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Another Swim Meet, Another Econo-Culture Tome Reread, and a Reflection on the Theory of Moral Sentiments:

Last weekend, at the Divisionals for my kid's swim team, it was Michael Lewis's Liar's Poker. This week, at the All-Stars, where the Kid swam fly and medley, I re-read (finally finished this morning), Tyler Cowen's In Praise of Commercial Culture (2000). It traces the relationship between art and commerce, and here is a sample of the reviews (yes indeed, I've cherry-picked, as I like the book, true, very true.) (And this post goes on for a really long time after the page break - if you plan to read it, better grab a bagel and a beer and sunscreen):

In Praise of Commercial Culture by Tyler Cowen...is a treasure trove of insights about artistic genres, styles and trends, dexterously illuminated through economic analysis. Cowen's main argument is that capitalism--by fostering alternate modes of financial support and multiple market niches, vast wealth and technological innovation--is the best ally the arts could have. --Andrew Stark (Times Literary Supplement )

A masterful performance...Cowen has provided a marvelously exuberant counterblast to the wide-spread view that in our philistine, materialist world the arts are going to hell in a handbasket. They are not. They are alive and well, and thriving as never before. Cowen goes a long way towards explaining why. For anyone with any interest in the history, funding and encouragement of the arts, In Praise of Commercial Culture is not to be missed. --Winston Fletcher (Times Higher Education Supplement )

[Tyler Cowen] argues that market forces stimulate the production of culture, high and low, and that far from homogenizing taste, they tend to produce art that is more specialized and diverse than it would be otherwise. In three especially lively chapters, Cowen traces the markets for the written word (where the printing press has been around for centuries), music (where recording technology became available only relatively recently), and painting (where reproductive technology counts for much less)...The picture of the art markets that emerges from In Praise of Commercial Culture is a reassuring one...It is less possible than ever before to create the monopoly on commercial culture that is the objective of totalitarian states. Within wide bands of fad and fashion, people are going to decide for themselves what they like. --David Warsh (Boston Sunday Globe )

(Cowen, a George Mason professor, is also now an economics columnist for the NY Times, and has a very interesting column today on the argument made at TheMoneyIllusion econ-blog that, particularly given the difficulties and downsides of fiscal policy today, the Fed should deliberately aim for re-inflation, at the 2-3% level, and should even move to negative interest rates (see Mankiw's blog for discussion of what and how) - essentially, penalties on bank retention of reserves. I have no settled view of any of this, but Cowen is a clear writer and his columns are always worth reading.)

Both when I first read In Praise of Commercial Culture and on this re-read of it, I took away a far broader lesson than simply an argument over public or private arts funding. The book seemed to me, then and now, to echo the cultural forms of life that the proto-economist-philosophes of the Scottish Enlightenment saw in the rise of commerce and capitalism....

(show)

T Gracchus (mail):
As a story about Hume or Smith, this pretty farfetched. Moral Sentiments, for Hume and Smith, have a rather different foundation, and explaining commercial activity is not it. More to the point, the 'sentiments' to be explained have no particular connection to the commercial culture -- the sentiments aren't the sentiments of particular economic culture. But points for creative reassembly.
8.2.2009 5:56pm
T Gracchus (mail):
As a story about Hume or Smith, this pretty farfetched. Moral Sentiments, for Hume and Smith, have a rather different foundation, and explaining commercial activity is not it. More to the point, the 'sentiments' to be explained have no particular connection to the commercial culture -- the sentiments aren't the sentiments of particular economic culture. But points for creative reassembly.
8.2.2009 5:56pm
Kenneth Anderson:
T Gracchus: Blogging written without a lot of review, so apologies for not being clear. I don't disagree with you at all that the moral sentiments to be explained have no particular connection to the, or a, commercial culture. I agree entirely.

What I would want to say, and did not express it particularly well, is that even this commercial culture requires explanation at least in part by reference to moral sentiments; one ought not to jettison them from the explanation for how that culture works entirely and think that one has nonetheless accounted for it. I don't mean to suggest, although I'm sure I do, that the theory of moral sentiments is a theory about this or any other particular commercial culture.
8.2.2009 6:18pm
Arkady:
Hmmm. I've often wondered what Smith (and more emphatically, Hume) would make of the "rational action" theory that undergirds much of modern economics.
8.2.2009 6:36pm
Arkady:
Oh, and


The composer Charles Ives, who supported himself in [an insurance] executive position


brings to mind Wallace Stevens--an insurance executive himself. Wonder if they ever ran across each other in business.
8.2.2009 6:42pm
Michael F. Martin (mail) (www):
For me at least, the more interesting possibility is that some of these amorphous moral sentiments might actually be susceptible to measurement. Any observer of individual behavior can see that certain activities are repeated with some average frequency in time and place. And groups could be classified according to what patterns of behavior are shared. See, for example, the Malmgren and Watts paper that demonstrates how emailing on two different college campuses during two different periods nonetheless produced similar statistics for different groups on campus (students and professors vs. administration). The understanding of how individual behavior is correlated or uncorrelated over time and place is an understanding susceptible to quantitative analysis, although such an analysis seems to have been widely ignored thanks to the success of rational expectations theory as a "mean-field" approximation.
8.2.2009 8:44pm
T Gracchus (mail):
Thanks for the clarification. Put that way, you are right.
8.2.2009 9:02pm
Mark N. (www):

Adam Smith, Adam Ferguson, David Hume and others of that period and school of thought saw in the rise of commerce many virtues for society and culture quite apart from simply a material increase in wealth.

