|6. The true purpose and scope of economics|
|7. Towards a new paradigm in economics|
This paper presents an outline of what economics as a science has to say about human activities, in the broader context of human life. Human beings should be at the centre of its attention, without reducing them to mere consumers, workers, savers or other very specific social roles as the neoclassical paradigm does. A compact overarching critique of the neoclassical paradigm is in chapter 1, while key elements of human beings are reminded and underlined in chapter 2. Body, psychical life, goal-free activities and social interaction are among such key elements, whose importance has been neglected by neoclassical economics or delegated to other sciences, without preparing economics to listening back from them. Giving way to a constructive phase for a new paradigmatic approach, the importance of establishing and articulating "what human beings do" is underlined in chapter 3. This calls for a substantive and explicit recollection of "what people do", so that the role of core economic concepts (such as buy and sell, produce and exchange) can be modestly localised in the bigger framework, basically as motivators and facilitators of higher-level entities. We leave aside a world made of goods "X and Y" and of uniform robots constrained to maximise some externally-given function in favour of retrieving general human actions over space and time (thus societies) and their relations to natural and artificial objects and categories. Chapter 4 highlights a method to retrieve a list of human activities by separating verbs - taken from a vocabulary - in groups such as "substantive actions" (with or without natural, traditional or modern objects), "temporal processes", "argumentation, decisionmaking and communication". This method is not fully carried out but several key results are put forth in chapter 5. In particularly they include the primacy of non-monetary actions over monetary actions and the multiple temporalities of the objects that allow for a certain action to take place. In chapter 6, economics is called to analyse and propose motivators, facilitators and limitators for actions with complex temporalities, with due attention to innovations and their diffusion over time and space, including to the factors that prevent certain people in certain conditions to enjoy the common heritage of humankind, and with the due attention to some of the possible ways to exert an influence on human systems for a multitude of purposes.
In so doing, this paper contributes to the establishment of a new paradigm in economics, synergically with a number of methodological and ethical contributions, quickly reminded in chapter 7.
A much simpler appendix provides the interested reader with practical advice on how to further apply the method outlined in chapter 4, thus allowing for independent but cumulative knowledge in the new paradigm.
A second appendix qualifies the call for putting humans at the centre of economics, paying the due respect to the critique by ecological economics.
Neoclassical economics reduces the multifacet dimensions of real human beings to a homo oeconomicus who smoothless computes optimization procedures. People are reduced to consumers, whose only activity is to choose goods and services to maximise utility, an all-encompassing measure of welfare and happiness, of which only formal features matters (such as continuity and twice differentiability). Particular models can replicate the logics of maximisation (possibly extending the formal tools of calculus to topology and other areas of high mathematics) to a variety of social roles, such as savers (deciding how much to save, largely based on the interest rates), workers (deciding how many hours to work), parents (deciding on how many children to have, based on the cost of raising, their expected contribution to household budget, utility,...), etc.
In addition to a number of empirical and logical troubles (including the actual diffusion of mathematical competencies in the population, the overwhelming informational and computational requirements, the ex-ante nature of utility function, the assumptions of completeness of choice set and of consistency of choice, the irrelevance of inferior options, etc.) over which there is a vast literature, this paper underlines six major reasons for criticism, which, later on, will give way to a new positive construction.
A. People are reduced to specific social roles, with little or no connection among them, unless further, even more heroic assumptions, are made. The choice of housing, work, consumption, saving, investment, mating, bequests are usually separated, for simplicity's sake, although in practice they (and so many others) are mutually dependent. But even if they were treated within the same model, this would only reinforce a vision of human beings being dominated by a single objective in life to be maximised. People are instrument of their own greed, implementing choices dictated by preferences they do not shape. Even models with endogenous preference formation build upon a maximisation engine, for which preferences will change in order to maximise something else.
B. The normative prescription of behaving rationally and consistently, according to a well-behaved set of preferences, produces a very poor description of actual behaviours, whose recollection is tortured enough as to fit the ex-ante frame, which cannot be modified based on empirical evidence, since it would then become largely undetermined.
C. The neoclassical economics assumes that everything
happening is the result of an intentional choice, every choice
is fully rational, every rational action is based on mathematics,
all available mathematics is calculus, topology or other high mathematics.
Each single statement here is false and should be reversed. There exist events and conditions that are not the result of choices. Choices are not only (bounded!) rational but also based on power, negotiation and emotion. Reasonable actions are made without the use of mathematics by real agents. When we are to model agents. we can draw on algorithms and routines that represent a rising contribution from computer science beyond traditional mathematics.
