Beyond MaxU

from David Ruccio

Much of contemporary neoclassical economics remains wedded to an analytical approach based on utility-maximizing individuals. And, as Nick Krafft discovered, neoclassical economists just don’t want to give it up.

Notwithstanding all the criticisms of the idea of MaxU over the years, including the exceptions to utility-maximizing behavior discovered by behavioral economists, the official line is “don’t throw out the baby with the bathwater.” Why? Because they just can’t imagine doing economics without rational, self-interested, utility-maximizing economic subjects. The fact is, letting go of MaxU probably involves moving beyond neoclassical economics but it certainly doesn’t mean the end of economic analysis. 

One exception is the work of Deirdre McCloskey, who has, in the name of Bourgeois Virtues, attempted to expand the concept of the individual, beyond utility-maximization. And, of course, she remains firmly rooted in neoclassical economics (what she considers to be old-style Chicago economics, as against Samuelsonian versions of neoclassical theory).

But there are two other alternatives. One is to produce a different concept of the individual economic subject, a nonunitary subject, for which there are many possibilities: the no-self self (as in Buddhist thought), multiple selves (as discussed by Paul Bloom, in “First Person Plural”), the decentered self (favored by postmodern theorists), the Lacanian self, and so on. Each and every one of them would give rise to a distinctly non-neoclassical form of economic analysis—but still an approach to economics grounded in the human subject.

The second alternative is to decenter economics from the subject. This would involve analyzing economic events and institutions without grounding such analysis on a given concept of the human subject. It is, in other words, a post-humanist economics—or, in Louis Althusser’s famous phrase, an economics based on a “process without a subject.”

I can’t take the time here to spell out what such different economic theories look like. My only point is, both approaches—the decentered subject and the decentering of economics from the subject—offer viable alternatives to MaxU and neoclassical economics. And that’s the problem Nick encountered in stubborn resistance to his question: moving beyond MaxU does (with the exception of McCloskey) involve throwing out the neoclassical baby with the dirty bathwater.

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