Literature and economics

While it is possible to be a great mathematician, physicist or biologist without wider life interests, good economics depends on understanding of human psychology and on cultural, historical and especially literary insight. Why should this be so?

Firstly, in any disciplinary field we have an obligation to make ourselves understood. Reading great writers helps us write what we want to say in ways others will understand.

The humanities develop critical-thinking skills and the ability to make connections across disciplines. A thriving economy requires innovation, and innovation requires the ability to see things from a different angle. The ability to see things from different perspectives is a style of thought inherent in pluralistic democracies and unnatural in totalitarian states. Disasters involving human judgement lapses, including global financial crises, result at least partly from failure to critically challenge group thinking, authority bias and social norms. A humanities education helps us look at objective arguments and evidence and not be overly swayed by emotion. It helps us challenge social norms, tradition and group thinking.

Literature builds self-awareness and the benefits of self-examination. It exposes the risks of becoming like Casaubon in Middlemarch, lacking authentic self-knowledge. Henrik Ibsen, when asked what it meant to be a poet, answered “to be a poet is to see.” Seeing things authentically is at the heart of Andersen’s story, The Emperor’s New Clothes. In seeing things as they are, writers commonly are ahead of economists, sociologists and others in foreseeing future changes. Heine wrote a prophecy of Hitler, Jack London of fascism (The Iron Heel), while George Eliot, Thomas Hardy and Henrik Ibsen saw through and exposed moral hypocrisy and stifling social norms and traditions.

Beyond meeting material needs, what is an economy for? Economics is about scarce resources and literature helps us understand and come to terms with the ultimate form of scarcity, our lives’ finitude. Ultimate human ends are psychological well-being, good people relationships, a purposeful, meaningful life, pleasant memories and thoughts of good times ahead, poignancy, love, pride in achievement, emotional bonds with loved ones, great friendships. Income and wealth are means to these ends, not the ends themselves.

“Good economics” is the study of how scarce resources flow to socially valuable purposes. “Bad economics” involves resources being diverted to socially low value or destructive pursuits. It would be absurd for example to encourage more geophysical disasters or pandemics on the grounds that repairing damage caused by earthquakes or disease outbreaks can temporarily lift GDP. GDP measures market incomes but not life quality, health, happiness and social cohesion. “Happiness research” tells us that, above a certain income level, there are questionable relationships between per capita income and happiness. Positive life qualities and experiences tend to be location and situation-specific, and can’t be captured in aggregate measures.

Literature teaches us that man does not live by GDP alone. Countries such as China have achieved massive economic growth, however this has not been associated with growth in personal liberties, freedoms, environmental quality or democracy. A narrow form of economics that measures only what is priced and traded is a confining prison that blocks out wider things in life.

While neoclassical economics makes such assumptions as rationality, writers realise life is to a great extent “irrational.” Good economics is about psychology, and literature records and transmits through the generations the world history of psychology. Rarely does great literature depict rational, calculating economic optimisers, probably because such figures exist only in abstract economic models. People are driven by economic incentives but also by envy, power, delusion, love, pity, revulsion with injustice, by a sense of fairness and dislike of free-riders, and by double standards of morality between in and out-groups. Such human behaviours are the core of much literature and it is through great writings we immerse ourselves in and come to understand the psychology underlying human behaviour. Great literature is therefore an historical chronicle of human psychology as it is, rather than how it is modelled in textbooks.

In writers as diverse as Dostoevsky and Henry James the complexity of human psychology is explored, as are the consequences when psychology misfires. While Melville in Moby Dick observes that “man is a money-making creature”, Ahab’s pathological hunting of the white whale trumps all financial motivation. It also overrides basic humanity, epitomized in the meeting between the Pequod and the Rachel when Ahab refuses to help the Rachel’s captain search for his son lost at sea, so the mad whaler can continue his obsessive search without the hindrance of humanitarian obligations. In The Christmas Carol Scrooge mistakes the means to an end (money) for truly worthwhile ends, and he sacrifices family, friendships, love, kindness and compassion in the process. Yet, as so often in literature, redemption comes even to Scrooge, and the literary record of this influences later readers.

