When economist Geoffrey Brennan took the floor Tuesday afternoon, he set aside the classic economic paradigm of goods and services, opting instead for the more intangible entity of esteem.
Brennan, a professor of social sciences from Australia International University who currently holds a joint visiting fellowship at Duke and the University of North Carolina at Chapel Hill, delivered his lecture as part of the Department of Economics' Distinguished Speakers Series.
"Esteem is a force for inducing people to behave in different ways," Brennan said. "Maybe understanding the way the economy of esteem operates will allow us to mobilize the forces of esteem to induce higher performance."
Brennan said he took an interest in studying esteem for a number of reasons. For one, he said, philosophers from Thomas Hobbes to Immanuel Kant have long argued that the desire for esteem is one of the most significant motives of human action. Even Adam Smith, hailed by some as the father of modern economics, acknowledged that the desire for goods derives in part from the effect they will have on one's esteem, Brennan said.
Brennan described how the desire for esteem can impact people's behavior, citing a New York case study in which women were observed either washing or not washing their hands after using the restroom.
"Forty percent washed their hands when there was no one else in the restroom, but 80 percent washed their hands when someone else was there," Brennan said. "The reason isn't difficult to surmise. People don't want to be thought of as dirty."
This desire to impress others, he continued, allows for the creation of institutions that economize on virtue, in which people are led to act according to a prevailing set of values. "To acquire esteem, I have to act in ways to secure your good opinion of me--ways of which you generally approve," he said.
Brennan noted some peculiarities of esteem, which make it different from other factors with which economists deal regularly. He said, for example, that esteem is an evaluative attitude, not an action.
"I don't need to applaud a person for washing her hands after using the restroom," he said. "It's enough that that person knows you will think less of them if they don't wash their hands."
Another peculiarity Brennan noted was that esteem is supplied spontaneously. Thus, he said, there is no rational dimension to the supply of esteem because it is based solely on people's beliefs about what is estimable.
In addition, esteem is non-tradable. "Esteem is not just like oranges and apples where you can trade them," Brennan explained. "Buy apples, sell esteem--it can't be done."
A final peculiarity Brennan noted was that the demand for esteem can at times be self-effacing. If a person is thought to be motivated solely by the desire for esteem, he will earn esteem to a lesser degree than if he was thought to be acting by another motivation such as benevolence.
In explaining the economics of esteem, Brennan illustrated a simplified model in which the amount of esteem accrued is proportion to the number of estimable actions a person takes. Standards for esteem, he said, emerge from prevailing practices, so people are measured only in comparison with other people.
"Honesty is always telling the truth," he said. "But if you're pretty honest, you'll still get favorable esteem because of the standards set by prevailing practice."
As standards increase, then, the amount of esteem a person gets for the same actions declines, and a person is therefore induced to do more estimable actions--a phenomenon Brennan said could be used to push populations toward higher performances.
"The economy of esteem has a tidal character," Brennan said. "Something changes the standard performance and everybody's performance rises with the tide."
Junior Thea Sircar, who attended Brennan's talk, said she enjoyed the lecture, particularly because it spanned her interests in both economics and political science. "What he said was applicable to both fields, especially as it relates to institutional design," Sircar said. "His explanation of how the desire for esteem to economize on virtue was a really interesting application."
Brennan has authored nine books, including his latest, The Economy of Esteem, which he co-authored with Philip Pettit. His past works include The Reason of Rules: Constitutional Political Economy, which he co-authored with 1986 Nobel Laureate in Economics James Buchanan. Brennan is currently president of the Public Choice Society.
Get The Chronicle straight to your inbox
Signup for our weekly newsletter. Cancel at any time.