The Price of Bibles

A few days ago, Rufus faulted the discipline of economics for failing to develop a theory of different types of wants, and for tending to press all wants into a single framework, that of “Delight.” Some considerations are below the fold. I’m not quite sure I’ve gotten his argument right, so some of them may be irrelevant.

Some wants, Rufus argues, are for the sake of physical survival, while others are for spiritual edification. Still others merely bring Delight (with a capital D that puzzles me, despite being a Sandman initiate; pardon the Digression).

Why do economists lump them all together, when they’re so obviously different, both phenomenologically and in ordinary speech? I’d like a glass of champagne, but I need my asthma medication. But why then do they cost the same? Is it some evil trickery of economics?

Surely, Rufus suggests, a proper science of value would have addressed these different forms or classes of want. That economics has not done so, he seems to argue, may be one reason why consumer culture is so shallow. “A ‘consumer’ is a pitiable human,” he writes, because looking at a human being merely as an element in an economic exchange is pretty dehumanizing.

I am not an economist, but a historian of ideas. And yet I am tempted to ask him — a consumer is a pitiable human… compared to what? The only thing more pitiable than a fool satisfied is a fool starving. And those could easily be our choices.

Intellectuals like us obviously find it appealing, personally, to pose as Socrates, and to be dissatisfied with everything we see, including abundance. Consumer culture? Shallow! I, however, am deep, and I signal this deepness by denigrating consumer culture. Now that pose satisfies like nothing else. (It’s also positional, isn’t it? In layman’s terms, a pissing contest?)

But let’s talk more about value, because in the history of the profession, economists actually tried out exactly what Rufus proposes. At one time there really were theories out there about different, incommensurable scales of value. These, though, were abandoned as unworkable for purposes of economic analysis. They either yielded paradoxes or else only made sense when one considered just a single scale of value in isolation, to the neglect of all others.

Finally, a sort of theoretical bargain was reached, in which economists adopted a putative universal scale of values, and claimed that each of us had one that was unique to ourselves — but then the economists all agreed that they wouldn’t make any strong claims about its normative content.

One of the best explanations of this move comes from Ludwig von Mises’ treatise Human Action. Two sections in particular speak to the question. Here’s the first:

It is customary to say that acting man has a scale of wants or values in his mind when he arranges his actions. On the basis of such a scale he satisfies what is of higher value, i.e., his more urgent wants, and leaves unsatisfied what is of lower value, i.e., what is a less urgent want… However, one must not forget that the scale of values or wants manifests itself only in the reality of action. These scales have no independent existence apart from the actual behavior of individuals. The only source from which our knowledge concerning these scales is derived is the observation of man’s actions. Every action is always in perfect agreement with the scale of values or wants because these scales are nothing but an instrument for the interpretation of a man’s acting.

Ethical doctrines are intent upon establishing scales of value according to which man should act but does not necessarily act. They claim for themselves the vocation of telling right from wrong and of advising man concerning what he should aim at as the supreme good. They are normative disciplines aiming at the cognition of what ought to be. They are not neutral with regard to facts; they judge them from the point of view of freely adopted standards.

This is not the attitude of praxeology and economics. They are fully aware of the fact that the ultimate ends of human action are not open to examination from any absolute standard. Ultimate ends are ultimately given, they are purely subjective, they differ with various people and with the same people at various moments in their lives. Praxeology and economics deal with the means for the attainment of ends chosen by the acting individuals. (pp 94-95)

In other words, we’d be making a huge blunder to observe that a Bible costs about as much as a cheap romance novel — and reason from this that our society, alas, does not value the Bible highly enough. (“It’s as if the Bible only provided Delight!” I suspect that the complaint would run. If I’m wrong in this, please let me know. Or in characterizing anything the original post by Rufus.)

One clue that we’ve strayed here is quite simply observed. Consider that, while inexpensive, Bibles fulfill a profound need, at least according to the Christian. This is why entire Christian charitable societies give away Bibles for free. Valuing them, apparently, at less than a cheap romance novel. Yet it’s obviously not contempt for the Bible that causes them to act. We can hardly even consider their actions without abandoning our attempts at a normative economics.

Economics describes the mechanisms by which wants are satisfied — taking those wants, and their arrangement into a hierarchy, as a given. It does not pass judgment upon them, and still less should prices be taken as moral guides or commentaries about our inner lives.

In itself, economics tells us that the price of books results from forces unrelated to their contents. The arrangement of the contents of a book makes no great influence on the costs of production, distribution, and sale, and competition among producers drives the market price — for all books — to something just slightly above that. Even an infinite increase in the interior value of owning a Bible would result in a negligible and temporary increase in the market value of a Bible, because Bibles are so inexpensive to produce, especially in the great quantities that are turned out all the time.

This is also readily apparent to the devotees of various religions: Catholics hold that the Koran is of no salvific value, and Muslims say the same of the Catholic Bible. Yet each is forced to observe, with equal embarrassment, that the market prices them as books, not as salvific objects.

Mises attacks the same problem from a different angle here:

[The] mode of speaking in terms of classes of wants becomes intelligible only if we remember the role played in the history of economic thought by the alleged paradox of value. Carl Menger and [Eugen von] Böhm-Bawerk had to make use of the term “class of wants” in order to refute the objections raised by those who considered bread as such more valuable than silk because the class “want of nourishment” is more important than the class “want of luxurious clothing.” (Mises, p 123)

(If you really want to follow the reference, see Böhm-Bawerk’s Positive Theory of Capital, particularly Book III, on Value.)

A lot of people thought these distinctions should matter for economic science, but the truth turned out to be a lot simpler, and also a lot more counterintuitive. What matters — for studying human action in a market composed of many goods — is solely which objects people act to obtain, and the relative difficulty or ease of obtaining them by various methods. After that, a satisfied want is a satisfied want; if you don’t want any more of it, then you stop acting, and economics is done with you for the time being.

Our purposes are bracketed out of the inquiry not by accident, but by design. If we asked economics to tell us what we should think about these things — the spiritual value of Bibles included — we wouldn’t be doing proper social science anymore. We’d just be projecting our beliefs, willy-nilly, upon our neighbors, with an annoying veneer of social science slapped on top. (Yes, some bad economists do this anyway.)

Economics aims to be a discipline whose fundamental insights would hold true even if all human wants were differently arranged, if all our religions were all replaced by new ones, if our body chemistry were instead based on silicon, and so forth. These details — what Mises somewhat dismissively calls economic history — could very well change. The principles describing them would remain the same, because they do not depend on interior motives or even on particular physical facts. They depend on connected chains of action and incentive created by agents with similar and contrasting scales of values. We should expect to see concepts like equilibrium, elasticity, comparative advantage, and similar prove useful even in wholly alien economies, and to have great explanatory power in our own. And so they do.