D. The purpose of economics becomes to enlist functions and compute optimizations (that humans are supposed to be able to perform but that, ironically, require peer-reviewed papers in order to be devised) in a vast variety of settings, usually generating prices and quantites exchanged at an equilibrium point, whose properties and responsiveness to exogenous shocks are explored and compared across comparative statics or dynamics exercises. Sometimes this involves the computation of some consumer surplus or overall welfare function that would provide arguments in favour or againts certain institutional arrangements (such as the degree of competition on a market, the amount and type of regulatory intervention, etc.). However, the multiplicity of simplifying assumptions made at the beginning and during the exercise deprives the advice given of much usefulness, since such "results" often can be quickly tracked back to some arbitrary ex-ante assumption. Basically, economics becomes a rhetoric device to justify any course of action certain groups decide to pursue.
E. The scope of economics is at first delimited to those choices where rationality can be applied (leaving e.g. to psychology many life changing behaviours) but, after so many models coping with diverse set of behaviours, at the end encompasses everything worth in life, assumed as priced, produced and exchanged. Eliminated at the beginning for "respect" to other disciplines, a lot of very important entities disappear for ever, becomes neglected, with the advice given to neglect them all together. What has not a price is worthless. Please ignore and bulldoze.
Emotions, environment, social groups: go out of the picture!
Sometimes reference is made to "scarse resources" whose utilization and allocation is supposed to be chosen in order to maximise something, leading to total exhaustion and depletion. The advice here is never to "save for the future" or "find out a way to reduce scarcity" (although capital accumulation and production, moving the frontier of availabilty as they do, are well within the scope of economics). The recognition that people and organization keeps slack of resources to be able to have the freedom for further unplanned action is out of neoclassical scope. On a broader terms, neoclassical thinking tends to take the goal as given and to formulate "optimal" pathways to achieve it (or better, to highlight how people are supposed to take such optimal pathways).
F. The aboundant presence of mathematics may induce the reader of neoclassical economics to think that it is a general theory, applicable in all places and times. However, a nearer look at many of its parts would reveal that it takes a pretty narrow reality domain and just pretends it's universal. For instance the theory of consumer talks exclusively of a single person. Now, families made by singles without children obviously do exist. However, families with two and more components, where decisions about consumption, work, saving decisions are taken together, do exist as well. And the nuclear family structure of the modern Western world is in good companion with other forms in other societies (clan, tribes, poligamic, poliandric, etc.) and presence of divorce is giving rise to many further mixed forms even in the same society. In a more abstract terms, a theory of consumption starting from "group decisionmaking" would be much more general than the neoclassical one (with the collapse to single in the special case in which the group is made up by just one person). Such theory may even achieve to unify, at least in part, companies and households if the group decisionmaking includes not only people with an emotional bond but also a professional bond.
What's wrong with all this neoclassical thinking? The order of the construction should be reversed. We need to start from a good description of humans (as a whole) and of human activities, before giving normative advice, which need to be explicit in the values that underpins it, so that social groups with divergent interests can choose whom to listen to.
Scarcity is an outcome of previous decisions and behaviours, not a natural condition, so we need to look to the historical cumulation and to ways in which time and social interaction exert a pressure in determining what is scarse and for whom.
Humans have a body. A physical and biological entity, which was born, raised but finally dies, inesorably. This has completely escaped neoclassical economics, in which people (reduced to consumers) pop up in the system as adult, with a given set of preferences, never worried by death. Body gives a number of constraints (e.g. in terms of speed of movement) and opportunities (e.g. of interaction). It can fall ill (temporarily or permanently), with health being an important component of well-being (especially felt when missing and too often overlooked when present). Impairment of cognitive and emotional capabilities is possible, their limitations always present. Body can be trained - and even more the brain, with a width of interconnected effects between people interaction since the earliest ages (and even before birth), exploratory activities and neuro-chemical reactions. Within body, a heart always beat (until death and with possible, risky, suspensions), bloody circulates, organs activate and react. All this to say that ignoring body leads a skewed view of human beings. Not only in their individuality (where worries for health are different than desires for goods and services) but also in connection with the other bodies of people, animal and ecosystems. Death is not only something with which everybody need to cope (possibly with different preferences about the timing and the way) but that involve humankind as a whole, when risking environmental catastrophes or nuclear destruction. Neoclassical consumers are busy in shopping, real person live within their body and feel the related fears and hopes. It's not by chance that in neoclassical approaches climate change has been reduced as a loss to GDP (easily compensated with some growth by other factors), whereas it poses an existential threat to humans and non-human lives, both individually and collectively.
