Friday, 22 February 2013

The Yin and the Yang of the History of Economics

In his Psychological Types of 1920 Carl Jung asks,
Who does not know those taciturn, impenetrable, often shy creatures, who form such a vivid contrast to those open sociable, serene maybe, or at least friendly characters, who are on good terms with all the world? (p 413)
With this rhetorical question Jung launches his seminal dichotomisation of personality into Introverts and Extroverts; a dichotomy that is perhaps the most successful of all of such polarities, and one that has long been part of common usage.
Yet Jung’s conception of the antithesis is much more than the commonplace contrast between the gregarious and the reclusive. In Jung’s analysis the antithesis is at bottom about two contrary relations between the Subject and the Object. To put the difference in a single sentence: the Extrovert ‘discharges’ energy upon the Object, while Introvert draws charge from the Object. Thus, to use his illustration, the extrovert sees that the weather is freezing, and puts on a coat to go outside. The introvert sees that the weather is freezing, and - fired up by the resolution that he must harden himself - goes outside without a coat. The extravert dislikes cold weather and so battles it; the introvert dislikes cold weather and soaks it up. The extrovert acts in way that directly corresponds to objective conditions; while the introvert’s acts in an indirect, and seemingly less effective, relation to objective conditions.
What makes Jung’s analysis so interesting to the student of economics is that he applies it to thought as well as action. Jung maintains, in other words, that from the different orientation of the two types to ‘the without’ there arises an extrovert ‘cognitive style’ (as we would say today) distinct from the introvert cognitive style.
The difference in the cognitive styles is partly manifested in the more obvious social aspects of the intellectual existence. The extravert thinker, says Jung, ‘begins to publish very early, becomes rapidly famous ... He cultivates personal relationships ... [and] takes an unusual interest in the development of his pupils’. The introvert, in contrast, feels a ‘distaste for teaching’, and because of his ‘absolute need to stand without error or blemish in the public eye ...  his style is loaded and complicated by all sorts of accessories’. His melancholy fate is often a misanthropic isolation.
But Jung also pursues the more truly intellectual biases of Extroverts and Introvert thinking. His position on these might be best brought out in reviewing his procession of examples. 
In keeping with the fundamental importance he attached to the antithesis, Jung traces manifestations of the dichotomy back to the beginning of Western thought: Plato, he surmises, was an introvert, while Diogenes was an extravert. Plato’s disregard of the external world as mere ‘shadow’ is obviously introverted, and the hard-bitten ‘here and nowness’ of Cynicism seems extrovert in its heed of externals.
Jung deems Christian theology to be richly illustrating of the impact the extravert/introvert dichotomy has on doctrine. Jung identifies the Ebionite tendency in Christology – that Jesus was human, and any divinity an illusion – as extravert; the Docetist tendency - that Jesus was divine, and any humanity an illusion – is introvert. Perhaps the most piquant of Jung’s contrasts is between two Church Fathers: Tertullian and Origen.  Origen is pure extrovert: all that “extensive journeying ... constantly surrounded by pupils and a whole host of stenographers who gathered up the precious words  that fall from the revered masters lips”. Tertullian’s polemical posture, by contrast, is pure introvert: as introvert does not necessarily mean ‘quiet’, and to Jung’s mind ‘affect-explosions’ (wonderful phrase!) are telltale give-away of introversion.  But Jung clinches the difference by reference to the two men’s modes of Christian sacrifice. Origen, notoriously, sacrificed his body: Tertullian sacrificed his mind. ‘To believe because it is absurd’: this was Tertullian’s notorious maxim, and in holding it he was making a perfect sacrifice of mind. Of course, it is mind (inward) rather than body (outward) that would constitute sacrifice to an introvert.
By obvious reasoning the Nominalist metaphysicians of the middle ages are judged by Jung to be introverts, while the Realists were extrovert. Luther was extrovert, and Zwingli introvert: the doctrine of the Real Presence that Luther maintained was a characteristically extrovert example of concretising the abstract; while Zwingli’s symbolic interpretation was introvert example of abstractising the concrete.
The contrast does not fade with the secularisation of thought. Darwin, Jung says, was extrovert: all that omnivorous roaming around the whole realm of knowledge. Kant was introvert. Humphry Davy, the rock-star showman of the laboratory was evidently extrovert; and Faraday, the oddball seer of the invisible physical world, was Introvert.  Georges Cuvier was  extrovert, and Friedrich Nietzsche introvert.
Jung, regrettably, never used economics to illustrate the contrast. Can one successfully identify the dichotomy among the famous economists?  Let me try.
Of the classical economists Adam Smith (1723-1791) is plainly an introvert; and David Hume (1711-1776) an extrovert. The allocation is so obvious from their characters that it hardly craves justification. But notice that Hume’s flamboyant aphorism that ‘reason is the slave of passion’ distinctly correlates with Jung’s contention that extroversion inclines to make thinking the slave of feeling (Jung’s words); since thinking impedes feeling, and so obstructs that discharge of ‘psychic energy’ on the object.  
Of the Ricardians, J.S Mill would seem fall into the introvert category on account of his aloofness from the common herd, while the uninhibited sociality of Jeremy Bentham (1748-1832), David Ricardo (1772-1823) and T.R. Malthus (1766-1832) seem fairly definitely extroverted.
The neoclassical economists H.H. Gossen (1810-1858), W.S. Jevons (1835-1882) and Vilfredo Pareto (1851-1923) are definite candidates for introversion. Jevon’s copious and earnest diary keeping is a dead give-way; while Pareto’s mysteriousness and misanthropy encourage the same diagnosis. Gossen’s ‘broad’ interests (painter, insurance salesman, musicologist, civil servant ....)  by Jungian  criterion would suggest extroversion. But his acute mental solitude suggests the reverse:  not to mention a literary style was so ‘tortuous that even Germans have trouble reading it’’ (falseMeijer and Vogel 2000).

