Behavioural assumptions in Nassau Senior's economics

Abstract

Behavioural assumptions in the form of psychological and/or socio-economic human motives in examining and explaining economic phenomena, situations and trends were used by the time of the mercantilists. A leading figure in this methodological approach, particularly during the classical period, was Nassau Senior. In the present article, after presenting relevant ideas and arguments in regard to special human behaviour employed by some outstanding authors before Senior, the analysis is directed towards exploring the role of the two main motives that he stressed: the motive for variety, and the motive for distinction. It is concluded that Senior deserves a tribute for developing an important framework of the various influences of specific human behaviour on some economic variables. Behavioural assumptions in the form of psychological and/or socio-economic human motives in examining and explaining economic phenomena, situations and trends were used by the time of the mercantilists. A leading figure in this methodological approach, particularly during the classical period, was Nassau Senior. Whilst other classicists used behavioural assumptions in their writings, such as wealth and profit motives, Senior elaborated on the behavioural assumptions much more and influenced later eminent economists, such as Jevons and Marshall. More specifically, Jevons (1871, pp. 40, 53-4; see also White, 1992, pp. 69-70) used Senior's 'Law of Variety' to justify his theory of the 'variation of the final degree of utility'. Marshall (1890, pp. 73-5, 77, footnote 1, 89-90; see also Chasse, 1984) was directly influenced by Senior in the formation of his analysis of human wants and its effects on the elasticity of demand and economic growth. This recognition of Senior's behavioural approach prompted us to study his ideas and arguments in relation to the role of various human motivations in economic structure and growth. In the first section we present relevant ideas and arguments in regard to special human behaviour employed by some outstanding authors before Senior. We then direct our analysis towards exploring the role of the two main motives that he stressed: the motive for variety, and the motive for distinction. These behavioural