The accident and emergency unit of the Royal London Hospital in East London is never the most salubrious of environments. But on a Saturday night, it turns into a cross between a warzone and a Hammer horror movie. Drunk people stumble around, bruised and beaten from bar brawls. Ambulance staff and police officers compete for access to suspected drink-drivers. The fear or grief on the faces of visiting family members is the most disturbing sight of all.
It was into such a scene that my wife and I arrived with our screaming daughter when she was less than a year old. We actually had no idea if there was anything wrong with her or not. That’s the problem with babies: they won’t tell you. The question perennially asked by doctors of parents with babies – ‘But does she seem OK in herself?’ – is another way of saying, ‘Trust your instinct.’ On this occasion, she’d woken up at an unusual time and was screaming in a way we’d never heard before, coupled with a rash and a temperature. She really didn’t seem ‘OK in herself’.
Amid the predictable chaos of the waiting area at 2 a.m., I noticed three young men who appeared to be plotting something with urgency. They were clustered around a form, onto which one of them was writing details in consultation with the other two. They pointed at parts of it, advising him on what to write, checking with each other for agreement before encouraging him further. He scribbled away while his two friends appeared to debate what he should do next, occasionally looking up to check if they were being watched. There was a great deal of nodding and pointing, as if some plan were being hatched. This went on for about twenty minutes or so, while our by now infuriatingly cheerful daughter was enjoying playing with some NHS leaflets.
After a while, a nurse came out and called the name of the young man who was filling in the form. The effect this had on him surprised me. His shoulders drooped, his face went into a grimace and he very, very slowly got to his feet, while his two friends suddenly became a picture of concern and pity. As he inched towards the nurse clutching his form, he held his head angled sharply down to one side and supported his neck, to suggest that he was now suffering a great deal. He walked slowly and – apparently – painfully towards the nurse, who led him off to a treatment area. After he’d gone, his two friends cheered right up and returned to their furtive discussions.
The young man had clearly suffered a neck injury. Or at least, he had clearly experienced some mishap that could have caused a neck injury. Whatever had happened, it had resulted in slightly more enthusiasm among the three young men than one would normally associate with accidents or emergencies. From where I was sitting, this was an obvious case of an insurance scam being plotted. I immediately felt angry that these time-wasters were holding us up, quite apart from the apparent fraud going on. No doubt a car accident had occurred, and one of them had then immediately recognized an opportunity to make some money. The only question was whether the ‘injured’ party could get through the necessary medical examination without fluffing his lines.
Maybe my reaction was grossly unfair. Maybe it wasn’t. As with babies, so for whiplash: there is no possible way of knowing. Whiplash is a curious type of medical phenomenon for a couple of reasons. Firstly, the term itself technically refers to an event that has befallen the sufferer, and not to a medical condition as such. Thus, if someone has experienced sudden straining of the neck muscles, as often occurs with rear-end car collisions, it makes sense to say that she has ‘suffered whiplash’. Secondly, to the extent that whiplash has any symptoms, they are only detectable to the sufferer. Evidence that ‘whiplash’ has occurred (other than a smashed car bumper) consists in the fact that the victim experiences long-term pain in the neck and back. But as with some psychiatric disorders, there is no identifiable disorder underlying this symptom.
Medical researchers have studied whiplash since the 1950s, in search of some physiological explanation for it, but without luck.1 It first entered the Cumulated Index Medicus (the database of American medical journals) in 1963, as experts struggled to come to terms with this mercurial syndrome. During the 1960s, American scientists conducted a series of experiments on monkeys which simulated extreme rear-end collisions, in the hope of then being able to discover the precise way in which these accidents damaged neck tissue. Too many of these caused paralysis or brain damage to the monkeys, without doing much to unravel the mystery of whiplash in humans.
One thing which is well known about whiplash, however, is that it is very unevenly distributed internationally. Rates of whiplash diagnosis are far higher in the English-speaking world than in most other nations, and have been growing sharply since the 1970s. Given that whiplash is chiefly associated with car accidents, and that cars have been getting progressively safer over this period, this increase is clearly associated with other factors to do with insurance claims. In Britain, for example, whiplash is responsible for a 60 per cent rise in personal injury claims related to car accidents between 2006–13, to the point where whiplash payouts are now equivalent to 20 per cent of the cost of every car insurance premium.
In other countries, the syndrome is far less well known, and extracts far less money from the insurance industry as a result. While whiplash featured in 78 per cent of all personal injury claims made in Britain in 2012, across the channel in France the figure was only 30 per cent.2 In the early 2000s, Norwegian neurologist Harald Schrader noticed that the incidence of long-term neck pain resulting from car accidents in Lithuania was zero. After studying this phenomenon and publishing his findings, he was met with fury from the Norwegian whiplash disability patient group (which boasted 70,000 members in a nation of 4.2 million people), who took umbrage with what they assumed he was implying.
