I am currently reading a book on the history of coffee - a town near Xalapa grows some of the finest coffee in the world and I wanted to find out more about the product. A lot of it discusses various fads to market coffee. In one place in the book, the author writes about the efforts to tie the budding field of psychology and marketing. He quotes Hugo Muensternerg, a Harvard Psychology professor who boasted "Business men will eventually realize that customers are merely bundles of mental states and that the mind is a mechanism that we can affect with the same exactitude with which we control a machine in a factory."
That same kind of nonsensical thinking seems to have affected economics at times - much of Galbraith's screed in the Affluent Society discusses market transactions as almost robotic in nature. What amuses me about the robotic position of this discussion is how little faith the side of the debate has in the ability of humans to reason. As Adam Smith commented in the Theory of Moral Sentiments - those who think they can manipulate the decisions of individuals make a fundamental error.
"The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder." (Theory of Moral Sentiments VI.II.42)
Monday, May 15, 2006
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