Literature provides an historical chronicle of economics. In the Telemachy (first book of the Odyssey) Athena appears in the likeness of Menter, a ship’s captain, trading iron for bronze. In a later age, Daniel Defoe pioneered the art of economic journalism. Literary chronicles of economic history help us avoid such myths as “this time it is different,” when for example a financial crisis occurs that follows an historically consistent pattern.

The humanities involve individualised creativity, not the discovery of Gradgrindian facts. There is uniqueness about creative endeavour in the humanities and inevitability about scientific discovery. If Rutherford had not split the atom, someone else would have. However, there is nothing inevitable about the creations of Shakespeare or Mozart. They are only what Shakespeare and Mozart could have produced – had they not been born their works would never have appeared.

The humanities are the products of creative imagination and in turn spur them. Imagination is required to deal with anything beyond stark physical realities.
Marketing and branding cannot be created in a scientific laboratory and rather depend on emotions, romance, cognitive fluency and connections to identity. These are social and psychological phenomena and they are learnt through literature, the humanities and relationships, not from mathematical formulae or textbooks. Products that connect to human psychology as chronicled in the humanities have a market advantage over rival products of equal and even superior technical functionality.

Literature can express the universal through the particular – James Joyce argued that if he could get to the heart of Dublin he could get to the heart of all the world’s cities. Shakespeare’s genius had much to do with seeing in the local and situational things that are universal. Great literature warns against those who profess an abstract love of ideas, creeds, and abstract humanity itself, and an inability to love individuals. It cautions us to distrust those who reduce humans and their feelings to abstractions. In Hard Times Dickens attacks abstract utilitarian philosophy, Gradgrindian facts and averages that suppress individuals, emotions and imagination.

Tagore observed that the advantage gained by the sacrifice of individuality is ephemeral; the only real advantage is the one gained by the enrichment of individuality. Dickens’ social critique is moral, his solutions being individuals should be kind to each other, not that society itself needs to change. This of course is naïve economics: society and its institutions often have to change if individuals are to flower and behave in pro-social ways. However, literature emboldens by fostering a reader’s one-to-one engagement with a writer.

Literature often involves an individual’s alienation from an economy’s workings. Melville’s Bartleby Scrivener is alienated from the bureaucratic environment in which he is working. Blake’s dark satanic mills, Mary Shelley, Cervantes and Melville (in Tartarus of Maids) all addressed the engagement of humans with technology or industrial processes.
Fundamental to a good life is a sense that one is part of something bigger and more enduring than oneself. As Virgil writes in The Aenaid:

“There are tears for passing things, and mortality touches the mind.”

Immersion in great literature allows an individual to feel part of something that predates his existence and survives him. Identification with such literature (which in some cases may involve an element of conflation of personal and literary identity) allows transcendence of the vagaries and vulnerabilities of individual identity. As such it magnifies one’s own identity and helps remove fear.

Higher energies come from working for something wider than oneself. This helps manage what would otherwise be the terror that comes from seeing one’s own life hermetically sealed, as the only thing that exists, as something which, when extinguished, is the end of all. Literature counters such black thoughts by acting as stores of human cultural achievements, communicating them through time and connecting individuals to something that survives them.

Great literature is a source of psychological strength because it gives an individual access to others’ psychological power and the ability to transcend the frailty of individual identity. So many people have dealt to a moment of despondency knowing “there is nothing neither good nor bad but thinking makes it so”. They have drawn individual strength from “the time is out of joint, Oh cursed spite, that I was born to set it right.” Often the uplifting theme is escape from individual frailties through transcending them through things that survive oneself.

