Economic reasoning often begins with a presumption that people act in a self-interested manner. And so there\’s been a string of small-scale research over over time about whether studying economics makes people more likely to act in a selfish manner. Adam Grant offers a nice short overview of this research (with links to underlying papers!) for Psychology Today last October, in \”Does Studying Economics Breed Greed?\”
The especially tough question in this research is how to distinguish between several possibilities: 1) Maybe studying economics changes the extent to which people act selfishly; 2) Maybe studying economics makes people more willing to admit that they might act selfishly, or makes them act more selfishly in small-scale classroom game interactions, but doesn\’t actually change their real-world behavior; or 3) Maybe people who are more likely to act in their own self-interest, or more likely to admit that they act in their own self-interest, are drawn to economics in the first place.
I won\’t try to summarize the literature here, especially because Grant already offers such a nice overview, but here are a few samples. A 2012 study by Andrew L. Molinsky, Adam M. Grant, and Joshua D. Margolis in the journal Organizational Behavior and Human Decision Processes (v. 119, pp. 27-37) considers \”The bedside manner of homo economicus: How and why priming an economic schema reduces compassion.\” Here\’s how Grant describes the study:
\”In one experiment, Andy Molinsky, Joshua Margolis, and I recruited presidents, CEOs, partners, VPs, directors, and managers who supervised an average of 140 employees. We randomly assigned them to unscramble 30 sentences, with either neutral phrases like [green tree was a] or economic words like [continues economy growing our]. Then, the executives wrote letters conveying bad news to an employee who was transferred to an undesirable city and disciplining a highly competent employee for being late to meetings because she lacked a car. Independent coders rated their letters for compassion.
Executives who unscrambled sentences with economic words expressed significantly less compassion. There were two factors at play: empathy and unprofessionalism. After thinking about economics, executives felt less empathy—and even when they did empathize, they worried that expressing concern and offering help would be inappropriate.\”
Of course, a skeptic might object that even if the \”priming\” with economics terms changes the amount of compassion expressed in a \”bad news\” letter, the executives would still deliver the bad news when they felt it was necessary.
In a 2011 study published in Academy of Management Learning & Education, Long Wang, Deepak Malhotra, and J. Keith Murnighan carry out various experiments on the topic of \”Economics Education and Greed.\” (10 (4): 643–660). For example, several of their experiments are online surveys in which people in various ways revealed their attitudes about greed. Those who majored in economics, or who read a snippet of economics before answering, were less likely to express attitudes that strongly condemned greed. Of course, a skeptic might point out that such surveys show what people say, but not necessarily what they feel or how they act.
In a similar spirit, I sometimes argue that many students enter an economics class seeing the world and the economy as fundamentally a zero-sum game, where anyone who benefits must do so at the expense of someone else. Learning about how division of labor and voluntary exchange at least has the possibility of being a positive-sum win-win game makes them more likely to consider the possibility of benefiting both themselves and others. Maybe there are some unreconstructed business schools which do teach that \”greed is good.\” But all the economics curricula with which I\’m familiar is painstaking about explaining the situations and conditions in which the interactions of self-interested parties is likely to lead to positive outcomes like free choice and efficiency, and also the situations and conditions in which it can lead to pollution, unemployment, inequality, and poverty.
My own sense is everyone plays many roles and wears many hats. A surgeon who cuts into people all day would never dream of getting into a knife fight on the way home. An athlete who competes ferociously all week goes to church and volunteers to help handicapped children during off hours. A parent fights grimly over the appropriate annual marketing plan, and then goes home and hugs their children and takes dinner over to the neighbors who just had a baby. Some economic behaviors certainly shouldn\’t be generalized to the rest of life, and it\’s possible to set up situations with questionnaires and little classroom experiments where the boundaries can become blurred. But there\’s not much reason to believe that Darwinian biologists practice survival of the fittest in their spare time, nor that sociologists give up on personal responsibility because everything is society\’s fault, nor that lawyers go home and argue over fine print with their families.
It\’s worth remembering that Adam Smith, the intellectual godfather of economics, reflected on selfishness and economics at the start of his first great work, The Moral Sentiments, published in 1759. The opening words of the book are: \”How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.\” And later in the same chapter: \”And hence it is, that to feel much for others and little for ourselves, that to restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature; and can alone produce among mankind that harmony of sentiments and passions in which consists their whole grace and propriety.\” Smith saw no contradiction in thinking about people as containing both selfishness and \”benevolent affections,\” and most people, even economists, seek a comfortable balance between the two depending on the situation and context.