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Maximization Is Fine—But Based on What Assumptions?

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  • Eric B. Rasmusen

Abstract

The Prologue to this issue discusses how the flatness of economics leaves out aspects of reality that do not fit neatly into its formulations. I agree that much is left out, but I am not so sure methodology is to blame. Rather, the omission is caused by our restriction of economic methodology to particular assumptions about reality. In this essay, I first show that something like utility maximization has long been present in Christian theology. To be sure, economics is ‘flat’ in its style and, unlike religion, excludes by custom certain scholarly tools which would complement the flat approach. I argue, however, that the essential difference is that some religions, in particular Christianity, take their start from belief in factual assumptions that economics ignores.

Suggested Citation

  • Eric B. Rasmusen, 2014. "Maximization Is Fine—But Based on What Assumptions?," Econ Journal Watch, Econ Journal Watch, vol. 11(2), pages 210-218, May.
    • Handle: RePEc:ejw:journl:v:11:y:2014:i:2:p:210-218
    as

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    References listed on IDEAS

    as
    1. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467-467.
    2. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    3. Sen, Amartya Kumar, 1970. "The Impossibility of a Paretian Liberal," Scholarly Articles 3612779, Harvard University Department of Economics.
    4. Sen, Amartya, 1970. "The Impossibility of a Paretian Liberal," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 152-157, Jan.-Feb..
    5. Rasmusen, Eric, 1998. "The Economics of Desecration: Flag Burning and Related Activities," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 245-269, June.
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    More about this item

    Keywords

    Economics; religion; God; happiness; utility maximization; Calvinism; rhetoric;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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