Bringing Proverbs to Policy: Classical Economics, Proverbial Wisdom, and Applications for Welfare Policy

Abstract

Economists have had tremendous influence in designing antipoverty programs in both Great Britain and America over the last 200 years. However, today’s economic experts have lost some respect for the wisdom of non-experts, or ordinary people, that was held in high regard by their intellectual forerunners. This article argues that the antipoverty programs designed by experts would be improved by the incorporating the wisdom of ordinary people. Classical economists from Adam Smith (the founder of modern economics) to John Stuart Mill (“the most influential English language philosopher of the nineteenth century” according to the Stanford Encyclopedia of Philosophy) believed that experts should pay close attention to the wisdom of ordinary people that is captured in proverbs, or proverbial wisdom. According to the Oxford English Dictionary, a proverb is a “short piece of advice” whereas wisdom is “knowledge or experience that develops within a society or period”. We can think of proverbial wisdom as advice that represents practical knowledge. In other words, proverbial wisdom is similar to aggregated anecdotal evidence that has been passed between people across time. The primary difference between economic experts today and non-experts is that experts see the world through formal models, whereas non-experts use the summation of experiences. A measure of these experiences (for instance, the experience of the median person or even the median voter) are transmittable through proverbial wisdom. The public policies of poor relief since the 1800s have been driven by debates over expert models and not debates between models and proverbial wisdom. Put another way, the rise in the expert has led to the fall of proverbial wisdom. Proverbs, as the reflection of human experience, could help to avoid injustice by guiding a system of heuristics to help with judging morality. For both Adam Smith and John Stuart Mill, the “Golden Rule” which they attributed to Jesus Christ, was especially meaningful in this regard. However, reliance the proverbs without the application of reason was not only unwise, but equivalent to idolatry. This article covers the “rise of the welfare expert” and the development of antipoverty policy in both Great Britain and the United States since the 1500s. The article also covers the use of proverbs in classical economics. Finally, the article concludes by making recommendations on how antipoverty might be improved in the United States.