The bizarre philosophical status of whiplash as a form of entirely invisible pain makes it unusually amenable to fraudulent insurance claims. Intuitively, this explains how rates of whiplash diagnosis vary so sharply from one country to the next: in countries such as Britain and the United States, where it is a well-known phenomenon, drivers who have suffered a rear-end collision will be that much more likely to spot the opportunity for some monetary reward. The three young men in the Royal London accident and emergency unit were a case in point. They obviously realized that they had to work out their version of events straight away and then get the victim to report the right sort of pain, even though a ‘whiplash’ diagnosis would require the pain to persist for some time. The number of lawyers specializing in representing such claims has grown dramatically since the 1970s. In the United States, lawyers can even attend specialist training seminars, organized by fee-hungry doctors, on how to construct a viable medical case.
Yet for the same reason that this syndrome is attractive to the fraudster, it is impossible to ever know how much fraud is really going on. Expert estimations of the rate of fraud vary wildly, between 0.1 per cent and 60 per cent, indicating the depth of the fog obscuring this issue.3 Insurance companies are struggling to know how to cope. Some have introduced somewhat mediaeval-sounding ‘Truth Statements’, which accident victims and their lawyers are required to sign, to confirm the discomfort that they claim to be suffering.
Adding to the confusion is a further philosophical and cultural riddle. As even some critics of the whiplash industry will admit, it is perfectly possible that drivers in Britain or America will, on average, genuinely suffer greater long-term neck pain following a rear-end collision than those in continental Europe. An accident victim who is aware of whiplash, and its possible monetary value, will consult a doctor, wear a neck brace, take rest, recuperation and time off work, and generally act like a victim. The psychosomatic aspects of back and neck pain mean that this person may indeed find herself with long-term problems. Meanwhile, the accident victim who dusts herself off, swaps numbers with the other driver, and sets about getting her car repaired, is likely to feel far less discomfort over the long term. Observable behaviour and subjective sensation eventually bleed into each other.
The medical or neurological response to this sort of problem, encouraged by the insurance industry, is to carry on looking even harder for the physical reality of neck pain. Fraud will be eliminated once the truth of pain has been uncovered. Until that point, truth statements and the like will have to do. This assumes, as per Bentham’s gambit, that accident victims experience a certain quantity of pain that could in principle be scientifically known to an observer, if only an appropriate method could be found. Such a method would likely have to focus on the body in some way. Bentham’s preferred route for measuring utility – using money as a proxy for it – is ruled out on this occasion, seeing as it is precisely the pursuit of money that appears to be generating the problem in the first place.
But what if whiplash is necessarily entangled with the pursuit of monetary compensation? And what if fraud of this sort is not some unfortunate, exceptional and eradicable element of our compensation culture, but an entirely inevitable feature of how our sense of justice and injustice has been colonized by monetary calculation? Deep within the whiplash syndrome, there is the idea of equivalence between the sensations produced via the nervous system, and money. The principle states that a certain quantity of subjective feeling can be counterbalanced by an appropriate quantity of money. Admittedly, this principle may be widely abused, in some societies far more than others. But the very fact that it is impossible to know whether it is being abused, or by how much, tells us something about the absurdity of this presupposition. Maybe, instead of searching harder for the ‘truth’ of physical pain, we should explore if money could ever serve as some neutral, honest and mathematical representation of our feelings.
Joseph Priestley, the man whose work had led Bentham to shout ‘Eureka!’ in Harper’s coffee shop that day in 1766, was a strong influence over the emerging middle class of industrial England. In 1774, he helped to establish the first Unitarian church in the country, which was still an illegal religious movement at the time. Unitarians rejected the orthodox Christian belief in the Trinity of Father, Son and Holy Ghost, arguing instead for a single God. Varieties of Unitarianism had been in existence across Europe since the sixteenth century, though never politically accepted. The English practitioners had been an underground movement until Priestley formally established his church. Understandably, given the suppression they had experienced, they were avid Enlightenment optimists and campaigners who argued for freedoms of speech and religious association.
They were also scientific optimists who placed great faith in the power of mechanics and engineering to advance the progress of humanity. Popular among industrialists, this coincidence of faith with machinery was convenient. A number of Mechanics’ Institutes were founded by Unitarians in the early nineteenth century, in an effort to connect engineering progress to the public good. Mathematics was viewed as especially valuable, where it helped to construct useful machinery and transform the physical world for the benefit of mankind. But it needed pushing beyond the study of the natural world or engineering and into social and political realms. It is scarcely surprising that they immediately viewed Bentham as a kindred spirit.
William Stanley Jevons was born into a Unitarian family in the outskirts of Liverpool in 1835. His father was a successful iron merchant, and the family was comfortably off. Unitarian principles dominated the family and dictated the young Jevons’s education, within which mechanical devices and geometric reasoning were constantly recurring features. As a child, he played with a balancing device as a toy, and such instruments would retain a fascination for him throughout his later career.4 He received his first introduction to economics as a nine-year-old, through the children’s textbook Easy Lessons on Money Matters, authored by the Archbishop Richard Whateley, which was read to him by his mother.5 Aged eleven, he attended the Liverpool Mechanics’ Institution. Throughout this, he was taught to view mathematics as the mark of ‘true’ science, no matter what the object might be.
