Economists can certainly learn a lot from humanists. But economists can also learn a lot from psychologists, sociologists, biologists and many other "ists". The issue is that economists, like all people, are constrained by time. All the time spent learning from humanists is time that can't be spent learning from psychologists.
Let's take the economist David Henderson for example. Like all of us, his time is limited but his desires are not. Therefore, he has to prioritize. He has to decide how to divide his limited time among his unlimited desires.
Henderson recently decided to allocate some his limited time to writing an entry about Cents and Sensibility (C&S). Thanks to his decision, I learned of the book's existence. The concept of cross-pollination matches my preferences so I decided to allocate some of my limited time to reading parts of C&S. Doing so inspired me to allocate some of my limited time to writing an entry about it.
The authors of C&S appreciate the fact that time, and other resources, are limited...
To reject the idea of scarce resources is to reject reasonable thought altogether.
Right. But is not rejecting this idea really the standard? In order to answer this question it might help to allocate a minute of your limited time to watching this commercial...
We can imagine that all the people in this video are humanists. The dog is Henderson the economist. His mission is to select a humanist. There are so many humanists to choose from... but he can't pick them all. So how does he pick a humanist?
How does an economist pick a humanist? How did Morton Schapiro pick Gary Saul Morson? Did he randomly pick him from a pool that only consisted of white, older, male humanists from Northwestern University? This university doesn't have a monopoly on humanists, does it have a monopoly on the best humanists? Or did Schapiro pick Morson out of convenience? Did Schapiro settle for Morson?
For sure an economist can learn something from every humanist. Just like a humanist can learn something from every economist. But...
1. Everybody's time is limited
2. Lessons aren't equally valuable
Therefore, if Henderson is going to pick a humanist, then he should pick the one with the most valuable lesson. The question is... how can he spot this humanist?
If the loudest humanist also had the most valuable lesson then there wouldn't be an issue. However, there's absolutely no correlation between loudness and value.
Morson and Schapiro are correct that economists should learn from humanists. I doubt many economists would disagree with this. But the real issue is how to connect economists with the best humanists. This real issue is a purely economic problem.
The authors correctly recognize that Adam Smith is the "most important source of economic thought". Unfortunately, they failed to use Smith's most important thought to solve the purely economic problem of connecting economists with the best humanists.
Smith's most important thought is the Invisible Hand (IH)...
It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. — Adam Smith, Wealth of Nations
In a market, people divide their limited dollars among their unlimited desires. This prioritization process results in society's limited resources being optimally divided among its unlimited wants.
Most people don't understand what markets are good for. For example, Netflix is in a market, but it is not a market. There are around 100 million subscribers who don't have the opportunity to divide their limited fees among Netflix's unlimited content. People think the system works fine, but how could it possibly work better than a market? If it does truly work better than a market... then why should Netflix be in a market?
Imagine a Netflix that was a market but with academic papers. Subscribers could freely read all the papers, but they'd have the opportunity to divide their limited fees among the unlimited papers. This prioritization process would highlight the most valuable papers in each field, which would facilitate the most profitable cross-pollination.
Let's apply the IH to the pedigree scenario. Henderson walks in and wants to pick a humanist to learn from. Because his time is limited, he should choose the most valuable humanist. Doing so depends on actually knowing the value of the humanists, which depends on readers dividing their limited dollars among the unlimited humanists. The IH would guide Henderson to the most valuable humanist.
To some extent we already use this process. Even though Schapiro is an economist I'm sure that he's heard of J.K. Rowling. Even though Morson is a humanist I'm sure that he's heard of Tomas Piketty. Piketty and Rowling both wrote bestsellers. Lots of people used their limited dollars to say, "Pick her" and "Pick him".
Personally, I'm not going to buy C&S. I'm not going to use my money to say, "Pick them". It would be a completely different story if the authors had actually advocated using Smith's best idea to solve the problem of connecting economists to the best humanists. Heck, even if they had attacked/criticized Smith's best idea I still would have purchased their book. But they didn't even mention, notice, admit, or acknowledge its relevance to their objective.
The authors said, "To reject the idea of scarce resources is to reject reasonable thought altogether." But they completely failed to see, or mention, the relevance of the IH. Once you accept the idea of scarce resources, then you must also accept the necessity of choosing the best system for dividing society's limited resources among unlimited wants. In order to efficiently divide society's limited resources, it's necessary to know the social value of the different wants. Resources can't be efficiently allocated if we don't know the social value of things.
It might help the authors to see a small, but real life, example of the IH applied to scholarly products. The students in my friend's 4th grade class have a blog... Classtopia. On the homepage their products are sorted by the hand of time. But on this page their products are sorted by the Invisible Hand.
Right now the IH is pretty small. It consists of the students, their teacher and myself. But in theory the IH could be as large as everybody in the world.
Schapiro is the president of Northwestern University (NU). He could implement the same system for the entire university. Students could put their papers online and donors could grade them with their dollars. This system could supplement, rather than replace, traditional grading. So each paper could potentially have two grades. One would be given by the professor... the other would be given by the market. Which grade would be more useful, credible, reliable, trustworthy and informative?
If NU was a market, then it would be easy for everyone in the world to find and learn from the most valuable papers that it produces. It would be hard to avoid, or ignore, or neglect the most valuable papers in the different fields. If a paper promoting the IH was the most valuable economics paper, it would be hard for humanists to ignore it. If a paper criticizing the IH was the most valuable humanities paper, it would be hard for economists to ignore it.
Should NU be a market? Of course. If we embrace the idea of scarce resources, then knowing the value of papers is the only way for people to efficiently divide their limited time among unlimited papers.
I sneezed while writing this entry. The gray cat woke up and looked at me. I said, "It was just a sneeze. I'm not a mouse. Go back to sleep."
Nobody benefits from the inefficient allocation of attention. Was this blog entry an efficient allocation of my limited attention and time? It matched my preferences but, then again, no man is an island. Socially efficient allocations can only be facilitated by the market process.
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