Issue 28 Vol II, November 30, 2006

A N A L Y S I S

The Extending Domains of Economics
Vinod Anand

THE science of economics has now obtained a multi-disciplinary flavour, and has sought the help of other social sciences like sociology, anthropology, political science, social psychology, and even socio biology to understand human behaviour. The boundaries are rather indistinct, which provides a healthy intellectual situation, because the approaches of different disciplines can then compete over bordering territories.  Economics has, thus, gone beyond its tunnel vision of yesteryears. It has now become a universal science to the extent that it has moved beyond rationalistic individual behaviour and market interactions. An economic problem arises whenever there is a constraint of resource scarcity, and one has to choose amongst the various options subject to the law of scarcity. Human choices (including social and political as well) are neither limited to market interactions nor do they fully meet the precept of rationality. It has also become universal because it can very well explain the behaviour of non-humans. This is an interesting dimension of economics that is gradually emerging. The frontiers of economics, thus, appear to be endless, and they have now reached the world of the non-humans.

The focus of this Paper is on non-human behaviour, which, due to many reasons appears to be more rational than human behaviour. This is based on the fact that nothing is fully perfect in the world, and so is the concept of rationality too. One can never be fully rational due to many reasons, both exogenous and endogenous. Given the same conditions, the degree of rationality (or irrationality) may vary from person to person.

Validity of economic theory and its prescriptions in human systems is subject to a number of exogenous constraints/ assumptions/parameters, determined by all kinds of man-made systems like, political set-up, economic and social structure, religions and rituals, public ethos, family environment and so on.

Many parallels have been drawn between human and bird families (of Western bluebird breed) in a study about the evolution of delayed dispersal or natal philopatry- the tendency for offspring to stay at or near home rather than look for new place to live and breed. It has been shown that accumulation of wealth brings family stability especially for this breed of birds just like the humans in terms of the fact that the female fledglings fly off on their own in late summer, but their brothers hang around through the winter and into the next breeding season, living off the bounty of their parents larder, and when the “wealth” (in terms of mistletoe berries, a winter food) runs low, the kids split. According to this experimental research, such a precept of close-knit families is common among cooperatively breeding birds of the given breed as well as humans, subject of course to the assumption that there occurs a continuous accumulation of wealth. This parallel is based on the fact that animals, including humans, can stay in one place to accumulate resources and also because of the benefits of access to accrued resources. It can, thus, be concluded that family stability comes either through ‘inherited wealth’ or ‘continuous accumulation of wealth’ or through both, especially when the family groups (humans or non-humans) are mutually cooperative.

The applicability of economic principles to non-humans is well demonstrated poetically in a poem entitled “Honeybee”. It is about honeybees and their daily routines.

“Honeybee starts early in the day
And follows the direction of the sun
It knows best its priorities in life
Knowing where to stop and when to run.


There is division of labour in the colony
A worker is busy in collecting pollen
A drone is to mate with the only queen
The queen lays eggs having tapering abdomen.


Dancing in circles it tells of food close to the hive
And recognises the odour of a flower on way
Performs tail-wagging dance for food at a distance
Working ceaselessly during the whole day.


In the honey crop nectar is converted into honey
It communicates in the language it knows
It can sting you on disturbing the hive
It works very hard, never begs or bows.”

It has been found that cockroaches have a much better concept of living as a strong household, with the motto of ‘one for all, and all for one, indicating the precept of ‘family decision’, as motivated by ‘Pareto Optimality’.  Such an outcome of this research is based on a group of 50 cockroaches for which three distinct nearby places were arranged. It was observed that the whole group settled at only one place. Later, these places were changed in terms of space in a way that only 40 cockroaches could stay in any one place. It was then seen that the group got itself divided into two sub-groups of 25 each, and got settled at two different places. Such a way of living together brings in collective well being of the group in various ways. This is also applicable to other non-humans like ants, fish, and birds of various breeds, to a large extent.

The parallel between humans and non-humans is also demonstrated in a study in terms of the simplest grammar, which is historically regarded as one of the skills that separates man from beast. It is thought that while many animals can roar, sing, grunt or otherwise make noise, linguists have contended for years that the key to distinguishing language skills goes back to our elementary school teachers and basic grammar. Sentences that contain an explanatory clause are something that humans can recognise, but not animals. In other words, it means that recursive grammar is uniquely human, It is really amazing to know that in an experiment performed on songbirds it was found that after training, nine out of 11 songbirds picked out the bird song with inserted phrases about 90 per cent of the time, whereas two continued to flunk grammar. This experiment clearly shows although language and animal cognition is a lot more complicated, yet it can be achieved to some extent.

There is no dearth of such specific studies.  Biologists have discovered that the decisions of animals can often be interpreted in marginal terms. Consider a bird foraging for seeds or insects that are distributed in patches. The bird must decide when to leave its current patch and fly off to look for another. As it continues to exploit the current patch, food becomes sparser and sparser there; the bird’s marginal ‘revenue’ (energy intake) per unit of time spent in the patch is falling. But if the bird abandons its current patch, it loses energy intake in the dead time before it locates a fresh patch. Bio economic reasoning in this situation says that the bird should continue to exploit its current patch until the marginal ‘revenue’ per unit of time spent there falls to equality with the average ‘revenue’ it can attain elsewhere, allowing for the dead time between patches. Field studies confirm that foraging birds do indeed behave as if they solve this economic problem.

There is another example revolving around the law of demand. In the case of 18 animal experiments, it has been found that the law of demand was supported in 15 (83. 33 per cent) experiments, contradicted in 1 (5. 55 per cent), and there were mixed or uncertain results in 2 (11.11 per cent) experiments. This is just indicative of the fact that the law of demand is also applicable in its own way amongst the non-humans.

In terms of what we have said above, it very clearly appears that economics is progressing very well to its endless frontiers. It is really amazing! There is no doubt that in time to come its horizons would widely expand and it would surpass all knowledge in a way that it will become an “infinite” science.

[The author is Professor of Economics at the National University of Lesotho, Southern Africa]

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