Hamilton versus PlatoAuthor(s): Walter C. NealeSource: Journal of Economic Issues, Vol. 37, No. 1, A Symposium on David Hamilton's"Evolutionary Economics: A Study of Change in Economic Thought" (Mar., 2003), pp. 47-50Published by: Association for Evolutionary EconomicsStable URL: http://www.jstor.org/stable/4227867 .

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J JOURNAL OF ECONOMIC ISSUES Vol. XXXVII No. 1 March 2003

Hamilton versus Plato

Walter C. Neale

MTihe norms of reason were not fixed in Greece. -Clifford Geertz

MTIhe idea of ultimate ends is a product of that dualism in human thought that can be traced back to primitive times and is especially clear in the thought of the Greeks, particu- larly Plato.

-David Hamilton

Early in my career I taught a section of a course that included Plato's Republic. The other instructors taught it as a book about justice, order, and the good society. I taught it as a document revealing what the ancient Greeks thought about society.

-David Hamilton

For more than a century there has been a deep divide in the history of Western social sci- ence. On one side there has been reasoning from synthetic a prioris. If it is doubtful that all synthetic a prioris can be classified as essences, nevertheless this kind of reasoning can be traced back to classical Greece. Plato's work is the locus classicus. The Greeks believed that one can know the essences of things and systems and know them a priori, by rational thought.

On the other side is the belief, or premise, that one can learn or know about any- thing only on the basis of observation. This rule-that one should reason only from pre- mises that can be supported by observed evidence-is usually associated with the names of C. S. Peirce, John Dewey, and Thorstein Veblen. However, Henry Sumner Maine's Ancient Law (1917, first published 1861) is the earliest effort I have come across to apply the new rules to the social sciences. His basic premise was his insistence that all histories

The author is Professor of Economics Emeritus at The University of Tennessee, Knoxville, USA.

47

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48 Walter C. Neale

must be founded on evidence from the time and place: all else was speculative history. He also took the successors to the Greeks to task for their equating of the natural laws of nature with the jus gentium-the laws common to all peoples of the Italian peninsula (26-36, 43-66)-thus creating "the great antagonist of the Historical Method" (53).

Perhaps there is no deeper divide in Western thought nor one that can be as mis- leadingly disastrous as this one. To accept the Greek or Platonic view is to accept argu- ments that lack a foundation in observable evidence. That, in turn, means accepting arguments with an integral element of guessing, error, or prejudice-leading to what many of us as undergraduates studying Western political philosophy called "choosing sides."'

While the theme of David Hamilton's Evolutionary Economics is the contrast between the treatment of economic change in the works of standard and institutional economists, it is also, happily, a fine example of which Maine would approve. To illus- trate, we may take the example of Hamilton's treatment of the difference between the hedonistic, Benthamite psychology of classical economists and the behavioral psychol- ogy of institutional economists.

Hedonistic psychology is a synthetic a priori. One might argue-a Benthamite would-that hedonism is based on observation. There are two ways in which this asser- tion can be defended. First, one can observe, on an elementary level, that people do avoid pain and often seize opportunities to enjoy pleasure. But this is a far cry from evi- dence that felicific arithmetic is the essence of human psychology. After all, one also observes that people will sometimes accept pain (e.g., withstand torture) or forego plea- sures (of many sorts), for varying reasons in varying circumstances.2 What people do depends upon varying, complex reactions, sometimes subconscious, and analyses of possible reasons for their reactions often leave us in a state of mystification.

Second, it has been asserted that the premise is a result of introspection, itself an observation. However, introspection opens the way to finding evidence within one- self-and who else, other than oneself, can observe what one so finds, and by what obser- vation? Introspection opens the way for anything that one wants to believe. After a century of research into psychology and psychiatry, one must doubt all "evidence" from introspection.

