Economics

How Learning Economics Makes You Antisocial

The corrupting effects of economic studies

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By Amitai Etzioni

One of the first experiments to test the hypothesis that teaching economics is debasing people’s morality was conducted by Gerald Marwell and Ruth E. Ames. They designed a game where participants were given an allotment of tokens to divide between a private account and a public fund. If every player invested all of their tokens in the public fund, they would all end up with a greater return than if they had all put their money into their respective private accounts. However, if a player defected and invested in the private account while the other players invested in the public fund, she would gain an even larger return. In this way, the game was designed to promote free-riding: the socially optimal behavior would be to contribute to the public fund, but the personal advantage was in investing everything in the private fund (as long as the others did not catch on or make the same move).

Marwell and Ames found that most subjects divided their tokens nearly equally between the public and private accounts. Economics students, by contrast, invested only 20 percent of their tokens in the public fund, on average. This tendency was accompanied by a difference in the moral views of the economists and non-economists. Three quarters of non-economists reported that a “fair” investment of tokens would necessitate putting at least half of their tokens in the public fund. A third of economists didn’t answer the question or gave “complex, uncodable responses.” The remaining economics students were much more likely than their non-economist peers to say that “little or no contribution was ‘fair’.”

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Other studies have found economics students to exhibit a stronger tendency towards anti-social positions compared to their peers. For example, Carter and Irons had both economics students and non-economics students play the “ultimatum” game — a two-player game where one player is given a sum of money to divide between the two. The other player is then given a chance to accept or reject the offer; if she accepts it, then each player receives the portion of money proposed by the offerer. If she declines, then neither player gets any money. Carter and Irons found that, relative to non-economics students, economics students were much more likely to offer their partners small sums, and, thus, deviate from a “fair” 50/50 spilt.

Finally, researchers had both economics and non-economics students fill out two “honesty surveys” — one at the start of the semester and one at the conclusion — regarding how likely they were to either report being undercharged for a purchase or return found money to its owner. The authors found that, after taking an economics class, students’ responses to the end-of-the-semester survey were more likely to reflect a decline in honest behavior than students who studied astronomy.

Other studies supported these key findings. They found that economics students are less likely to consider a vendor who increases the price of bottled water on a hot day to be acting “unfairly.” Economics students who played a lottery game were willing to commit less of their potential winnings to fund a consolation prize for losers than were their peers. And such students were significantly more willing to accept bribes than other students. Moreover, economics students valued personal achievement and power more than their peers while attributing less importance to social justice and equality.

Although the entering economics students for both classes reported similar levels of dishonesty scores at the start of the class, by the end, those in the class with a focus on game theory reported significantly higher levels of dishonesty scores than their peers. Such results show that it is not just selection that is responsible for the reported increase in immoral attitudes.

Later studies support this conclusion. They found ideological differences between lower-level economics students and upper-level economics students that are similar in kind to the measured differences between the ideology of economics students as a whole and their peers. He finds that upper-level students are even less likely to support egalitarian solutions to distribution problems than lower-level students, suggesting that time spent studying economics does have an indoctrination effect.

The problem is not only that students are exposed to such views, but that there are no “balancing” courses taught in typical American colleges, in which a different view of economics is presented. Moreover, while practically all economic classes are taught in the “neoclassical” (libertarian, self centered) viewpoint, in classes by non-economists — e.g., in social philosophy, political science, and sociology — a thousand flowers bloom such that a great variety of approaches are advanced, thereby leaving students with a cacophony of conflicting pro-social views. What is needed is a systematic pro-social economics, that combines appreciation for the common good and for others as well as for the service of self.

With permission from the author, originally published here.

6 January 2016


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  • imcl

    Thank you Amitai – an astute article! Yes, why do we not have systematic pro-social economics being taught at university? We have the same problems in most schools of urban planning where neoliberal dogma rules, leading to ever-larger urban investment projects promoting maximum returns on capital, often at the expense of human health, and health of the earth.

    • Matthew Tanous

      “Yes, why do we not have systematic pro-social economics being taught at university?”

      The same reason we don’t have “systematic pro-social” physics being taught at university. Science is not dependent on worldview. The problem here is that economic science demonstrates that what you think is “fair” is not only not so, but creates negative effects for all involved in the complex system of trades and gifts that is the market.

      Calling for “pro-social” economics is basically plugging your ears and shouting “la la la” to drown out what you don’t want to hear.

      // ever-larger urban investment projects promoting maximum returns on
      capital, often at the expense of human health, and health of the earth //

      If you understood economics at all, you’d realize that these urban investment projects are the result of the convergence of many, many different regulations trying to do exactly what you are crying for. Everything from zoning law to development subsidies to rent control to building codes creates and worsens this situation.

