By Vernon L. Smith and Bart J. Wilson
While neoclassical analysis works well for studying impersonal exchange in markets, it fails to explain why people conduct themselves the way they do in their personal relationships with family, neighbors, and friends. In Humanomics, Nobel Prize-winning economist Vernon L. Smith and his long-time co-author Bart J. Wilson bring their study of economics full circle by returning to the founder of modern economics, Adam Smith. Sometime in the last 250 years, economists lost sight of the full range of human feeling, thinking, and knowing in everyday life. Humanomics shows how Adam Smith's model of sociality can re-humanize twenty-first century economics by undergirding it with sentiments, fellow feeling, and a sense of propriety - the stuff of which human relationships are built. Integrating insights from The Theory of Moral Sentiments and The Wealth of Nations into contemporary empirical analysis, this book shapes economic betterment as a science of human beings.
Table of Contents of Humanomics
- Humanomics Spans the Two Worlds of Adam Smith
- Words and Meaning in Adam Smith's World
- Conduct in the Social Universe
- Frank Night Preemptively Settles the Horse Race
- Axioms and Principles for Understanding Human Conduct
- Propositions Predicting Context-Specific Action
- Propriety and Sympathy in a Rule-Governed Order
- Trust Game Discoveries
- The Ultimatum Game as Involuntary Extortion
- Designing, Predicting and Evaluating New Trust Games
- Reconsidering the Formal Structure of Traditional Game Theory
- Narratives in and about Experimental Economics
- Adam Smith's Program for the Study of Human Socioeconomic Betterment
Blaž Remic on Erasmus Journal for Philosophy and Economics wrote:
"Smith and Wilson combine insights from their experimental economics research with insights about human character from Adam Smith’s Wealth of Nations and especially his 1759 book The Theory of Moral Sentiments. Not only are the two Smith’s systems compatible, they make each other stronger. Adam Smith’s insights into how empathy drives human behavior turn out to be confirmed by today’s game theory and empirical lab experiments. Rather than the hyper-rational Homo economicus who lives only in textbooks and on blackboards, Both Smiths and Wilson are more interested in Homo sapiens, a much more subtle and demanding subject. Their choice of title is a good one.
Maria Pia Paganelli on The Library of Economics and Liberty wrote:
"In their book Humanomics Vernon Smith and Bart Wilson (henceforth S&W) challenge explanations based on social preferences - together with the standard assumptions of the utility maximization (‘MaxU’) paradigm in general—and propose their own account based on the insights from Adam Smith’s The Theory of Moral Sentiments. [...] we can differentiate between at least three different approaches to humanomics. The first one incorporates the shortcomings of human nature and rationality [...] This is also the approach of mainstream behavioral economics. [...] Another approach to humanomics is about the impact of economic activity on the social fabric, (psychological) well-being, and the inner moral core of human beings who participate in it [...] While in the first case humanity entails imperfection, in the second it suggests a virtuous, but somewhat fragile, character of the human nature facing potentially corrupting effects of market institutions. [...] S&W belong to a third stream, as does Deirdre McCloskey. Here, humanness is not about bounds on rationality or some inner trait, but about living and interacting with others in the social world. [...] the exclusive focus on the Smithian framework hides an omission that is perhaps the hardest to understand: the complete neglect of recent and complementary developments in sociology. [...] Does the book succeed? It does, by pointing us in the right direction. But it is not - and probably S&W would agree that it should not be - a definitive statement on humanomics. [...] This book presents a compelling case of what the theoretical core of humanomics could look like, and an ambitious invitation for scholars to rally around this core and further develop the approach by building on the rich tradition of social and economic theory of the past to answer twenty-first century problems."
