Over the last three posts, we've summarized some of Hirschfeld's criticisms of the rational choice model. Overall, Hirschfeld has argued that utility maximization assumes unbounded desires, which creates scarcity as our desires always keep outstripping resources. So maximization is inherently problematic. And in the last post, Hirschfeld challenged the connection between utility and flourishing. If utility maximization doesn't produce flourishing, then why pursue it?
All of these are criticisms of the rational choice model, but not alternative proposals. So what does Hirschfeld suggest as an alternative model? It's here where Hirschfeld turns to Thomas Aquinas and his account of virtue and happiness.
I cannot and won't try to do justice to Hirschfeld entire argument, so I'll just pick one select insight.
Specifically, the rational choice model assumes a flat, simplistic psychology of human choice and flourishing. The way to achieve happiness is to always maximize your preferences. To be sure, for most of us most of the time, that's how we make choices and live our lives. We rank our choices and pick the one we find most attractive.
But for Aquinas, happiness isn't found in maximizing our good, happiness is achieved through virtue, through ordering our choices in light of ultimate ends. Virtue, and the concomitant ordering our desires, is therefore what is "rational." By contrast, it's failing to behave virtuously, just myopically satisfying your preferences, that is "irrational."
The key Thomistic virtue Hirschfeld focuses on is the virtue of prudence. Prudence is akin to practical wisdom, learning how to arrange and manage one's life in such a way so as to achieve your ultimate ends. Vital to prudence is bounding our desires, not allowing insatiable desires to swamp our plans. Prudence exercises what Hirschfeld calls "constrained maximization." Exercising the virtue of prudence I place limits on my desires, finding locations of "enough" so that my desires for any given good don't become excessive. Prudence achieves a sort of "balance" among all the goods on offer in life, always adjusting them so that my life keeps moving toward a flourishing life embodied by ultimate ends.
Now the challenge here, as we learned in the case of altruism, is if prudence can't be captured by the rational choice model. Recall, there is a utility function for Mother Teresa. Altruism can be a preference in the utility maximizing game. Couldn't the same be true for prudence? Imagine two choices, A and B, where B is the more "prudent" choice, and therefore preferred. Couldn't that be a thing?
Hirschfeld argues, no, prudence can't be modeled by the rational choice model. Yes, it is true, that the more prudent choice is being preferred, but the prudent preference isn't maximizing anything. The prudent choice is bounding desire, limiting it, stopping it at "enough."
Let me explain it this way. Under utility maximization there's always a preference that can pop up that you might prefer. Since desires are unbounded, there's no line in the sand, no limit. Maximizing just goes on and on. So, for example, you have choices A and B. You prefer B, so choose B. But at some future point the option C enters your life. Say it's a new iPhone on the market. Consequently, with the arrival of C, you now now prefer C over B. And so on. As Hirschfeld points out, this maximization game never terminates, it just goes on and on as long as more money or newer gadgets get made. This is what drives the insatiability of modern economics, the spur and demand of never ending growth.
But now imagine that I'm making my choices guided by the virtue of prudence. I have my iPhone, and another one comes on the market. Prudence says, my current iPhone is enough. So that's my preference, and I make my choice accordingly. I don't buy a new iPhone. And suddenly, the whole maximization game comes to a halt. I have no need for more or better. I have a preference here, but nothing is being maximized. I'm not seeking "more" good. The good I have is "enough."
Hirschfeld has a really wonderful discussion contrasting prudence with maximization. Maximization involves optimizing, making the choice that brings "more" good. By contrast, prudence is involved, not in ranking goods, but in arranging goods. In this way, prudence is akin to making aesthetic choices, like arranging flowers or paint on a canvas. The choices here aren't about "more," but about balance, contrast, and proportionality. And a critical component of these aesthetic choices is discernment in light of some final goal. In these aesthetic judgments, more isn't always better.
Now the rejoinder here is that people aren't prudent, that we don't make virtuous choices, and to expect this from people is ridiculous. That's true. And the degree to which the rational choice model captures our myopic, dysfunctional decision making, it's a great tool for describing human behavior. But with Aquinas now in hand, Hirschfeld has her own rejoinder: Fine, this may be the way we make choices, but let's stop calling it rational. Because what you're modeling is irrationality. Economics is founded upon the "irrational choice model," and irrationality isn't going to move us toward flourishing, not personally and not collectively.
At it's heart, this is Hirschfeld's project, a thorough interrogation of how human choice is related to flourishing and pointing out that the rational choice model fails in providing us an effective model of that connection. Speaking theologically, what the rational choice model models are disordered desires, unbounded, insatiable desires, which undermine our ability to discern and pursue "the good" in our world and lives. We need to exercise more prudence, personally and collectively. A sane life involves bounded desires. We need locations of "enough" rather than endless growth. An ever-rising GDP is not a metric of human flourishing. It may be "more," but more isn't always better.
To be clear, this is not to deny, in the least, that material prosperity isn't a good. It is, and it's an important one. And this isn't to deny that economic analyses shouldn't play a part in evaluating policy. It should. It's simply the sane acknowledgement that material affluence isn't the only social good we need for a flourishing life and global community. Instead of maximization, prudence tells us, here or there, when our affluence has reached "enough" and can be traded off for other goods, like sustainability or equity. In addition, we need to recognize that economics has ceased being a tool and has become a value system, a belief system, a vision of human flourishing. Market growth and market efficiency are being pursued as ends in themselves rather than as one among many means we use to pursue the social ends we have collectively selected and strive toward.
To borrow from Jesus, the markets were made for humanity, not humanity for the markets.
Yes, I know, I know, will any of this change how economists and policy makers think?
Perhaps not. But with theological critiques like Hirschfeld's in hand, we can start pointing out that the heart of modern economics is far, far from "rational." What we're modeling is disordered, irrational, and unhealthy. Perhaps the markets are ruling our world, but we can staring pointing out that the emperor has on no clothes.
