Lehrman American Studies Center

I had many stimulating conversations during the two weeks at the Lehrman Center Summer Institute. In this post, I would like to expand on some thoughts related to a few conversations with John Mueller, Sophia Aguirre and a third colleague—a fellow participant whom I will not mention by name. Any especially bizarre ideas or errors are doubtless my own, while all praise should be directly to these three.

John Mueller is engaged in a project to change how we think of economics. Mueller points out that economics has a long history stretching back to Greek antiquity, originally meaning the study of the laws of household or good household management. This means how the father or master of the household (later expanded in the early modern period in Europe to include the mother) governs the other family members, meaning children, slaves and extended family members who may live in the greater household. (Think of how Don Vito Corleone passes rule over the Corleone family on to his son Michael in "The Godfather.")

Building on the thought of St. Augustine, Mueller argues that the many kinds of conduct in the family may be reduced to a handful of basic things, including producing, exchanging and distributing the basic goods necessary to life. In the ancient world of Greece, Rome, or Augustine's world in northern Africa (the Roman city of Hippo, though he traveled widely), and indeed up until about 200 years ago, generally about 90–95% of the population was involved in agriculture. Thus, the household management and specifically the production in question meant tilling, fertilizing, planting, harvesting, storing, distributing, possibly selling, cooking, and household industry such as sewing or basic construction. In cities, household management might have been more commercial, depending on how much the family "earned it living" (as we say) from producing for local markets.

So far, this might just sound like a history of the family or family industry—or so we would perhaps like to pigeonhole it, if we were deciding where in a subject catalog to index this story.

Mueller's point is that insofar as this is a story of how people produce, exchange and distribute, albeit on what seems like a small scale to us today, this is the heart and origin of economics. We should NOT think of this logical move as saying: Since they are producing and distributing, then this looks like Economics. Rather, Mueller means that the post-Adam-Smithian technical pursuit of quantifying, calculating and predicting certain kinds of human exchange is still the same thing as what early thinkers studied and called oeconomia (oikonomia), meaning the study of the laws of the household. So, it's not that this old stuff should be added to modern Economics. It's that modern Economics should remember that it is really a small part of this old subject of study.

So what is the difference between the older, fuller economics and the post-Adam-Smithian, truncated economics? According to Mueller—if I get him correctly, and here I am a little fuzzier—the difference is that the original, fuller form of economics included the observation that resources are scarce (pace Augustine) and apparently even the notion that through division of labor and specialization, people can increase their total productivity.

More importantly, though, according to Mueller, economics was also integrated with what we now call ethics. This ethical economics was a branch of natural law, meaning that economists of old like Augustine or Xenophon reasoned about what the natural, rational relationships between family members are. Husband and wife have certain obligations to one another; same with parents and children and friends. Since this area of rational inquiry tried to explain what people should do for one another and give one another (whether help, love, food, money, service), it was an ethical inquiry; since it was about what they should give one another among other things in the material sense, it included what we now take to be economics, i.e. distribution of scarce goods between people.

There is a lot more to be said about this older vision of economics. But since I advertised at the beginning to talk about Sophia Aguirre's ideas too, let me move on to her, since her work concerns similar things. This second part is shorter only by accident; I had more opportunity to speak with Mueller than with her.

Aguirre focuses on the family economy in particular, especially the matrimonial or conjugal relationship. She takes as a basic assumption significant natural differences between men and women, especially differences between what roles they can play well within the household. She argues to re-establish what modern social scientists rather dryly call traditional gender roles. Simply put, she says, men are generally better at acting as the breadwinner for the family group; women are especially good, she avers, at "distributing" goods in the household. Following the way that she speaks of it and the kind of examples she used, I think that she means things like cooking and the household accounting (from buying and provisioning to keeping the money accounts, managing the day to day details). I expect that she would add child-rearing to this, but I don't know. I hope that she publishes a short article or book or writes a blog about this subject for popular consumption (not technical!), since she makes a lot of claims that will come as a shock to economists, other social scientists, and feminists (and many other women who would not consider themselves feminists).

