Tibor Scitovsky

Infobox Scientist
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name = Tibor Scitovsky


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birth_date = birth date|1910|11|3
birth_place = Budapest, Hungary
death_date = death date and age|2002|6|1|1910|11|3
death_place = Stanford, California
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citizenship = flag|United States
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fields = Economics
workplaces = Stanford University
alma_mater = University of Budapest
University of Cambridge
London School of Economics
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Tibor de Scitovsky also known as Tibor Scitovsky, (November 3, 1910 – June 1 2002) was a Hungarian born, American economist who was best known for his writing on the nature of people's happiness in relation to consumption. He was Associate Professor and Professor of Economics at Stanford University from 1946 through 1958 and Eberle Professor of Economics from 1970 until his retirement in 1976, when he became Professor Emeritus. In honor of his deep contributions to economic analysis, he was elected Distinguished Fellow of the American Economic Association, Fellow of the Royal Economic Society, member of the American Academy of Arts and Sciences, and Corresponding Fellow of the British Academy.

Life

Scitovsky was born in Hungary in 1910. As the "de" indicates, he was born into a noble family; his father held the post of Foreign Minister. He was educated at the University of Budapest (from which he held an undergraduate degree in law), University of Cambridge, and the London School of Economics. He came to the United States on a traveling fellowship. He enlisted in the United States Army during World War II, in counter-intelligence. Because he still had family in German-allied Hungary he changed his name during this time to Thomas Dennis.

After a spell at Stanford from 1946-1948, he left for Berkeley and remained there until 1968, although he was on leave to do research at the Organization for Economic Cooperation and Development.

Starting as early as 1959, he began an examination of the nature of human well-being from a broader viewpoint than is customary among economists.

His contribution to welfare economics

Scitovsky can be said to have made his mark in welfare economics - but a mark of various hues. In the first place Scitovsky is the author of the "Community indifference curve" (CIC) (1941, 1942) which is a remarkable analytical device that can be superimposed upon a production possibilities frontier and thus help one visualize the Paretian conditions for optimality. However, in those same papers, he also unveiled what became known as the "Scitovsky Reversal Paradox". What he demonstrated was that if an allocation A is deemed superior to another allocation B by the Kaldor compensation criteria, by a subsequent set of moves by the same criteria, we can prove that B is also superior to A. The Scitovsky paradox threw much of welfare theory into confusion during the 1940s and 1950s.

Like Abba Lerner, Scitovsky embraced the Keynesian Revolution from a welfare perspective. His 1951 book integrated the analysis of "power asymmetries" in different markets with macroeconomics, basing a theory of inflation on this concept (also 1978). He also ventured deeply into international trade theory, including the tarrifs, economic integration, import-substitution policies, balance of payments problems and economic development (e.g. 1958, 1969, 1970).

Starting around 1960, Scitovsky returned to "welfare" theory, but now with a different tone. Welfare, Scitovsky argues, has been confused with "consumption" and consequently "growth", but human progress must be measured qualitatively as well as quantitatively. Many societies, he claims, can attain better quality consumption with fewer resources while other, with numerous resources, only achieve lower quality consumption. Thus, argues Scitovsky, we should be careful when making welfare comparisons for quality matters.

Scitovsky has struggled over the years to give us a precise definition of "quality", but it has generally been related to "joy" in consumption. In particular, he drew on the arts as an example of the nature of human aspiration. His 1976 book, "The Joyless Economy", remains a major critique of modern and especially economic values. In it, he advised that we should spend our money on things that we will not adapt to ("pleasures", such a beautiful scenery or meeting good friends every now and then — things that can continually fascinate us and provide a degree of fulfillment) rather than wasting our time and money buying things which we get adapted to ("comforts", such as a newer and fancier-looking sofa, etc. — the pleasure of which is temporary and fades with time). [Scitovsky, T. (1976). "The Joyless Economy: The Psychology of Human Satisfaction". Oxford: Oxford University Press.] [Booth, D.E. (2004). Conspicuous consumption, novelty, and creative destruction. Pp. 11-36 in D.E. Booth. "Hooked On Growth: Economic Addictions and The Environment". Lanham, Maryland: Rowman and Littlefield Publishers.] [Kahneman, D. and Sugden, R. (2005). Experienced utility as a standard of policy evaluation. "Environmental & Resource Economics" 32: 161-181.] Certain types of consumption, he argues, are "joyless", others "joyful" and the difference between them is a composite of several things of which challenge, risk and a sense of accomplishment would be major factors.