In the early 1850s, Jevons enrolled to study chemistry at Bentham’s alma mater, University College London (UCL). This also gave him the chance to attend the lectures of another famous Unitarian, James Martineau, a Benthamite who taught a course on ‘mental philosophy’. It was during the 1850s that a distinctive tradition of English psychology was emerging that had parallels with what Fechner was doing in Leipzig at the same time. The use of introspection, to study the inner life of the mind, gained respectability through the mid nineteenth century, especially following Alexander Bain’s 1855 work, The Senses and the Intellect. Bentham’s influence was important to this tradition too, but it was more the speculative, philosophical Bentham, who created theories of pleasure, rather than the technocratic Bentham, who wanted to actually ground politics in physical equipment. With his Unitarian and industrial background, Jevons was more naturally inclined to hard, geometric mechanics. Psychology was all very well, unless it could not be rendered mathematical.
Jevons would have remained at UCL for longer, but in 1853, with his family suffering financial difficulties, his father obliged him to accept a job in Sydney, Australia, as a gold assayer. This required the use of very finely tuned instruments and scales to test the quality and weight of gold, a practice that appealed to Jevons’s mechanical sensibility. Here was a practical challenge, which involved the application of mathematics to the physical world and saw Jevons returning to his childhood hobby of using balancing devices. Not only that, but the object in question would prove to be the critical one in shaping Jevons’s later intellectual career: money. It is interesting to consider that at precisely the same time as Fechner had begun his weight-lifting experiments to look at the mathematical relationship between physical objects and psychic feeling, 10,000 miles away Jevons was working with another form of weight-lifting instrument to test the monetary value of a precious metal. If the three different entities of mind, matter and money could be fixed in some mathematical relation to each other, the implications for the understanding of the market economy would be profound.
While in Australia, Jevons continued to read widely in psychology, exploring Bentham’s work and discovering the writings of another English psychologist, Richard Jennings. He showed comparatively little interest in economics, which was at the time dominated by the figure of John Stuart Mill, and remained within the tradition of ‘classical political economy’ that had been initiated by Adam Smith in the 1770s. Classical political economists concerned themselves with weighty, material and political issues of how to increase the productive capacity of nations through free trade, division of labour, agricultural policy and population growth. They argued in favour of free markets, but principally because this was viewed as a way of increasing production. If wealth was the goal, they reasoned, then the resources that needed studying were physical ones: labour power, food, fixed capital, land. The classical economists had no discernible concern with psychological questions of feelings or happiness. As far as they were concerned, the problems of economics were ultimately those of how best to harness nature.
But while Jevons was in Australia, there were signs that the core assumptions of political economy were about to change. Jennings was a psychologist, but his 1855 work Natural Elements of Political Economy suggested that economists could not ignore psychology any longer. Given that labour was central to the classical economic view of capitalism, it must surely be relevant that workers suffer different levels of pain as they go through their day, which then influences how much they are able to produce.
It is often said in circumstances of boring or monotonous work that ‘the last hour drags the longest’. Jennings made a similar observation, but specifically in relation to physical exertion: the longer one spends labouring on a task, the harder it gets. Fechner’s observation, that weights feel heavier the longer they are held, picked up on the identical issue. Such insights spoke to an emerging concern among industrialists at the time, that workers were suffering from fatigue, and that the bourgeoisie’s principal source of wealth, namely labor, was gradually becoming depleted. As the nineteenth century wore on, this worry led to an explosion of strange experiments on fatigue and possible ergonomic solutions.6 And so it was via the subjective experience of work, as an exercise that gradually increases in painfulness, that capitalists became interested in how we think and feel for the very first time.
Jevons was drawn into reading economics, thanks to Jennings’s pioneering work. In 1856 he was also drawn into a dispute over the funding of a railway in New South Wales, and his interest in economic theory was piqued further.7 From Jevons’s Unitarian perspective, economics, as passed down by Adam Smith, was not strictly speaking a science: it lacked the mechanical and mathematical rigor. But by starting from a different premise, much as Jennings had already suggested, perhaps this was a domain that was amenable to truly scientific reasoning after all. If the economy could be understood as a mathematical problem, to be solved through the attainment of quasi-mechanical balance, then economics would be placed on genuinely scientific foundations. He wrote to his sister in 1858 letting her know that he was now determined to focus on extending mathematics to the study of society. In 1859, he returned to Britain and re-joined UCL to study economics.
Markets as balancing devices
Money is an extraordinary thing which can cause psychological havoc. In some psychosomatic situations such as whiplash, it may even cause physiological havoc. The central fact about money is that it must perform two contradictory functions at once: to serve as a store of value and as a medium of exchange. When acting as a store of value, it becomes something we cherish and want to hang onto, often by placing it in a bank account. When acting as a medium of exchange, it is something that opens up infinite possibilities to attain other, much more useful and desirable things. This contradiction is manifest in the physical design of money itself, which has to combine a high level of symbolic appeal (in its insignia and shininess) and minimal level of actual physical usefulness.
