Elias L. Khalil

This paper advances two interrelated theses. As for the first thesis, it distinguishes well-being, on the one hand, from happiness, on the other hand. As for the second thesis, it differentiates between two important facets of happiness: what this paper calls “happiness-as-tranquility” and “happiness-as-aspiration”. Actually, in order to differentiate the two facets of happiness, we first need to distinguish happiness from well-being. This is the case because happiness, after all, is a by-product of reflecting upon and ruminating over well-being. Given it is the same well-being, how could it give rise to different facets of happiness? It can only do so if we stop conflating happiness with well-being. This entails taking to task the widely accepted concept of “subjective wellbeing”. Such concept is expressly designed to obfuscate the difference between well-being and happiness. As for the two facets of happiness (the second thesis), this paper relies upon the contrast of two famous works of literature: the story of Job and the story of Faust. The contrast uncovers the criticality of the temporal dimension in the acts of reflection upon and rumination over well-being. If people reflect on past accomplishments, they experience backward-looking happiness along the Job story—i.e., happiness-as-tranquility. If people reflect on desire, they experience forward-looking happiness along the Faust story—i.e., happiness-as-aspiration. While the two facets of happiness seem contradictory, they are indeed complementary if we recognize the temporal element when one reflects upon and ruminates over well-being.

For Smith, love inextricably involves negative feelings, what this paper calls “bonding cost”. The bonding cost can be moderate. However, it can easily become excessive, taking the form of turbulent emotions, obsessions, vulnerabilities, and ego-centrism. Hence, it is no wonder that Smith is highly critical of love. However, paradoxically, Smith also embraces love, as it nurtures individual development and family warmth. Should we therefore conclude that Smith is inconsistent? Not necessarily if we introduce rational choice theory to the analysis of love and bonding—which Smith calls “mutual sympathy”. Rational choice theory allows us to identify the suboptimal level of love, namely when bonding costs (i.e., obsessions and emotional upheavals) exceed the benefits of love (the nurture of individual development and family warmth). Otherwise, when the benefits of love equal bonding costs, the level of love is optimal. Furthermore, another thesis of the paper, the proposed rational analysis of bonding, should not mean that bonding and material/substantive motives/preferences are commensurable. The distinction of love-based preferences (bonding) from substantive-based preferences (material satisfaction) challenges us to identify exactly how love differs from substantive satisfaction—a challenge that this paper undertakes.

Smith asks whether patriotism and cosmopolitanism spring from the same source. If they do, we face two anomalies. First, we should expect a British subject to love France more than Great Britain because France has a larger population than Great Britain. Second, we should expect a British subject to love France more than a far-away country such as China given that the British subject is more familiar with the French than with the Chinese people. Both expectations are factually untrue. This led Smith to reject the patriotism-cosmopolitanism continuum thesis. The love of country must spring from a source that is unrelated to the love of humankind. Nonetheless, neither kind of love can be reduced to substantive utility that informs the economist’s utility function and the social welfare function. Substantive utility appears as self-interest and other-interest (altruism). The altruist preference varies in intensity, depending on familiarity: people are ready to help more familiar people than less familiar ones. What complicates the discussion is that Smith uses the same term “familiarity” to discuss varying degrees of love: people tend to love more familiar people than less familiar ones. This paper sheds light on Smith’s confusing concept “universal benevolence”—which is best understood as the love of humankind.

This review identifies at least six different kinds of fellow-feeling in Adam Smith’sTheory of Moral Sentiments.The six kinds are (i) the mirroring of emotions; (ii) altruism; (iii) judgment of pitch of emotions/actions; (iv) judgment of merit of emotions/actions; (v) friendship-and-love; and (vi) aspiration that leads to admiration. Smith does not list them side-by-side. This side-by-side listing promises to help thinkers to see how to assemble them to construct a coherent and systematic framework on how to amalgamate three moments of behavior: the emotional, the rational, and the moral.