Scitovsky has extended his ideas into social critique: specialization has taken much of the joy out of work, he has argued, and consumption in American society (more than any other) has placed far too great a stress on comfort and safety in consumption and living, thereby depriving consumption activities of their challenging, risky and difficult elements, i.e. "joy". But given the innate "need" for such joyful, risky activities in human beings, thereby we can divine the cause of certain types of human behavior (e.g. gambling, dangerous sports, crime, etc.). The "cure" for a joyless society, Scitovsky maintains, is to "educate" our consumption so as to infuse it with those joyful elements. Without such education, we are apt to surrender decisions on the quality of consumption to producers and these tend to aim for what is most amenable to mass production and comfort.

While Scitovsky's arguments may seem daring, he stands in good company: Frank Knight, Thorstein Veblen, John Maynard Keynes and John Kenneth Galbraith are but a handful of the many other prominent economists who have stressed the need to think carefully about the "qualitative" aspects of economic progress.

Major Works

*"A Study of Interest and Capital", 1940, "Economica".
*"A Note on Welfare Propositions in Economics", 1941, "RES".
*"Capital Accumulation, Employment and Price Rigidity", 1941, "RES".
*"A Reconsideration of the Theory of Tariffs", 1942, "RES".
*"A Note on Profit Maximization and its Implications", 1943, "RES".
*"Welfare and Competition: the economics of a fully employed economy", 1951.
*"Mobilizing Resources for War: The economic alternatives", with E.S. Shaw and L. Tarshis, 1951.
*"Two Concepts of External Economies", 1954, "JPE".
*"Economic Theory and Western European Integration", 1958.
*"Standards for the Performance of Our Economic System", 1960, "AER".
*"On the Principle of Consumer's Sovereignty", 1962, "AER"
*"Papers on Welfare and Growth", 1964.
*"Money and the Balance of Payments", 1969.
*"Industry and Trade in Some Developing Countries", with I.M.D. Little and M.F.G. Scott, 1970.
*"What's Wrong with the Arts is What's Wrong with Society", 1972, "AER".
*"The Producer Society", 1972, "De Economist".
*"The Place of Economic Welfare in Human Welfare", 1973, "QJE".
*"Inequalities: Open and hidden, measured and immeasurable", 1974, "Annals of AAPSS".
*"Are Men Rational or Economists Wrong?", 1974, in "Nations and Households in Economic Growth".
*"The Joyless Economy: An inquiry into human satisfaction and consumer dissatisfaction", 1976.
*"Market Power and Inflation", 1978, "Economica".
*"Asymmetries in Economics", 1978, "Scottish Journal of PE".
*"Can Changing Consumer Tastes Save Resources?", 1979, in "Economic Growth and Resources".
*"Can Capitalism Survive? An old question in a new setting", 1980, "AER".
*"Excess Demand for Job Importance and its Implications", 1981, in "Wert und Praeferenzprobleme in den Sozialwissenschaften".
*"The Desire for Excitement in Modern Society", 1981, "Kyklos".
*"Subsidies for the Arts: The economic argument", 1983, in "Economic Support for the Arts".
*"Human Desire and Economic Satisfaction", 1985, "Kyklos".
*"Psychologizing by Economists", 1986, in MacFadyen, editors, "Psychology".
*"Human Desire and Economic Satisfaction: Essays on the frontiers of economics", 1986.
*"Growth in the Affluent Society", 1987, "Lloyds BR".

References

External links

* [http://cepa.newschool.edu/het/profiles/scitov.htm Profile of Tibor Scitovsky] at the [http://cepa.newschool.edu/het/home.htm History of Economic Thought website] .
* [http://news-service.stanford.edu/news/2004/march10/scitovskymeml-310.html Obituary]