Inspiration for Metaeconomics: What Led to Developing the Metaeconomics Framework and Dual Interest Theory, and, the Focus on Self-control?
Return/Go To What is Dual Interest Theory
This has been very much a personal path, going back to my early experience on a grain and livestock farm in northern North Dakota, only a 100 miles or so south of the Canadian border... way up north! Due to challenging weather and other growing conditions, including a very short growing season, it was not easy to Make wealth. It also became apparent that due to the high risk nature of this kind of a natural environment... this particular place in which we were trying to farm and raise livestock on this Spaceship Earth on which we all travel... that there was an essential need for Market&Community... i.e. farmers in the local, state and regional setting had to work together, while still working individually, in order to economically survive, certainly to prosper. To help make this work, this early experience involved our heavy participation in agricultural cooperatives of various kinds, wherein farmers who cherished their independence to pursue their Self-interest, the shared Other-interest with their immediate families, could join together with other farmers (and consumers: there were also food store, grocery coops) to amass the capital essential to make a good capitalism work. That is, while most capital (including the farm land itself) was individually owned, there was also some shared Other-interest at work in owning some capacity to produce oil products (gasoline, diesel fuel, etc.) in a shared refinery; cooperatives that sold seed, fertilizer, tools, fencing materials and farm equipment; cooperatively owned local grain elevators, as well as terminal elevators on the Great Lakes for moving the grain to Market; and, yes, even insurance companies owned cooperatively. So, in my early experience, individual farmers pursued their own Self-interest within the context of all farmers involved in the various cooperatives providing some capital to jointly own production and consumption facilities to help them pursue their shared Other-interest. It all worked reasonably well, with towns in the local area who were more cooperatively organized still viable areas; most of the other small communities have been gone for a very long time.
My earliest experience also pointed to the key role of Market&Government, the latter a partial extension of the cooperative philosophy. This is say, it became clear capitalism could be good, if the proper context for it was in place. My memories of the political economy conversations and debates about the best mix of Market&Government still float around in my mind, especially involving my grandfather, father and their other coop friends, but also remembering conversations with many others in the community who were not thinking that way; in fact, high school acquaintances... very uninformed people, when I think back on it ... used to refer to the local cooperatives as "communist", and "socialist", as though that is what a cooperative is about, which is nothing further from the facts, the truth than one can get. A cooperative is very much a Self-interest organization, a place to express the Self-interest; this expression, however, was to be tempered and conditioned by the Other (still within one's Own-self, but shared with others in the coop), using Metaeconomics to characterize it, but I am way ahead of the story by about 4-decades. These types of experiences also stirred me to educate myself, to go find out for myself, how best to build Market&Government, Private&Public (shared with others)-property.
Due to having a long term interest back to my earliest memories in conservation, it was an easy step to become involved in economic research on what motivated and otherwise drove farmers to adopt soil and water conservation technologies. After completing my PhD, my first academic position, which was defined in the arena of Water Resource Economics, led to my earliest research based observation that there was huge variation in farming communities on the degree to which conservation technologies were being adopted, and the degree to which they were being applied by those who had adopted same. This was the case even though available machinery, seed, and fertilizer technologies, and educational materials (from US Federal Extension Service), were available to everyone, and often the land was of very similar slope and quality in general. So, what was going on? A microeconomics look at the demand for conservation inputs by farmers would suggest it was all about the profit, moving along some path 0G (see the Figure in What is Dual Interest Theory), and stopping at the maximum profit point A (again, see the Figure). Our first studies suggested this kind of framing explained at best about 15-20 percent of the variation in farmer conservation choices (Lynne, Shonkwiler, and Rola, 1988; Lynne and Rola, 1988), so what was going on?
The primary story, coming out of Microeconomics, that it was all about the profit, was not working; this put us on a path to discover the rest of the story, which immediately pointed to the role of the farming community within which the farmer operated. We started to see there was something about the shared interests in these communities, and how farmers identified with downstream communities, that was influencing the extent to which the individual interest of the farmer was affecting conservation choices. There was a need to find a way to model, represent both the Farmer&Community in the economic choice to adopt and apply conservation.
So, What Direction, in Light of the Apparent Need?
