The economics of Szasz: Preferences, constraints and mental illness

Abstract

Even confirmed economic imperialists typically acknowledge that economic theory does not apply to the seriously mentally ill. Building on psychiatrist Thomas Szasz’s philosophy of mind, this article argues that most mental illnesses are best modeled as extreme preferences, not constraining diseases. This perspective sheds light not only on relatively easy cases like personality disorders, but also on the more extreme cases of delusions and hallucinations. Contrary to Szasz’s critics, empirical advances in brain science and behavioral genetics are largely orthogonal to his position. While involuntary psychiatric treatment might still be rationalized as a way to correct intra-family externalities, it is misleading to think about it as a benefit for the patient.