The Max U Approach: Prudence Only, or Not Even Prudence? A Smithian Perspective

Econ Journal Watch 10 (1): 2–14 (2013)

13 Pages Posted: 14 Jun 2014

See all articles by David Lipka

David Lipka

Anglo-American University; International Centre for Economic Research (ICER)

Date Written: January 30, 2013

Abstract

In many works Deirdre McCloskey criticizes professional economics for too readily representing man as a maximizing agent — Mr. Maximum Utility, or Max U. McCloskey says that economic activities are not the machinations of robots or mathematical functions, but rather affairs among human beings. She prefers to approach the human being as a complex of virtues (or lack thereof). In all this, I basically concur. But McCloskey says that the Max U approach represents man in terms of one virtue: prudence. She calls the Max U approach “Prudence Only.” My concern is that associating Max U with prudence does not do justice to prudence. In treating of prudence, I draw exclusively from Adam Smith’s Theory of Moral Sentiments. Smith makes many statements about prudence. It is by no means clear that they add up to a well defined notion of prudence, but it is clear that most of Smith’s important statements about prudence do not fit the Max U approach. My paper aims to correct and avoid any notion that Smithian prudence may be thought of as maximization or optimization.

Keywords: Max U, prudence, Moral Sentiments, Adam Smith, D. N. McCloskey

JEL Classification: B12, B40, D10

Suggested Citation

Lipka, David, The Max U Approach: Prudence Only, or Not Even Prudence? A Smithian Perspective (January 30, 2013). Econ Journal Watch 10 (1): 2–14 (2013), Available at SSRN: https://ssrn.com/abstract=2449218

David Lipka (Contact Author)

Anglo-American University ( email )

Lazenska 4
11800 Praha 1
Prague 1, 11800
Czech Republic

International Centre for Economic Research (ICER) ( email )

Villa Gualino
Viale Settimio Severo, 63
10133 Torino
Italy

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