Ted Fischer talks about how people act financially and how they behave romantically and how those two behaviors are opposed to each other, often needlessly.
Question: Does love play a role in our economic decisions?
Ted Fischer: I think love does play an important role in our economic behavior. And it’s something that we don’t allow. I think that the dominant model of human behavior is based these days, is based on economic behavior that we’re relational, that we’re self-interested, and we’re never surprised by self-interest, or selfishness. If we read a headline of an executive that fudged the books and took a big payout, we’re not that surprised. We may be disappointed, but we’re not that surprised. And it’s because we have this notion that in economics and in all aspects of our lives we’re looking out for number one. We’re selfish, rational actors. And yet, love is opposite of self-interest. It’s the exact opposite. And so how -- and yet, none of say that love isn’t important in our lives either. So how then can we incorporate a consideration of love, of concern for others, into our economic behavior? And I think that this is really important. And in fact, we’re seeing now a lot of this neurological research in this evolutionary biological research that is said we’re self-interested, and even love is a way of promoting our reproductive success. We’re seeing now that maybe empathy is also as deeply ingrained as self-interest, and that compassion, and these would have real evolutionary advantages as well. Again, think of, you know, naked humans on two legs, who can’t run very fast living out in the African Savannah 10,000 years ago. We needed to bond together, and not just men, and women, and babies, but groups of people. And so, maybe empathy is as deeply ingrained in our evolutionary history as self-interest is. And in fact, we can see this in -- there are mirror neurons in our brains, and so when we look at another person’s face there are empathy neural networks that get activated, that are very, very important. And so, this means that we are connecting with another person, and we feel for that other person. Adam Smith, is often considered to be the patron saint of economics, and his invisible hand that we looking out for our self-interest we unwittingly pursue the interest of everyone. But what we forget very often is that Smith was also concerned with other interests. Sympathy, the way in which we treat other people, and he very explicably said that we gain satisfaction from seeing other people be satisfied as well, be happy. And we sometimes forget this in our economic equations.
Question: How does compassion relate to consumption?
Ted Fischer: Well actually, I think, we can see it manifesting itself today in consumer behavior. Some of the fastest growing areas in the retail trade these days are in fair trade products, for example, fair trade coffee. You go to the coffee shop, are you willing to pay an extra quarter for this cup of coffee that is fair trade? Now why is that? Now might say you just want to show your status and, “I’ve got plenty of money. I’ll just buy the fair trade coffee.” But I think there’s something deeper there. Very often in these same coffee shops there will be photos up of the people who are harvesting this coffee, be it in Colombia, or Hawaii, or New Guinea. And so, I think that people want to feel a connection with those who are making the coffee, and feel like they’re really helping improve their lives as well. And I would say that’s a form of love. Not romantic love, but it is a form of love. And we’re willing to put our money where our mouth is. Put our money where are feelings are very often in doing that, buying fair trade coffee, buying ecologically conscientious products, which is another really huge growth area these days. So I think we do a lot of this. I think we express love through economic transactions. You can even say that when you go shopping for your family at the grocery store that’s a form of love as well. We tend to diminish love in economics from both directions, both the power of love and economic decisions, but also when we use economics to pursue love. Are you just buying love? But I think when we a gift for someone it’s more than just the economic transaction. There’s really a part of ourselves in that. And not just a gift, cereal for breakfast the next day. It’s a way of expressing love economically.
Question: Is love a selfish act?
Ted Fischer: love is the opposite of self-interest. Love is also not rational. And so, if we think of humans as being rationally self-interested actors, love complicates that, both because it’s the opposite of self-interest and because we’re not rational when we fall in love. And I think that this has big implications for economic and public policy. If we can say, how can we create a society, -- well how about this, so France these days is looking at ways of changing the way they measure economic success. Do we do it by GNP? To the sum of all of our economic transactions, or can we come up with a measure of fulfillment? Can we come up with a measurement that better captures, are people happy? And not happy in this kind of giddy, shallow way, but deeply fulfilled I their lives. And that doesn’t always mean increasing GNP. In fact, sometimes it could be decreasing GNP in some ways. And I think if we introduce love into these economic equations, not just in our consumer decisions, but in public policy as well, it opens up a whole new range of the way in which can conceive of the society in which we live. And I think we see now more than ever after these economic crisis that markets are not natural things. It’s not like a river or it’s not some natural physical force that we’ve discovered. We create markets. Markets are contrivances. And if we realize that it means that we can create the in different ways. We can have them serve our own self-interest. Maybe our self-interest is not working more hours per week, but having more leisure time with our family. Maybe our self-interest is not having 10,000 more square feet of house, but living close to our friends and neighbors, so that we can have more social interaction. And looking at love in those equations really changes things.