Interest rates are the main way in which capitalist societies strive to balance these two functions of money. When interest rates go up, our desire to hang onto money increases accordingly; when they go down, our desire to spend it increases instead. Sometimes, we flip between viewing money as everything, and viewing it as nothing. The psychoanalyst Darian Leader has noted how money often plays a central role in the behaviour of bipolar disorder sufferers.8 When they are manically happy, they view money in purely liquid terms, of infinite possibility, with no intrinsic worth of its own. They give it away, spend rashly, revel in the freedom it grants. When they are later depressed, they become weighed down by money’s ubiquitous importance once more, only more so due to the debts and costs they ran up during their mania.
Thus one way of understanding the history of liberal economics, from Smith onwards, is as an ongoing attempt to deal with the bipolar character of money. As we all instinctively recognize, markets are places where goods or services are exchanged for money of some sort. But what we tend to overlook is how odd such an exchange actually is.
How is that a £10 note can be deemed equivalent to, say, a pizza? In order for this exchange to take place, money’s dual roles as both medium of exchange (I am willing to get rid of it) and as store of value (the pizza seller is willing to accept it) have to function simultaneously. How can a piece of pure, numerical symbolism serve as equivalent to a doughy, cheesy meal, without either side feeling hard done by? For if it can’t, then the market system itself becomes completely impossible, and we would end up each having to produce our own food, clothes and shelter. The constant risk is that people either value money too highly (cue hoarding and price deflation) or not highly enough (cue barter and hyper-inflation). The solution offered by economists is to invent a mysterious entity that lurks magically inside the pizza, which they term ‘value’.
Often, we use the word ‘value’ to mean ‘price’, as when someone says, ‘This painting is valued at £1,000’. But it’s quite clear from other uses of the term ‘value’ that it doesn’t mean price at all. If I describe the pizza as ‘bad value for money’, that suggests it really shouldn’t have been exchanged for as much as £10. The value and price of the pizza were not, in fact, equivalent to each other, and the customer was being ripped off. The idea of value allows us to view markets as balancing devices, whose outcome should in principle be fair. By suggesting that value is a quantity like money, economists are able to show how both sides of an exchange are, ultimately, equivalent. When the market for pizzas is working correctly, they argue, ten of these pounds will buy you an equivalent quantity of value. Rather than exchange a quantity (money) for a quality (pizza), both sides of the equation can be represented in numerical terms. The market becomes imagined as a set of scales, which weigh money and value against each other, until the two are in perfect balance. What the idea of value really says is this: money itself is not the most important thing in life, but it is the perfect measure for anything that we do consider important.
So what is value? How is this ubiquitous quantity to be conceived? The classical political economists argued that the value of a good or service derives from the amount of time that has gone into making it. In this case, the pizza’s real worth resides in the amount of time spent producing its various ingredients and cooking it. In principle, if markets are working fairly, the price of the pizza should be equivalent to this quantity of labour time in some way. This ‘labour theory of value’ dominated economics for nearly a century. By 1848, John Stuart Mill was confident enough to write that ‘happily there is nothing in the laws of value which remains for the present or any future writer to clear up; the theory of the subject is complete’.9 But that particular version of the theory never interested Jevons.
On 19 February 1860, Jevons wrote the following entry in his diary:
At home all day and working chiefly at Economy, arriving as I suppose at a true comprehension of Value regarding which I have lately very much blundered.10
The book in which this ‘true comprehension of Value’ would be articulated, The Theory of Political Economy, would not appear for another decade. By then, two continental economists, Léon Walras in France and Carl Menger in Austria, had ‘blundered’ towards a similar discovery. In combination, these three economists unleashed a revolution within economics, eventually producing the narrower, more mathematical discipline that we recognize as economics today.
Shopping for pleasures
A number of English theorists, including Bentham, had wondered whether the mentality of consumers might actually be the decisive factor in determining the price of things. This idea even cropped up in Archbishop Whateley’s children’s book of economics that was read to Jevons as a child. But it took Jevons, Walras and Menger to establish this notion as the new foundation for economics. The question of value remained crucial, for how else could the market be represented as a place of fair exchange? Their novelty was to conceive of value from the perspective of the person spending the money, rather than the person producing the goods. Value would become a matter of subjective perspective.
What marks out Jevons was his determination to build such a theory directly upon the psychology of pleasure and pain. He described his project in sharply Benthamite language:
To satisfy our wants to the utmost with the least effort – to procure the greatest amount of what is desirable at the expense of the least that is undesirable – in other words, to maximize pleasure, is the problem of economics.11
The centrifugal point of capitalism was being shifted. From Adam Smith through to Karl Marx, the factory and labourer were deemed to dictate the price things were sold for in the market. From 1870 onwards, all of this changed. Now it would be the inner ‘wants’ of the consumer where the all-important question of value would be established. From this perspective, work is simply a form of ‘negative utility’, the opposite of happiness, which is only endured so as to gain more money to spend on pleasurable experiences.12 Subjective sensation, and its interaction with markets, was elevated to a central question of economics.