Humans are immersed in the psychical life, both during the day and in sleeping. They feel emotions and attachment (to people and things), pay attention (or not) to events (both real and imaginary, interpreted often in an idyosincratic way). They care about others and care about being cared about. They have (not always by choice) people surrounding them nearby, whose variable "distance" is key for their well-being (too near, too far, in right moment, in the wrong one). Mother, father, brotherhood, friends. Their desires are orders, sometimes. Pleasing them and appealing them to give us something (material or immaterial) is a relevant aspect of being human in a small group. This small group opens up to neighbours, strangers, people with whom we share or not psychical, economic and social traits (visible or invisible). What's important is that individual preferences are shaped, by assimilation or by reaction, in a social and psychical process in which large variations occur over time. The logical consistency so dear to neoclassical economics prevents an adaptation to the nearest, which often occurs in an implicit negotiation and oscillation of what is possible and what not (e.g. because it make them angry). The sharp distinction between what technically possible (and within the consumer's budget line) and what is not - so typical of the neoclassical setting for decisions - is blurred for real humans who knows that certain decisions might be forced for a while but may also provoke a reduction of goodwill for further steps. Parents pay for what the child wants butmay well say no, or change the object of the purchase. This exercise, which forges the perception of the child, will continue in different ways throughout life in the negotiations in the family where choices (including consumption, work, location) are partly subject to group decision as well as at work (with colleagues, bosses, etc.), in politics, etc.
Imagining a totally independent decision unit, acting as a reptile looking for a prey of its exclusive interest, is at odds to our nature of mammals, where early age care and education shapes behaviours also in the later stage, including on behalf of those we may give birth. This does not prevent an education being oriented to produce a reptile, aggressive, competitive and selfish. But one needs to be aware that a description of the variety of humans requires a full and explicit recognition psychical and social life, including education and interation.
Being good at math is not the unique trait that characterise human beings - and its generality over time and societies is pretty much limited. How did the consumers who lived before the Modern Age and calculus make their decisions? The neoclassical theory, in its fictious generality, is singling out very specific time and people as "the representative" of human kind.
In more specific terms, kids at their youngest age - sleeping many times a day, eating, having their phisiological processes, and being cleaned - express strongly their felling of dissatisfaction, that has somehow to be interpreted to understand what would calm it down. Do they have preferences? Well, they express what they feel, with cries and smiles and so many gestures, which their caretakers may well interpret as major milestones of development.
Since the very beginning, what hurts and what pleases is not symmetric: absence of the former does not lead to the latter. They can mix, with all sort of combinations. Utility, as a sum synthetising all positive and negative aspects and feelings of a certain situation is badly equipped to describe this evidence, that continue to be true over the lifetime: motivators and demotivators, what Herzberg called "motivators" and "hygenic" factors, are, as indicated by his researches on work conditions and productivity different and asymmetric. Also consumers have an asymmetric relations to motivators and hygienic factors, as point out for instance in this research.
Babies play. They are moving and touching, licking and letting things falling. They are attracted by lights and colours, quickly pointing out with their fingers what they want.
In this simple gesture resides the beginning of all choices.
It's not a comparison. The object is chosen - or better: indicated - not because it best fits some imaginary function. It wants it as a thing to be manipulated, including by "Palmar Grasp" and "Pincer Grasp", universal developmental milestones of humans.
The neoclassical theory ignores that everyone was a baby and a child at a some point in time. It neglects the early age developments which are fundamental to understand later stages where larger autonomy allows for wider experimentation.
What is particularly striking in babies is that their playful activities are goal free. They do not serve for a purpose. There is no evaluation of alternative ways to reach that purpose. These playful activities are made for the pleasure of making them. Things are not used as the adult suppose they need to be used. Indeed, it's the adult that sometimes suggest a purpose, just to be disappointed in seeing how little interest has the kid to pursue it.
Things are put in the mouth and crashed as the perception of matter and its persistence are on track to be established, generating the phenomenological lawfulnesses that will accompany expectation formation and surprise.
For many month, the absence of the mother, or of the caretaker to which the baby is now attached, provokes anxiety because her disappearance is interpreted as definitive, in a world where time is still to be structured. It's only the repetitive experience that she comes back and of the emotional tenderness and nearness confirming that every missing time will be followed by return can convince the baby to reduce anxiety (and not for much time!).
In later months, the construction cubes will be the occasion for the kid to "produce" things, in a game where external expectations are systematically failed, because the kid is just experimenting without the goal of, say, building the highest tower. And it frequently will destroy the tower well before the adult would like.
The others want us to have a goal they chose for us. We don't.
We are free to set, change, reverse and neglect goals, or to have none. We are not always satisfying some impellent need. We have the freedom to act, or simply not to. When a neoclassical guy approaches us and say "Chose between these two goods and exhaust your budget" we may simply say no: not choosing, delaying choice, looking for further alternatives, looking for additional sources of budget, leaving some slack resources after having chosen, ask others for their opinions, etc.
It's misleading to frame a choice as something in which people do not modify the frame in which choice occurs.
This is even more important when we look at the moltitudes and what is called history: history has no goal. Humankind has no goal. It is experimenting with the planet as the baby with the plate.
Risking at every step to waste everything.
