How Would Homo Economicus Spend Holy Week?

During this holiest of weeks, we are asked to do penance for our sins.

As an economist, I have been trained to think of people as rational actors. What does it mean for a purely rational person to be repentant? Could homo economicus ever go to confession?

Why ask this question at all? There's an economist's reason and an apologist's. The economist's definition of rational economic man is one who always acts so as to maximize his own personal happiness, taking into account all the relevant costs and benefits of his actions, and using fully all the available information. By examining this mythical person — homo economicus — we can see some of the things economics misses. For an apologist, the question might be a way to grapple with the meaning of repentance. What would it mean for rational economic man to ever be truly repentant?

We can easily imagine homo economicus (HE for short) feeling some regret about something. For instance, he regrets he didn't sell all his shares of JDSU in 2000 when it was selling for $150 instead of holding on to it until now when it is trading at $3 per share. But he isn't irrational because things might have turned out otherwise, and he isn't really repentant because he didn't do anything morally blameworthy. He just made a mistake.

The situation is quite different if we do something hurtful to another person. One person says, “You hurt me. I want you to apologize.”

What are the possible responses of HE, the “rational” person? One is, “I didn't know that I hurt you. I didn't know in advance that what I was about to do would be hurtful to you.” HE pleads imperfect information. HE is not truly sorry, because he was only ignorant, not actually wrong or guilty of anything.

Another possible response from homo economicus is, “I wanted to hurt you. I knew it would hurt you. I am entitled to hurt you if I feel sufficiently aggrieved with you or with life in general. I did what I wanted to do. I don't owe anything to anyone. I didn't expect you to like it. I knew you'd probably yell at me. But I am willing to pay the price of your displeasure.” This is homo economicus all right, rational and calculating. But you would not want to be married to him.

There is an intermediate response. “I didn't particularly want to hurt you. I hurt you as a byproduct of something else that I wanted to do. I do not plead ignorance or having imperfect information. I simply pleaded that what I wanted to do was more important to me than your feelings about it.” In this case, homo economicus’ rationality doesn't make his spouse feel any better. In fact, this explanation (rationalization is more like it) might make her feel like smacking him.

This intermediate case is the most interesting, because it could sometimes be an appropriate response to a situation. We can imagine situations where it was acceptable to do this and situations where we would feel fairly treated if someone said this to us. Context is everything.

Suppose a husband refused to accompany his wife to a dinner that was important to her. He knows she wants it and that she will feel badly if he doesn't go. He chooses to do something else instead. We can't judge this situation in the absence of further information.

Suppose the dinner is an event honoring the wife for winning the Nobel prize in economics. The husband refuses to go because he doesn't want to miss his card club, which will be meeting during the trip. His plea of rationality would probably not gain much sympathy either from us, the impartial spectators, or from his wife. We would probably conclude that there was something skewed about his preferences.

Suppose instead the dinner is at her mother's house. Her mother is a shrew who can't shut up and continually criticizes everyone in sight, including and especially her son-in-law, whom her daughter never should have married in the first place. He says he would prefer to do just about anything rather than go and endure his mother-in-law's behavior. His wife is sly homo economica (SHE for short). SHE proclaims she is hurt, demands that he always act to avoid hurting her and pronounces him an inconsiderate lout. We might conclude SHE is using her pain to manipulate him.

But one thing is for sure: The fact that you have made a “rational choice” to hurt another person is not a stand-alone argument. You have to supplement your cost-benefit calculus with a justification for the preferences themselves. The wife in the first case doesn't think traveling to Sweden should count as a cost. The husband in the second case doesn't think visiting his mother-in-law should count as a benefit. The argument is over their preferences, not over whether anybody calculated accurately.

And that is the heart of repentance, too. When we ask someone to apologize, we don't want to say they made a mistake. When somebody hurts us as a byproduct of something else they want to do, we want to be more important to them than whatever it is they wanted. That is what their apology means to us: We have moved up the ladder of importance to them. When somebody is manipulating us with their pain, we want them to be sorry — sorry for wanting their own way so much that they will distort the presentation of their feelings to get it. Sorry for not trusting us enough to make a straightforward request for what they want without a lot of emotional freight.

We want them to admit there was something wrong with their preferences in the first place. And this is just what is so difficult about offering an apology. We have to admit we were wrong in what we wanted, as well as in how well we pursued our own interests. That is why homo economicus and his mate, sly homo economica, need to go to confession, just like everybody else.

Jennifer Roback Morse is a research fellow at the Hoover Institution and the author of Love & Economics: Why the Laissez-Faire Family Doesn't Work (Spence, 2001).