In keeping with his Unitarian roots, Jevons was only prepared to engage in economics if he could find a way of doing so mathematically. ‘It is clear that economics, if it is to be a science at all, must be a mathematical science’, he argued; ‘our science must be mathematical, simply because it deals with quantities’. It’s not clear that Jevons was ever particularly good at maths himself, but his prejudice in favour of such an analysis held nevertheless. Economics could be founded on a science of pleasure and pain, but only on the basis that these psychic entities also obeyed certain mathematical laws. For such a vision of economics to succeed, the mind itself would have to be treated like a calculator.
In the preface to the second edition of The Theory of Political Economy, Jevons expressed his regret that he had retained the term ‘political economy’ in the book’s title and not used ‘economics’ in its place. The distinction is a significant one. He clearly saw his work as a new start for a more rigorous discipline than the political economists had been able to achieve. Once the correct mathematical foundations had been established, the study of the economy would be placed on new and objective foundations.
For Jevons, everything was a question of balance, gauged in terms of quantity. His fascination with the machine-like qualities of the mind made him a pioneer of the sort of cybernetic thinking that would later produce computer science. He even commissioned a Salford clockmaker to build him a primitive calculator out of wood, or what he termed his Logical Abacus, as a mechanical model for rational thought.13 The mind resembled the toy balance he’d played with as a child, or the gold-assaying device he’d used in Sydney.
When deciding whether or not to eat a pizza, I am performing a balancing act, with the pleasures on one side and the pains on the other. How much pleasure will it give me, versus how much pain? Whichever quantity is greatest will dictate what I decide to do. As Bentham had proposed, our minds work like mathematical calculators, constantly trading off the pros against the cons.14
Jevons’s landmark contribution was to plant this vision of a calculating hedonist firmly in the marketplace. Bentham was seeking mainly to reform government policy and punitive institutions, which acted on the public in general. But Jevons converted utilitarianism into a theory of rational consumer choice. The mechanics of the mind, where value resided, and the mechanics of the market, which generated prices, could be perfectly attuned to each other. As he suggested:
Just as we measure gravity by its effect in the motion of a pendulum, so we may estimate the equality or inequality of feelings by the decisions of the human mind. The will is our pendulum, and its oscillations are minutely registered in the price lists of the markets.15
The market was a vast psychological audit, discovering and representing the desires of society.
This granted money an exceptional psychological status, as it allowed others to peer into people’s private desires. Bentham had idly wondered if money might serve as a proxy through which to measure pleasure, but never quite extrapolated this into a theory of economics. Jevons was effectively turning the market into one vast mind-reading device, with prices – that is, money – as the instrument that made this possible. This being the case, money was no ordinary instrument, and economics was no ordinary science. The ideal of bringing the invisible realm of emotions and desires into the open was now bound up with the ideal of the free market.
The classical economists had studied capitalism in terms of toil, sweat and the physical produce that resulted. Jevons represented it merely as the play of fantasies and fears, rendered mathematical. This was partly an effect of historical context. Between his childhood in industrial Liverpool and his middle age spent living a comfortable scholarly existence in Hampstead, north London, industrial economies were exhibiting some profound changes, especially manifest in cities.
The world’s first department store opened in Paris in 1852, introducing the experience that we now recognize as ‘shopping’. Never before had products simply appeared on display, magically separated from their producer, with nothing but a price tag to represent the pain of acquiring them.16 Nationwide rail networks meant that goods were now moving around further and faster than most people. Official bank notes or fixed prices would have been relatively uncommon in the 1830s, with many shops still maintaining their own ledgers of who owed what to whom, and at what agreed price. By the 1880s, retail culture, based upon widespread circulation of paper money and even some recognizable brands, was established. In the absence of such a culture, an economic theory founded on the premise of individual pleasure-seeking would have looked like crazed utopianism.
In short, capitalism could now be viewed as an arena of psychological experiences, in which physical things were merely props for the production of sensations, to be acquired through cash. A commodity, for Jevons, was simply anything that can ‘afford pleasure, or ward off pain’.17 Alfred Marshall, one of the giants of English economics who followed directly after Jevons, expressed this acutely:
Man cannot create material things. In the mental and moral world indeed he may produce new ideas; but when he is said to produce material things, he really only produces utilities; or in other words, his efforts and sacrifices result in changing the form or arrangement of matter to adapt it better for the satisfaction of wants.18
During the 1980s, it became fashionable to declare that capitalism had suddenly become based upon ‘knowledge’, ‘intangible assets’ and ‘intellectual capital’, following the demise of many heavy industries in the West. In truth, the economy was reconceived as a phenomenon of the mind a whole century earlier. Capitalism became oriented around consumer desire, directed by that most alluring spokesman for our silent inner feelings, money.
