Money, Banks and Finance in Economic Thought

Economics, the market and the return of the discarded: sociability, happiness and morality

Rudi Verburg, VU Amsterdam

The science of economics originates in the emergence of a market society, based on division of labour, with the market as a separate mechanism for decision-making and coordination. Markets are the frame through which we think about economics and are the backcloth of the evolution of economic thought. Consequently, the narrative which has unfolded on stage may be said to have a reference to markets. One curious event on that stage has been the return of topics that had been left behind ages ago: sociability, happiness and morality. In the early days of economics it was taken for granted that human beings are driven by a variety of passions and motives before the economic agent’s motivational repertoire was narrowed down to rational utility maximisation. The rise of behavioural and experimental economics signify the growing realisation that the homo economicus is in many ways an inadequate characterisation of economic behaviour from which to theorise. A similar development has taken place with respect to happiness. Early nineteenth century, one author even referred to economics as ‘the science of promoting happiness’. However, happiness was soon discarded as a concept economists could do without. And yet, in the 1990s happiness research was expected by some to revolutionise economics. Started out as a moral science, economics gradually came to present itself as a positive science. Recently, however, the importance of the moral dimension in understanding economic behaviour and its outcomes is taken seriously in various branches of economics. Why have economists become interested (again) in what was previously designated as unusable? If these events tell us something about the way economists think about markets, what do they tell us? In the paper it is argued that the story of the fall and rise of sociability, happiness and morality helps us to gain a historical perspective on the market, showing how in the course of time the concept of the market several times was adjusted to accommodate changing views and circumstances. The insights into markets brought on by the return of the discarded suggests a tendency towards a new, more inclusive, conception of the market, highlighting collaboration and community besides the more conventional focus on competition.

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Keywords: Markets, sociability, happiness, morality

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