In order to localize the contribution that economics can make, thus its purpose and scope, it's important to remind the reader about what humans do. It's just a reminder because the reader is a human. Thus she - let's imagine that's a she - knows well which are her daily activities and the non-daily, broader or extraordinary, activities she does. She knows which belong to broader projects or, instead, are being initiated by impulse, without any intended consequence, for their own's sake. She knows how most of them are common to other people but others do deviate in object, purpose, way of being carried out and many other aspects. If asked to focalize those actions that are common to all humans, in every place and time, she might well enlist several. For instance sleeping. Across life, people do sleep many times. Not always in the night, not always all days. But people do sleep. And they need no money for doing that. It is more confortable and protected to sleep in a bed in a room in a house. For which someone one time may have been making a payment. However, the mere act of sleeping does not involve payment. Conversely, when you book a room in a hotel it does not matter if you sleep or not. Those houses and bed and linen were produced by someone somehow in some past time and most likely they were paid for doing that. But in most cases these payments have been done already and belong to the past. The activity taking place now does not require further economic action. Economic aspects were instrumental in generating a stock that now is in use to facilitate a human activity that would occur even in absence of the stock itself. You can sleep on the grass, if strictly necessary, or, better, if you are a baby in the arms of your mother.
In this simple example of activity, we already have a hint of the role of economic actions in the broader context of life. It facilitates activities and motivates people to act and, sometimes, to produce something that remains for the future. It is perfectly possible that certain actions do not need any payment whatsoever and, conversely, that a payment would not be enough for the activity to be carried out. You cannot be paid to dream while sleeping - even less to have a specific dream.
In another vein, taken an action exerted on a certain artifact you probably would find some economic activity somewhere in the present or in the past, if you insist enough in looking. Which provides some ground for a thin and dispersed but frequent presence of economy in life. What's crucial is that in most cases this presence is complementary and hierarchically subjugated to something more important.
Let's take a second example. You go out to the cinema. This means entering into a building, paying the ticket, seating in the large room to, finally, enjoy. What is really crucial - and the key motivator for your action - is the latter; the other activities were ancillary and instrumental. Your satisfaction is mostly related to the quality of the film; and the decision to go there is mainly motivated by it. On the production side, the film itself needed a producer (often more than one) that has a reasonable expectation that the income streams from the film will more than cover all its costs. He may have had to explain it and convince a bank to make a loan, maybe betting a collateral for it. Accordingly, the economic drivers were very important for the same existence of the film. However, the final quality of the film - and the level of enjoyment you personally gets from it - have only a relation with them, without being fully determined by them. A lot of films which costed a lot are bad films that too few people want to see - and generate big losses. There are also bad films that are seen by a lot a people.
Moreover, given the past as it was, if one additional person enters into the building and see the film without paying the ticket, nothing else will change. His enjoyment will be the same (or even be larger). His presence does not in itself ruin anyone or force the cinema out of market. The core activity of seeing a film requires a lot of past activities but in itself does not require an economic activity (its repetition on a wider scale and for longer periods of time does).
The activity "going to the cinema" is not something so general that embraces all times and places: it is conditioned to cinema having being invented. In France some 150 years ago. And having being spread across the globe, with prices that allow many - although not all - people to go out and see. With millions of people enjoying going out to the cinema so much that there is a credible case for producing at least some films.
And with Internet streaming, DVD diffusion and the many future next big things in the so called "entertainment industry" (which seems to include also very serious films) it is in a constant change of structure and financial sustainability. Economics has to say something about it. Probably including many of the issues and reflections that generated in the managerial sciences, which are pretty used to cover a qualitative description of the technology, the firms, the market, the subjective reasons for choosing a film, but even more the social processes leading groups to go out and pay for it.
More in general, economics as a science needs to aim broad and high, in identifying (commenting, structuring, supporting if worthy,...) economic activities and their relationship to the full body of human activities. We look for activities that happened in any time and society and will probably will occur also in the future, but we need to have room for discussing also activities that derived from historically determined developments, including in technology and fashion, and their innovation and diffusion trajectories.
For this to happen, it's crucial to establish what human do and, as a inner chapter, which activities are core to the economy and deserve an economic analysis.
The goal is to have a list of activities that humans do. At a point it will be useful to know if such activities are common to all people or whether they have a narrower scope. But for the moment we adopt the approach according to which if someone does the activity, it's included in the list (a sort of "OR" logical statement).
There may be many methods to generate such list. Since humans are the same, these different methods will tend to identify the same actions (with more or less level of detail; with better coverage of certain groups of activities using a method and other groups better discovered by another). Again, we suggest the adoption of the "OR" way and include in the list all activities found in all methods.
This list will be produced iteratively and will always be open for future addition (since in the future new activities may arise and new methods to elicit may turn out to be useful). Because of the "OR" way, an activity present in the list will hardly be cancelled because if someone was doing it once upon a time, it is kept in the list even now and in the future.
In particular, in this chapter we propose one of such methods and we articulate a list of steps that would implement it. The overall enterprise is pretty big and we leave for the future and for other authors. In particular an appendix will provide practical advice for the interested reader.
