The Romantic Economist

Economists need to be embedded in the culture of society to explain how it works, says Natalie Gold

April 30, 2009

The Romantics are a disparate bunch. They encompass members of different literary schools, such as Keats and Wordsworth, and different political tendencies, such as Burke and Wollstonecraft. Neither they nor their contemporaries would have recognised themselves as a movement, but they have been posthumously designated as such, with their stress on imagination, intuition and feeling in reaction to the Enlightenment emphasis on reason.

In the first part of his book, Richard Bronk presents a history of ideas in which he argues that the Romantics have more in common than some modern writers credit. In the second part, he draws lessons from the Romantics for contemporary economics.

Bronk identifies four broad Romantic themes: the use of organic metaphors to understand social interaction, the acceptance of value pluralism and incommensurability, the understanding that imagination and sentiment supplement reason, and the recognition of the role of language, perspective and metaphor in structuring the world.

He traces the precursors of the Romantic economist, finding among them Adam Smith, for his emphasis on moral sentiments, and John Maynard Keynes for "animal spirits" and his growing scepticism about mathematical models at the end of his life. He argues that John Stuart Mill, in modifying Jeremy Bentham's Utilitarianism, tried to bridge the divide between Rationalism and Romanticism, but ultimately failed because he insulated his economics from his Romanticism.

Present-day economists should embrace the lessons of Romanticism, Bronk argues. What implications does this have in practice? Much of the book is devoted to general critique and broad principles, and specific lessons are fewer.

Nevertheless, he does make some recommendations. From organicism he draws the lesson that the prevalence of increasing returns makes the existence of general equilibrium uncertain. So, rather than building optimising models that are predicated on the existence and attainment of equilibria, economists should take inspiration from chaos theory. Value pluralism leads him to conclude that gross domestic product measures of welfare are too simplistic, and that we should use more decomposed measures, which make the trade-offs between increasing output and inequality more explicit. The Romantic emphasis on the role of language moves him, via social constructivism, to endorse more nationally specific models that capture the influence of insti-tutional structures on behaviour.

A lot of these suggestions are clearly sensible, but we don't need to invoke the principles of Romanticism to understand why. Other suggestions that Bronk makes are more controversial, such as the argument (related to his advocacy of chaos models) that economists should sacrifice prediction in favour of post hoc explanation. While it is true that the economy, like the weather, is difficult to forecast, in both cases it would be foolish not to base policy on our best predictions. And although Bronk is right that imagination plays an important part in our lives but is neglected by economic models, his solution - that Romantic economists will curtail their use of game theory because it does not capture our radical uncertainty about the future - is extreme.

Bronk is stronger on macro- than on micro-economics. While he is familiar with the "varieties of capitalism" literature and growth theory, he does not discuss behavioural economics or evolutionary economics, both relatively recent micro-economic responses to the shortcomings of the rational choice paradigm. As a Romantic economist, he should welcome these developments. As traditional modelling is supplemented, something like his vision of fragmentation, where a variety of research methods are used, is slowly taking place.

Economists must be immersed in literature and culture in order to understand the societies they try to explain, Bronk believes. He himself is certainly well versed in Romantic literature and philosophy and has written a scholarly treatise on it.

The Romantic Economist

By Richard Bronk

Cambridge University Press

400pp, £45.00 and £17.99

ISBN 9780521513845 and 735155

Published 5 February 2009

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