The Ghost in the Machine

On economics and human value

Last week I attended a meeting of the American Academy of Political & Social Sciences to accept the 2022 John Kenneth Galbraith Fellowship. It is a huge honor to receive recognition from such a venerable association and in the name of one of the great economists of the twentieth century. The AAPSS asked each new fellow—there are six others—to prepare some remarks at the ceremony, so I thought I would share mine here, along with a video for those who would like to listen along as they read.

I took this opportunity not to exalt the discipline of economics but to explore its limits. While economics can offer an immensely powerful analysis of material relations amongst people, it cannot (and should not pretend to) capture those immaterial aspects of human life that, while falling outside the realm of costs and benefits, nevertheless motivate our behavior and beliefs. I’m talking about the realm of spirituality, morals, and commitment to our fellow human beings. Viewing humans as mechanisms that respond to economic incentives can take you some way toward understanding why people do what they do, but it cannot take you all the way.

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The Ghost in the Machine

Remarks before the American Academy of Political and Social Sciences, Washington, D.C., October 19, 2022

We economists study markets, the behavior of consumers and firms, the art and science of buying and selling, the theory of rational choice. This is important work, to be sure. It is prudent to think carefully about incentives when creating social programs, for example. We should conceptualize and try to measure the costs and benefits of alternative policies. Doing this is a technical enterprise with respect to which economics has considerable power. Even so, I do not find this analytical perspective, by itself, adequate to the task of social prescription. Indeed, the single-minded focus on benefits and costs that one associates with economic science can be a profoundly impoverished way of thinking about how we should live together in society.

Here is an example, drawn from recent discussions about racial profiling. The natural economics take on that problem goes as follows: When screening resources are limited, one detects an unobserved hazard most efficiently, as a statistical matter, by using all available information that correlates with the hazard. If dangerous actors are known to be drawn disproportionately from a group of people who look a certain way, then using that knowledge to design a screening process eases the monitoring problem. An economist sees immediately how such an analysis would go. On the other hand, when we undertake to classify people categorically, and to treat them differently based on this categorization, we have done more than solve a resource allocation problem. We have also made a public statement about how we look upon and relate to one another.

It seems to me, this expressive aspect of the policy (i.e., whether to make such a statement) is often the whole ballgame. Determining how we relate to one another can be a more fundamental moral judgment than is an efficiency calculation. And yet, whereas the principles entailed by a cost-benefit calculation are easy to discern (“more is better than less”), to what principles can we look for guidance on the question of how to look upon those who are observably different from the rest of us? Does it make any sense at all to talk of the “benefits” and the “costs” of relating to one another in this way rather than that? Because our value commitments (“What manner of people are we, and how then must we comport ourselves?”) can transcend our economic concerns (“How much do we have, and how might we get even more?”), we are (thank God!) often moved to eschew what otherwise would seem to be the most efficient course of action. As a result, the cost-benefit calculus so prized by us economists is, in general, not sufficient to prescribe a course of action.

Now a critic will come along and say, channeling the spirit of the great Gary Becker, “Ah, but you have simply failed fully to account for all the costs and benefits; doing so allows one to include the value commitments within a cost-benefit framework.” I can understand this argument, but I think occasions will arise where, in the nature of the case, it is impossible in principle to do such a modified accounting. For we are talking here about the beliefs and the ideals we are prepared to affirm—matters that are incommensurate, it seems to me, with the costs and benefits that are an economist’s concern.

Consider the person who is tempted to steal but in the end decides not to do so. Contrast two distinct modes of reasoning supporting this decision: The person calculates that to risk detection and punishment entails costs in excess of the benefits. Or, the person says to himself, with conviction, “I am not a thief.” The point I’m making is that an analyst ought not try to assimilate the second mode of reasoning to the first by introducing the fictitious notion of a “cost to thinking of oneself as a thief.” To do so is to compare apples to oranges by asking, in effect, “What is this person willing to pay for an unsullied self-concept?”

Social science can capture only a part of the human subject. Our methods project human beings onto those materialistic dimensions that we can then try to fathom. That is, as the objects of scientific inquiry, human subjects must ultimately be treated as mechanisms. Yet, in so doing we social scientists leave out that which most makes a person human. We leave out the soul—what some derisively refer to as “the ghost in the machine.” Still, my fundamental conviction is that we human beings are not defined by our desires at a point and time. Indeed, I even deny that we are defined by our biological inheritance. “God is not finished with us when he deals us our genetic hand,” is how a poet might put it, and poetry has its place. I claim that, as spiritual creatures, the full extent of our humanity transcends that which can be grasped with the deterministic vision that an economist, a sociologist, or a psychologist brings.

If this is right, then it is crucial to grasp the implication that the behavior of freely choosing, socially situated, spiritually endowed human beings will in some essential way be indeterminate, unpredictable, and even mysterious. For, when human agency is driven by what people understand to be meaningful—by what they believe in—then the intersubjective processes of social interaction and mutual stimulation that generate and sustain patterns of belief in human communities become centrally important. But such processes of persuasion, conformity, conversion, myth construction, and the like are open-ended and only weakly constrained by material conditions.

What we believe about the meaning of life powerfully shapes how we act in a given situation, but these beliefs themselves are not deducible as a necessary consequence of our situation. We can always agree to believe differently or more fervently, particularly if those with whom we are socially connected are undergoing a similar transformation. Thus, religious revivals and reformations can sweep through our ranks and change our collective view of the world virtually overnight. We can be moved to make enormous sacrifices on behalf of abstract goals. We are ever capable—as the Czech playwright-turned-politician, Vaclav Havel, has said so well—of “transcending the world of existences.” Put differently, that “ghost” doesn’t dwell within the human “machine.” Instead, it emerges from the intersubjective fervor of the crowd.

All of which is my way of suggesting that “epistemic modesty” is an indispensable virtue for those who would take up the vocation of social scientist.

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