We want simply to show that at least one method exists and that even very preliminary results do already shed light on the path a new economic theory may take. A lot of choices are made in outlining such method, thus subsequent implementation will change each and everyone of them to enrich the list. Thus, don't worry too much if this first description seems to make too many simplifications. You will be in charge of responding to your critiques.
All these introductory remarks made, let's go.
Human collective knowledge has sedimented in languages. In some languages, verbs have been separated from other words to identify "actions" in a very broad sense. Let's take a vocabulary of one of such languages, for instance English, because it's the language in which this paper is written (and which the reader needs to know in order to follow it, so we can assume that he knows it). Let's take a vocabulary of mid size, collecting relatively common terms. In it, some words will be verbs and will constitute the starting point for our list.
For instance a vocabulary of some 2000 words will contain some 392 verbs.
A first group to kept apart is made by verbs that human cannot perform, since they are related to meteorological events, minerals, natural elements and to animals. Some of them might be applied metaphorically to humans but let's take the decision to keep them out.
A second group to kept apart is related to verbs that relates to events (such as "occur, happen").
A third one is having to do with increasing, maintaining, and decreasing a quantity. They are very used in economics, with the subject usually being an economic variable (e.g. "GDP increases, unemployment falls"). It is less likely that humans can be the subject of these verbs.
In short, human actions are, as necessary but not sufficient condition, verbs that accept a human as grammatic subject. For instance "Mary sleeps. I go".
We would like to isolate substantial action (such as "drink", "sleep"), which do not need any object or which have a thing as an object, separating them from verbs that works on a meta level (which, as a general rule, require some further verbs after). Thus we form several groups for the latters.
Firstly, there is a group of verbs relating to time and the process of the substantial action. "Begin, interrupt, end" are eminent members of this group. They are nicely used before substantial action ("He began to drink").
Secondly, there is a group of modal verbs relating to permission, duty and will with e.g. "be able to, must, wish" being eminent members of this group.
Finally we have a list of 354 verbs that would most likely accept a human as subject:
* there is large group of (57) verbs related to understanding, argumentation, decisionmaking and to communication. We may include in this group all verbs relating to the internal or external negotiation of the action (thus "accept, advise, avoid" but also "decide, avoid, refuse"). They are nicely used before "to do something";
* an even larger group of (297) verbs of substantive action, which does not require any further verbal extension to have a meaning.
In principle one might try to catalog these verbs of human substantive actions according to some generic measure of frequency of use (daily vs. less often), of generality across today's world (local vs. international), of generality across time (time-related vs. eternal).
Irrespective of any disagreement on such attributes of the verbs and of the possibility of replicating such judgements by people of different cultural and national background, age, gender etc., maybe in an online survey, some general aspects should be underlined.
There are verbs that are related to specific uses of specific goods, e.g. "parking" (which almost inevitably would refer to a "car" or "a vehicle"). This makes them candidates for the time-related (innovation related) category of actions that presuppose the previous innovation, thus were not available (or even known) before. When the specific good always existed (or existed since the beginnings of history), like trees, fire or writing, one could separate the verb from the situation where the good is recent and a flows of neologisms is entering into the language (e.g. as it happening with computers, with "clicking", "saving a file", etc.). By retrieving when a certain verb began to be introduced one might, within this approach, have a hint about its temporality (for instance verbs with an etimology from Latin and other dead languages from a verb with the same meaning would obviously point in the direction of "eternal").
Actions that tend to be in existence since human evolved from monkeys
are typically related to:
1. the body and its functioning, meanwhile leading to history-related activities for health care, cosmetics and shelter/fashion by garments;
2. gestures and movements of the body, meanwhile leading to history-related activities of transport and mobility, including the related vehicles and services;
3. psychical life;
4. communication across humans, meanwhile leading to history-related activities of writing, recording, playing, narrowcasting and broadcasting.
In other words, the useful division of actions in groups need not to cancel the bridges that cross from one group to another.
Further division and subdivision of the same list of verbs can be introduced. The list can be polished by separating certain meaning of the verb from others. The list and the groups can be enriched by reference to a broader vocabulary. A validation of the generality of the substantive verbs can be looked for by means of comparison with other languages, especially those who distinguish verbs from other grammar "words".
A lot of work remains to be done and a number of improvements can be suggested and carried out. But already what found and outlined until now provides food for thought.
The verbs that have a direct and eminently economic meaning are the following:
to be worth
In broader terms, verbs that may have also an economic meaning, beyond and in addition to a non-economic one, are the following:
to strike (in the sense of making a strike at work)
In all from 15 to 30 verbs out of 354 are pillars of economic analysis, thus from 6% to 12% of total human activities.
