Monday, November 17, 2008

Aristotle, Updated

In the 2002 hit movie, My Big Fat Greek Wedding, father of the bride Gus Portokalos says to his future non-Greek son-in-law, "When my people were writing philosophy, your people were still swinging in trees." 

Aristotle is one of the people Gus was bragging about. In the 4th century BC, Aristotle said that man is a rational animal. Reason is man's most reliable guide, and an essential tool for investigating the natural world. No wonder Aristotle has been called the father of modern science.

But modern economic science teaches us that human reason has its limits. The human mind is not a computer sorting through complex alternatives at the rate of billions per second. It simply does not have the time or the resources to analyze decisions in that kind of exhaustive detail. Somewhere along the way, the mind must decide that enough is enough. It must make a decision on the basis of a reasonable expectation, not an optimal solution. To quote a popular saying, "better a good plan than a perfect one." The human mind is not an optimizer. 

Back to the 4th century. Aristotle also said that humans are social animals. We live in groups, and we use the behavior of our group as a guide for our behavior. We call such behavioral guides "culture," and to some degree, culture exists outside the realm of reason. Why do American's shake hands and the Japanese bow? Because they do. Social norms develop organically and over long periods of time. They do not always conform to rational expectations.

In both of Aristotle's 4th century statements, he implies a third point: humans are animals. Modern science has validated Aristotle's conclusion in ways that would have startled but no doubt delighted him. We are more closely related to the animals than he ever could have imagined. We share many of the same organs, physiology, and we have the same genetic material, just arranged differently.

One of the primary goals of animal social behavior is social status. This is visibly true in the world of primates and human teenagers. Status is no less important in the world of adult humans, where it is earnestly but more subtly pursued. Everyone is sensitive to the charge of naked ambition.

In Aristotle's age, status came from an individual's high birth, education, and being Greek (some things never change, Gus). Wealth did not necessarily equal status. In fact, Aristotle's view of the money making business was that it was an unpleasant necessity best left to men of lower rank.

Aristotle's view was not unique. For most of history, making money was viewed as a low-status occupation, less worthy than politics, the military, and religious orders. Napoleon I would famously disparage the English nation by dismissing it as "a nation of shopkeepers."

Napoleon not withstanding, by the late 19th and early 20th centuries, especially in the United States, business fortunes finally brought a social status rivaling that of aristocrats, generals, and religious potentates. 

Today, creating wealth through business activity is the most widely accepted means of achieving higher social status. But it is not, by any means, the only one. A degree from an Ivy League school is really more about status than it is about getting a superior education. Driving a Prius is more about status than it is about environmental concerns. In fact, driving a Prius and driving a Maserati serve exactly the same social purpose. Both cars elevate the status of the driver within their chosen circles. 

In one survey, over half the buyers of a Prius said the main reason they bought the car was that "it makes a statement about me." Maserati owners buy their cars for the same reason. 

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