The Theory of the Individual in Economics: Identity and Value.

Author:Waller, William
Position:Book Review

The Theory of the Individual in Economics: Identity and Value, by John B. Davis. New York: Routledge. 2003. Paper, ISBN 0415202205, $31.95. 240 pages.

John Davis has written a fascinating book. Put most simply, he explores the concept of "the individual" in orthodox and heterodox economics. He argues that a theory of the individual should at least consist of two properties: individuation and reidentification. Individuation concerns whether an individual can be identified as different and unique from other individuals. Reidentification is concerned with whether identified individuals can be reidentified after a change.

When a self-identified heterodox economist writes a critique of orthodox economics conceptions, the outcome of the activity is not in doubt: How the critique is executed is what makes the process interesting to the philosophically inclined reader.

Davis's critique is clear, elegant, and compelling. He argues that the subjective individual of John Locke fails to meet the individuation standard because the differences among such individuals are based on internal mental states that are inaccessible to the external world. Neoclassical economics abandons subjectivity for the abstract individual with unique preferences (which can be revealed). But if choices are the only characteristics of atomistic individuals, the theory of the individual becomes so reductionist that it ceases to be about human beings. Realizing this, orthodox economists (at least those who actually worry about such things) mutated from a unitarian neoclassical orthodoxy to the analytic cacophony of derivative mainstream economics, each with a slightly altered view of individual behavior.

To address the issue of reidentification Davis selects Gary Becker's human capital theory and sets it up as the "iron" man (the opposite of a "straw" man) to critique. This is an important choice because this mainstream approach includes not merely a passive, immutable individual who responds to exogenous changes in logical time but instead focuses on an individual who chooses to change himself or herself in one-directional, linear, nonreversible logical time. Can we reidentify an atomistic individual who has invested in human capital for him- or herself with his or her original self?. Of course we cannot, because we couldn't tell them apart in the first place.

Q.E.D. What fun! Davis has shown that mainstream economics doesn't have a theory of the individual-delightfully ironic...

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