Two Minds: Intuition and Analysis in the History of Economic Thought
Roger Frantz | 2004-12-15 00:00:00 | Springer | 178 | Economics
The "Two Minds" noted economist Roger Frantz explores in this landmark book are, first, the analytical mind and, second, the intuitive mind. In part one he presents the leading theories on intuition, discusses recent developments in cognitive science, and borrows from such non-economist intuitors as Albert Einstein, Jonas Salk, Henri Poincare, Ludwig von Beethoven, and Robert Louis Stevenson to explore the role of intuition in science and creativity.
In part two, Frantz considers the presumably analytic and logical nature of economics and then demonstrates the many ways in which economists from Adam Smith to Herbert Simon have relied on intuition as a fruitful mental activity.
This book provides a rich complement and alternative perspective to some of the theoretical and mathematical models that have dominated the dismal science since the late 1940s. Reviews
Frantz had the opportunity in this book to show how Adam Smith ,John Stuart Mill ,Joseph Schumpeter,John Maynard Keynes,Frank Knight and Herbert Simon(Daniel Ellsberg is overlooked)successfully integrated a clear and distinct role in decision theory,economic theory and economic thought for intuition.Unfortunately,he succeeds in a haphazard and vague manner.This is due to the fact that his discussions of intuition overlooks extremely important sources such as Daniel Ellsberg and Gary Klein.Paraphrasing Klein(Sources of Power,1998,p.31),intuition "...depends on the use of experience to recognize key patterns that indicate the dynamics of the situation...some aspects of intuition come from the ability to use experience to recognize situations and know how to handle them ".Frantz does not have a clear understanding of what intuition is.This lack of understanding appears many times,for example, on p.91 when he discusses Keynes's concept of animal spirits,which Keynes discussed in an informal manner due to his inability to explicitly integrate an optimism-pessimism index, a la Hurwicz ,into his discussions of the role of confidence that a decision maker has in his estimates of probability(Ellsberg successfully integrated such an index(alpha) into his approach along with an index(rho) to measure confidence.)Keynes's use of the term "animal spirits" is his informal way of emphasizing the importance of the degree of optimism or pessimism a decision maker has,given his confidence in his information base.Frantz ,unfortunately, conflates the state of confidence with animal spirits and conflates animal spirits with intuition.Contrary to Frantz,animal spirits do not express reasons of which we are not aware.Animal spirits has absolutely nothing to due with reasoning.It is an emotion that may have feedback effects on conclusions reached primarily by reasoning based on the most complete information base a decision maker can construct plus past experience(intuition).Frantz is correct that animal spirits played a major role in and was a major determinant of new investment in Keynes's theory of investment(chapters 11 and 12 of the General theory plus the two page extension on pp.239-241 in chpter 17).However,animal spirits deals with the optimism and pessimism of decision makers and has nothing to do with confidence,intuition,or reasoning.Download this book!Free Ebooks Download