The Stoic philosopher Marcus Aurelius once said, “Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.” At first glance, this may seem like a philosophical musing on human perception, but upon closer examination, it reveals something more profound about the limitations of our understanding and knowledge. Whether art, science, or daily interactions, our perspectives are shaped by personal experiences and biases, meaning the “truth” often remains elusive. This is particularly problematic when we consider the world of economics, where one of its most fundamental assumptions—complete information and transparency—is central to its models. What happens when we realize that everyone sees the world differently, and thus, accurate, objective knowledge may not exist? Let’s explore how this assumption unravels, using Marcus Aurelius’ wisdom as a lens.
The Nature of Subjective Experience
As Marcus Aurelius points out, everything we encounter is filtered through our experiences, biases, and emotions. This subjectivity permeates every facet of life, from media consumption to personal relationships, as highlighted by several examples:
- Media and News: The same event is often reported in vastly different ways, depending on the perspective of the outlet or journalist. What’s presented as fact is shaped by underlying ideologies and biases.
- Social Interactions: Even in one-on-one conversations, people walk away with different understandings of the same discussion, informed by their unique experiences and emotions.
- Art and Interpretation: One piece of art may evoke joy in one person and sadness in another. There is no single “truth” in how art is received.
- Science and Knowledge: Even the “objective” world of science is subject to evolving interpretations, with theories that are constantly revised as new information becomes available.
The overarching theme here is that perception is inherently subjective, which presents a challenge when systems or disciplines rely on the assumption that humans can operate with complete, unbiased information.
The Assumption of Full Information in Economics
In economic theory, the concept of complete information assumes that all market participants have access to the same complete data set. This forms the bedrock of models that describe rational decision-making, market efficiency, and equilibrium. The belief is that with perfect transparency, consumers, firms, and governments will make decisions that optimize outcomes.
However, as Marcus Aurelius reminds us, what we hear is an opinion, and what we see is a perspective. Therefore, the assumption that complete, objective information exists for everyone, or even anyone, is fiction. People interpret data differently, prioritize different aspects of information, and often need a more complete picture. For example:
- Market Behavior: Two investors may receive the same financial report, but one might see it as an opportunity to buy, while another views it as a sign to sell. Their perceptions of risk, potential, and broader economic conditions diverge.
- Consumer Choice: Individuals don’t just make decisions based on price and quality; their cultural backgrounds, personal values, and emotions play a role. According to economic theory, a person might pay more for a product because of perceived brand value, not because it’s the “rational” choice.
- Policy Decisions: Governments may create policies based on economic models assuming complete information, but in practice, the populace does not need equal access to all the information required to make informed decisions, leading to unintended consequences.
The inherent subjectivity of human experience questions the possibility of complete information. If everyone interprets data differently, how can economic models rely on the assumption that all participants are making rational, informed decisions?
Does Economics Fall Apart Without This Assumption?
If we strip away the assumption of complete information, it exposes a vulnerability at the core of economic theory. How can we predict behavior, market trends, or policy outcomes when the foundation of agreed-upon truth is missing?
The answer may lie in rethinking economic models altogether. Instead of assuming perfect information, economists could focus on how individuals act based on incomplete, biased, or fragmented data. Behavioral economics already touches on this by examining how cognitive biases and heuristics influence decision-making, but it’s just the beginning.
This shift would require acknowledging that economic behavior is less about optimal decisions and more about navigating uncertainty. It also means that economists must accept broader outcomes as valid within any given model, embracing unpredictability and variability as natural aspects of human behavior.
The Larger Implications for Social Sciences
Beyond economics, Marcus Aurelius’ insights have profound implications for the social sciences. Many disciplines—psychology, sociology, political science—rely on the idea that human behavior can be predicted based on shared truths or rational frameworks. However, recognizing that no two people see the world similarly complicates efforts to establish universal laws about human behavior.
The social sciences, like economics, may need to evolve toward a more flexible understanding of human nature that accounts for subjectivity, diversity of experience, and the limits of knowledge. As Marcus Aurelius suggests, we must be humble in our assumptions and acknowledge that even our most rigorous theories are shaped by perspective, not immutable truth.
Marcus Aurelius’ quote challenges us to reconsider how we approach knowledge and truth. In fields like economics, where complete information is a necessary assumption, this presents a significant crack in the foundation. By recognizing that what we see and hear is shaped by subjective experience, we open the door to new ways of understanding human behavior, market dynamics, and the role of uncertainty in decision-making. Rather than falling apart, economics and the social sciences can evolve, embracing complexity, variability, and the limitations of human knowledge as essential elements of their study.