Other neoclassical seem to provide some pairs of opposites.  Knut Wicksell (1851-1926) and Phillip Wicksteed (1844-1927) were doctrinal allies who occupied opposite positions psychologically . Wicksell’s gauche manners, drastic religious fluctuations, and clumsy public stands contrasts with Wicksteed’s ‘extraordinarily broad range of scholarly and theological explorations’, his longtime dedication to adult education,  and his dextrous forays into public life.

Another contrast of neoclassical economists well illustrates the cognitive implications of the dichotomy. I refer to  the two combatants of capital theory: John Bates Clark (1847-1938) and Eugen Böhm-Bawerk (1851-1914). On one side Clark, ‘simple and childlike" (in the words of one eulogist); and on the other Böhm-Bawerk,  president of the Austrian Academy of Science, a  member House of Peers,  ambassador to Germany, and three times Minister for Finance. His pedagogical texts are fluent, persuasive and very much directed to ‘without’, be it Clark, Marx or the literally one hundred other authors he took on. By contrast Clark’s ‘students would often try to induce him to accept or refute Böhm-Bawerk's theory of the dependence of the interest rate on the undervaluation of the future. Clark would merely re- state ... his own productivity theory of interest’. (Jonson 1938). This quote is so starkly illustrative of Jung’s contention of the defective self-absorption of introvert teaching that Jung could have well added it to his own store of instances.
But there is another more intellectually significant contrast between Clark and Böhm-Bawerk; one that concerns their relative aptitude, and incapacity, for ‘theory’ and ‘parable’  Böhm-Bawerk was talented at presenting parables, but never managed to articulate his notions in abstract theory. With Clarke it was the reverse; his thought reclines in cloudy abstraction and never condenses on the concretely illustration. Clark, of course, had a doctrinal aversion to thinking of capital in terms of a concrete array of pick and shovels etc, and was father of the ‘neoclassical aggregate production function’; Böhm-Bawerk’s theory of ‘roundaboutness’ was brought to life by a suite of stories about woodcutters, fishermen, etc.  This contrast seems to manifest a difference emphasised by Jung: that extroverts are given to ‘concretising’ the abstract, while introverts are attached to abstracting from the concrete.
In the 20th c Keynes flagrant personality obviously conflicts with the secretive and enigmatic Marshall: the first flinging aphorisms and essays at the public; the second devoting his prime of life to clot, from his bathchair, the pages of his Principles with ever more footnotes and qualifications.  From about the same period (see Coleman, Cornish and Hagger 2006) a similar contrast can be drawn from the antipodes:  between the blatant D.B Copland and the remote and massive L.F. Giblin. (Copland’s periodic collapses corresponds well with Jung’s contention that extroverts are susceptible to ‘hysteria’). It was perhaps not accidental that it was a protogé of Giblin – Arthur Smithies – who perceived that J.A. Schumpeter (another diarist) was an essentially solitary figure.  ‘No one was invited to share Schumpeter’s intellectual life’, Smithies observes. ‘He made his intellectual journeys alone’. Smithies added, ‘To explain his personality I am convinced we have to go back to his earliest childhood and recall that he spent most of his first 10 years as the only son of a young widowed mother’. The only son of a young widowed mother?  Precisely Adam Smith’s predicament ...