Measurement revisited
‘I hesitate to say that men will ever have the means of measuring directly the feelings of the human heart’, wrote Jevons in The Theory of Political Economy.19 This must have been a difficult thing for him to admit. After all, he had made some strong claims about precisely how human beings take decisions. Like Bentham, he looked to the natural sciences in the hope that they might one day provide the empirical basis for his theory of individual choice. ‘The time may come,’ he suggested, ‘when the tender mechanism of the brain will be traced out, and every thought reduced to the expenditure of a determinate weight of nitrogen and phosphorous.’20 He even conducted some experiments of his own, very similar to Fechner’s, in which he lifted weights to study the impact of objects on his own sensations.
For a cluster of British scholars, working between 1850–90, the challenge of psychic measurement would not be given up without a struggle. They drew on Bentham and Darwin in search of a theory of human behaviour that might confirm their largely aristocratic political prejudices, which often translated into a belief in eugenics. One of them, James Sully, had studied with the great German physicist Hermann von Helmholtz in Berlin and returned to England with the new psychophysical methods pioneered by Fechner. Another, Francis Edgeworth, became a neighbour and close friend of Jevons, through whom he was introduced to economics.21
Building on Jevons’s example, Edgeworth pushed the case for psychic measurement even further.22 He had high hopes for the science of feelings. We need ‘to imagine an ideally perfect instrument, a psychophysical machine, continually registering the height of pleasure experienced by an individual’. Such a machine would be called a ‘hedonimeter’. ‘From moment to moment the hedonimeter varies,’ he went on, ‘the delicate index now flickering with the flutter of the passions, now steadied by intellectual activity, low sunk whole hours in the neighbourhood of zero, or momentarily springing up towards infinity’. Of course, in 1881, this was mere science fiction. Some would claim that in the twenty-first century, it is no longer so, that we are approaching the point when the inner feelings of consumers (for example, whiplash claimants) can be scientifically discerned. The more interesting question is why such a scientific fantasy has long exerted such a hold over our economic imaginations at all.
The question that Jevons was not able to answer was why, if markets are working effectively, such a science of pleasure and pain is necessary. If we can simply assume that individuals are broadly pursuing their own interests, and that they know how to do this, why not just let the market sort it out? Why would we also worry about how much ‘nitrogen and phosphorous’ is churning through their brains, or build ‘hedonimeters’ to represent their pleasures? For Bentham, as a public policy thinker, it was quite clear why such instruments were needed. Governments needed a science which informed them of what was the best use of their power and money. But wasn’t the great advantage of the market price system that it would perform such a science of its own accord? Surely money was the measure of value, not psychology. Did economists really need to know what was going on inside people’s heads?
For the economists who came immediately after Jevons, the answer was a firm ‘no’. Following Jevons’s death in 1888, economists began to distance themselves from his psychological theories or methods.23 In place of Jevons’s theory stating that each pleasure and pain has its own discernible quantity, a theory of preferences was introduced in its place. As economists such as Marshall and Vilfredo Pareto saw it, economists have no need to know how much pleasure a pizza gives me, but only whether I would prefer to have a pizza or a salad. The way I spend my money is determined by my preferences, and not by my actual subjective sensations.
Gradually economists discovered that they could say less and less about what goes on in the minds of consumers, to the point where it’s enough to simply observe their use of money and assume the rest. By the 1930s, the divorce of economics from psychology was complete. Jevons would have been delighted to see how mathematical the science was becoming. But he may have been somewhat disappointed to discover that the basis for such science owed nothing to his theories of happiness. In which case, why, today, is happiness everywhere once more?
Economic imperialism
Jevons is one of the architects of what is often referred to as homo economicus, a somewhat miserable vision of a human being who is constantly calculating, putting prices on things, neurotically pursuing his own personal interests at every turn. Homo economicus doesn’t have friends and doesn’t relax. He is too busy looking out for number one. If he ever really existed, he would be deemed a psychopath. But of course that is partly the point – this theoretical construct doesn’t actually exist. Jevons imagined the mind through metaphors of geometry and mechanics; he never went quite as far as suggesting that the brain is actually a physical balancing instrument.
At the end of the nineteenth century, homo economicus made sense as a scientific theory to help understand markets. There was never any sense that it should be applied outside of the monetary arena. The theory of utility maximization, as it was developed by Jevons et al. in the 1870s, was useful to the extent that it explained why people buy and sell things. That was all. But over the second half of the twentieth century this economic theory became increasingly expanded, until it came to serve the same broader public function that Bentham’s original utilitarianism sought to achieve. What began as a theory of market exchange was gradually inflated until it became a theory of justice.