On the other side is Hamilton's treatment of behavioral psychology. He treated it as a psychology that reasons from observable evidence of how people behave. At first I had feared that Hamilton was tying institutionalism to a specific view of psychology that no longer enjoys great respect. But he did not treat it as the product of one or another school of thought-such as those of John B. Watson or B. F. Skinner-but as a general method of investigation that leads to changes in analysis as more evidence becomes available and as argument corrects errors. Hamilton's behavioral psychology allows changing analyses of "human nature without essences" (here I have added two italicized words to the title of Hamilton's chapter 3). At no point did Hamilton allow us to inter- pret his argument to say that institutionalists have accepted a new essence.

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Hamilton versus Plato 49

It is only to be expected that various attempts will be dropped because more infor- mation and further analysis and argument will show weaknesses in the earlier proposals. But when people say that behavioral psychology has now been dropped, what they mean is that past leading efforts to articulate it in specific ways have failed to earn general acceptance, not that the rule that one must observe has been dismissed. Hamilton pre- sented behavioral psychology in his history of thought as the psychologists' version of the new rules about analyses. But, in Hamilton's argument, modern psychology does not depend upon any one or more particular interpretations of behaviorism because interpretations can change, even change radically, in response to new observations or analyses. Hamilton has no specific interpretation of behaviorism. His is an open-ended interpretation.

I have concentrated on the Platonic nature of the classical economists' version of psychology, but this barely begins to dent the mass of classical assumptions that are syn- thetic a prioris. To illustrate briefly, one can point to the labor theory of value, descended via Adam Smith, David Ricardo, and Karl Marx from John Locke's labor the- ory of property, to the more modern versions of utility and disutility, and to preference functions from which indifference curves are derived. Or, of more recent vintage, one can point to the new economic history's assumption that there is a natural law that molds social change in accordance with the arithmetic of pleasure and pain, now dressed up with transactions costs that are unobserved, just guessed at (after all, there must be costs-pain-in hedonistic psychology). Such examples could be extended indefinitely.

Dependence on these kinds of essences is not restricted to economics. To mention only one case: in sociology and political science Parsonian (and other) functions are a way to divide up the social world. The divisions are made by reasoning that strikingly reflects the way in which our society divides up the world, without observed evidence that there exists a list of universal functions out there in Plato land. Perhaps that is why so many lists have been proposed.

Thus Hamilton's study is more than a study in the difference between standard eco- nomics and institutional economics. It is also a fine example of how to study economics and economies without resorting to synthetic a prioris and essences.

Notes

The attributions for the epigraphs are, respectively, Clifford Geertz, "Anti Anti-Relativism" (1984, 275); David Hamilton, Evolutionary Economics (1991, 114); and David Hamilton, oral communi- cation, April 10, 2002. 1. An alternative characterization: "Political philosophy consists of stories about people who

never existed doing things that they never did" (Chanock 2001). 2. W. Stanley Jevons, one of the founders of marginalism, was not entirely happy with the sim-

ple pleasure/pain (utility/disutility) view of people's motives. In The Theory of Political Economy (1965, first edition 1871) he differentiated between the "lower," utilitarian (hedonistic) motives and "higher" motives that could "rightly overbalance all considerations belonging to

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50 Walter C. Neale

the next lower range of feelings, but so long as the higher motive does not intervene, it is surely right that the lower motives should be balanced against each other" (25). But this is too close to saying that where a hedonistic psychology applies, there it applies-a definitional tau- tology. In any case, the human psyche is much more complex than this.

References

Chanock, Kate. Oral communication, June 2001. Geertz, Clifford. "Anti Anti-Relativism." American Anthropologist 86, no. 2 (June 1984): 263-78. Hamilton, David. Evolutionary Economics. 1970. Reprint, New Brunswick, N.J.: Transaction Publishers, 1991. Jevons, W. Stanley. The Theory of Political Economy, 5th ed. 1871. Reprint, NewYork: Augustus M. Kelley, 1965. Maine, Sir Henry Sumner. Ancient Law. 1861. Reprint, London: J. M. Dent, 1917.

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