Monday, June 11, 2012

anticipatory utility

I came to the Duke Summer Institute on the history of economic thought with the hope that I could learn how earlier economists thought about the behavioral phenomena that psychological economists are now studying more rigorously, before the mathematization of neoclassical economics took over the profession for the last century.* My expectations have already been rather blown out of the water.

Take, for example, Jevons writing in 1866:

A principle of the mind which any true theory must take into account is that of foresight. Every expected future pleasure or pain affects us with similar feelings in the present time, but with an intensity diminished in some proportion to its uncertainty and its remoteness in time. But the effects of foresight merely complicate without altering the other parts of the theory. 
Such are the main principles of feeling on which economy is founded.  A second part of the theory proceeds from feelings to the useful objects or utilities by which pleasurable feeling is increased or pain removed. 
An object is useful when it either affects the senses pleasurably in the present moment, or when, by foresight, it is expected that it will do so at some future time.  Thus we must carefully distinguish actual utility in present use from estimated  future utility, which yet, by allowing for the imperfect force of anticipation, and for the uncertainty of future events, gives a certain present utility.

Anticipatory utility, anyone? Apparently it took us 134 years to develop Jevons' idea of a "true theory", although we can hardly be blamed, since it was also not such a trivial extension as he suggests there.

*I definitely do not mean to imply that this was a bad thing or a thing that psychological economists now need to 'fix' neoclassical economics. More on that later, perhaps, if I decide my view hasn't already been repeated often enough by others.

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