meant to be. He does describe what is at stake as a "paradigm shift" - and he offers his alternative account of human behaviour as a "new paradigm". Yet he is at pains to emphasise that a synthesis of the neoclassical paradigm and his alternative is possible, that he "does not expect the prevailing neoclassical paradigm to be abandoned", and that his own position is a compromise between the prevailing neoclassical one and a social-conservative rival which he notes but does not discuss. Perhaps one way of construing Etzioni's purpose is as that of presenting neoclassical social theory with a "human face" : the face-lift involved is substantial, and economists will have to search hard to find many features of homo economicus left intact, but the exercise is not to be seen as an attempt at total obliteration.

So what specifically is wrong with the "neoclassical paradigm"? First, it has a faulty account of human motivation. That is, it offers a view of the human agent as single-mindedly maximising his/her own pleasure - of man as an egoistic hedonist. Second, it has a wrong account of human decision-making. It presents a picture of instrumental calculation, with major emphasis on logic and empirical evidence, with virtually no role for emotions, value judgements, intuitions, rules of thumb, habits, prejudices and the like. And third, it mis-specifies the relevant "actors" in social environments, offering "free-standing individuals" as the prime movers in human affairs rather than "social collectivities" - under which individuals should properly be subsumed.

As an alternative, Etzioni presents what he calls his "deontológica! I & We paradigm". The characteristic features of this paradigm are:

1 . a bi-furcated motivational structure, involving two "irreducible utilities and two sources of valuation: pleasure and morality";

2. a decision-theory in which "people select means, not just goals, first and foremost on the basis of their values and emotions" ;

3. a kind of methodological collectivism in which "social collectivities are the prime decision- making units".

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276 Book Review

The three sections of the book set out in turn each of these domains of disagreement with the neoclassical apparatus, seek to defend Etzioni's alternative "I- We deontology" and sketch out some of the implications of this alternative for social analysis.

It is, I think, clear - whatever else - that the anxieties that Etzioni expresses about neoclassical economics (and neoclassical social theory, more generally) are widely held. Economists may rail that those anxieties are grounded in confusions, or that choice among paradigms is necessarily a choice among imperfect alternatives (just as all choices are) and that Etzioni's alternative is still unproven, or too vague to provide testable hypotheses, or insufficiently general or (worst of all) excessively inelegant. But the truth of the matter is that the questions Etzioni raises are ones that most economists prefer to ignore; and in my view the typical neoclassical answers to those questions are not sufficiently persuasive to justify that ignoring. I found Etzioni's book engaging, bracing and in some measure persuasive, even though I think his characterisation of the neoclassical paradigm is somewhat misconceived and his proffered alternative confused. The book does, after all, deal with matters that are a good bit more interesting than much that occupies the pages of current professional journals. And if Etzioni's critique raises more ques- tions than it answers, then that is perhaps good enough reason to create a professional society to explore the critique further.

It is not possible in a book review to offer anything like a complete account of Etzioni's argument. And I certainly cannot hope to provide the decisive riposte to his critique, or even a tolerable defense of neoclassical social theory (which I am not much inclined to do anyway). There are, however, several points on which I disagree with Etzioni, or where I think his argument is misleading and I want to mention them here.

1. Hedonism

I do not think many economists will recognise as their own the hedonistic psychology that Etzioni attributes to them. The prevailing view is that revealed preference theory exempts economics from concern about the psychology of preference. The mind can, so the view goes, be treated pretty much as a black box. There is no need to enquire why the agent values X: enough to know that she does. Armed with that knowledge, and assuming the standard "rationality" properties of the economics textbook, the social analyst can predict behavioural responses to relative price changes. For the economist even the action-belief-desire story that decision-theorists offer is seen to be somewhat beside the point; and decision-theorists would surely regard as unnecessarily narrow the equation of "desire" with "desire for pleasure (or pain avoidance)". Now, I agree with Etzioni (and others) that economists need a rather richer psychology than they imagine - even for the "comparative static" kinds of propositions of which much economics is composed. And when economics does offer instrumentalist accounts of behaviour - as, for example, in the profit- maximising theory of firm behaviour, or expected return maximisation as a theory of portfolio selection, or income maximisation as a theory of voting behaviour (as in much of public choice theory) - the spécification of preferences involved is actually quite restrictive. But economists believe that this is a matter of specifying the "utility function" properly, and that the use of the term "utility function" does not commit them either to egoism, or to a belief in some psychological stuff called "utility" or to a kind of hedonistic psychology associated with the early utilitarians. Nothing Etzioni says will, or should, convince them otherwise. Moreover, somehow in Etzioni's account, all these matters - egoism, hedonism, and rationality - get all mixed up. It needs a more analytic mind than Etzioni's to carve up this territory convincingly.

2. Irreducibility

One implication of Etzioni's attribution of hedonism to the neoclassical model is that he is led to a more plausible claim of bifurcated choice than he would otherwise be allowed. That is, we might well agree that attempts to reduce "moral motives" to a matter of the agent's own pleasure and pain are unsatisfactory, without accepting the notion that moral and "other" considerations are non-comparable in the arena of action. For the economist, the question here is more or less an empirical one : if the cost of pursuing some moral objective in terms of other ends forgone increases, is the extent to which that moral objective is pursued reduced or does it remain

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Book Review 277

unaffected? To argue that choices involving conflicts between moral and other considerations are made, and that such choices obey the axioms of decision-theory, is not necessarily to assume that such choices are "easy" or that moral considerations can be reduced to some psychologically common units with other reasons for action. To observe, for example, that people who vote out of a sense of civic duty will do so in smaller numbers when the weather is bad, or that blood donors will reduce contributions of blood when there is a perceived increase in the risk of AIDS contamination, is to acknowledge the relevance of relative prices/opportunity costs in "moral" behaviour, but does not in any way imply that fulfilling one's civic duty or giving blood offers the same kind of satisfaction (if any) as a good bottle of wine or ten minutes in the jacuzi.

