DESCRIPTIVE AND NORMATIVE EXPLANATIONS OF ECONOMIC

BEHAVIOUR: ECONOMISM AND CULTURALISM

By Anani Marius, Cirstea Alexandru, Constantin Ioan

The field of economics began as a branch of moral philosophy during the

Enlightenment in the 18th century. Adam Smith considered the founding father of
economic theory, focused on finding rational solutions for moral and ethical issues.
Smith's first major work, The Theory of Moral Sentiments, published in 1759, delved
into the intersection between ethics and economics. His second book, An Inquiry into
the Nature and Causes of the Wealth of Nations (1776), is known for the "invisible
hand" theory, which argues that if individuals pursue their self-interest, the outcomes
for society will be positive. Despite modern scholars misconstruing the "invisible
hand" as the essence of Smith's thought and promoting self-interest and profit-
seeking, Smith's work was empirical and descriptive rather than apologetic. He
observed that people have a natural tendency to trade, leading to the division of
labor, greater prosperity, and an increase in order in society. Contemporary
economics has become a deductive and normative science, while economic
anthropology has taken on the task of describing economic behavior more
descriptively.
The self-interested model is based on the fulfillment of personal benefits. The
actor becomes homo economicus, a person that is driven by his own needs. This
was thought to be the best economic alternative, as each acting on their self-interest
will push society to create goods and services that benefit both consumers and
producers.
This way of thinking quickly became a liability for anti-utilitarianists, which
considered that this economic model became “an overwhelming influence and even
imperialism in all contemporary social sciences”. Allain Caillé, a French sociologist,
through his publishing work, tried to push away people from this ideology, although
his work was only considered “a critical work on the intellectual and political mutation
that had occurred in the West in the years 1970-1980” (A. Caillé, “Ouverture
Parisienne”, Revue du MAUSS, 2010/2, no. 36, p. 25–33). What he referred to as
“ouverture maussiene” or maussian opened refers to the idea that economic
exchange is not just a matter of rational calculation of self-interest, but is also deeply
rooted in social and cultural contexts. This concept is based on the work of Marcel
Mauss, a French sociologist who argued that gift exchange was a fundamental
aspect of social life. According to Caillé, economic exchange is not just about
maximizing individual self-interest, but also involves a reciprocal relationship
between individuals and a sense of obligation to others. This means that economic
exchange cannot be simply reduced to how well it benefits both parties that engage
in the process of transaction but is also related to building social connections and
relationships. In practice, ouverture meussiene means that economic exchange
should be understood in the context of social and cultural norms, rather than just in
terms of market transactions. This requires a shift in thinking away from a purely
economic perspective and towards a more social and anthropological perspective.
Utilitarian economism got its momentum from the work of the Chicago School
of Economics, and especially of the leading figure of this movement, the Nobel Prize
laureate (1992), Gary Becker, one of the most original economists of the late
twentieth century. His unique take on the economy led to many new areas of
specialization within economics – the economics of crime and punishment, the
economics of addiction, the economics of the family, human capital theory, and the
economics of discrimination. He applied the rational economic model to a large
number of social problems normally not studied by economists. His two key
contributions include developing the notion of human capital and applying rational,
economic behavior to non-economic related matters.
Becker tries to break free from the curse of capitalism, considering that
individuals are not solely motivated by selfishness or material gain, but also by
satisfying the needs of the society in which they live. His perception of society is
centered around the constant flow of change and variables that might occur in
economic exchange. In his analysis of marriage decisions and family relationships,
Becker states that individuals spend time searching for a spouse who will provide
them with the maximum amount of utility. Longer searches lead to better information
about whether any spouse would be the most desirable one. This falls short of the
“revolutionary thinking” that Becker tries to promote, as it can be reduced to the
principles of capitalism. Comparing choosing a spouse to a firm choosing the best
suitable employee is the most capitalist thing to do. He then continues to say that like
a firm wanting to maximize profits, a family can maximize utility through
specialization; thus, the husband typically specializes in market production and the
wife specializes in household production. Moreover, all his statements regarding the
time and resources sacrificed to raise a child can also be easily classified as