      • Ricardo Monteiro

        I would say lalalala and still go for a more holistic rationality that would have higher returns (in case we internalize all external dimensions economics usually tends to talk about but doesn’t).

      • Unlearning Economics

        I’d love it if you could provide one example of a theory as empirically successful in economics as it is in physics. Until then, your claim that economic theory is as impossible to contradict as physical laws is just empty ideology.

        In any case, you have a warped view of what economics is. Plenty of economic research focuses on the benefits of the types of programs outlined by imcl above.

        • That people act to better their situation, as they see it, by endeavoring to maximize returns while minimizing effort is well observed and intuitive.
          Do you believe otherwise?
          That demand curves slope down is fundamental and accepted by all economists.

          Living things act to survive. Would you care to counter that?

          • Unlearning Economics

            I don’t want tautologies, axioms, intuitive statements, assertions and other empty ideological posturing. I want you to come back with some actual, falsifiable tests that are consistent with clear statistical, case study or experimental evidence. Then I will evaluate whether your assertions about economics contain any substance.

            Anyway, I could point you to research in academic economics, based on reference-dependent preferences, that disputes that demand curves always slope downwards. This is also true when price becomes a signal for quality (such as jewellery), or in stock markets, where a higher price can signal higher potential future returns. Let me know if you’d like a link to some of this stuff.

          • Which is the tautology?
            What have YOU offered beside some hypothetical possiblities?
            Have you even learned economics that you’ve unlearned?

            Mainstream economics is a mishmash of econometrics pretending to be scientific. A more accurate label for it would be socialist economics for it is based on the assumption of the political management of the economy.
            Few have any significant grasp of how markets function without the steel fist of government interventions (which are often contradictory as politicians endeavor to satisfy both the general public and their financial benefactors.

            Do you have any definitive study of what you propose? What exactly do you propose?

          • I;’;ll admit to being arrogant. I’ve been involved in this perspective and reading, observing arguments, arguing, and more reading, observing current events for 35 years.

            ” This is also true when price becomes a signal for quality (such as
            jewellery),…”

            But then people are purchasing something in addition to the object, they are buying prestige. However, when they buy, they don’t look for the highest price they can pay for it, they shop for the lowest price (unless they are also buying bragging rights).

            “..or in stock markets, where a higher price can signal higher
            potential future returns.”

            Speculative investments are done in hopes of a higher return. Stock purchasers are aiming to buy at what they believe is the lower price over time. Nobody wants to buy stocks at the peak price, and if they guess wrong and do so, they take it as a loss.

            This is not the same thing as buying goods and services for consumption…which is what supply/demand curves are about.

          • Dawson Steele

            I agree with you that traditional economics is more a religion than a science, but it seems to me that whatever one thinks of government, the idea that there is, or ever could be, a scenario where “markets function without the steel fist of government interventions” doesn’t seem realistic in this age. Whether it’s formal government regulation or informal horse trading and lobbying, money and politics and markets are hopelessly intertwined, and you’d be hard pressed to find any politicians or business leaders willing to separate them (because this is precisely how a vast majority of elites preserve their wealth and influence). I’m not getting involved in the debate between you and Unlearning Economics, but I think your side comment is actually a more relevant topic to discuss. To me, one of the great shortcomings of economic theory is that it’s just that — theory. Practicalities can be ignored in favor of modeling or writing the perfect journal article, and the result is a less helpful map for both individuals and society at large.

          • Unlearning Economics

            “Which is the tautology?”

            ‘Living things act to survive.’ is pretty close to a tautology, and is consistent with virtually any philosophy, from Marxism to Freudianism to mainstream economics.

            “Have you even learned economics that you’ve unlearned?”

            Yes, I am currently doing a PhD in economics.

            Your paragraph about economics confirms that you’re defining ‘economics’ as ‘your political beliefs’ (which seems to be libertarianism). More fool me – I’ve only just realised you’re not the same person I initially responded to! I was disputing that economics is a science, which is completely different to the argument we’re having.

            “What exactly do you propose?”

            I agree with the author of this article that we need multiple approaches in economics, including ‘pro-social’ economics.

    • Oscarthegrouch

      ‘Health of the earth’?

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  • Jan de Jonge

    Though there is nothing wrong with this article, I want to point out that this theme is already discussed by economists more than 20 years ago. See the references. I immediately add that Etzioni refers to these articles.
    references.
    Carter, John R. and Michael D. Irons. 1991. “Are Economists Different, and If So, Why?” The Journal of Economic Perspectives 5: 2: 171–177.
    Frank, Robert H., Thomas Gilovich, and Dennis T. Regan. 1993. “Does Studying Economics Inhibit Cooperation?” The Journal of Economic Perspectives 7: 2: 159–171.