Economics assumes selfish individuality, yet we know from psychology and anthropology that humans are a social species and individuals depend on others.
Healthy human development sees people develop an awareness of their own weaknesses and the strength they can draw from others. As Martha Nussbaum observes in Not for Profit, literature and the humanities more generally highlight individual’s vulnerability and dissolve the illusion this can be solved by control over others and over things. Exposing one’s own vulnerability and uncertainty in life erodes control illusion and makes people more Rawlsian in their personally lived philosophy. Literature often shows that no one can control his own life and that of others and so domination and perfection is not always desirable or possible. It teaches that weakness in people is not shameful and should not be exploited.

Great literature teaches empathy with others. As Walt Whitman writes in Song of Myself:

..”whoever walks a furlong without sympathy walks to his own funeral drest in his shroud.”

The humanities helps us be world citizens and think of the wider good, to conceive and act for future generations, and indeed for other species in a Peter Singer “ever-widening circle”.

Literature and the humanities more generally foster our ability to see “the other.” For example, debating competitions that force people to debate the opposite of what they believe allows them to see through others’ eyes and humanize “the other”.

The humanities can of course be used by extremists to turn people against one another. Repressive and stigmatising literature works by impeding imaginative access to the views and positions of the stigmatised and preventing people having a sense of and emphasising with “the other”. However, the humanities in general and literature in particular provide a powerful counter. George Orwell observed in his essay What is science? that the (non-Jewish) scientific community by and large put up no resistance to Hitler, and that those few who did resist commonly had wider humanities, language or other interests enabling them to transcend the intellectual prison of narrow identity. Von Stauffenberg and his anti-Nazi collaborators drew inspiration from Stefan George’s poem The Anti-Christ. Carl Goerdeler, an ultra-conservative politician, opposed the Nazi destruction of a statue of the Jewish composer Mendelssohn since he sought to protect Jewish cultural heritage and through this the Jewish people.

Harmony, social cohesion and peace both locally and on a global scale require people to understand both shared human needs and aspirations and the differences between people. A mark of an individual’s education is ability to understand the great cultural and creative achievements of all ethnic and cultural groups. Learning another language shows how others “cut up the world” differently, and the imperfections signal how differently things appear to those who stand in a different pair of shoes. As Whitman wrote:

“May-be seeming to me what they are (as doubtless they indeed but seem) as from my present point of view, and might prove (as of course they would) nought of what they appear, or nought anyhow, from entirely changed points of view”

The humanities traverse cultures and world-views. They transcend narrow nationalistic, ethnic, religious or other group identities. The humanities help us see others as individuals rather than as instruments of our own ends. Part of this involves positional thinking: the ability to see the world from another’s perspective. The humanities allow us to shares others’ perspectives, and to conceive sympathetically of others’ condition and well-being.

Literature helps us explore the local and situational and to see people as individuals rather than as part of a faceless mass. It undermines the tendency to feel disgust for others and shrink from them. As such, literature breaks down double standards of morality between in and out groups. Tagore wrote that “all over the world today we find every nation striving hard to preserve its separate self. At the same time we find each getting to be conscious of its link with humanity at large.” By fostering individual self-awareness literature helps us see the bad as well as the good in ourselves, our own group, and therefore breaks down simplistic stereotyping of other groups.

Literature often teaches individual self-reliance and resilience – celebrated in Whitman’s Noiseless, patient spider. Kipling’s If, like Henley’s Invictus, epitomises the Victorian ethos of resilience, self-reliance, self-control and the “stiff upper lip.” Great literature is never cynical, never fully destructive of the good within humanity. Much literature conveys a sense of cosmic justice, where good people are redeemed, even if dead, virtue prevails against the odds, bad deeds are punished, and evil destroys itself. The darkest, most violent pieces often have a redemptive element. Hamlet dies, but his legacy lives on past the troupe of angels who take him to his rest. The evil sisters and their husbands in King Lear turn on and destroy each other, and Macbeth is defeated. Hardy’s Mayor of Casterbridge finds his past comes back to haunt him.

