Tolstoy, Kirzner, and Happiness as a Process
A recent Liberty Fund Virtual Reading Group explored the theme of joy in Leo Tolstoy’s novel Anna Karenina. For Tolstoy, happiness is not an end state that a person can reach. It is an ongoing discovery process filled with trial and error. This is similar to the way many economists view markets.
One of F.A. Hayek’s most famous articles, for example, is titled “Competition as a Discovery Procedure.” NYU’s Israel Kirzner dedicated his career to the idea 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, error correction, and learning.”
Tolstoy’s characters in Anna Karenina each go through Kirzner-style processes of pursuing happiness. The title character, the unhappily married Anna, begins an affair with a dashing military officer named Vronsky. Parallel to their story is Levin, a young man Tolstoy modeled after himself, and Ekaterina, more often called Kitty, a debutante who is both kind-hearted and impressionable. The novel follows their lives, along with those of their family members and other people around them.
For many of the characters, part of their happiness discovery process is figuring out where to live. They go back and forth between the city and the country, with varying results. The country is a good fit for Levin, who has a pastoral romantic streak; his time in cities reinforces this for him.
Anna and Vronsky are more comfortable in Moscow and St. Petersburg conversing in salons, attending the theater, and dancing at balls, and don’t do as well out in the country. Different people have different preferences, both in markets and in happiness.
However, Anna and Vronsky’s affair is a scandal in their high society city circles. While the male Vronsky is mostly accepted back by his old friends, Anna is shunned in a double standard typical of the time and is isolated and lonely. Anna and Vronsky move abroad for a time to escape social censure, and then to a country estate.
They try new things in these settings, just as an entrepreneur would. While in Italy, Vronsky discovers his artistic talent, though he is disappointed that his skill with the paintbrush is limited to that of a copyist transcribing what he sees. A true artist, such as the one he and Anna meet and who paints her portrait, can instead create original interpretations and can bring hidden qualities into the open. Realizing this, Vronsky puts down his brush.
Anna tries her hand at starting a charitable school at their country estate, but pays more attention to those children than to the baby daughter she has with Vronsky. She also misses the son she left behind with her husband.
Just as most new businesses fail, many of these experiments in pursuing happiness come up short. Anna’s journey eventually ends in suicide. Vronsky ends up a broken man, last seen on a train on his way to volunteer in the Serbo-Turkish war.
Levin, the young Tolstoy stand-in, is the character whose happiness process is the most successful. That is because after many failed attempts, he eventually discovers moderation. He begins the book as an enthusiastic rural romantic, idealizing peasant farmers and their way of life. He then careens in the opposite direction into almost a contempt for peasants, who seem unable to make good decisions on their own.
During this period Levin works on a book on political economy, favoring an agrarian economy run by experts. He never finishes it, abandoning it for other, more fulfilling purposes in the same way that an entrepreneur stops making products that lose money, and switches to other products that people value more highly.
A lifelong religious skeptic, Levin near the end of the book is overcome by a religious fervor that he finds as unsatisfying as his earlier skepticism. Only at the very end does he find peace by moderating his new zeal into a quiet, contemplative faith.
Levin’s wife Kitty, who tends to take on the characteristics of the people around her, pursues happiness by choosing the right company. After spending an unhappy time in Anna’s orbit, and then unhealthily emulating a young woman she meets at a health resort, she finds herself at her best when surrounded by her family and like-minded friends.
Each character in Anna Karenina goes through a different discovery process, just as every market actor does. Also like markets, the process does not go perfectly for everyone in Anna Karenina.
Happiness and economics are not the same thing. But the processes underlying them have enough in common where, if you understand a little about one, you can use that to better understand the other.
Frank Knight, the great University of Chicago economist, wrote in “Ethics and Economic Reform” on page 55 in the collection Freedom and Reform, that “to call a situation hopeless is for practical purposes the same thing as calling it ideal.” The problem with perfection is that it can’t be improved upon. On reflection, this is a depressing thought. Knight was writing about markets, but the same thing is true of happiness.
That is why it is important to think of both markets and happiness as processes. Nobody can be perfectly happy, just as markets can never reach perfect competition. But in both, there is always room for improvement, and always room for optimism.
Economics, at its core, is not about money, efficiency, or maximizing utility. It is about how people find ways to get along with each other—and how they don’t. No wonder its insights apply so well to the pursuit of happiness, which as Tolstoy describes, works in a similar way.
Ryan Young is a senior economist at the Competitive Enterprise Institute.
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