Aguirre takes her work in a more practical direction than Mueller. Mueller seems most interested in performing a kind of intellectual recovery, to reintegrate ethics and economics into a more integral, humane science. Aguirre by comparison, claims that there is a major efficiency play to be made based on returning to more traditional gender roles. She argues that if the husband tries to do the things that a woman is better at doing, he will do it less efficiently. Similarly, I gather, there may be something less efficient about women being the primary bread-winners in the household. Is this correct? Third, when parents outsource the raising of their children to daycare, or care for their aging or sick parents or other relatives to institutions like hospitals or "nursing homes," this is somehow less efficient than if it is done by the nuclear family itself. This may be true. Speaking for myself, I am sympathetic to the general thrust of this line of argument. But Aguirre needs to tell us much more. What is the limit to the return to traditional gender roles, in Aguirre's view? Should all families homeschool their children?

Moreover, how is this efficiency to be measured? I am not an economist, but I think that efficiency is measured in terms of how many "inputs" have to be input per output put out. We know how to measure this with dollar investment in industrial production—efficiency is measured in widgets produced per dollar of costs. Aguirre makes the provocative, radical claim that the basic, traditional, family institutions are more efficient, meaning presumably that people can produce more as workers in the economy, or perhaps even "produce" better education or spiritual growth than can schools. Or am I taking this too far? I am unclear how far Aguirre wants to push her argument. Also, how can we prove this? How can we at least construct a test or case study of this?

Finally, I would like to briefly mention some ideas that a colleague and I threw around a couple of times in talking about Mueller's and Aguirre's presentations. Since we are both historians, we found ourselves wondering what Aguirre's family economics model might tell us about how to do history. The answer is not obvious. After all, if all that Aguirre's model implies is that we should shift the unit of analysis of a presentist theoretical inquiry (economics, perhaps also political economy), why should this help us explain why things happened in the past? We still need to try to explain what individual agents undertook certain courses of action. My friend and I threw around a few ideas. First of all, if Mueller and Aguirre remind us that people often act for the sake of others, in particular for the sake of members of their family, out of typical love and concern (obviously this is only in general), then perhaps this approach to a more integral economics can remind us that sometimes we should not directly look for a historical agent's motives in self-regard taken narrowly. People act for the sake of others as well as for their "own" sake. We know that in wars, people fight because they believe in a cause, whether it's defense of the nation, vindication of rights, or revolution. Why did Americans in the nineteenth century found schools or work extra hard to pay for the education or advancement of their children? It's obviously not really self-interest in any narrow sense. (I think that objectivists/Randians try to account for this as a kind of self-interest, in the sense that anything which makes you feel better, even advancing the direct interests of another person like your child, is self-interested. I cannot imagine that anyone finds this notion of self-interest persuasive.)

It is a strange disconnect that until quite recently, economists formally took individual, rational self-interest to be the foundational methodology of their science. But sociologists, anthropologists and historians generally look for a variety of explanations of motivation, to the extent that they even restrict themselves to looking for conscious motives—they also look for structural patterns of thought and behavior, something economists have only recently turned to or returned to.

I'll end with a question: Should Aguirre's family economics model change our view of historical economic development? For instance, Douglass North and Paul Thomas in their justly well-regarded book The Rise of the Western World (1973) argue that the most important institutional factors contributing to the emergence of modern market economies and the growth of commercial wealth and governmental power in countries like England and the Netherlands in the seventeenth century were things that fundamentally involved one-on-one, bilateral, commercial transactions. For instance, information and security transaction costs declined as governments increased law and order and did a better and better job enforcing contracts. I don't think they consider the family at all, save in that families became the vehicle for business to develop... (!) Yet they generally treat historical actors as basically self-interested, Lockean individuals. Can an economics focused on familial relationships and the alleged higher efficiency of familial production and distribution of human goods explain more cogently how commercial societies emerge and grow rich and powerful?

Tags: Economics, Ethics