The humanistic/existential branch of psychology pointed in the direction of multiple, dual and joint interests, or, if we prefer the utilitarian rather than interests notion, which would point to a dual utility. Social capital research in sociology suggested there could be substantive community influences. Scientific materials coming out of neuroscience, and especially in neuroeconomics, the study of the human brain, suggested the possibility there was more than one tendency in human nature, a duality perhaps being even a fundamental feature of human biology and evolution. This duality is also a common theme in philosophy, going back to Aristotle and Plato. Some religions suggest a trinity at work in the human experience and choice process. Understanding in thermodynamics also suggested that interdependence better describes human reality than does the concept of independence. Arguably the best elaborated theory of holistic psychology, by Angyal (1941/1965) pointed to both autonomous (self-interest) and homonomous (shared other-interest) tendencies, pursued jointly.... and sometimes leading to heteronomous (controls from outside the individual) when self-discipline, self-control failed.
Multiple and Dual Utility
Etzioni, A. "The Case for a Multiple-Utility Conception." Econ. and Philos. 2(1986): 159-183.
Etzioni, A. The Moral Dimension: Toward a New Economics. New York: Free Press, 1988.
In the 1986 paper, with most of this material also represented in the 1988 book, Etzioni starts with the proposition that "...neoclassical economists have made heroic efforts to accomodate within the confines of the concept of rational utility maximization the fact that individual behavior is significantly affected by moral considerations (p. 159)." The paper argues that monoutility theory (Note: As developed in microeconomic theory, the family of indifference curves/ preference idea from introductory microeconomics classes, single interest theory/SIT) is too parsimonious, that we need to consider at least two irreducible utilities, one for pleasure and one for morality (and perhaps more utilities, but he cautions against the anarchy that could arise in a theory with too many).
He identifies three kinds of utility commonly considered in standard (micro) economics: 1) utility resulting from pleasure seeking, hedonic origins; 2) same hedonic origin, but now includes utility gained from knowing of the utility gains by others, commonly referred to as interdependent utility; and 3) utility as an attribute, resulting from, as a common denominator for, all quests for satisfaction. He ultimately rejects all three as sufficient to an all encompassing theory.
Perhaps the most intriguing section in the paper addresses the interdependent utility concept. He points out how self-sacrifice, self-denial are incompatible with the concept (p. 162). And, in fact, normal people act differently all the time, by doing the right thing, doing what ought to be done, whether such acts give pleasure or not, whether or not individuals enjoy same. He also makes perhaps the most salient point in the paper, re: expanding the self-interest/ pleasure utility to encompass other people's utility (p. 162): "Once a concept is defined so that it encompasses all incidents that are members of a given category (in the case at hand, the motives for all human activities), it ceases to enhance one's ability to explain. . . the concept ceases to differentiate. . . To the degree that this 'theory' aims to shed light on motivation, it constitutes a conceptual failure, because the purpose of introducing concepts is to call attention to meaningful distinctions." As long as what ever one does is said to simply indicate pleasure came from same, utility theory is nothing more than a tautology. This is clearly the case for interdependent utility theory.
It also challenges developers of Metaeconomics to do so only if it will "call attention to meaningful distinctions". I also recall the argument, and I believe it is his, in another paper/book, that using the Interdependent Utility concept/theory also precludes one from staying with the "invisible hand" concept, which undergirds microeconomics theory, in effect, because knowing how much utility someone else is gaining from some action is to make the hand visible, indeed. Please note that metaeconomics preserves the Invisible Hand concept, i.e., one does not have to know the utility gained by someone else before taking economic action, as in interdependent utility theory).
Etzioni concludes (p. 180): "Attempts to accomodate moral behavior within the monoutility theory model strain it." Both pleasure and morals motivate/ drive economic behavior. This paper was a major inspiration in developing Metaeconomics around an individual having at least two utilities, and, in later developments, two interests. We bring the Moral Dimension highlighted by Etzioni as a another set of indifference curves, representing another kind of interest, namely the Other(shared with others)-interest, an interest also resting within one's own-self. This is not about interdependent utility/interests, but rather about another kind of interest within the self... this is still about the self, the own-interest, as Adam Smith made clear 250 years ago.