Much literature is about people finding out through hardship what is important in life. For Eliot’s Silas Marner, Silas’ love for his adopted daughter Eppie becomes more important than gold, gives him meaning in life and redeems him. In Dombey and Son and Great Expectations Dickens highlights the importance of relationships over wealth and social status.

Much literature grapples with issues of identity and the human tendency to identify within groups. The Shield of Achilles scene in Homer’s Iliad describes a mosaic of human psychology inscribed on a shield protecting an in-group from an out-group. Yeats’ promotion of nationalist identity recognised it gives fractured, marginalized people a sense of being connected to something wider than themselves. He said in his Nobel lecture “…the nationalism every generation had called up in moments of discouragement was romantic and poetical,” that is, it was transcendental. Goethe argued that “science and art belong to the whole world, and before them vanish the barriers of nationality”. Byron fought for Greek independence, and popularised Armenian culture. Melville’s Typee and Omoo gave a positive perspective on indigenous Pacific societies, with Melville himself campaigning against the blighting effects of missionaries who brought not only Christianity but a destabilising social code.

Great literature often promotes social reform, either directly or by building empathy. Literature concerns itself with other worlds, and this means we see our own world from outside it, helping us be objective about it. In immersing us in other worlds we become more empathetic with them. George Eliot’s Daniel Deronda did much to break down anti-semitic feelings, while Dickens defended Jewish people in Our Mutual Friend. Turgenev’s Sketches from a Hunter’s Album contributed to the end of serfdom. Checkhov campaigned for prison reform and Thomas Hardy and Isaac Bashevis Singer for animal welfare. Gorky’s The little boy and girl who did not freeze to death at Christmas exposed the social conditions that ultimately led to the Russian revolution.

While literature can be socially reforming in nature it can also be deeply conservative of wisdom and positive values built up over time.
Sortes virgiliana (“among Virgil’s works”) was a medieval Christian practice of searching for inspiration by opening Virgil’s work at random and finding and meditating on a thought there. This reflects a belief in the wisdom of past writers. It is therefore akin to a whakapapa that underlies modern minds and communicates wisdom built up over time and thought worthy by each generation to pass on to descendents. Dostoevsky exposed poverty and social deprivation in pieces such as The Heavenly Christmas Tree. However, in The Devils he spoofed social reformers, while in Crime and Punishment and The Karazomov Brothers he exposed the crime and moral depravation that comes when “everything is permitted” and religious belief and moral values are eroded.

Great literature often teaches the need to challenge authority, tradition and social norms. In doing so, it drives social progress, undermining racism, sexism and tyranny. Blake’s The Little Black Boy reflects the common humanity between black and white people, while Visions of the daughters of Albion defends women’s rights to self-fulfilment. Lord Byron advocated social reform and his Song for the Luddites supported this movement. Steinbeck’s Grapes of Wrath chronicled the miseries of the Great Depression, while Rihi Pohiwahine recorded the devastation of 19th century New Zealand wars:

Who can raise the dead from their graves?
No one but almighty God
Who guards us in this void
This terrible void, this dismal void
Who first caused this void?
For seven long years the patu has
Opposed the sword
Be prepared, be prepared, the worse is yet to come…

Literature thrives in and actively promotes an atmosphere of freedom. Milton’s Areopagiticia is a treatise against censorship. Solzhenitsyn’s One day in the life of Ivan Denisovich and Gulag Archipelago helped remove the last vestiges of credibility from the Soviet Union.

Great literature passes that most acid of tests: the ability to cower tyrants. It does so because of its mystery, independence, its uncontrollability. It is too shape-shifting a target to shoot between the eyes. It can survive the mortal lives of individuals and therefore threaten to curse today’s evil-doers in future generations’ eyes.

Mandelstam presciently wrote: “Only in Russia is poetry respected – it gets people killed. Is there anywhere else where poetry is so common a motive for murder?” Mandelstam wrote “the Stalin epigram” in 1933, after seeing the effect of the Great Famine while he was visiting the Crimea. It directly attacked Stalin:

We live not feeling the earth beneath us
Our words inaudible at a few paces
And when there is enough for half a conversation
The name of the Kremlin mountaineer is mentioned.

