Economics presents us as utility maximising agents – we give up certain things in order to get others, based on our assessment of the utility each will provide. The true cost of each choice is its opportunity cost – the alternatives this choice involves foregoing, each with their own utility.
One thing this model neglects, I think, is the total loss of the framework of utility that comes with death; and, similarly, the total loss of any choice between any alternatives. Death is the end of choice, and not an alternative like any other, with its corresponding pleasure or pain. It is a disruption or destruction of the entire system of pleasure and pain by which our lives are guided. But this disruption is also one of the most powerful motivating forces behind our economic behaviour.
Now, death may not be the end. More relevantly, people may not believe it to be the end. So apparently irrational economic behaviour could, theoretically, be analysed in terms of attempting to maximise utility after death. Also, the thought of death, and its consequences, is always an element of our current mental functioning. The thought of the prestige a glorious death would bring us, for example, is a pleasure we can enjoy here and now – and this pleasure may be enough to drive us towards self-sacrifice. Death may be the end of thought – but the thought of death, which is the only experience we ever have of it, is always a part of our living mental processes. So even the total destruction of thought, choice, pleasure, pain, etc, cannot be separated from the energies of life.
All the same, the ever-present possibility – indeed inevitability – of the loss of the framework we use to make decisions is a constitutive feature of this framework. It is something that is always factored in to our ways of making decisions – but which orthodox economics seems unable to take into account.
As an example, look at economics’ treatment of eating and drinking, the most basic forms of consumption. These behaviours are driven, we’re told, by their utility. Eating brings us pleasure, starving brings us pain – which indeed explains why people favour one over the other. But this framework ignores the more basic explanation for our behaviour and sensations – we need food and drink to live, and thus to experience any pleasure or pain at all.
Economics neglects this, I think, because the discipline finds it difficult or impossible to include the constitutive possibility of a model’s elimination within that model. How can you model for the model’s destruction? How can you model for a possibility which is, by definition, a possibility in which your model does not apply?
This is a very general problem. God knows the solution. But this kind of thing is worth bearing in mind, I think, as we wade through orthodox economic theorising – including such statements as: “All costs are ultimately opportunity costs.” (Krugman, Wells, Graddy, ‘Economics’, p. 7).