Introduction Marina Bianchi and Neil De Marchi

Introduction Marina Bianchi and Neil De Marchi Over much of the past half century, sporadic attention has been given to the possible links between economics and psychology, though recently there has been a steady rise in the numbers of both psychologists and economists interested in behavioral economics. From both disciplines have come behavioral challenges to the strong version of rational choice thinking. And, along with them, have come challenges to the challengers to relate their observations to mathematical models, as favored by economists (Camerer 1999), and to explain how people come to make the choices that they do. This recent trend is not part of what we set out to examine, though the one essay in the volume by a laboratory psychologist, John Staddon, offers a methodological reflection on a particular form of behavioral economics, prospect theory. For the rest, the focus is historical, which is to say that we wish first and foremost to identify and shed light on different contexts and episodes involving contact between the two disciplines, and on the ques- tions that either spurred or were raised by such contact. Correspondence may be addressed to Marina Bianchi, Department of Economics and Law, University of Cassino, Via S. Angelo, 03043 Cassino, Italy 03043 (e-mail: marina.bianchi @unicas.it); or to Neil De Marchi, Duke University (e-mail: [email protected]). The edi- tors wish to thank all the participants at the HOPE conference, “Economizing Mind, 1870–2015: When Economics and Psychology Met . or Didn’t,” held at Duke University in April 2015. Special thanks to Jeff Biddle, for his many interventions and thoughtful suggestions throughout that conference. Finally, thanks also to all the anonymous referees of earlier versions of the essays. History of Political Economy 48 (annual suppl.) DOI 10.1215/00182702-3619214 Copyright 2016 by Duke University Press Downloaded from http://read.dukeupress.edu/hope/article-pdf/48/suppl_1/1/430828/HOP48_5_01Bianchi_Fpp.pdf by guest on 26 September 2021 2 Marina Bianchi and Neil De Marchi As with any history, context and contemporaries’ perceptions are all important. How did such contacts as occurred come about? What seemed at stake to those involved? How did they view their options at the time? If challenge of one sort or another colored the interaction, in what terms was it couched? And how was it resolved? Or, was it not resolved but simply dropped? Then why? Was it perhaps dropped but only temporarily, to be taken up at a later date, maybe in modified form? And so on. One more disclosure, superfluous though it may be: in a single volume we cannot aspire to completeness. Yet even if selectively, the reader will discover unexpected threads (or the lack thereof) clarifying the identities of and connections between the two disciplines. We begin with a novel focus on the widespread use in the Victorian era of diaries, daily planners, and the like, as aids to good decision making. As Harro Maas makes clear, good here connotes both sensible but also morally responsible. Benjamin Franklin, a most assiduous eighteenth- century user of diaries and planners and, more important, a publisher of almanacs, thought of his way to structure decision making as a sort of moral algebra. Good decision making is part of being an ordered, responsible person—thus, again, “good” in both senses. A version of Franklin’s method was famously applied by Charles Dar- win in trying to decide whether he should marry his cousin Emma Wedg- wood. It was adopted by the heroine of George Eliot’s Middlemarch. And, Maas reminds us, the economist William Stanley Jevons, in Sydney, used it in weighing whether, when offered the post of head assayer at the Mel- bourne Mint, he should accept the offer and the higher income it would bring. That would enable him comfortably to fulfill his obligations to his younger siblings back in England, but would postpone his personal wish to return to London to study economics. In most cases the Franklin method was closely linked to a diary or planner, and these typically included blank sheets useful for setting out the pros and cons of a pending decision. Indeed, so widespread was the use of diaries and planners, and so important was their auxiliary role in clarifying and improving choices, that Maas speaks of there being an “economy of the self” or of “self-accounting” that rested squarely on these simple aids. Interestingly, Jevons also went beyond this. He invoked the theories of the mid-nineteenth-century psychologist-physiologist Alexander Bain to convey that keeping a diary or planner was not just a sensible and worthy practice but was the way our minds actually work. In other words, what was a “moral” aid became for Jevons also a psychological given. Downloaded from http://read.dukeupress.edu/hope/article-pdf/48/suppl_1/1/430828/HOP48_5_01Bianchi_Fpp.pdf by guest on 26 September 2021 Introduction 3 This extra step taken by Jevons made Jeremy Bentham’s pleasure-pain calculus an integral part of personhood, one in which the pendulum