Distrusting Economics

Passions Within Reason: The Strategic Role of the Emotions

by Robert H. Frank
Norton, 304 pp., $19.95

Trust: Making and Breaking Cooperative Relations

edited by Diego Gambetta
Basil Blackwell, 246 pp., $49.95

Robert Frank’s high-spirited book is a tract against selfishness. But contrary to what that might suggest, it is not a moral tract urging altruism, benevolence, and brotherly love upon its fallen readers. Frank’s target is not the moral failings of the “average sensual man,” but the intellectual failings of social scientists carried away by the urge to explain all of human behavior as a matter of self-interested calculation. And his message is simple: the view that we are rational, self-interested calculators—the view that economics has popularized and the other human sciences have borrowed—is false in fact, hazardous as the theoretical basis of social science, and dangerous when it is fed to students of economics, psychology, and the other human sciences.

Frank’s robust statement of his case can hardly be improved on:

In recent years, the message from behavioral scientists has been that people are fundamentally selfish. Biologists tell us that behavior is shaped ultimately by material rewards, that the relentless pressures of natural selection will cull out any organism that forgoes opportunities for personal gain. Psychologists affirm this view, noting the pervasive role of material rewards in the learning process. Economists, for their part, point with pride to the power of self-interest to explain and predict behavior, not only in the world of commerce but in networks of personal relationships as well.

Yet, he says,

The plain fact is that many people do not fit the me-first caricature. They give anonymously to public television stations and private charities. They donate bone marrow to strangers with leukemia. They endure great trouble and expense to see justice done, even when it will not undo the original injury. At great risk to themselves, they pull people from burning buildings, and jump into icy rivers to rescue people who are about to drown. Soldiers throw their bodies atop live grenades to save their comrades. Seen through the lens of modern self-interest theory, such behavior is the human equivalent of planets traveling in square orbits.

Frank frequently pauses to list many other obviously non-selfish activities, from tipping generously in restaurants we shall never patronize again to turning out to vote in the foulest weather. Since we all know of such cases, we might wonder why people have been so quick to identify rational behavior with calculatedly selfish behavior. Frank suggests two reasons; the first is the desire to seem smart, to show that one is not naive. “Nice guys finish last” has the ring of worldly wisdom. “Nice guys quite often finish first” is less snappy and anyway sounds sentimental. The second reason is the intellectual predominance of economics among the behavioral sciences; it is this that preoccupies Frank, who himself teaches economics at Cornell. Two hundred years ago economics, thanks to the theories of Adam Smith, emerged as the first successful social science—politically influential, intellectually coherent, its practitioners armed with a conviction that they belonged to a recognizable discipline. One hundred years ago it began to appear as something like…

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