Market-Values and Responsible Consumption

Every introductory class of microeconomics begins by stating the following two propositions (rational choice theory):

1. Individuals are self-interested.
2. Individuals make rational choices.

(*This is of course an overly simplified characterization of economics, but it will do for our current purpose of contemplating on the essence of market-economy and consumption.)

Of course, ‘self-interested’ and ‘rational’ are vague terms open to various different interpretations. However, usually, those propositions are taken to implicate that individuals make choices that will provide them with the greatest benefit (i.e., benefit at margin). Once again, ‘benefit’ here is a vague term. At first, the rational choice theory presents itself as a mere description of individuals. In fact, economists take pride in distinguishing themselves from other normative disciplines. For a while, I thought that the theory is really a normative one just like other ethical theories are. I am not sure anymore. But I do not think that the rational choice theory is a mere description. Rather, it is one way to interpret human behaviors. Thus, economists got it backward. It is not that humans do in fact make rational choices based on their self-interests and then economists as third-party observers simply describe what humans do. Rather, humans do what they do and there are many ways to interpret what they are doing, but rational choice theorists suggest one way of interpreting what they are doing. What ‘self-interested,’ ‘rational,’ and ‘benefit’ mean are determined analytically within the interpretative framework of the theory: these terms were never empirical generalizations to begin with.

The value of goods is determined in the market. It is where the supply and the demand meet. The suppliers and the demanders are willing to respectively sell and buy the products within a certain range of price. The value is more or less the function of their bargaining. This much is uncontroversial. Where this picture is mistaken is thinking that this is all there is to the value of goods. If the suppliers and demanders are interpreted by the rational choice theory, for instance, the underlying determiner of the valuation is whether the possession of the goods results in the greatest benefit, whatever it means. But what in turn does determine what it is for something to be the greatest benefit, to be what self-interest aims at? Is it the sensation of satisfaction each individual feels at consuming the product? Can you ever quantify such qualia which is a private psychological phenomenon? If you quantify it by how individuals behave after the consumption, do you really need the concept of benefit and self-interest? Why not just talk about the behaviors, therefore behavioral economics?

There is something intuitively wrong about treating individuals by behaviorism. In making observations about and nudging individuals, we are not treating them as agents capable of making deliberations. Rather, we are treating them as some sort of commodities and statistical values. In other words, we are not treating them as people anymore. There is nothing physiologically natural about the concept of personhood because it is not a natural fact about humans. Essentially, personhood (freewill, rationality, deliberation, etc.) is a social status attributed to an individual. One is an agent capable of making free choices not because of his genetic constitutions, but because he is conferred with such a status. That is all there is to the conceptual layer of personhood. Thus, there is a gap in nature between description (is) and prescription (ought).

What the rational choice theorists miss is this social aspect of rationality. In fact, ‘rational’ quickly goes out of the picture and is taken to be synonymous with ‘self-interested’ as soon as it is asked what rational choices are. Even if people are self-interested, that does not mean that they will make rational choices. Going by one’s sensation of satisfaction is hardly rational. At best, it is capricious.

Rationality is a loaded concept, but at its core rationality is a normative concept. In making rational choices, one does something because that is appropriate to do so. Sometimes, it is appropriate to go by one’s private sensations, but not always. It may serve one’s self-interest to steal things if he will never get caught. But he should not. Here, some other reasons (ethical) override his own private reason. It might go against his own self-interest (sensation of satisfaction) to have these ethical reasons override his own. But, as a rational agent, he is obliged to adhere to these other reasons.

At this point, economists start stretching the meaning of ‘self-interested’ in order to cover the cases where one acts according to higher reasons. Isn’t it the case that the person has still acted in accordance with his self-interest? Isn’t following the ethical reasons what now gives him the feeling of satisfaction? Well, once again, if so, then why appeal to the concept of self-interest at all? If everything is self-interest, the concept is deus ex machina. The theory is unfalsifiable, but loses its explanatory power as well. Also, there is a significant difference between doing the right thing because one feels joy at doing it and doing the right thing because it is the duty. The disposition to do what one finds joyful is hardly a reliable one. If his taste changes, he will stop doing the right thing. We would like our moral saint to have the deontological disposition as his virtue, as what constitutes his motivation to do the right thing. We do not need someone who does the right thing because it is fun; we need someone who does the right thing because he perceives it to be so and has developed the disposition to respond to this perception in the appropriate way regardless of whether he feels joy.