I agree this is true to an extent, but it can certainly be overstated--- and I think how much Adam Smith in particular liked markets and commercial culture is indeed frequently overstated by modern commentators. It's clear from his writings that Smith thought there were many positive aspects, for both economics and society and culture more generally, of free trade and exchange of goods. But he has a lot of negative comments as well, in some cases sounding as if his support for unfettered commerce is a grudging position he takes only because the alternatives are worse.

He comes very near in some cases to even stating a thesis vaguely like: it is distasteful that men are motivated by profit and greed, and it is true that businessmen are mainly scoundrels who are ever concocting "conspiracies against the public", but it is futile to pretend that we can do anything about it, so we would do well to organize society around the assumption of a profit motive.
8.2.2009 9:46pm
Allan Walstad (mail):
Mark N.

He [Smith] comes very near in some cases to even stating a thesis vaguely like: it is distasteful that men are motivated by profit and greed, and it is true that businessmen are mainly scoundrels who are ever concocting "conspiracies against the public", but it is futile to pretend that we can do anything about it, so we would do well to organize society around the assumption of a profit motive.

I think a more accurate characterization of Smith's view is that keeping markets free IS precisely what we can do about the self-interested tendencies of the commercial class. It is a mistake to think that government intervention will in general successfully curb or control those tendencies, in part because the commercial class is very adept at bending government power levers to serve itself rather than the general good. I think history continues to prove him correct about that. What disciplines producers is the ability of consumers to pick and choose.

On the separate matter of the Fed pursuing an inflationary policy: inflationism is one of the oldest and crudest economic fallacies. I guess you have to be a really well-trained and credentialed mainstream economist t get away with pushing that Kool-Aid. Just as with the physicians of olde who prescribed bleeding for their patients, recovery only proves the basic resilience of the system against multiple insults, not any efficaciousness of the prescription.
8.2.2009 10:23pm
MarkField (mail):

I think a more accurate characterization of Smith's view is that keeping markets free IS precisely what we can do about the self-interested tendencies of the commercial class. It is a mistake to think that government intervention will in general successfully curb or control those tendencies, in part because the commercial class is very adept at bending government power levers to serve itself rather than the general good.


In light of Smith's harsh condemnation of Mandelbaum, I think this overstates it. I'd rephrase Mark N's comment like this:

It is distasteful that men are motivated by profit and greed, and it is true that businessmen are mainly scoundrels who are ever concocting "conspiracies against the public", but the marketplace does encourage certain forms of moral behavior which are beneficial and we should accept that as the best the market can do while continuing to inculcate other values in different ways.
8.2.2009 10:45pm
Allan Walstad (mail):

Smith's harsh condemnation of Mandelbaum

Do you mean Mandeville? I see in TMS where Smith criticizes Mandeville, but I don't see the relevance. It's been awhile since I studied W of N but it certainly was not my impression that Smith claimed the marketplace encourages moral behavior so much as that it tends to harness self-interested behavior to the general good. "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but from their regard to their own interest."
8.3.2009 1:56am
Perseus (mail):
Some of us would call integrating the economics of markets with sociological-institutional explanations and moral sentiments old-fashioned political economy.

As a story about Hume or Smith, this pretty farfetched. Moral Sentiments, for Hume and Smith, have a rather different foundation, and explaining commercial activity is not it. More to the point, the 'sentiments' to be explained have no particular connection to the commercial culture -- the sentiments aren't the sentiments of particular economic culture. But points for creative reassembly.

I disagree slightly. Smith argues that the sentiments do not creatively reassemble but rather naturally assemble in one especially important form, namely, the "desire of bettering our condition," which produces the "natural progress of opulence" that is the driving force of history. That's why for him economic history--rather than politics, art, or religion--becomes the key to understanding human history.

I've often wondered what Smith (and more emphatically, Hume) would make of the "rational action" theory that undergirds much of modern economics.


I'd say that while he might be skeptical of the hyper-rationality of rational economic man, he would mostly endorse the "economic approach to human behavior."
8.3.2009 2:30am
MarkField (mail):

Do you mean Mandeville? I see in TMS where Smith criticizes Mandeville, but I don't see the relevance.


Yes, sorry -- brain fart.

The relevance is that Smith was careful to separate himself from Mandeville's argument that the morals of the market were ideal; Smith expressly rejected that "out of private vices comes public virtue" claim. Smith didn't think that was true at all. He did, however, think that it made good tactical sense to make what advantages we could of the imperfect morals of the market. JMHO, but your original phrasing struck me as leaning too far towards Mandeville's view.
8.3.2009 10:12am
Allan Walstad (mail):
Mark,
It seemed to me that what Smith objected to in Mandeville was what he took to be the latter's denial that things like virtue or altruism or public-spiritedness actually exist as anything other than disguised self-interest or "vanity." Smith could still endorse with Mandeville the idea that a market economy constrains self-interest in beneficial ways.

What I was responding to in Mark N's comment was the sense I got from it (possibly mistaken) that Smith would have been viewing the market as the default option to which we might as well acquiesce. In Smith's time, of course, trade was highly constrained, and Smith was arguing positively for what was probably a counter-intuitive option to many people (as it still is).

Perhaps hair-splitting, but having typed it in I'll hit the post button for what it's worth, if anything.
8.3.2009 12:29pm
MarkField (mail):
Fair enough, Allan. Thanks.
8.3.2009 3:44pm
lucklucky (mail):
That NYT piece really bad. They still think that economy is something manipulable and in this case that people should be forced to spend money. Soviets had a totalitarian socialism, we have a financial socialism...either way it will bring disasters. We will see in future an increase in frequency of boom and bust, with Governments going over in panic and we getting in return even more uncertainity.
8.3.2009 11:31pm

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