This gives a quantitative, thus almost comically precise, estimation of the relevance of the economy to broader human activities. There is a law stating that everytime a quantitative indicator is chosen in order to track a phenomenon, manipulation begins in order to change the indicator in absence of any change in the phenomenon (it's the Goodhart's law). Thus, don't try now to manipulate the list adding a list of verbs that are relevant in economics just to boost your self-esteem :)
However, without recalculating that index, it's true that a number of core economics verbs is missing from the list, which is based on an externally given vocabulary of 2000 words.
"Selective extension" of the verb list helps better and more systematically conver groups of human actions. Thus one might want to add them as for interesting subject of attention in economics:
In other words, economics is immediately concerned with the reasons, the ways and the consequences of economic actions, well aware that they constitute a small part of the whole set of human actions. Conversely, by talking and analysing human activities, a role for economic actions can be found behind and within the latters.
In a metaphor, if non-economic susbstantive actions are a skeleton, then economic actions are like ligaments between one bone and another. In the total physiology of a body they are just a small part - they are not the brain, the nerves, the chemistry possibly dictating the will of an action, or the muscles that provide the force to carry it out, or the skin that keeps the body together.
By including new actions in the set of immediate economic concern, extensions of economics comes out fluently.
But already with the set we have for now, one may develop examples of typical situation when human activities are carried out on a background of economic activities. The latters connect actions across agents. They facilitate actions that are undertaken for some positive reason and counterbalance, thus allowing, actions that are somehow a burden.
Now it's time for some possible critique. Why not include "to eat" within the set of economic verbs, as it is a good example of "consuming", which is something that "consumers" are expected to do? It's because you don't need to be in a process of producing and exchanging in order to eat. You may go to a forest, take a raspberry and eat. No payments involved, no production involved.
Also animals eat. In so doing, they are not carrying out an economic action.
Babies drink the milk of the mother. At later stage, kids are given food by their caretakers, usually without the request of price for it.
Conversely, if you go to a restaurant, you'll obviously pay for the food, the service, the place and these payments keep the restaurant runnning, pulling supply and value chains. That's exactly what we mean when talking about "legament" and interstitial role connecting and allowing for human actions.
"Eating" has probably served as a mold for the neoclassical theory of consumption, which over-emphasises non-durable goods that are destroyed during the process of consumption and which assumes a decreasing marginal utility of the good as its quantity is consumed. However, the theory falls short in accepting that people do get satiation at the certain point, without an ever-increasing utility function. Indeed overexageration with food, even the most appealing, does provide rejection and clearly diminish the quality of the experience that becomes nasty (as one is externally forced to eat more and more without limits). And its long term consequences - as obesity - are negative both for health and for social acceptance and self-esteem, with cardiovasculary diseases in view.
Conversely, with some time allowed from one eating experience to another, the decreasing marginal utility ceases to apply. In a life you can eat a certain food thousands of times and yet, next time, you will be enjoying it again.
Thus a proper theory of consumption, that would consider eating as a human activity, would have clearly identified "satiation" as a key concept, would have recognized the risk of over-consumption and mis-consumption (which is even more clear when analysing drinking behaviours of alcoholic substances) and would have recognized the importance of time and of cyclical needs.
The examples of the restaurant and of the cinema points out a further key message: the complex overlap of temporalities. The buildings in which many activities take place need to have being built in the past. They are long-lasting artifacts that allow and sometimes shape the activities. The city (or more in general the human settlement) in which they are, together with infrastructure, public spaces, built and non-built environment, have life timespan that can go back centuries if not millenia. And they will probably last in the future as much. They constitute an element of certainty, while land-use change is incrementally modifying the landscape. All this brings to the picture the need of considering past human generations as somehow the coral "polyps" that led to the magnificent production of the coral reaf, with its multicolouful vibrant life (and the contemporary high risk of coral bleaching and the devastating effects of the acidification of the seas).
Conversely, the very short time activity of giving us a ticket or serving a meal draws upon labour contracts that span months or years, in turn building upon education and learning-on-the job activities of various duration. They are embedded in economic entities of some stability, such as companied or cooperatives.
The memory of the film (especially if particularly good or particularly bad) will remaing for a long time in the persons who saw it - and possibly in those to which certain comments have been made by the direct participants. In principle such information might have an impact in their decision to see it or not, in some moment in the future.
Repurchasing is a very important verb and activity, motivated by several different reasons and with many implications, as here it is underlined.
In other words, human activities take time, build on information, events and artifacts that cumulate over time, with a wide variety of time spans, and their full effects take time to be realized and fulfilled. They are not concentrated in one point of time, collapsing all such relationships, as the neoclassical model assumes. Nor all decisions are taken "at the beginning" of the modelled time as game theoretical constructs tend to do, including when assuming multiple stages which are retroactively solved starting from the last in order to generate the optimal full pathway of decisions.