If Etzioni is to pursue his claim of non-comparability, he needs to explain how alternative actions are to be ordered. Are moral considerations to be given lexical priority? If so, there is a kind of comparability - moral considerations are always trumps. And on this reading advertisers (and others who wish to influence behaviour) will always appeal to morality; even the slightest ethical nuance will dominate the most enormous price differential. I do not find this possibility persuasive. If this is what Etzioni has in mind, then I am inclined to respond in similar terms to those a friend used to describe Etzioni's book. "Mm. Morality? Nice idea - but I don't think it'll catch on".

If, on the other hand, "morality" and "pleasure" are to be two dimensions to evaluation, with equal status but incomparable so that vector dominance is the relevant ordering device, then other problems emerge. One is the definition of the relevant reference point : once specified, there will be no moral catastrophe so great that it will induce the actor to forgo a single dollar/org1 at that reference income/pleasure. Again, this seems implausible. And it begs crucial questions as to how the reference point for any agent is determined.

There is one further aspect of this kind of moral/pleasure dichotomy that I find somewhat disturbing. The implication is that all "non-economic" motives can be satisfactorily subsumed under the "moral" rubric. On this reckoning, prejudice, malice, envy, zenophobia and lust for power, to mention some obvious contenders, are "moral" considerations. Alternatively, if only considerations that accord with common ethical preceptions are admitted within the "moral" category, then we are left with the impression that the more restricted the domain of conventional "economic" motives then the more moral the social outcomes. There is, in other words, a kind of natural gloss attributed to "non-economic" considerations in human behaviour that should not be allowed to pass unnoticed, because it lends a normative authority to those arenas where "economic" motives play a less major role.

3. Whose Morality:

Etzioni quite rightly, in my view, indicates an association between the neoclassical paradigm and utilitarianism - but the association is not at a level relevant for his critique of neoclassicism. That is, Etzioni is concerned with the moral dimension in agent behaviour. In that context, what is rele- vant is the moral apparatus that actors actually take with them into the arena of choice. The point of including morality, so conceived, is to explain/predict behaviour, not to evaluate it. Whereas the role that utilitarianism/consequentialism plays in economics is at the level of normative evaluation of the social outcomes that emerge, or the institutional arrangements that generate those social outcomes - not at the level of the value inputs that participants in those social processes use to choose among alternative actions. To exemplify the distinction, consider Adam Smith's Theory of Moral Sentiments. There, Smith offers an elaborate theory of moral psychology - a map of moral sensations and their consequences, full of references to common illusions and the like (implanted by the "benign deity"). But the Smithian evaluation scheme - what makes the deity appropriately describable as "benign" - is a consequentialist norm, one that might be characterised as a simple form of utilitarianism. And any utilitarian of this style - including the welfare economist - can presumably treat as a quite separate question what values motivate the agents whose actions generate the social outcomes the analyst seeks to evaluate. Smith's own evaluative scheme surely does not obligate him to assume that everyone else is a utilitarian, and it is not much of an attack on utilitarianism at this level to point out that many agents do not act as utilitarians in making actual choices.

1 Org = basic unit of pleasure

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278 Book Review

4. I-We and Method

To argue that the kind of psychological atomism that afflicts much of economics is entirely unsatisfactory - to insist, that is, that the description of the social context in which actors are located should involve more than the set of market prices actors confront - seems to me to be entirely proper. But it is surely one thing to make this point, and another entirely to want to identify "social collectivities as the prime decision-making units". We could for example want to recognise the crucial role of the weather (and changes in it) in explaining human action in an agrarian economy - or of military technology in explaining political and social institutions (as in Lyn White's elegant account of the impact of the stirrup) - without wanting to specify the weather or the stirrup as a "decision-making unit". A model of individual behaviour without an account of social constraints may be in many cases quite ridiculous ; it may even be that individual actions are entirely socially determined (though I do not, for a moment, believe that this is at all the case in contemporary societies). But there is an enormous step from this position to the kind of collectivist methodology that Etzioni seems to endorse. I recognise that there are issues at stake here on which economists and sociologists are almost invariably at cross-purposes - but I do not see Etzioni's contribution as significantly diminishing the confusion.

There are other matters on which Etzioni's account is, in my view, mistaken - for example on the distinction between consequentialist and deontological ethics ; and on the question of whether rational action is a theory of action or of deliberation. But I consider Etzioni's to be a worthwhile enterprise, and one that deserves the attention it is receiving. I am not surprised that Etzioni has found the response to his book in certain quarters violent (as he remarks, in a way redolent of issues like the Vietnam War or nuclear disarmament) : he catches neoclassical orthodoxy on some raw nerves and is often ungenerous to the positions he seeks to criticise. But perhaps the capacity to engage - and enrage - may be the book's most significant achievement. I certainly recommend this book strongly to all economists : we may not get much pleasure from it, but it may be good for us !

C?. Brennan, Economics Department, The Research School of Social Sciences, The Australian National University, G.P.O. Box 4, Canberra, ACT 2601, Australia

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