Michael D. Thomas on Journal of the History of Economic Thought wrote:
"this book by Vernon Smith and Bart Wilson can be read as an attempt to reintroduce the human component into economics. It can be read as a criticism of modern economics and as the presentation of a substitute for it. It can be read as a modernization of Adam Smith, the 18th century father of economics and professor of Moral Philosophy; or as a book about experimental economics. It is all of this and much more. [...] Smith and Wilson rely heavily on Adam Smith in the definition of this new model of understanding of human conduct. It is impossible to ignore their reliance on Smithian language and texts to explain their experimental findings and their open and constant reminder that most of what they are saying was said earlier by Smith. But what is striking to me is that they are also Smithian in their method of analysis. And that is why I think this is (mostly) a book about learning. [...] The feelings they refer to are the Smithian feelings of gratitude and resentment. They allow us to develop 'rule-following adaptation to learning from other social experience,' and to move from outcome-based models to models that understand circumstances and proper rules of conduct within them. In this sense Humanomics could be easily retitled 'The principles which lead and direct philosophical enquiries; illustrated by the history of economics.' Early in the history of economics, models had more explanatory power than models developed later; this book represents a call for us to go back to the original models after a long detour. I see Smith and Wilson writing with both the enthusiasm of curious children and the precision of experienced scientists. The book is captivating and well-written. It is accessible both to educated readers and to specialists. It is a must-read for anybody interested in social sciences."
"The book does many things and all of them are done well. It is a scholarly tome that challenges the reader, it is a careful analysis of the texts of Smith’s Theory of Moral Sentiments primarily, and The Wealth of Nations, secondarily. Important for doing the task Smith and Wilson set out in this book are long discussions of how word use has changed Since Adam Smith’s time. The book does more than a scholarly dive. It reports on the experiences of two very careful researchers and how their findings in the laboratory brought them to seek a new perspective on human sociability that was currently neither part of neoclassical economics, nor fully represented in behavioral economics. In short, the use of primary sources in this book illustrate how Adam Smith was thinking more comprehensively about the space of exchange and social life than most heterodox economists of today. This discussion of Adam Smith forms the theoretical or methodological background presented in the book’s methodology, the years of experience the authors have in the lab forms the basis for an empirical puzzle, and the two come together nicely to form the storyline presented in this book. Together, they create a synthesis that challenges the reader to expand their ideas about the scope of economics as a discipline and how economics can be done with broader anthropological considerations. [...] The only obstacle to reading this book is also one of its major strengths: Smith and Wilson master the existing scholarship about Adam Smith, which might appeal the most to scholars in history of economic thought. The discussions of linguistics, behavioral economics, and experimental economics contributed much to my understanding of why Adam Smith remains important. The authors took care to write for a broad audience, but the readership that is prepared to get equal insight from all of these sections is rare. The good news is that each part of the analysis is worthy of reading the book on its own. There is enough scholarly material here to provide discussion material for reading group or the classroom. It is also a worthy addition for anyone seeking insight into the continued development of economic methodology."
About Vernon L. Smith and Bart J. Wilson
Vernon L. Smith is George L. Argyros Endowed Chair in Finance and Economics and Professor of Economics and Law at Chapman University. He was awarded the Nobel Prize in Economic Sciences in 2002 for his groundbreaking work in experimental economics. Dr. Smith has authored or co-authored more than 300 articles and books on capital theory, finance, natural resource economics and experimental economics. He serves or has served on the board of editors of the American Economic Review, The Cato Journal, Journal of Economic Behavior and Organization, the Journal of Risk and Uncertainty, Science, Economic Theory, Economic Design, Games and Economic Behavior, and the Journal of Economic Methodology. He is past president of the Public Choice Society, the Economic Science Association, the Western Economic Association and the Association for Private Enterprise Education. Previous faculty appointments include the University of Arizona, Purdue University, Brown University, the University of Massachusetts, and George Mason University, where he was a Professor of Economics and Law.
Bart J. Wilson is the Donald P. Kennedy Endowed Chair in Economics and Law at Chapman University. He is a founding member of the Economic Science Institute and founding member and Director of the Smith Institute for Political Economy and Philosophy. His research uses experimental economics to explore the foundations of exchange and specialization and the origins of property. Another of his research programs compares decision making in humans, apes, and monkeys. Bart has published papers in the American Economic Review, Proceedings of the National Academy of Sciences, Proceedings of the Royal Society B: Biological Sciences, and Nature Human Behaviour. His research has been supported with grants from the National Science Foundation and the Federal Trade Commission.