What I've Been Reading: Geoffrey Brennan and Philip Pettit, The Economy of Esteem

I mean to start doing more book-blogging here, along the lines that Tyler Cowen does it-- my thoughts and reactions to what I read, rather than worked-out reviews. These'll sometimes be opaque to those who haven't read the books, but might at least stimulate interest in them. What follows is rather longer than I expect these posts will usually be.

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This is a superb book by two outstanding scholars, demonstrating a terrific fusion of rigorous philosophical argument and formal/ economic reasoning, in the service of an argument that modern economics is radically incomplete. Against the invisible hand of the marketplace that relies on interest, and the iron hand of regulation that relies on punishment, they set an intangible hand relying on the quest for esteem. In the heart of the book, they walk through one type of setting after another and one type of problem after another, showing in an abstract and powerful way what the tradeoffs and dynamics are within the pursuit of esteem, what social institutions and individual choices look like when thought of in esteem-seeking terms.

It’s also, to my mind, a sometimes strange and frustrating book. I may not be its target audience, for much of it seems designed to refute the null hypothesis that esteem-seeking is irrelevant or powerless, and that only interest-seeking matters. I suppose that it ought to be persuasive to anyone subscribing to that hypothesis. But then again someone holding it has disregarded a great deal of evidence and argument already, and won’t necessarily cease to do so just because the argument Is presented in terms he or she finds cognitively familiar.

As a result, Brennan and Pettit often—not always, but often—talk about the desire for esteem as an unusual feature of human life, something that has its primary effects in the domain of civil society set apart from the market and the state. But it is pervasive; it pervades and intertwines with the pursuits of wealth and power. It is indeed more pervasive than they are, no matter how powerfully they shape our macro-social institutions. The desire to avoid disesteem and humiliation , and the willingness to follow norms the breaking of which is shameful, surrounds us and shapes us, all the time.

Another oddity of emphasis, that is I think connected. The authors are conscientious about regularly noting perverse cases—“intangible backhand” problems in which the desire for esteem results in misaligned incentives or undesirable behaviors. But these are always treated as exceptional, as interestingly quirky—kind of the way that economists present Giffen goods. The language of “esteem” and “estimable” encourages this.

But there are plenty of other words and concepts that might be used, but that barely register in the book: Pride. Glory, vanity, or their traditional hybrid vainglory. Egotism (as distinct from the egoism of homo economus). Above all, as far as I’m concerned: status. Many of the dynamics that are presented in such successful abstraction seem likely to be beneficial so long as we think of them as esteem-seeking—and immediately take on a more baleful aspect when we think of them as status-seeking.

The book notes that sometimes the economy of esteem is blocked from its best operation by a systematic disesteem for whole groups of people, e.g. racial prejudice. And its treatment of what happens within the subordinated group as a result are very interesting. But the superordinate group isn't mentioned, and I kept thinking that some whiteness studies would have done some good here. The authors are interested in the disincentive to performance among the subordinate group who can't receive full-- or, sometimes, any-- esteem rewards for excellence. But the counterpart is the unearned status boost for even the least estimable members of the superordinate group. Jim Crow was economically destructive, but represented a categorical increase in status for lower-class whites; they gained a status floor beneath which they could not normally fall, just in virtue of not being black. And so they became dogged supporters and enforcers of Jim Crow, to protect and maintain their own otherwise-precarious status gains.

The often-positive-sum esteem settings the authors focus on are important and interesting. But they are not the whole of the economy of esteem, and are probably not the most important ways that esteem and status affect social institutions, the market, and politics.

A final complaint, minor in fact though it bothered me a great deal. Brennan and Pettit do make occasional reference to the historical importance of the view that esteem-seeking was a primary motivation. But their desire to contrast the intangible and invisible hands means that Adam Smith almost always appears as a synecdoche for the economistic worldview—and doesn’t appear often in any case. But Smith’s greatest work, the Theory of Moral Sentiments—mentioned here primarily as a source for the invisible hand metaphor!—is a work that’s centrally about the relationship between esteem-seeking and moral psychology, between the desire for praise and the desire for praiseworthiness, between human motivation and the good opinion of others; in short, about the core material of this book. And the book omits altogether the great critic of esteem-seeking behavior, Smith’s contemporary Jean-Jacques Rousseau.

The book in fact contains many good answers to traditional critiques of esteem-seeking, draws credible connections between the pursuit of esteem and the attainment of excellence, and greatly adds to our understanding. And I want to emphasize again how admirable its combination of economic and philosophical reasoning is. This may be the finest manifestation I know of the intellectual atmosphere that existed at the Australian National University’s Research School of the Social Sciences (where the authors were longtime colleagues) for many years, and that’s high praise. But the book by its own admission is meant to be research-agenda-opening, not primarily question-answering. Much work remains to be done in thinking about status, power, and interest-based motivations alongside each other, sometimes rivalrous, sometimes reinforcing, always interacting—and about what follows for the methodologies of the social sciences.

With respect to institutional reforms, the authors are very concerned to make the point that professionals should be treated like professionals, and rewarded with esteem for excellence, rather that either micromanaged in a punitive regulatory fashion or "incentivized" (as the ugly word goes) with constant payments for performance. This is persuasive and important-- and indeed helps to make sense of how and why many professions are organized the way that they are. But it's a lesson that operates within boundaries, too. Professions as sectors, and firms of professionals like law firms, face market discipline, even when professionals as individual workers are not paid by commission. I think the authors are concerned to show that, e.g., civil servants and public school teachers also ought to be treated as professionals, with their time use regulated by the intangible hand and not the invisible or the iron hand. No doubt there's something to that; but it needs to be paired with an understanding of what will take the place of the market boundaries faced by private-sector professions. And there's something slightly underwhelming about "treat schoolteachers better" as the institutional takeaway from a book that, on its face, is attempting a major overhaul in how social science is done.

(At least, a major overhaul in how economics is done. Sociology, it must be said, has never been blind to the importance of status. But economists-- even, apparently, very fine and professionally-interdisciplinary economists-- sometimes have trouble acknowledging that sociology has gone somewhere before they have.)

The best part of the book by far is Part II, "Within the Economics of Esteem," that formalizes and analyzes many features of esteem-seeking behavior, and casts light on lots of situations. (Not accidentally, many of these are set in universities and among academics; I've maintained several times on this blog that academic life is more usefully modeled as status-seeking than as interest-seeking.) Readers of these chapters need to be brave enough not to be frightened away by the mere appearance of a diagram or an equation, but these are no more difficult than what appears in an introductory microeconomics class and in any case their ideas and intuitions are clearly explained in the accompanying prose. But pause to appreciate the models if you can. They're pitched at a very well-chosen level. They simplify and abstract, as models do... but they don't simplify into straight lines or monotonic curves. Brennan and Pettit have thought carefully about discontinuities, asymmetries, sharp angles, and indeterminate zones, and they simplify just enough to highlight them, rather than simplifying them away-- and many of the best ideas of the book are found in the discussions and justifications of those discontinuities, asymmetries, and so on.