The value of goods is determined by the interactions between suppliers and demanders. But the rendezvous point should not be where their caprices accidentally and momentarily meet. The point of attributing rationality (the capacity to make deliberations and free choices) is conceiving individuals as capable of doing appropriate things. Centering our analysis on the sensation of satisfaction is seeing the painting, but failing to see the painter. We do feel satisfied with many random things. But we should feel satisfied only with certain things. We do want many things we do not need: luxury, gluttony, etc. But we should want certain things. Hume’s law: “Is” does not imply “ought.” So, who gets to determine what is the right thing to do, what one should want?

What it is for something to be a hammer is determined by the purpose of hammer. The hammer is meant to be used as a tool to hit on nails. The appropriateness of using something as a hammer is evaluated by the telos of hammer-ness. The telos of hammer-ness is what gave birth to and determines the appropriate shape for the hammer. Otherwise, there would have been no consumable product known as hammer. The value of hammer is to be determined by how useful the hammer is in hitting nails. If so, it is appropriate for the hammer to be owned by someone who will use it to its excellence, not by someone who is willing to pay more. The same principle goes with foods, cars, books, etc.

Aristotle is often scoffed at for claiming that rocks fall to the ground because that is where they belong. If you read Aristotle as saying that rocks do intentionally fall in order to be at where they should be, sure his philosophy is of antiquity. But that is not what he meant. Rocks do not intentionally follow the laws of nature. But, insofar as the law of gravity is concerned, it is appropriate for rocks to be (falling) on(to) the ground rather than floating around. The ground is where the rocks belong at by their own nature (by the operation of the laws of nature). As such, that is where they should be. It does not matter what the rocks or any other individual wants, no matter how much one is willing to pay for a gravity-free world.

As Susan Wolf notes, one function of rationality is to accurately recognize the patterns and features of the world. What is appropriate for each object is determined by its telos, its nature under the ruling of the laws of nature. Thus, what one must desire as a consumer in the market is the appropriate use of the product. Even if I can pay more for that hammer to include it in my collection rather than use it as a tool, I should let the craftsman to possess it. The price of the hammer should be determined by how much the craftsman is willing to pay for the labor that goes into manufacturing the hammer, not by how much I am willing to pay for the hammer so that I could keep it on a wall as a collection. Any desire beyond this necessity (and, here, I mean the strongest kind of necessity: metaphysical necessity) is a disturbance to the natural order of the world and is therefore extraneous.

This picture suggests that one must be a responsible consumer. In making decisions about consumption, one must take into account various considerations about the nature and appropriate use of the product and its impact on the natural order of the world. Of course, it is impossible to take everything into account as human knowledge is fallible. But there is a significant difference between having this moral attitude and giving in to hedonism. The former is self-correcting, and the latter is unreliable.

The market is run by humans. In turn, humans as rational agents are essentially normative. We are rational agents not merely because of our genetic constitutions although our genetical constitutions may have provided us with some physiologically necessary conditions for realizing that capacity. We are rational agents because we are treated to be so, and the conferral of rationality is crucial to our identity because we can be respected as individuals with basic rights in virtue of being able to make value decisions (Kant). We do not just act because we feel like to. We act because we aspire to do the right things. Why do I drink water? Because I believe that drinking water is the right thing to do when I am thirsty. (This normative response is of course my second-nature.) Why do I endorse my belief that the necktie is blue under this light-setting although it looks green? Because I believe that the appropriate response is to take this light-setting as a non-standard condition. If social science does not take this normative aspect of humanity into its account of human activities, then it will never provide us with the enriching picture of who we are and what we ought to do (and how we ought to treat one another).