Cross-disciplinary examinations of economic phenomena have generated increasing interest of late. The new approaches being explored include evolutionary economics, experimental economics (which employs techniques developed in psychology labs to study economic behavior), and neuroeconomics. We have been inspired by these efforts, most of all by neuroeconomics’ attempts to map alterations in the physical state of the brain during activities like buying, selling, or earning rewards. We are convinced that precisely determining what chemical and electrical reactions take place in the brains of human actors will yield breakthroughs in understanding many of the fundamental, outstanding problems in economics, such as why people act to bring about situations they prefer rather than ones they detest, what causes the trade cycle, whether or not socialism really can work, and why so many people listen to Paul Krugman.
Standing on the shoulders of the giants who have pioneered those approaches, we’d like to take the opportunity kindly offered by LewRockwell.com to introduce the exciting new discipline of gastrointestinal economics (or GI-economics for short). The hard core of our research program is to examine the biochemical processes taking place in the stomach, intestines, liver, kidneys, urinary tract, and so on, during economic activity. (Yes, by dealing with the liver, kidneys, and urinary tract, we are engaged in a bit of GI-economic imperialism, since those organs aren’t, strictly speaking, part of the gastrointestinal system, but they are so closely related to it that we are sure that we aren’t biting off more than we can chew.)
We don’t want to come off as being full of ourselves, but we believe this announcement requires real guts on our part, since we are somewhat queasy about how it will go down with other Austrian economists. We worry that many of our friends and colleagues will find it hard to swallow a discipline that smells to them like pure tripe. Nevertheless, in the hope that we haven’t exceeded the intestinal fortitude of our readers, we have choked back our fears and concluded that, if we can’t stand the heat, we should stay out of the kitchen.
The primary reason we have selected this course is our conviction that there are important questions in economics that only the GI approach can answer. To cite just a few of them: What cellular responses occur in the large intestine when someone who never gave a crap about money suddenly begins to do so? Which chemical reactions regulate the response of an heir’s kidneys as he pisses away his family’s fortune? How does the liver cope with the poison pills often created by corporate executives in the hope of making hostile takeovers unpalatable? Is flatulence, as Friedman contends, always and everywhere a monetary phenomenon? And do such injections into the atmosphere in which investment decisions are made inevitably result in a boom and then, as the effects diffuse through the economy, a bust, as Austrian theory seems to suggest?
Consistent with Austrian methodology, GI-economics places greater emphasis on understanding digestive processes than does the typical, mainstream fascination with end-states, which we frankly regard as a load of crap. For instance, we plan to draw new implications from the well-known “feces-flow doctrine,” which states that “no net inflow of consumption goods into the GI-tract is possible,” or, to put it more colloquially, “what goes in, must eventually come out.” Medical research has time and again corroborated models based on this theory, by finding estimated beta parameters having “p-values” that are far too low to be merely accidental leakages.
GI-economics also raises a large number of questions that appear relevant to the study of laws and legal institutions, for example: What biochemical reactions are triggered as the poor are chewed up and spit out by the court system? Are there particular intestinal flora that will aid juries in digesting the increasing amount of technical evidence, such as the results of DNA tests, that is being presented in criminal cases?
We have even extended our research into such fundamental aspects of economics as the theory of utility. Economists have traditionally modeled people’s wants by introducing the goods and services that consumers expect will fulfill their appetites into a “utility function.” But money has been omitted from such recipes, because, although it buys goods and services, it is not itself consumed (except by currency collectors or people with very odd dietary habits). In such models, people’s taste for money is regarded as indirect, and they will only value it if others are willing to accept it as payment. But GI-economists have developed ways of monetarily rewarding the digestive efficiency of experimental subjects, while monitoring the activity in their GI-tracts with state-of-the-art scanning devices. So what happens down there when people get paid? Colin Gaston and his colleagues have offered diners increasing amounts of bread based on the speed with which they can break down a nice, traditional three-course meal. In their recent paper, “Anticipation of monetary reward selectively recruits parietal cells,” they varied the payout and found that (K+ + H+)-dependent-ATPase-enzyme-rich areas (such as the parietal cells) showed changes in their membrane environment that were proportional to the magnitude of the monetary reward anticipated by the subject. Such results may mean that the GI-tract learns to pass money directly through its utility function, and that economists' theory of tastes should take into account the fact that most people don’t barf at the possibility of receiving a pile of dough.
There are numerous other projects being cooked up by GI-researchers, but we don’t want to force feed our readers so much information in one sitting that they can’t keep it all down. Instead, we hope that we have put on the table a sample of tidbits that contain just enough meat to whet our readers’ appetites for sampling more of what is on the menu for GI-economics. We contend that the current accomplishments of the new discipline are just a foretaste of the rich repast it will serve up in the future. We believe that the output of our new discipline will fertilize the growth of economic theory in widely varied fields.
Watch for the latest poop on the field in our forthcoming publication, The Journal of Gastrointestinal Economics.
September 16, 2004