Date of this Version
The notion that something beyond money could also be an important part of economic choice goes back hundreds of years. Adam Smith, who is credited with providing the framework for modern market-based economies, wrote extensively in the late 1700s about the role of the “moral sentiments.” In fact, his book The Theory of Moral Sentiments was actually drafted first, and he worked on it many years after the publication of his better known book On the Nature and the Causes of the Wealth of Nations, the latter focused “on the money.” Intriguingly, the sentiments/empathy book is all about how market trade (international and otherwise), in order to be efficient needed to be conditioned by first “walking-in-the-shoes” of your potential trading partner (empathy), and asking yourself “how would I wish to be treated?” Ironically, in that Adam Smith saw a role for empathy over 200 years ago, it has not had much attention in economics, although studied widely and deeply in many other disciplines, such as philosophy, theology, psychology, ethology and more recently, neuroscience.
Recent neuroscientific findings show that a number of regions of the brain are involved in empathy (Rueckert and Naybar, 2008). Deficits in empathy have been found in children with autism, in adults with multiple sclerosis and in psychopaths (who have little/no concern for others’ well being; even though they empathize, fully understanding the other person, they do not choose to enter into shared sympathy). This research suggests that the brain actually has “empathy regions,” with empathy and the shared sympathy it can lead to being a part of normal choices. Therefore, it is not unreasonable to expect that these regions may play a role in many, if not all economic choices.