When John von Neumann and Oskar Morgenstern published their Theory of Games and Economic Behavior in 1944, they announced their desire to transform economics from a theory centered on parametric choices into one centered on strategic interactions among the members of society. While that professional shift in focus from rational action to societal interaction didn’t materialize, in 1964 the psychologist Edward Byrne published The Games People Play. That book sought to incorporate some concepts from game theory into substantive interactions among people; rather than working with parametric maximization, Byrne sought to bring ideas from game theory to bear on some evolutionary dynamics of human relationships. In this project Abby Devereaux and I pursue an ecological orientation toward social life. The object we denote as society is not postulated in advance of analysis but is generated inside an ecology of continually evolving human interactions: the intuitions of von Neumann and Morgenstern meet those of Edward Byrne.

During my graduate student days (1963-66) I was enchanted by the vision for human living that I encountered in reading Richard Cornulle’s Reclaiming the American Dream. A few years later, I was retained as one of many consultants to the Filer Commission on Philanthropy. That experience disappointed me deeply, for reasons I didn’t understand then but do now and which map onto the distinction between the classical and neoclassical orientations toward economics. Lenore Ealy received a Ph.D. in history from Johns Hopkins in 1997, but the primary thrust of her career has been devoted to studies of philanthropy and voluntary association in conjunction with the challenges humans face in living together. Modern economics is materialist at its core, which bends philanthropy to that core. Classical economics points in a contrary, philosophically idealist direction, suggesting in the process a wholly different orientation toward philanthropic activity which this project explores. At base, philanthropy springs from a non-sentimental recognition of a common humanity portrayed by a Great Chain of Being (Arthur Lovejoy 1936) while recognizing that each of us operates from particular links in that chain. 

Modern economics is grossly derelict, though that dereliction is rampant throughout society in reifying collective entities when action is a property only of individuals. A German thinker from a century ago, Carl Schmitt, explained that political action turned on the friend-enemy distinction. Similarly, William Riker’s (1962) Theory of Political Coalitions explained that democratic action normally followed the principle of the minimum winning coalition: the members of a winning coalition receive the largest gain when its size is the least possible needed to win, normally a bare majority. Once you look inside winning coalitions, you will see that not all members are equal. Those spoils are highly skewed, with the distribution of those spoils being governed by types of parliamentary rules that govern relations among the members of the governing coalition. Democracy is typically portrayed in such sweet and lovely terms as promoting the public good or advancing the common interest. Such representations avoid examination of how democracy actually works. This project approaches democracy from the inside, revealing the types of transactions that grease the political wheels. Initial exploration into this project makes it easy to understand why the preponderance of legislators leave their positions substantially wealthier than when they first occupied them, despite the modesty of their salaries.

Traditional economics works by positing systemic equilibrium which implies congruency of that equilibrium with all individual actions inside that system. While a reasonable person might find this presumption fatuous in the extreme, it has supported more than a century of economic research. Even more, as that presumption has been weakening in recent years, it has given way to a presumption that democratic politics has the potential for restoring that congruency. In sharp contrast, this project pursues a systems-theoretic orientation toward society. There is no living as isolated and independent individuals. We all live unavoidably among others inside systems of many forms and types, and this situation requires different schemes of thought from what economists are accustomed to. For instance, economists dispute whether the collapse of 2007-08 resulted because government failed to control market participants or because government participation was too heavy. The alternative, systems orientation, attributes systemic outcomes to system features and structures. Among other things, the systems orientation places greater emphasis the properties and moral imaginations of the participants in those systems. 

Numerous celebrations are clearly being planned around July 2026. Nearly all of these will surely reflect the polarities of competition between political parties. Orthodox economics is comfortable with party competition because the abstract conceptual categories with which economists work can be subject to wide variations of interpretation. This variation is not a source of problem because all those participants are united in their belief, which came into economics early in the 20th century, that it is the state that bears primary responsibility for the good order of society: people might write the first draft of their lives through their market activities, but it is the job of the state to perfect that first draft. This project explains how the orthodox framework of economic analysis facilitates a form of self-deception that channels political outcomes in directions favored by ruling coalitions. In their History of Taxation and Expenditure in the Western World(1986), Carolyn Webber and Aaron Wildavsky explain that history across regimes and periods as the emergent outcome of competition among differently situated people over how they were to live together. It is surely no different today. This project takes an inside-out approach in contrast to the customary outside-in approach to evolutionary phenomena. 

While Marta was finishing her dissertation, she and I published “Dyads, Triads, and the Theory of Exchange” in 2013. This paper advanced a categorical distinction between two forms of exchange-based relationship. The dyadic relationship covered all relationships where participation was truly voluntary, such as illustrated throughout Elinor Ostrom’s (1990) Governing the Commons. The triadic relationship covered the interjection of democratic governance into privately governed relationships. With democracy, comes ideology and theater in place of the working out of consensus among participants when human relationships are privately governed. This research project entails Marta’s and my expanding that paper from 2013 into a book which will soon be ready for publication. 

In 2024, Meg Tuszynski and I published Reason, Ideology, and Democracy (Palgrave Macmillan), though we had published other items before that. Meg is Managing Director of the Bridwell Institute for Economic Freedom at SMU. Much of the work on economic freedom seeks to relate measures of economic freedom to rates of growth. This project takes a somewhat different approach to this subject. The preponderance of economists seem to be philosophical materialists even if not Marxists, in that the core of economic analysis rotates around resources and their ownership and use. Philosophically, those Scots of whom I am so fond were idealists and not materialists. Human life and its conduct by the carriers of those lives rotates around the moral imaginations people have and not the things they have. While supporters of markets understandably emphasize mutual gains from trade, that doesn’t end the scope for social theorizing. Yes, there are people who are eager to produce and trade, but there are other human characteristics in play in society, and these lead us into the realm of complex social analysis, especially when organized societies are not limited to market transactions but also include politics of myriad types and forms. With politics comes expanded scope for envy, arrogance, self-deception, and systemic lying—the latter referring to the large and ever-expanding gulf between the ”promises” politicians make to people in their capacities as taxpayers and in their capacities as beneficiaries, now measured at several trillion dollars.