  • These games are just that. Nothing like life.
    Here’s a game. You’re in a lifeboat that can hold 12 people without risk of capsizing, yet there are more people that need rescue. Do you take more aboard and risk losing everyone, or do you keep the number in the boat at twelve?

    • Ricardo Monteiro

      I am sure if there are too many people drifting only a few would consider taking one more. If there is one single soul trying to survive I am sure many within that boat would vote to rescue that person…

      • Now you are using logic tempered with some of that natural sympathy for fellow humans.
        When people know they are in a game without serious consequences, they are likely to behave differently than in real life situations.

        Economics has a logic to it and while “sharing” at the point of government guns may appeal to human sympathy, there is no sympathy toward those to whom the guns are being pointed.

        Every attempt to organize society with armed might and an appeal to human sympathies is doomed to fail in the objective of making everyone economically equalized because it violates the logic of economics and destroys the motivation to be productive. What’s more, in such societies, human sympathies are subsumed under the survival instinct and people turn against each other when the pie is shrinking.

        This isn’t a matter of how we’d like the world to be, it’s a matter of reality.

        Humans, by nature, are social creatures, but we have instincts that are most suited to tribal life where everyone knows everyone. Now we live in a world where our well being is dependent upon a myriad relations between strangers.

        How best to organize such a world, via political power (sanctioned extortion) or markets (value creation and exchange).

        • planckbrandt

          Yes, but in the real world, much of the scarcity that we experience is caused because money is created as debt, and created out of thin air. There can be no shortage of money that is created as book entries into checking accounts as digits that serve as money in this economic system. The life boat is one thing. The fake scarcity of money which animates most of us in our daily lives toward self-preservation and even sabotage of institutions is quite another.

          • Much of the scarcity we perceive as a problem is due to policies that reward consumption and punish production…and the sheer waste of subsidies, militarism, and bureaucracy.

        • Ricardo Monteiro

          I am using a tempered with some of natural sympathy for fellow humans, because I am also a player and that is the way I play. There is not one single rational behavior. I ll give you an example: 1) one family makes just enough for survival. The amount of income that goes over their line of poverty is used to buy tvs, go to cinema and buy junk food; 2) another family has a higher income and uses their actual savings to buy a house which they pay a damn bank for 30 years. You might think, according to your point of view that one of them is irrational. Well, in my point of view they are both very rational. They just tend to maximize their utilities based on the restrictions they have (which includes income, information and so on).
          But I fully agree with you when you say humans are animals with instincts of survival: they tend to react stupidly. However, they also tend to anticipate the future, and that one (whenever conditions tend to stabilize) might be quite coercive and against your actions in the past. games are usually interactive and sequentially.

        • Brian MacIver

          If your actions would be public, published in tomorrow’s newspaper
          then HOW would your decision be affected?

          • I’ve run for congress promoting policies which I believe would be best for everyone, especially the poor. I still promote those policies which simply amount to maximizing human freedom and increased prosperity in which all may partake.
            Why would I do anything different.

        • Christopher Brooks

          There are more than just those two options. Most people seem to desire a mixture of those two options, which creates a third option in itself(note I’m not one of those people) and there are also other possible ways to organize social and economic networks; P2P networks for example can be neither markets(due to the fact they don’t necessarily involve exchange, though they also can be markets; cryptocurrency for example is an example of a market-facillitating P2P network) nor political(though they can be used to facilitate democratic decision making). Mutual aid societies-brotherhood lodges being one example of something that has fulfilled this function in the past-are another example of something that is neither market nor political power. There are many other examples of things that can function in such ways, and markets themselves can take many forms(cooperatives vs corporations, for example); it is entirely possible to conceive of a market based entirely on independent producers who only organize temporarily for large projects and during such organization make all decisions, including decisions about how to divide the wealth, in a democratic fashion.