natu- rally moves in the direction of pleasure. A comparable motion may be observed in markets (though with “gain” replacing “pleasure”) and is reflected in the numbers, graphs, indexes, and so forth that are used to convey what is going on in them. Jevons’s conflation was gratuitous, and some decades later, as shown by Craufurd Goodwin in this volume, it became a target of the institutionalist economist Wesley Clair Mitchell, who blamed Jeremy Bentham for the simplistic framework that had come to dominate economic theory: consumers and businessmen treated as just two sorts of rational actor; pleasure and profit made interchangeable, as was pain and loss, in both cases the dollar serving as the unit of sensation. Simon Cook and Tiziana Foresti provide a detailed account of the relationship between economics and the tradition of experimental psychology established at Cambridge University. This is a complex history and one scarcely addressed by historians of psychology or economics, but which contains threads that link three different approaches to the scientific study of society: those of the economists Alfred Marshall and Thorstein Veblen, and that of the early social psychology of F. A. Bartlett, appointed director of the Cambridge Psychology Laboratory in 1922. Although this Cambridge tradition is commonly considered to have begun only at the very end of the nineteenth century, Cook and Foresti have uncovered an earlier tradition that, though not experimental, incor- porated a common model of the human mind. This model, whose ultimate source was Herbert Spencer, included hierarchical, accumulative, and comprehensive aspects of the evolution of the nervous system: hierarchical, in that it distinguished higher levels from lower, the former being more evolved, so more recent and more complex, and exercising control, or inhibiting the older and simpler lower levels; accumulative, in that evolution adds new levels while not removing the older; and comprehensive, in that it explains the operation of all levels in the same manner. Cook and Foresti suggest that this model was held by both Marshall and the Cambridge psychologist W. H. R. Rivers. The scientific psychology of Herbert Spencer formed part of a recently established Moral Sci- ences Tripos in the 1860s, where Marshall encountered it. Rivers learned it from the great neurologist Hughlings Jackson, an ardent disciple of Spencer. Downloaded from http://read.dukeupress.edu/hope/article-pdf/48/suppl_1/1/430828/HOP48_5_01Bianchi_Fpp.pdf by guest on 26 September 2021 4 Marina Bianchi and Neil De Marchi The common model allowed for differences. Thus Marshall conceived of the evolution of new mental tendencies and instincts in a linear progres- sive way, while Rivers emphasized the potential for conflict between new and old tendencies, new and old instincts. For Rivers, indeed, when new behaviors are incompatible with old routines, the older are not just put aside, as Marshall suggested happens with old habits. Rivers made of old instincts a repository that he dubbed the unconscious. Rivers is known for his insistence that shell-shocked soldiers in World War I tap into their unconscious and confront their worst dreams and hidden memories, if they were to be restored. Bartlett, for his part, though influenced by Rivers, focused on the interaction between various fixed and stable human instincts. Tracing differences and links in Cambridge, Cook and Foresti also identify cross-Atlantic congruences (note: not direct influences). Chief among these for their purposes here is that between Alfred Marshall and the American economist Thorstein Veblen. Veblen took his understanding of habits from the psychologist William James, but he elaborated on it in a way all his own, insisting that habits establish efficient routines for indi- viduals and, on the social level, release communities from having con- stantly to redefine and reorganize social roles and shared values. Veblen’s notion of habit is different from that of Marshall and rests their different conceptions of the relationship between habit and instinct, a conception that Veblen took mainly from William McDougall. Cook and Foresti also explore how this difference had a real impact on Veblen’s and Marshall’s respective social philosophies. A second transatlantic congruence, though of a different sort and not mentioned by Cook and Foresti, may be that between William McDougall, who later moved from Cambridge to Harvard and then to Duke University, and Wesley Clair Mitchell (for whom see Goodwin’s essay). Mitchell aligned himself with McDougall’s characterization of consumers as lazy, influenced by habit, whim, fashion, and so forth, and careless about prices: a far cry from the rational behavior supposed in economic theory. Craufurd Goodwin notes that, even if economics and psychology acquired their identities at about the same time and in contexts that might have given rise to an open and shared universe of concerns and of ways to go about addressing them, on the whole this did not happen.

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