Maybe Studying Economics Does Not Make You Selfish

The relationship between studying economics and selfish behavior has been a topic of debate and speculation.

While some may assume that the principles of economics inherently promote self-interest, it's crucial to consider the diverse perspectives within the field and the individuals studying it.

One common concern or complaint about studying economics is that by taking the position that people make choices and respond to incentives, the discipline is in effect advocating that people pursue self-interest–rather than just acknowledging that in many contexts, from looking for a higher-paid job to buying what’s on sale at the grocery, people do act in these ways. Moreover, the complaint continues that when economics advocates self-interest, it will shape the pliant minds of impressionable students, leading them to wear “Greed is Good” t-shirts next to their hearts rather than becoming responsible citizens.

Gathering evidence for or against this claim is tricky. Just comparing economics majors to those in other disciplines won’t prove that studying economics caused anyone to change their level of selfishness, because it’s quite possible that those who already tended to selfishness were more likely to seek out the haven of economics in the first place. In addition, a simple survey that asks about feelings of selfishness isn’t the best approach either, because it is possible that a class in economics might lead people to be more willing to admit selfish motives, while not actually changing their behavior. A researcher needs a way to measure the degree of selfishness–preferably a way revealed by actions, not by words.

Daniele Girardi, Sai Madhurika Mamunuru, Simon D. Halliday, and Samuel Bowles dig into the topic in “Does studying economics make you selfish? (Southern Economic Journal, forthcoming, published online November 23, 2023). They point to some previous studies on the subject, and a few years back I pointed to a review of such studies as well. Here is the Girardi et al. group on some previous evidence:

A much smaller set of articles has addressed our question, namely, is there a causal effect of the study of economics on social values and policy preferences? Two identification strategies have been deployed. The first is to observe students’ attitudes or behavior over time, contrasting those in economics courses with those taking other courses. Frey and Meier (2003) study (real-world) giving behavior of students in economics and other courses over their period at university. They find no evidence that studying economics reduces contributions. Bauman and Rose (2011), using a similar design, find no evidence that taking economics courses reduces the contributions of economic majors to a public interest group. However, they find a negative effect on the contributions of non-economics majors who take economics courses.

The second strategy is to implement a controlled experiment, briefly exposing randomly selected subjects to economic concepts or language, and a control group to an exposure that is otherwise similar but unrelated to economics, and then observing the difference in the before-after measures of interest. Ifcher and Zarghamee (2018) randomly assign some experimental subjects to the treatment—economics exposure—by means of language affirming “(1) that all individuals are self-interested and (2) that all individuals attempt to maximize their payments.” Subjects then play incentivized games. The authors find that compared to subjects exposed to non-economic language, the exposure to economics shifts behavior towards self-interest. In another experiment, Molinsky et al. (2012) asked mid-career business leaders acting as “managers” to convey to a “subordinate,” some bad news, for example reassignment to an undesirable location or dissatisfaction with the subordinate’s job performance. Immediately prior to this, managers had been randomly selected to create a sensible phrase from a scrambled bunch of words, some of which contained economic content (e.g., in unscrambled form: “analyse costs and benefits”), and some that did not (the control). In communicating the bad news to the subordinate the managers who had been exposed to the economic words experienced less empathy and conveyed less compassion to the subordinate than did those in the control group.

The Girardi et al. study is based on an online survey given to students in five classes at the University of Massachusetts-Amherst at the beginning and end of the semester. They write:

We administered an online survey at the beginning and at the end of the semester to a group of undergraduate students enrolled in four intermediate microeconomics courses and one non-social science course. The survey includes questions on personal characteristics and policy preferences, and four economic games with real monetary stakes—a Trust Game (TG), a Triple Dictator Game with charities (DG), and two belief elicitation questions about the behavior of others in the same games. We use these to obtain individual-level measures of “deviation from self-interest” due to generosity (DG) and reciprocity (TG), and beliefs about the social preferences of others. …

The economics students in our sample start the semester with a more favorable opinion of market competition and relatively more conservative policy views, and display lower generosity and higher reciprocity in experimental games. But other than economics students being substantially more “pro market,” these effects of differential selection into economics are relatively small and imprecisely estimated. We found little to no causal effect of studying economics on social preferences and beliefs about other people’s social preferences. Differences in these outcomes between economics students and the control group did not change during the semester, and are also unaffected by the content of the economics course. We find no effect on an aggregate “left–right” measure of political positions, nor on views of markets, government intervention, and green policies. The sole evidence of a substantial effect is that economics students come to express less opposition to a highly restrictive statement about immigration policy.

I’m not overly confident that any of these studies on whether economics causes selfishness should be treated as dispositive. But the empirical evidence that does exist for the claim seems weak.

As Girardi et al. point out, economics is not purely about selfishness. As they write:

We outlined at the outset a line of reasoning that might lead us to affirm the commonplace view that studying economics leads to more self-interested behavior. But there are also cogent reasons to expect the opposite. Montesquieu, Voltaire, Smith and other 18th century thinkers held that markets promote honesty and cooperativeness towards others, and that these predispositions are as important as self-interest in making markets work. Students in today’s economics courses might well marvel that in markets, even when interacting with total strangers, adherence to social norms of respect for others’ property rights and reciprocating goodwill (e.g., not stealing the other’s goods) can be the basis for mutually beneficial exchange. Exposure to this message could promote social preferences as well as self-interest.

When thinking about economics and selfishness, I also remember the comment from John Stuart Mill arguing that selfishness should be viewed as a natural force, like gravity or the wind. Mill wrote:

The same persons who cry down Logic will generally warn you against Political Economy. It is unfeeling, they will tell you. It recognises unpleasant facts. For my part, the most unfeeling thing I know of is the law of gravitation: it breaks the neck of the best and most amiable person without scruple, if he forgets for a single moment to give heed to it. The winds and waves too are very unfeeling. Would you advise those who go to sea to deny the winds and waves—or to make use of them, and find the means of guarding against their dangers? My advice to you is to study the great writers on Political Economy, and hold firmly by whatever in them you find true; and depend upon it that if you are not selfish or hard-hearted already, Political Economy will not make you so.