Consider the following example. On 24 March 1989, the Exxon Valdez oil tanker ran aground off the coast of Alaska, while carrying 55 million gallons of oil, resulting in what was then the largest oil spill in US history. Over one hundred thousand sea-birds were killed, and the populations of various fish, sea otters and other wildlife were still below their previous level over twenty years later. Various reports emerged regarding the negligence of those on board, inadequate staffing, and poor equipment that might otherwise have prevented the disaster. The legal consequences of this took several years to be worked out. But beyond Exxon’s liability for the cost of the clean-up, there was a broader moral question: how to punish the company for the damage they had done to a thousand miles of beautiful coastline? How to counterbalance what they’d done?
One of the answers to this question was produced by the state of Alaska. Using a technique known as a ‘willingness to pay survey’, a representative sample of citizens in all of the other forty-nine US states were interviewed on how much they would be ‘willing to pay’ for the Exxon Valdez disaster not to have taken place.24 They were each provided with information about the extent and impact of the disaster to inform this mental calculation. The answer, so it turned out, was an average of $31 per household. Multiplied by 91 million households, this produced the calculation that Exxon owed the American public $2.8 billion. This figure was used to help calculate the final legal settlement of what Exxon had to pay as a fine.
What we witness in this sort of example is economics becoming used as a basis for broad public agreement, well beyond the limits of the marketplace. Techniques invented for the study of equilibrium in small private market exchanges are extended to deliver judgements over major public moral controversies. And think what a strange activity is at work at the heart of this: citizens scattered across America were required to close their eyes and imagine what they personally would pay in order for some distant event not to have happened. They must reach down inside themselves, in search of some number which they believe to be equivalent to the ‘value’ of a clean coastline. How odd it is that a technique based on wild introspection, whose veracity is entirely impossible to prove one way or the other, should attain higher authority than, say, the testimony of judges or elected officials or wildlife experts.
And yet the political authority of such techniques is growing all the time. Wherever the capacity to reach publicly acceptable agreements recedes, so the recourse to economics to settle disputes has increased. To find out whether it is worth spending money to protect beautiful landmarks, making cultural resources freely available to the public or increasing transport safety, policymakers increasingly use techniques such as ‘willingness to pay surveys’ to work out what the hypothetical price of those goods might be.25 Other techniques include studying the effect of a beautiful park on local house prices, to understand the park’s value in money terms. In health care, where limited resources must be spent in the best way possible, the question of ‘value for money’ is a constant problem. Once again, psychological introspection plays a role, with the public being surveyed to discover their numerical evaluation of cancer or blindness, despite typically having no experience of these hypothetical syndromes.
These techniques represent a fudge between a democratic worldview, which demands that the voice of the public be heard, and a Benthamite science, which states that only numbers can be trusted. The unwieldy outcome is that the public may speak, but on the condition that they adopt metrics and prices as their language. In order to have their say, they must mimic a calculator.
In the early 1990s, economics and psychology experienced something of a reunion. Data on ‘well-being’, drawn from surveys, began to be used by economists. New techniques for measuring ‘experienced’ utility (as opposed to ‘reported’ or ‘anticipated’ utility) were introduced, such as the ‘day reconstruction method’, in which participants try and record how they actually felt at various times during the day, or smartphone apps which prompt the user for an update on their current feelings throughout the day. Appropriately enough, one of these apps, developed at the London School of Economics, is referred to as a ‘hedonimeter’.
If economists can establish precisely the link between psychological pleasure and money (through comparing the well-being of people with different incomes), and they can then study the relationship between well-being and various non-market goods (such as safety, clean air, health and so on), a series of correlations can be traced in order that a price can then be put on anything. The British government has used just such a technique to establish the monetary ‘value’ of art galleries and libraries: find out how much happiness these places create, and then find out how much income would be required to produce the equivalent amount of psychological benefit.26 This enables decision-makers to put a price on public culture. The same technique has been suggested as a basis on which to calculate damages payments to those who have been victims of some intangible or emotional harm, such as the loss of a child.27
None of this is to say that such techniques are not useful. Spending on health care, for example, requires some basis on which to navigate dilemmas. Money has become the moral lingua franca through which this is now done: different health outcomes are given different monetary values by specialist health economists. But as economics is drawn into more and more public issues and moral disputes, so the psychological question of valuation becomes more problematic. In order that money and economics can stand up as viable means of dealing with public controversies, Jevons’s question of how we experience pleasures and pains becomes harder to ignore.
So long as economists were only dealing with market exchanges, they were able to operate without any concern for what we felt inside. Jevons’s dabblings in utilitarian psychology were not really necessary for what he was trying to achieve. It is only when economists start to spread their calculative tentacles further into public life, into the settling of moral and legal disputes, that they start to wonder what we’re feeling. Outside of the market, the question returns: what is this quantity of money equivalent to? How much well-being is it actually delivering? Money tries to stand on its own as the measure of everything, but ultimately, given its bipolar character, always fails. And it’s only for this reason – the perilous vacuity of cash – that happiness has returned as a preoccupation for economists once more.
Back to Jevons?