Can rational choice theory justify hope and patience in dealing with calamities such as financial collapse or terminal illness? The Book of Job is a good entry-point. Three friends of Job counsel him to avoid hopelessness and bitterness arising from frustration regarding calamities. They do so on non-rational grounds. They argue that Job should ignore the evidence and instead blindly uphold the belief ‘God is just.’ However, such blindness permits magic, superstitions, and cultish beliefs. The specter of such beliefs is probably what prompted the fourth friend, Elihu, to dismiss the arguments of the three friends. Elihu reasons that one should be rational, i.e., acknowledge the evidence. This need not entail the conclusion ‘God is unjust’ – as God cannot perform miracles on a daily basis. That is, given the evidence, one cannot sustain hopeful beliefs that God will interfere and reverse the course of natural catastrophes and shocks from which humans, as well as other living beings, suffer. One at best can be patient, accept suffering considering worse counterfactuals. Based on Elihu’s critique of the arguments of the three friends, and building on Maimonides’s interpretation, this paper concludes that standard rational choice theory can explain patience, but not hope.

Why would decision makers adopt heuristics, priors, or in short “habits” that prevent them from optimally using pertinent information—even when such information is freely-available? One answer, Herbert Simon’s “procedural rationality” regards the question invalid: DMs do not, and in fact cannot, process information in an optimal fashion. For Simon, habits are the primitives, where humans are ready to replace them only when they no longer sustain a pregiven “satisficing” goal. An alternative answer, Daniel Kahneman’s “mental economy” regards the question valid: DMs make decisions based on optimization. Kahneman understands optimization not differently from the standard economist’s “bounded rationality.” This might surprise some researchers given that the early Kahneman, along with Tversky, have uncovered biases that appear to suggest that choices depart greatly from rational choices. However, once we consider cognitive cost as part of the constraints, such biases turn out to be occasional failures of habits that are otherwise optimal on average. They are optimal as they save us the cognitive cost of case-by-case deliberation. While Kahneman’s bounded rationality situates him in the neoclassical economics camp, Simon’s procedural rationality echoes Bourdieu’s “habitus” camp. To abridge the fault line of the two camps, this paper proposes a “two problem areas hypothesis.” Along the neoclassical camp, habits satisfy wellbeing, what this paper calls “substantive satisfaction.” Along the Bourdieu camp, habits satisfy belonging, love, and bonding with one’s environment, what this paper calls “transcendental satisfaction.”

This book brings together, for the first time, philosophers of pragmatism and economists interested in methodological questions. The main theoretical thrust of Dewey is to unite inquiry with behavior and this book's contributions assess this insight in the light of developments in modern American philosophy, social and legal theories, and the theoretical orientation of economics. This unique book contains impressive contributions from a range of different perspectives and its unique nature will make it required reading for academics involved with philosophy and economics.

The category “other-regarding preferences” is a catch-all phrase based on a self/other dichotomy. While the self/other might be useful when the motive is self-interest or altruism, it fails when the motive involves bonding. This article identifies three motives that involve bonding: i) the preferences regarding friendship and community; ii) the preferences that amalgamate communal bonding with self-interest; and iii) the preferences for distinction and status. These three types of preferences unify the self and other—usually aided by ceremonies of gift exchange and celebratory prizes. This article offers a more complete taxonomy of preferences and, corollary, structures of exchange.

This paper proffers a dialogical theory of decision-making: decision-makers are engaged in two modes of rational decisions, instrumental and existential. Instrumental rational decisions take place when the DM views the self externally to the objects, whether goods or animate beings. Existential rational decisions take place when the DM views the self in union with such objects. While the dialogical theory differs from Max Weber’s distinction between two kinds of rationality, it follows Martin Buber’s philosophical anthropology. The paper expounds the ramifications of the dialogical theory in understanding structures of exchange considering assessments of diverse thinkers.