Jointness, Nonseparability, Nonallocable Inputs and Goods
Frisch, R. "Technical Description of the Production Law for Multi-Ware Production." Chapter 14 In: Ragnar Frisch. Theory of Production. Chicago: Rand McNally and Company, 1965.
Lynne, G.D. "Allocatable Fixed Inputs and Jointness in Agricultural Production: Implications for Economic Modeling: Comment." Amer. J. Agr. Econ. 70,4 (November, 1988): 947-949.
Lynne, G.D. Modifying the Neoclassical Approach to Technology Adoption with Behavioral Science Models. Journal of Agricultural and Applied Economics 27,1 (1995):67-80.
Sautter, J., Ovchinnikova, N., Kruse, C., and Lynne, G. Farmers Decisions Regarding Carbon Sequestration: A Metaeconomic View. Society and Natural Resources 24,2 (January, 2011): 133-147.
Frisch (1965) is the most creative piece of writing (and perhaps not enough appreciated) in economic science about joint processes. It is the only writing I have seen that clearly expresses the fundamental nature of such processes as the production of wool and mutton, wherein no one has total command over the choice of the mix, except perhaps the sheep, and the extent that perhaps feed ratios and other input ratios might affect the ultimate mix of joint products. All manner of real-world production processes are joint and nonseparable, with more than one output coming out of that process, especially in the context of thermodynamics: Every production process is embedded in the spaceship earth system, and, as a result, is joint with it. This arises through the phenomenon of nonallocable/nonallocatable inputs (Lynne, 1988).
While Frisch (1965) focuses on inputs used to produce multiple products (multi-ware), the theory can be analogously applied to examine multiple utility, i.e., the consumption of goods producing utility, or satisfying interests, with the focus being on the command over the self-interest and other(shared, while still internalized within ownself)-interest by the person...like a sheep having command over wool and mutton... but now involving nonallocable goods over which the brain/mind makes gains in satisfying both self&other-interest. It was this idea of overlapping isoquants leading to jointness in production which inspired the idea of overlapping indifference curves leading to jointness in interests/utility represented in the Metaeconomics Framework, which in turn led to Dual Interest Theory (Lynne, 1995; Sautter et al., 2011).
Return/go to What is Dual Interest Theory
Berne, E. Transactional analysis in psychotherapy. New York: Grove Press, 1961.
Clarkson, P. Transactional analysis psychotherapy.New York: Travistock/Routledge, 1992.
Metaeconomics builds upon Berne, with the notion in transactional analysis of the Child and Parent, and Adult in control/in charge, as an abstract model of the human in molding a quite successful psychotherapy, which integrates across a great deal of knowledge from all the branches of psychology. The Parent (while being both Nurturing and Critical) holds the norms data/ the moral dimension, and the Child seeks pleasure (while being both Adaptive and Free/ Creative). In metaeconomics, we take this trinity as a working model of rational human beings, and reason that the Parent represents the other-interest, and the Child the self-interest, with the Adult bringing in self-control, and rationally mediating across said parts of the brain/mind. Irrationality appears when the Adult is no longer in command. We arrive at a more complex understanding, perhaps better describing real human experience, in this kind of economics.
The work of Maslow also holds potential:
Maslow, A. H. Motivation and Personality. New York: Harper Row, 1954.
The chapter on self-actualization in this book is worth a read, especially with it culminating in the notion that the self-actualizing person is all about fusing the dichotomies, in this case between the self-interest and the other-interest. Other economic scientists pursuing a new, more human centered theory are also building on Maslow's work, e.g.,
Lutz, M.A. and Lux, K. Humanistic Economics: The New Challenge. New York: Intermediate Technology Development Group, 1988.
Angyal, Andras. 1941. Foundation for a Science of Personality. New York: The Commonwealth Fund.
Angyal, Andras. 1965. Neurosis and Treatment: A Holistic Theory. New York: The Viking Press. 1965.
