If you want to know what Chicago PhD economist hedge-fund-guru-cum-academic Richard Robb has concluded after pondering deeply the intersection of personal agency and rational choice economics, this book is for you.
This book may not be for you.
But I really liked it!
So let’s talk about it. This tightly written, brief book sits at the intersection of economics and philosophy. It will be very interesting to a very specific set of readers: people who have a decent grounding in rational choice and behavioral economics, and are troubled by those fields’ implied imperative to optimize life in a utilitarian, mechanistic way. I believed in the great importance of personal agency before this book, and I also believed that rational choice economics has very broad applicability, and this helped me mesh those ideas together and relieve some dissonance between them.
The book picks a few key cracks in the utilitarian model and wedges them open to show that even a perfectly rational, optimizing, calculating homo economicus will necessarily exercise personal agency. He will tend to choose “for-itself” (author’s term) to e.g. take on challenges for their own sake, show uncalculated mercy, occasionally act out of character, and so forth. The book also explores practical implications for policy: situations where a standard economic approach explains a lot, but recognizing people’s agency does more.
One centerpiece is an interesting, difficult to summarize discussion of optimizing utility over time. Unlike in an economics model, we don’t sit outside time and make a single strategy that then executes. As we continuously make strategies, our time horizon is constantly shifting, and our strategy is constantly being evaluated against the new horizon. Given this, you need implausible assumptions in order to build a model where people will both adopt, and then maintain upon future re-evaluation, a single fixed strategy to maximize expected utility. At the end of the day, the justification for doing any given thing will contain an element of personal choice—not just choice to optimize based on preferences, but choice to do it “just because” or “for-itself.”
Another interesting discussion centers on the parable of the Good Samaritan, who doesn’t necessarily succeed at being an “effective altruist” along the rational economic lines: potentially a lesser degree of care for a greater number of people might have resulted in a higher benefit measured in quality-adjusted life years. Did he have to pay the innkeeper so much, with an open-ended commitment to pay more? And obviously the Samaritan can’t lavish this degree of care on every beggar he meets; he would never have made it out of town onto his journey. But he chose “for-itself” to care for the man, and it seems obvious that this was a good thing to do.
I think this book has some fascinating implications for theology as well. (Not explored in the text, but here goes.) God, as an omniscient being with a perfect ability to calculate utilitarian courses of action, might seem to be in a very tight box: since he can determine the optimal course, he would execute it; end of story. Reasoning along those lines you tend to end up with a Deist clockmaker god, who initializes the system and then lets it run, without a lot of room for e.g. answering specific prayers. But God, acting as a personal being, is within scope for many of the book’s arguments, which tend towards the conclusion that he not only can but must exercise agency. So then you end up with a God who can act in a “for-itself” manner, showing mercy for its own sake, as in Isaiah 48:11—“For mine own sake, even for mine own sake, will I do it: for how should my name be polluted? and I will not give my glory unto another.”
Similarly the Holy Ghost typically inspires people to for-itself action, as in John 3:8—“The wind bloweth where it listeth, and thou hearest the sound thereof, but canst not tell whence it cometh, and whither it goeth: so is every one that is born of the Spirit.” (I have not heard many reports of the spirit inspiring people to re-parameterize their utilitarian calculations.) And Christ originated the parable of the Good Samaritan and lived accordingly. At the same time, Father, Son, and Holy Ghost obviously smile on institutions that help people (e.g. consider your favorite faith-sponsored charity—mine being Latter-Day Saint Charities) and it seems hard to deny that all else equal, they would like these to be administered in a cost-effective way. So their actions fit well within Robb’s framework that respects rational choice, while limiting its scope. End of theological aside.
I guess most of this seems sort of obvious (of course people just do stuff sometimes!); it takes a special kind of economics education to get to where it isn’t. But this book sketches out a nice synthesis where the importance of “for-itself” choice is still clear on the far side, after broadly accepting rational choice economics, not just on the near side.
I heard about the book on EconTalk and felt sort of inspired (in a for-itself way, retrospectively) to pick it up. Glad I did.