In the post-War generation Milton Friedman is obviously extrovert; all that globe-trotting, the high media profile, the sunny demeanour. Ronald Coase serves to illustrate the introvert; the sheer individuality of his contribution, his oblique exposition of his ideas, the vinegary presentation, the overall maverick aspect.    
But what in summary is the difference in cognitive style? The above would suggest that the essence of introvert thinking is a hankering after the abstract, while the extrovert embraces concrete. But Jung declares in rebuttal,
Extroverted thinking, therefore, need not necessarily be concretistic thinking – it may equally well be ideal thinking, if, for instance it can be shown  that the ideas with which it is engaged are to a great extent browed from without and transmitted by tradition and education
‘From without’ : there lies what critically distinguishes extrovert style from introvert style . And to Jung the key application of this critical distinction is in Judgement, the great end of thinking.
‘whether or not thinking is extroverted hangs directly upon the question: by which standard is its judgement governed ... from without , or is its origin subjective?’  (p 429)
The upshot, therefore, is that the essence of extrovert cognitive style is a favour of public (‘scientific’) methods of evaluation.  Introvert cognitive style inclines to appeal to intuition and insight in methods of evaluation.
Not surprisingly, Jung sees dangers in both tendencies pushed to far. Jung believed extrovert intellectual products risk yielding a ‘stale and hollow positivism’. To add to the indictment he suggests extroversion risks transforming reason into sophistry; morality into Pharisaism; religion into superstition; and intuition into ‘mere personal subtlety’. But at the same time Jung complains that the introvert forgets the point of thinking, and ‘creates theories for the sake of theories’.
Jung expresses the failings of both styles in parody: whereas the Extrovert argues ‘It is therefore it is’, the Introvert argues ‘I think therefore I think’.
Jung seems even handed in judging the two cognitive styles, is uninterested in awarding a superiority to one or the other, and at various points presses their complementarity; extrovert style lends ‘breadth’, while the introvert lends ‘depth’.
Perhaps the greatest contribution of Jung’s notion is not to award victory to one style, or to secure a bland peacemaking between the two, but to heighten our consciousness of the dependence of the apparently logical on the psychological, and thereby foster a intellectual scepticism in both ourselves and others.

Coleman, William 2007, ’Arthur Smithies’, Biographical Dictionary of Australian and New Zealand Economists, J. King ed, Edward Elgar, U.K.

Coleman, William, Selwyn Cornish and Alf Hagger 2006, Giblin’s Platoon: The Trials and Triumph of the Economist in Australian Public Life ¸ANU EPress, Canberra,

Jung, C.G., 1924 (1920),  Psychological Types,  London.

Meijer, Gerrit and Richard F.A. Vogel 2000, "The fate of new ideas: Hermann Heinrich Gossen, his life, work and influence", Journal of Economic Studies, 27 (4/5), 416 – 420.

Johnson, Alvin 1938, ‘Memorial to John Bates Clark, 1847-1938’ American Economic Review, 28(2), 427-2.