A recent Liberty Fund Virtual Reading group explored the theme of happiness in Leo Tolstoy’s novel Anna Karenina. For Tolstoy, happiness is not an end that one can reach. It is an ongoing process of discovery full of trial and error. This is similar to how many economists view markets.
One of FA Hayek’s most famous essays, for example, is entitled “Competition as a Discovery Procedure.” Israel Kirzner of NYU devoted his work to the concept of markets as a process, rather than an outcome. George Mason University economist Rosolino Candela describes Kirzner’s view of markets as “a process of discovery, correction, and learning.”
Tolstoy’s characters in the Anna Karenina each goes through a Kirzner-style process of the pursuit of happiness. The title character, the unhappily married Anna, begins a relationship with a dashing military officer named Vronsky. Accompanying their story are Levin, a young Tolstoy model, and Ekaterina, often referred to as Kitty, a kind-hearted and impressionable first singer. The novel follows their lives, as well as those of their family members and other people around them.
For many actors, part of their process of finding happiness is figuring out where to live. They went back and forth between the city and the country, with various results. The country is a perfect fit for Levin, who has a romantic history of ministry; his time in the cities reinforces this.
Anna and Vronsky are more comfortable in Moscow and St. Petersburg they talk in salons, go to the theater, and dance at balls, and do not do well in the country. Different people have different preferences, both in markets and in entertainment.
However, Anna and Vronsky’s story is scandalous in their high-class urban circles. While the male Vronsky is more accepted by his old friends, Anna is shunned in the usual way of the time and is lonely and lonely. Anna and Vronsky move abroad for a time to escape public censure, and then to a country estate.
They try new things in these settings, just like an entrepreneur would. While in Italy, Vronsky discovers his artistic talent, although he is disappointed that his skill with a paint brush is limited to that of a copyist who writes down what he sees. A true artist, like the one he and Anna met and painted his portrait, can instead create a true rendering and can bring out the hidden qualities in the open. Seeing this, Vronsky puts down his brush.
Anna tries her hand at starting a charity school in their country, but she pays more attention to those children than to the daughter she has with Vronsky. She also remembers the son she left behind with her husband.
Just as many new businesses fail, many of these experiments in the pursuit of happiness fall short. Anna’s journey ends in suicide. Vronsky ends up a broken man, last seen on a train on his way to volunteer for the Serbo-Turkish war.
Levin, the independent young Tolstoy, is the protagonist of his most successful happiness. That’s because after many failed attempts, you finally find balance. He begins the book as a passionate rural man, who makes good on small farmers and their way of life. He then looks the other way and almost despises the farmers, who seem unable to make good decisions for themselves.
At this time Levin was working on a book on political economy, favoring an agricultural economy managed by experts. He doesn’t finish it, he leaves it for other satisfying purposes in the same way that a businessman stops making products that lose money, and switches to other products that people value more.
A lifelong skeptic of religion, Levin towards the end of the book succumbs to a religious zeal that he finds as unsatisfying as his earlier skepticism. It is only at the end that he finds peace by tempering his new passion into a quiet, meditative faith.
Levin’s wife Kitty, who often takes on the traits of the people around her, pursues happiness by choosing the right company. After spending an unpleasant time in Anna’s lane, and inappropriately impersonating a lady she meets at the health center, she finds herself at her best when surrounded by her family and like-minded friends.
Each character in the Anna Karenina he goes through a different discovery process, as does every market actor. And like markets, the process doesn’t go well for everyone in it Anna Karenina.
Happiness and economics are not the same thing. But the underlying processes are similar enough that, if you understand a little about one, you can use that to understand the other better.
Frank Knight, a senior economist at the University of Chicago, wrote in “Ethics and Economic Reform” on page 55 of the collection. Freedom and Reformthat “calling a situation hopeless for practical purposes is the same as calling it ideal.” The problem with perfection is that it cannot be improved. If you think about it, this is a depressing thought. Knight was writing about markets, but the same thing is true about happiness.
That’s why it’s important to think of both markets and happiness as processes. No one can be perfectly happy, as markets cannot achieve perfect competition. But in both, there is always room for improvement, and there is always room for optimism.
Economics, at its core, is not about money, efficiency, or maximizing consumption. It’s about how people find ways to get along—and how they don’t. It is no wonder that their understanding is so effective in the pursuit of happiness, which works in the same way as Tolstoy described.
Ryan Young is a senior economist at the Competitive Enterprise Institute.
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