Is economics the analysis of forms of rational conduct? Could you go further and define it – as Gary Becker’s work does – as the study of any conduct that responds systematically to modifications in any variables in the environment? Or is it something less expansive than that? This is the question with which Michel Foucault draws to a close his [amazon_link id=”140398655X” target=”_blank” ]Essays on the Birth of Biopolitics[/amazon_link].

[amazon_image id=”140398655X” link=”true” target=”_blank” size=”medium” ]The Birth of Biopolitics: Lectures at the Collège de France, 1978-1979: Lectures at the College De France, 1978-1979 (Michel Foucault: Lectures at the Collège de France)[/amazon_image]

Interestingly, he specifically points to behavioural economics – the incorporation in economics of “non-rational” choice from behavioural psychology – as a further extension of terrain. And there is a central paradox therefore in mainstream economics: is homo economicus a free agent the government should leave alone to engage in market activity, [amazon_link id=”1433200155″ target=”_blank” ]free to choose[/amazon_link]? Or instead is the agent responding to variables in not necessarily “rational” but systematic ways who can therefore be steered or manipulated by government action?

Somebody clever – I can’t remember who – recommended the book to me. I must admit that although there are some interesting points, I found it very heavy going. It’s because of the language of this style of philosophy, which seems very obscure to me. It reminded me of the story Bob Lucas once told, about discussing a problem in a particular model of the labour market with Ed Prescott. The next morning he found in his office a note from Prescott with an equation on it, solving the problem. Lucas said: “Many people would ask for words to explain what the equation means, but an economist will ask for an equation to explain what the words mean.”