ABSTRACTWhat is the source of the adulation of the rich-and-powerful? It cannot be benevolence. But then what is the criterion that delineates adulation from benevolence? This paper argues that the criterion resides in the set of inputs of the utility function: Does the set includes only interests, i.e. bundles of goods and resources? If so, the product is benevolence. But if the set includes aspiration, i.e. the desire to attain some imagined higher station, the product is adulation. Relying on Smith's theory, aspiration first amounts to the immersion of the self with the desired higher station. Second, aspiration becomes supplanted with adulation, the basking under the achievements of the more successful rich-and-powerful as second best, i.e. when the decision maker fails to attain the aspired station. The proposed interests-aspiration distinction, as the ground of the benevolence-adulation distinction, has one important payoff. The origin of the adulation of higher rank, and the consequent stability of the political order, should be traced to aspiration-derived inputs, not exclusively to interests.

This article advances what it calls the ‘Impossibility Result’: it is impossible to claim that the reduction of exploitation leads to the improvement of efficiency. The Impossibility Result is the inevitable result of the proposed conceptual difference between ‘injustice’ and ‘exploitation’. Injustice occurs when one member of a society deviates from the norms and the legal rules concerning how one should treat other members of that society. Exploitation occurs when one member of a society takes advantage of entities such wild animals, cattle, a field of vegetables, or other people that lie outside the boundary of that society. In many cases of exploitation, the exploited may derive some benefit, as in the case when enslavement is better than death. In other cases of exploitation, the exploited may derive zero benefit, called here ‘harm’, as in the case when a deer is hunted.

There has been no systematic study in the literature of how self-deception differs from other kinds of self-distortion. For example, the term ‘cognitive dissonance’ has been used in some cases as a rag-bag term for all kinds of self-distortion. To address this, a narrow definition is given: self-deception involves injecting a given set of facts with an erroneous fact to make anex antesuboptimal decision seem as if it wereex anteoptimal. Given this narrow definition, this paper delineates self-deception from deception as well as from other kinds of self-distortions such as delusion, moral licensing, cognitive dissonance, manipulation, and introspective illusion.

Rosen accuses conventional biology of abandoning its main challenge: the understanding of the nature of life. Biologists generally act subservient to physicists, handicapped by the Cartesian metaphor of the organism as machine. This allows biologists to eschew the issue of intentionality and finalism. The machine metaphor assures biologists that they do not need to appeal to laws other than the ones used by physicists. Rosen argues that the machine metaphor affords the reduction of the organism to its constituent parts.

Neo-Darwinism is based on the same principles as the Walrasian analysis of equilibrium. This may be surprising for evolutionary economists who resort to neo-Darwinism as a result of their dissatisfaction with Walrasian economics. As it is well-known, the principle of rationality does not play a role in neo-Darwinism. In fact, the whole (neo-)Darwinian agenda became popular exactly because it expunged the idea of rationality from nature, and hence, from equilibrium. It is less known, however, that the rationality principle is also not central in Walrasian equilibrium analysis. Therefore, if we find that the rationality principle must be central to the analysis of decision making of human and nonhuman organisms, we must advance organomics . Organomics is bioeconomics understood as the use of rational choice to the study of the behavior of human and nonhuman organisms. Organomics offers a different starting point than the one offered by neo-Darwinism.

This chapter offers a subtle but subversive thesis: There is no difference between everyday action and creativity and, consequently, evolution. This thesis is subversive. It goes against the dominant dogmas in economics (i.e., neoclassical theory) and evolutionary biology (i.e., neo-Darwinian theory). Both dogmas draw a radical divide between action and evolution. For neo-Darwinian theory, action is phenotype ultimately determined by genotype—while the genotype evolves according to another mechanism. For neoclassical economics, action is determined by rational calculation of the efficient allocation of given resources—while resources evolve according to another mechanism. To undermine the radical divide between the theory of action and the theory of evolution, this chapter shows how everyday action—from walking, fetching water, to fishing—is entrepreneurial at first approximation—and hence should be the basis of the theory of evolution.