With ten thick worms his fingers
and words like pound weights
a huge cockroach moustache on his lip
the tops of his boots gleam.

He is surrounded by a scum of sniveling half-men
And listens to the tributes of bootlicking half-wits
One whistles, one meows, a third merely whimpers
He pokes out his little finger, and he alone goes Boom.

He forges decrees in a line like horseshoes,
One for the forehead, one the temple and one straight between the eyes
He rolls executions on his tongue like berries.
He wishes he could hug them like big friends from home.

The best literature connects people with the past, and therefore with values, motivations and achievements that today’s politicians struggle to control. Perhaps for these reasons, Bukharin told Stalin “poets are never wrong”. During the 1940 London Blitz, with the Soviet Union still allied to Nazi Germany, Anna Ahkmatova wrote To the Londoners, signalling which side Russian writers were on…

To the Londoners

Time, with an impassive hand, is writing
Shakespeare’s twenty-fourth play
We, the celebrants at this terrible feast,
Would rather read Hamlet, Caesar or Lear
There by the leaden river;
We would rather, today, with torches and singing,
Be bearing the dove Juliet to her grave
Would rather peer in at Macbeth’s windows
Trembling with the hired assassin –
Only not this, not this, not this,
This we don’t have the strength to read!

Much literature explores the exercise of power and how to curb its abuse. Jonathan Swift’s A Modest Proposal satirises the colonial administration’s policies in Ireland. Kipling’s Recessional is a warning against imperialist hubris, its reference to “lesser breeds without the law” almost certainly referring to German imperial tendencies and the risks they were unconstrained by law.

Shelley challenged oppressive power in Mask of Anarchy. The thirst for power is a Shakespearean driver, and its abuse is at the core of Dickens and George Orwell. Orwell’s greatest works such as Animal Farm focus on how power can be abused. Stalin sought absolute political power, but to some extent he was aware that some writers were off limits. When the NKVD were persecuting Pasternak Stalin is believed to have written a note to them saying: “leave this cloud-dweller alone.” It is likely Maxim Gorky was murdered by the NKVD to stop him publishing texts that would have undermined the Nazi-Soviet alliance. After they read his private notebooks the NKVD are believed to have acknowledged Gorky’s literary incorruptibility despite Soviet patronage, noting: “no matter how much you feed the wolf, it still looks to the forest…”

No one in his lifetime can personally experience the mass of observations needed for the rich insights into human behaviour that underlie economics. However, literature provides vicarious ways of “living” hundreds of lives lived over thousands of years.

The mark of an educated person is to be able to enjoy the achievements of all great cultures, if that were possible given the constraints of our short life spans and cultural limitations. Literary choices are highly culturally influenced. For those of a European cultural tradition, Homer’s Odyssey, some Virgil, Shakespeare’s major plays and poems, Dostoevsky’s Crime and Punishment and The Karazamov Brothers, Melville’s Moby Dick, Orwell’s Animal Farm, Eliot’s Middlemarch, several great Dickens novels, perhaps a smattering of Yeats and Whitman frame much of what matters. And of course “western” literary heritage includes Terence, believed to be a freed African slave from Carthage, St Augustine, from what is now Algeria, and Pushkin whose grandfather was black.

George Stigler once remarked that the optimum industry structure is that which exists, because what exists has survived over time. Literature can be described as immortal when it survives the acid test of transmission through generations of people’s minds. Shakespeare and much classical literature are not only immortal through time but transcendental across cultures, and therefore liberating for humanity.

Peter Winsley
October 2010


About Peter Winsley

I’ve worked in policy and economics-related fields in New Zealand for many years. With qualifications and publications in economics, management and literature, I take a multidisciplinary perspective to how people’s lives can be enhanced. I love nature, literature, music, tramping, boating and my family.
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