Jevons wondered if the ‘tender mechanism of the brain’ would eventually be brought to light, resolving the truth of our pleasure-seeking once and for all. Just over a century after his death, some believed that this breakthrough had arrived. Nitrogen and phosphorous were not quite as central as Jevons had guessed. Instead, the economic mechanics of the mind appeared to come down to a single brain chemical: dopamine.
The notion of a neurological ‘reward system’ first appeared in the 1950s, as scientists began to probe the brains of rats to see how they altered their behaviour in pursuit of pleasure.28 The very idea of such a system has clear echoes of the psychological theories as proffered by Bentham and Jevons. It implies that animals are governed by pleasures and pains, repeating the actions which reward them, and avoiding those which punish them. Only now, there is no longer any need for metaphors of balancing devices, along the lines entertained by Jevons – the real biological substrate of our calculated hedonism is allegedly being revealed.
In the early 1980s, it was discovered that dopamine is released in our brains as the ‘reward’ for a good decision. To economists, this posed an enticing question: could value in fact be a real, chemical substance, varying in quantity, inside our brains?29 When I decide to spend £10 on a pizza, might this actually be because I will receive an exactly equivalent quantity of dopamine, by way of reward? Some perfect balance is imagined, with cash on one side of the scales, and a commensurate dose of neurochemical on the other. Perhaps it might be possible to identify the exchange rate through which these dollars-for-dopamine trades are undertaken.
Elsewhere, neuroscientists believe they have identified the precise region of the brain, the nucleus accumbens, which triggers decisions to buy a product. Confirming the theory of psychology as a balancing act, one paper claims to have located the specific neural circuits which deal with pleasure and price respectively, the scales, as it were, on which every consumer decision depends.30 For the more optimistic disciples of Jevons, this is the brave new world that is dawning today.
Common sense suggests that these are absurd propositions. The sheer unlikeliness that the brain would ‘naturally’ operate according to principles first developed by economists in the 1860s seems overwhelming. Why would anyone believe that, in our fundamental biological nature, we operate like accounting machines? The answer to that question is simple: to rescue the discipline of economics and, with it, the moral authority of money.
After 2008, which witnessed the largest financial crisis since 1929 leading to the longest recession since the 1880s, this was the terrain in which a large number of apparently intelligent people believed political economy should be debated. Peering inside the brain would reveal what exactly had gone wrong. Thus it was not the strategic lobbying of banks against financial regulation from the 1980s onwards that was to blame. Nor was it the revolving door between the White House and Goldman Sachs. Neither was it the fact that investment banks were able to bribe credit-rating agencies into praising financial products that were full of junk. No. The problem that had struck the financial world was one of the wrong kinds of neurochemicals.
Explanations were legion. There were too many men in Wall Street, driven by too much testosterone!31 Too many of the bankers were high on cocaine, which led to dopamine being released when it shouldn’t have been!32 Bankers had simply forgotten about the biological flaws in their brains, which led them to be overconfident at the wrong moment (blame cavemen for not having evolved out of that one). They were victims of evolutionary malfunctions.33 In response, traders have discovered meditation practices as ways of trying to calm themselves to a state of better-calculated risk-taking. A medicine is offered by the company truBrain, a neurosupplement developed on the basis of EEG brain scans run on traders while trading, which promises better decision-making in the market. Some are simply fortunate to be endowed with brains that ‘tip them off’ when a financial bubble is about to burst.34
The neuroeconomic prejudice is that the mechanical, mathematical view of the mind ought ultimately to be correct. Of course there are anomalies, when neurochemicals are produced in the wrong quantity, or at the wrong time. But by tracing when these occur and building them into our calculations, the mind can be relied upon to perform its balancing act once more. The truth is that whenever policy-makers, economists or business leaders start to dabble in the neuropsychology of reward or incentives or dopamine, their agenda is really a different one altogether: to ensure that money retains its privileged position as the measure of all value.
A financial crisis represents an acute threat to the public status of money, raising the urgency of placing ‘value’ on firm foundations. The brain is simply the latest locus for these foundations, in a history that snakes back to the 1860s. Much of our interest in pleasure and happiness today derives from a tradition of economics that only requires sufficient theory of the mind, as is required by a free market economy. To suggest that such theories can be divorced from that political and cultural context is like trying to understand a set of kitchen scales without any understanding of what cooking involves. When the three young men in the Royal London Hospital recognized that neck pain equals compensation payout, they were simply exploiting an idea that is integral to our contemporary trust in markets. Unless the idea of fairness can be disentangled from the notion of ‘value for money’, with all of the psychological questions that the notion poses, philosophical quandaries such as whiplash will proliferate.
Markets are one context in which such ideas have been developed in the broader service of capitalism. But they are far from being the only one. Other economic and political institutions require quite different ways of imagining and measuring our pleasures and well-being. After economists shut the door on psychology during the 1890s, psychologists were free to engage in economic activity on their own terms, with their own paymasters. Different metaphors and assumptions about our minds came into play, with their own implications for how capitalism would develop. Our current preoccupation with quantities of inner happiness is as much a legacy of these, as it is of Jevons and those who followed him.