capitalist thinking.
According to Caillé, this ideology proves the beginning of the reign of homo
oeconomicus. By adopting Rational Action Theory (which states that individuals act
rationally and make decisions based on logical calculations of the costs and benefits
involved in any given situation), society makes a big step toward neo-liberalism,
which is nowadays triumphing as well in academic economic science as in the real
world. The simplest thing for the economic man to remember is that, according to
Marcel Mauss, primitive, archaic, and traditional societies are not fundamentally
utilitaristic, but rely also on the triple obligation to give, take and return, namely the
obligation to display one’s generosity. This theory proves that man has not always
been an economic animal, but as time passes he will become just that.
The second model discusses the moral model of human behavior and its
relationship to the development of capitalism, with a focus on the work of Max
Weber. Weber's "Protestant Ethic" thesis argues that the religious ethic of Calvinist
Protestantism strongly influenced the birth and development of capitalism in
Western, especially Northern countries, with the Puritan work ethic playing a crucial
role in the growth of capitalism. Understanding the role of religion in shaping
economic behavior requires examining the religious beliefs and values that
distinguish various Christian confessions, and how they have impacted economic
activity over time.
We discuss four main Christian denominations: Catholicism, Lutheranism,
Calvinism, and Puritanism.
Catholicism: Catholics are a branch of Christianity that emphasizes the authority of
the Church, the sacraments, and the importance of good works as a means of
salvation. Catholicism has a hierarchical structure and places a strong emphasis on
tradition and ritual.
Lutheranism: Lutherans believe in the importance of faith in Jesus Christ for
salvation and the authority of the Bible as the sole source of religious authority.
Lutherans also believe in the priesthood of all believers, meaning that every
Christian has direct access to God without the need for intermediaries.
Calvinism: Calvinism is a branch of Protestantism that emphasizes the sovereignty
of God, the doctrine of predestination, and the importance of good works as
evidence of salvation. Calvinists believe that individual worldly success is a sign of
divine favor and that economic success is a means to heighten one's self-confidence
and identify those who are blessed. Instead of working hard to become a good man
like in Catholicism, in Calvinism, you work hard to keep being the perfect and saved
man you hope you’re destined to be. If you do bad, this means that it’s a sign you’re
bad from the beginning and doomed to eternity, so you fight to keep demonstrating
you were born worthy. This creates a strong work and moral ethic.
Puritanism: Puritanism is a religious and cultural movement that emerged in
England in the 16th century as a response to corruption within the Church of
England. Puritans sought to "purify" the church and emphasized the importance of
personal religious experience, the doctrine of predestination, and the importance of
the Bible as the sole authority for religious belief and practice. Puritans believed in
hard work, thrift, and the reinvestment of profits, all of which were crucial for the
growth of capitalism.
In summary, Calvinism and Puritanism played a significant role in the creation
of capitalism by promoting a set of values and attitudes that were favorable to the
growth of capitalist societies. The emphasis on hard work, thrift, and the
accumulation of wealth, along with the belief in individual worldly success as a sign
of divine favor, provided the foundation for the development of modern capitalism.
The Puritan work ethic, with its emphasis on self-discipline and individualism, helped
to create a culture that valued economic success and innovation.
In conclusion, the debate between economism and culturalism can be
considered a manifestation of the formalist and substantive perspectives in economic
anthropology. The dispute originated in Karl Polanyi's distinction between the formal
and substantive meanings of economics, which highlighted the fact that the two
original meanings of the term are heterogeneous. The formal meaning presupposes
a set of rules that determine the choice between alternative uses of scarce
resources, while the substantive meaning does not necessarily presuppose choice or
scarcity of resources. Polanyi argued that only by adopting the substantive meaning
of 'economic', we will be able to provide the social sciences with the necessary
categories for an investigation of all real economies of the past and present. This led
to the birth of a new school of thinking in economic anthropology, the so-called
‘substantive’ orientation. Unlike substantives, formalists adopted an individualistic
methodology because their interest is always directed to the problem of choice, and
choice is seen as a rational individual agent’s action, so attention is now directed to
individual behavior, not institutions. The controversy between the two orientations
can be characterized as methodological opposition.