In another vein, human activities are not only performed by individuals separately. Humans' activities are undertaken and carried out by social groups, such as workers, farmers, entrepreneurs, as well as by formal and informal organizations and networks. Group decisionmaking, sub-cultures and conflicts may sediment in routines as compromises and temporary victory of a group over another. It's important to highlight which verbs do accept a collective as subject.
In short, even a preliminary and uncomplete application of the method does provide several insights of the structure of human activities, the role of economic actions in processes shaped and dominated by them, thus opening the way to some general remarks on economics as a science.
Economics is the science addressing economic actions, which normally act as facilitators, limitators and motivators of human actions. For instance, with "buying" being an action that allows human activities hinging on the good or the service bought being performed by the buyer, the process of buying (including its cognitive, emotional and practical aspects and its relationship to affordability) is object of direct attention by economics. The features of the process may limit access to the good/service. For instance, a high price may exclude the poor, unless he accepts to further reduce his access to other goods, probably already insufficient or barely sufficient to cover his needs. Credit may act as facilitating condition, implying an even more complex temporal structure. The willingness of the seller, and of the original producer - as well as his suppliers - to deliver the good has to do with different elements, one of the most important of which is the price he can get from this act. Accordingly, a high price may be strongly motivator. By putting together these different reflections, there may be a sustained development of luxury goods that exclude a (more or less) large part of the population. To the extent there is a value judgement favouring the diffusion of goods across the whole population, different schemes may be proposed to address the issue. To the extent there is a value judgement in favour of strong diversity across people, other schemes may be proposed.
Value judgement and proposals are integral part of economics. In particular, proposals for new economic actions (or new ways to carry out existing ones) are an important task for economics to offer a positive contribution, given explicitly stated value judgements. People listening to economics will share or refuse or reformulate the value judgement and will be able to outline, project, and implement better informed actions. Economics is part of the conversation aimed at a better world, with the criteria for what constitutes a better world being part of the discussion.
In our view, economics is called to analyse and propose motivators, facilitators and limitators for actions with complex temporalities, with due attention to innovations and their diffusion over time and space, including to the factors that prevent certain people in certain conditions to enjoy the common heritage of humankind.
Innovations and persistencies are core objects of interest for economics as a science. Conversely, lack of access to job opportunities, savings scheme, financial flows, company services and goods and other limitations need to be investigated and approached.
The analysis of human action is propedeutical to a discussion to their role in fulfilling needs and in the overall well-being of humans. The well-being of humans, which is related to carrying out certain (and not other) human activities, and ways to enhance it (over time and over people and societies) is intertwined with the pillar of economics that generates proposals, which in turn is in relation with value judgements.
Such economics conceives human beings as full of purposes, intentions, limitations, hesitations and as capable of making judgements, take decisions, carrying them out at different degrees of success and with a multiplicity of effects on himself and on others.
In this vein, economics is interested to highlight at least some of the possible ways to exert an influence on human systems for a multitude of purposes. Human systems are made up of individuals and social groups, with a vast number of ways in which they can take shape (households, neighbourhoods, etc.). As a consequence, certain borders with sociology need to be blurred. In particularly, purposefully undertaken social processes of persuasion and change need to be addressed by economics as well.
Moreover, this piece of research lay the path for economics to open a dialogue with the science of history and with geography, including with business and industrial history as well as with anthropic geography, up to regional sciences.
"Economic actions are a small group of human actions, which facilitate, limit and motivate many of the others. Economics analyses existing (and proposes new) economic actions in view of supporting desirable changes in human activities and their actual diffusion in world (present and future) population".
With this new definition of the scope and purpose of economics, a number of scientifically legitimate actions can be taken within a new "normal science", including by transitioning under the umbrella of the new paradigm a large body of established theoretical and empirical research.
The view of economics as resulting from this short paper contributes to a new paradigm in economics, alternative to the neoclassical one. As Thomas Kuhn has taught us, for a new paradigm to emerge we need new questions, new ways to generate answers, new criteria for judging whether the answers are satisfactory, and some indications on ways to improve the answers ("normal science" practices).
Critiques are not enough, alternatives need to be provided. In particular, a new paradigm wins if it is capable of addressing well an "anomaly", something that even protracted and intense attempts by the previous paradigm could not lead to explanation and, in economics, to effective solution, if negatively perceived.
The Keynesian revolution was hinging on the capability of the new paradigm to address "unemployment" which was outright excluded by neoclassical economics or considered as optimal in some sense (to the effect that every time unemployment hurts key segments of a society, Keynesian economics comes back). As we hinted at the importance of considering limitation to human activities and ways to remove them as inherent to economics, we provided some common ground not only with Keynesians but also with Amartya Sen's basic needs approach.