          Humans do indeed have tribal primate instincts, but that’s at best only one third of what needs to be taken into account when dealing with human social interactions because the conscious, decision making mind of a human can be considered in its three parts. There is pure survival and base instincts, tending to be highly ‘self-centered and motivated by things like pure lust, fight-or-flight, etc-one of the three aspects that must be taken into account. There is the pure ape, who is tribalistic and oriented towards survival and status in relatively small bands, capable of altruism but always towards those in the same band. Then there is the part that must be used for building any society beyond that of the tribal level, that is used to create the cities and other almost hive-like organizations of human society and is also responsible for extending human tool use beyond that of other primates; this part deals mainly with symbolic, abstract symbolic processing and can potentially accept nearly any protocol(though will cause issues with the other two parts in this model if that protocol does not allow for the full fulfillment of the other two forms of processing involved) for such interaction. For example, if the symbolic-cultural protocol is oriented towards strict property rights but this conflicts, due to drastically unequal property distribution, with either survival(making a person starve, for example) or group loyalty(many forms of discrimination are both caused by tribalistic loyalties and have the resistance against them motivated by much the same, though there is also symbolic-cultural programming involved; another closer example is most emotionally undamaged humans will put their loyalty to family above their loyalty to the law) the people experiencing this dissonance will tend to seek out other forms of symbolic-cultural programming that are not oriented to strict property rights to the same degree and which offer protocols for resistance against the same. If these two protocols cannot engage in negotiation with each other by exchange of symbolic-cultural information and come to some form of resolution, then they will default to the same innate programming you see in chimpanzee bands making war on each other.

          Economic systems are not immutable laws of reality, any more than, say… IRC is an immutable law of how computers work.

          • Economic systems may not be immutable. but the reality of scarcity is a fact of life as is competition for resources, and humans seek to maximize returns for their efforts.

            The urge to survive (and avoid discomfort) is an immutable drive in all living things, and from that, we get downward sloping demand curves.

            Economic systems premised on anything but the realities of human nature will be disfunctional.

            The other issue in economic systems encompassing so many people that many are strangers to each other is the knowledge problem.
            Fortunately, the knowledge problem is only a large problem in economies with centralized control. Unfortunately, people have instincts that tend toward support for some kind of hierarchical command structure. That is what brings us back to the knowledge problem, for the incentives of political power inherent to hierarchical systems have a corrupting effect. One result of democracy in such a system is that is puts people into conflict with each other as they strive to influence that command structure for their own benefit, or to prevent their political competitors from taking the advantage.

            These problems may be elegantly resolved by having a true free society and economy, but the difficulty remains that there is no easy way from here to there.

    • Oscarthegrouch

      Who’s in the boat– friends/family or strangers? Is the one in the water a cute girl or someone whose jib I don’t like the cut of? How many other boats nearby, and are they fully loaded? Do I have a chance to pull the one onboard and then later shove them off if we start to sink? Is the limit of 12 true or sandbagging (like weight capacity posted in elevators?) Etc.

    • Oscarthegrouch

      The ultimatum game above is also flawed, in that we don’t know how much money is being risked… if the other guy splits $10 with $7 for him and $3, I will kill us both to express my annoyance at being ripped off. If it’s $7000 and $3000 though, I will take the $3000.

  • Aram Hawa

    Some of the information in this article is not entirely accurate. For example in the public goods game outlined above it suggests that it is uncommon to observe low contributions to the public good amongst non-economists. This is false, large number of tests conducted using a wide variety of subject pools have repeated this game and find that significant free riding does occur in observable subject behaviour. Moreover the game theoretical prediction is that all subjects will free ride as marginal private benefit outweighs the marginal social benefit, this however depends upon the specific function which transforms the donations into the contributors pocket.

    As a student of the course I would agree that economics isn’t taught in the correct manner in order for students to get a broad idea of the scope of economics. Too much time is spent in the mathematical technicalities of optimising functions to determine best response decisions in consumption/production/output levels. Too little time is spent discovering the use of economics as a way of improving societal health on a potentially global scale which requires a restructuring of some of the limiting assumptions we make about consumers and their welfare which takes one into the nature of the human psyche and forces us to consider philosophical ideas of welfare.

  • Ahmanson

    Why should anyone care about “egalitarian solutions to distribution problems”? And since when does “anti-social” equal “immoral”? Society is not the highest good, and is nothing but a large number of individuals. I’ve thought “social” was a dirty word since I was a little kid. This is the logic of oppression.

    • DevilDocNowCiv

      Ah,

      Thanks, absolutely correct. And why should a vendor not be able to charge more for his/her water on a hot day? Especially if many vendors are available, morality takes care of itself in business.

  • Oscarthegrouch

    “What is needed is a systematic pro-social economics, that combines
    appreciation for the common good and for others as well as for the
    service of self.”

    This statement is assuming the conclusion. Whether a more equal distribution of resources is desirable is itself the question.

  • Consistently non-violent

    “The problem is not only that students are exposed to such views, but that there are no ‘balancing’ courses taught in typical American colleges, in which a different view of economics is presented.”

    Nearly everything else taught in social science programs at American colleges are ‘balancing.’

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