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Pragmatic Narrative Microeconomics
If we believe we can empathize with people by seeing the world the way they do, what are we saying? We are saying that, given the internal and external pressures they face, the landscape they see, their impression of their own identity, the individual’s actions make sense. If we believe we can empathize, my question is: how do make a science out of this empathy?
The way people act in various situations is mostly out of (1) self-interest and (2) their perception of the shared narrative in the current scenario, what role that gives them, and how their actions will effect that role.
For instance, when you go to a corner shop to pick up some milk, your relationship with the cashier is usually pretty clear. Maybe you don’t know him and he doesn’t know you, so you fall back into expectations as determined by the culture of your locale. Or maybe you don’t know him that well, but you know he remembers you, maybe that he even expects you to pick up some milk. You get ready to answer questions like “The usual, eh?” Or maybe you know each other by name, you’ve had a conversation or two and you switch on your “personable self” in order to have light conversation.
In any scenario there are lots of things you can’t do, or more precisely that you refuse to do because you don’t like where they’ll take you. When you’re in high school and you’re not enjoying the class, you don’t go punch the teacher because you know it won’t get you anywhere you want to go. But when your parents ask you about the girlfriend you’ve been fighting with, but who you think things will work out with in the end, you often don’t tell them because maybe they hold grudge worse than you do. Or worse, maybe they’ll automatically blame you: that’s the role you have with them.
First contact is when the roles are most unstable. When you go for a job interview you’re hyper-aware of how the moves you make effect the other party’s perception of you. Yet, this is clearly operating in the background of any relationship. If every time your friend starts talking about how we need to implement Universal Basic Income and you call them a commie, they won’t just stop—they’ll learn. They’ll decide you might be a bit more conservative, they’ll view you as less open, etc. Most of the time it’s much subtler than this. It’s as simple as the words you use as a greating: “Hey” vs. “Hello” vs. “What up?” vs. “Hiiiiii“ vs. an inside joke, enforces upon each meeting some flavor of what you can expect from one another.
All of this is clear and there are writings about it psychology, linguistics, anthropology, and many others. The knowledge is spread all around, and it’s not clear that any centralizing force would be very effective—there isn’t enough information to explain the vast majority of human behavior in anything but the broadest strokes, so what kind of patchy job would we end up with?
It is this state of affairs that makes me feel we need to setup a new way of thinking about things. Human behavior is influenced by too many things for us to have a predictive model that we could ever expect to plug-in to: even if we had one, we couldn’t take the measurements necessary to get a prediction out. F.A. Hayek’s description in _The Fatal Conceit_that to explain the results of human systems we must take inspiration from Chemistry and explain the kinds of macro phenomena we would expect to see has part of the key. But to understand what kind of reactions happen we must go to the lowest level, individual human interactions. Humans are not replaceable with each other, and attempts to explain them purely as the products of certain groupings like class will fail. There is too much diversity in a given grouping to get proper robustness.
However, different__elements__ of human identity and situations may setup predictable landscapes of interaction. Instead of trying to predict things as if the people themselves were fungible, we must look for the characteristics which have predictable effects. This makes the problem more difficult than the classically simplified vision of going down to the lowest level of a system and figuring out the properties of each specific component. And it provides us with the biggest, most contentious problem of all: what elements tend to contribute most to behavior?
Classically, there has been an obsession with identity here, but I would like to say that personal identity isn’t half as important as role. A person’s role in a situation, as sketched out above, will tend to constitute the pathways they see available to them, and how local options open up future ones. Individuals—trained by a lifetime of dissatisfaction—will tend to choose paths by which they can get what they want or avoid some other end. This doesn’t mean individuals are good at getting what they want: they may have a totally inaccurate view of what the landscape is really like. But if we believe we can empathize with others meaningfully, it seems likely that under an individual’s perception their actions are rational at least insofar as they are usually likely under the internal and external pressures an individual faces. That is our pathway into Pragmatic Narrative Microeconomics.