Principles of Embodiment in the Making of Economic Life

This chapter presents the argument that moving from disembodied rationality to embodied reason to study economic life requires connecting perception, cognition, and action; coupling organism and environment; and overcoming the opposition between rationality and emotion. This links the theoretical and empirical literature on embodiment to economists such as Smith and Keynes. The role of metaphor, conceptual blending, language, artifacts, and habitus in the making of the self and economic life is highlighted. In doing so, the “Hayek paradox” is resolved by showing that abstraction is not opposed to embodiment but enabled by it, and, in contrast to behavioral and experimental economics, embodiment is not portrayed as a source of disturbances to (market-based) rationality posited by a disembodied normative standard. The chapter proposes the dialectic of inward and outward embodiment as a fundamental principle of embodied reason, and traces it back to Hegelian philosophy to ground the theory of economic agency and institutional action.