The evolutionary paradigm (nurtured by works of scholars as Nelson and Winter, Rosenberg, Malerba, Dosi, Orsenigo, ...) hinges on "innovation" as the anomaly that deflects the attempt by neoclassics (whose representation of R&D as an optimizing activity, with an optimal budget, optimal results is too clearly at odd with the very nature of it, including as perceived by the agents that undertake it). Indeed, the importance of verbs referring to specific goods, which leads to the relevance of space, time and innovation is a good backgroud for evolutionary economics. Also the wealth of verbs referring to processes in time (a separate group of verbs from those expressing substantive action) is very conducive to an articulated evolutionary analysis of economic change.
In other works of mine, I implicitly considered "climate change" as the anomaly that has to be urgently addressed by humankind, with the neoclassical paradigm conceiving only prices and quantities as relevant - thus advicing only price-signal or quantity-signal policies in the respective form of CO2 taxes and cap-and-trade schemes, both of which are of limited effectiveness and a political boomerang. In the book I led ("Innovative economic policies for climate change mitigation", I built from a different perspective a large toolbox of alternatives, broadly consistent with what here described (for instance the full recognition of the importance of "quality").
In methodological terms, the formal methods of the new economics should be, in our view, agent-based simulations, assuming bounded rationality of the agents, possibly with explicit cognitive, emotional and communicational capabilities and actions, normally taking the form of routines. I highlighted a few areas for routine decisionmaking of consumers in agent-based models here, whereas a broader contrast between the neoclassical and the evolutionary theory of consumers is here.
In a moment in which evolutionary economics - in an attempt to be competitive with the neoclassical paradigm by making the same mistakes - sometimes is assuming highly mathematised decisionmaking rules, it's important to remark what we called the golden rule of modellers and more in general that, since we are talking about human actions, humans should understand what we are talking about, at least in the sense of its key building blocks.
Models are not simplified schemes of reality, they are complexified and dynamicized schemes for discussion, a gym for reasoning, going beyond oral, writtten and graphical tools.
In another vein, it's pretty obvious that the analysis advocated in this paper are eminently qualitative. In this, we take very seriously the critics to Galileo (who called science to "quantify quality") made Husserl's Crisis of the European sciences (which called in 1936 a foundational philosophy to "qualify the quantitative" to avoid a rationality prone to fulfill any type of goals, including the Nazi's ones). The explicit presence of value judgements is meant to serve to avoid such situations.
In ethical terms, we need to move away from the two versions of Voltaire's Candide "hero" (Pangloss) who, stating the "this is the best of all possible ways", are underpinning most of the neoclassical economics: some put the accent on the word "best" (stating that, by leaving the market act, we automatically get to optimal solution, highest utility for the highest number of people, etc.), other the word "possible" (emphasising the limitations that any change in current situation would hurt someone, that certain sub-optimal outcomes are inevitable - the so-called second-best instruments, etc.). At the end if you are unemployed, with very limited income and consumption, reduced fulfillment of your even basic need, it's a meagre consolation to know that this is already optimal or that nothing else can be done - and the discussion on which is the case turns out to rather idle.
Instead, the ethical stance of the new paradigm should be based on the recognition that it is always possible to improve and to worsen the current situation. This fills of responsibility everyone taking action and its advisors, including the economists.
In short, this paper, and the collection of key concepts in which it is published, including some that are directly linked from it, wants to mobilise you in becoming an active agent for change in economics, the economy and the flows of human history.
As we based on the recognition of the materiality of human body, we are well placed to recognise the materiality of objects built and consumed by humans, which draw on the extraction of material input from natural systems (both inanimate and animate), as well as the materiality of wasted objects and side-productions, including greenhouse gases and pollutants. Accordingly, our analysis does open the possibility for the exhaustion of resources, the collapse of ecosystems and extintion of species, for climate change and pervasive pollution (e.g. microplastics) as well as for all other factors disturbing a safe planetary operative space and/or local conditions.
If humans didn't exist there wouldn't be an ecological and climatic emergency. And if economics were not to analyse humans we would be deprived of considerations and suggestions for change in their individual and collective behaviours. Conversely, we are not really ready to apply economic analyses to animals as if they were humans (which means that we do want to treat separately humans from non-humans).
When we say that economics should put humans at the centre of attention, we do not mean that they are the only entities we should care of - nor we are replicating the mistakes of neoclassical economics, which we aboundantly criticise here. We stand together with "ecological economics" in the request of fully taking into consideration nature, including ecosystems and their health.
We recognize the intrinsic value of nature, biodiversity, and non-renewable inputs as well as the waste and pollution that economic processes may generate, just to mention a few of the entities ignored in the neoclassical paradigm (until they are priced and exchanged, as this were the key to solve all problems). The proposals that economics should make include suggestions on how to change consumer behaviour, market structures and policymaking processes, as we did in this book. In it, some chapters are devoted to value-driven behaviour, quality-oriented decisions, regulatory frameworks and actual policy-market agents interaction, going well beyond neoclassical Pigouvian tax schems and cap-and-trade financial instruments.
In summary, the positions stated in this paper do not contrast but rather implement and complement ecological economics.