Like Angyal, metaeconomics sees the integrated and balanced pursuit of autonomous (self-interest) and homonomous (other-interest) tendencies. The individual strives to master the natural and social environment, and thus seeks autonomy. At the same time, the individual seeks unity and relationships with others, and causes, and the natural, spaceship earth system, and thus seeks homonomy. Outside governance and control (heteronomy) is always a factor, however, with the individual striving to stay away from it, seeking individuality, freedom and liberty ... while still needing connectivity, and, when self-control fails, perhaps some outside control/help is justified. Behavior is arguably best explained at the interstice of autonomy X homonomy X heteronomy (terms coined by Angyal, 1965).
Cory, G. A., Jr. The Reciprocal Modular Brain in Economics and Politics. New York: Kluwer Academic/Plenum Publishers, 1999.
Metaeconomics differs from the Maslow perspective in that it sees each part of the tri-partite, trichotomous individual largely on par, and in conflict rather than hierarchical (Cory, 1999, p. 45-46), although metaeconomics posits the Adult ultimately takes command. Cory (1999) suggests something quite similar to metaeconomics with the notion of the three-level, or triune, brain. Cory (pp. 38-39) identifies the egoistic range (self-interest), empathic range (other-interest in metaeconomics), and the dynamic balance struck (by the mediating adult in metaeconomics) across these two ranges of the triune brain that are in behavioral tension in varying degrees at all times. The behavioral tension leads to all manner of mental issues; people must strike a balance between the egoistic and the empathic tendencies, a notion that made its way into metaeconomics as represented in the balance in self&other-interest. We it is quite reasonable to claim that metaeconomics not only has some direct links,s, in particular the notion that behavioral tension subsides with balance in the dual interests, but also works well in connecting this triune brain concept from neuroscience with economics more generally.
Singer, T. Understanding Others: Brain Mechanisms of Theory of Mind and Empathy. In: Glimcher, P.W., Camerer, C.F., Fehr, E. and Poldrack, R.A (Eds.). Neuroeconomics: Decision Making and the Brain. New York, NY: Elsevier, 2009.
The mirror neurons were first discovered in observations of the behavior of macaque monkeys, in a now classic, seminal study by a group in Parma, Italy in the early-1990s. It was found that the same neurons in the premotor cortex "fired" whether the monkeys performed certain hand movements or observed the same hand movements by another monkey or by a human. Subsequent fMRI studies of humans found evidence for these shared neural networks among humans: Merely perceiving anothers pain, suffering resulted in feeling the pain and suffering. In effect, human brains (and that of several close relatives in the rest of the animals) have the capacity to project ownself (the notion of empathizing) into the situation of others. Once this projection has been done, the individual can at that point decide whether to join in sympathy with that other, or not.
Söllner, F., 1997. "A Rexamination of the Role of Thermodynamics for Environmental Economics." Ecol. Econ. 22 (1997): 175-201.
Metaeconomics recognizes the fundamental contemporary and intertemporal justice problem that arises from the inherent interdependence highlighted in thermodynamics. The 1st law helps us understand that matter and energy cannot be destroyed, but rather are just changed in form. So, residuals are always an outcome, pollution is pervasive, we cannot be independent of each other or other elements of the abiotic and biotic community. The 2nd law helps us understand the one-way road nature of this Spaceship Earth, on which we travel. All aspects of our reality are represented in dissipative energy structures. So, we can take no action without affecting, albeit in some perhaps small largely imperceptible way, the choice set for the future. The reality of interdependence that we now understand, based on 1st and 2nd law realities, leads to a substantive micro-motives and macro-behavior problem in the economy and society. Metaeconomics proposes to address this micro-to-macro (and macro-to-micro) transition problem through recognizing empathy as a motivating force in individual actions. As such, metaeconomics thinking facilitates the meta-economic value decision called for by Söllner(1997). Intergenerational (and contemporary) justice will occur only with sufficient expression of empathy, expressed in the idea that the individual, through The Will seeks an I-Thou state of existence.
Institutional and Behavioral Economics Section (IBES) - Agricultural and Applied Economics Association and Society for the Advancement of Behavioral Economics (SABE)
The very supportive environment provided in these two professional associations helped in immeasurable ways to further the development of Metaeconomics, in joint efforts with colleagues in IBES (Concept, IBES Fellow, Current Site) and SABE. These innovative, open Associations facilitated sharing ideas on new scientific ground, something often resisted and rebuffed in more traditional Associations.
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