This past semester, I enrolled in my first-ever philosophy course through the Harvard Extension School. Not having any prior experience with philosophy, I figured familiarizing myself with some of the most well-known philosophers and their thoughts on the meaning of life and more would be a good place to start.
Over the semester, I considered deep and dynamic philosophical ideas, and throughout the course I honed a new skill: the ability to review a question, deconstruct an argument, and respond by posing a new, unaddressed question….or twelve.
As my ability to understand this process grew, the economist in me couldn’t help but want to collaborate with my new inner philosopher. Thus, I have a new pressing question at hand:
What kind of economist would Jean-Paul Sartre have been?
In order to unpack this question, I will focus on two popular thoughts Sartre expressed in his work. First, the idea that “existence precedes essence,” originating from Sartre’s 1946 publication Existentialism is a Humanism
, and second, his famous line, “Hell is other people,” drawn from his 1944 play No Exit.
In this first quotation, Sartre references two schools of thought: essentialism and existentialism. Traditionally, essentialism explains that everything in this world has an inherent essence that predetermines what a thing will be before it has become. For example, a tree is a tree because of its innate characteristics that all trees have. Even before a tree is created, there is an essence of what it is to be a tree. In more relatable terms, we can imagine that before you or I were born, our parents had expected what general essence we would have—they were not, for example, in any way surprised that we looked like a human and not a dog.
Alternatively, existentialism rejects this assumption that any one thing has a predetermined essence. Instead, it claims that a thing’s essence is created after its existence commences. Back to the tree: Sartre explains that a tree exists in the world because it has roots, branches, leaves, and so on. This defines its presence. But a tree also has an essence, and what gives a tree essence is how we integrate it into our environment, how we perceive its presence, and what use it serves. What Sartre concludes is that the existence of the tree precedes this essence that we have assigned it through our societal practices.
There is, however, a caveat to the practice of developing essences, which leads us to Sartre’s conclusion that “Hell is other people,” and the climax of my philosophical musings.
Sartre claims that we are born into a world where essences have already been assigned—even though they are not predetermined. And while this is not to say that a thing’s essence cannot be changed, it is to affirm that society as a collective whole has already agreed on a use pattern that will inevitably interfere with one’s perception.
So how does this tie to economics? Well, I would argue the following: If Hell is other people, then perhaps Hell, too, is capitalism.
How did I come to make this claim?
Well, a fundamental economic tool is finding market equilibrium: where supply meets demand. But while many consumers will agree to pay the price firms have assigned to their products—as is inherent in the calculation, itself—many might disagree with their value.
Imagine how this might be true for luxury goods. We are born into a world where the Louis Vuittons and Salvatore Ferragamos of the world are priced much higher than other brands offering similar goods. But since we’ve arrived to the scene where the brands’ essences have already been defined as exclusively expensive, there’s not much we can do to convince these companies that their prices should actually be a fraction of what they’re charging.
So while Sartre never saw a Vuitton handbag or Ferragamo shoe, based on his logic, we can venture to say that he agrees with this economic assessment. In a perfect market equilibrium, supply and demand intersect exactly where profits are maximized for sellers and utility, for consumers. But when goods or services have well established luxury essences, it is destined that they will command higher prices than their non-luxury counterparts.
This might be enough philosophical thought for one day, but if you’re looking for more economics, check out Economics for Managers to learn the economic skills you can leverage in your business.