In 'Misbehaving,' an Economics Professor Isn't Afraid to Attack His Own - NYTimes.com - 0 views
www.nytimes.com/...ehaving-by-richard-thaler.html
economics rationality behavioral social science utilitarian moral reasoning theory optimization chicago
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the book is part memoir, part attack on a breed of economist who dominated the academy – particularly, the Chicago School that dominated economic theory at the University of Chicago – for the much of the latter part of the 20th century.
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economists have increasingly become the go-to experts on every manner of business and public policy issue facing society.
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rather than being a disgruntled former employee or otherwise easily marginalized whistle-blower, Mr. Thaler recently took the reins as president of the American Economic Association (and still teaches at Chicago’s graduate business program
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The economics profession that Mr. Thaler entered in the early 1970s was deeply invested in proving that it was more than a mere social science.
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But economic outcomes are the result of human decision-making. To achieve the same mathematical precision of hard sciences, economists made a radically simplifying assumption that people are “optimizers” whose behavior is as predictable as the speed of physical body falling through space.
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After so-called behavioral economics began to go mainstream, Professor Thaler turned his attention to helping solve a variety of business and, increasingly, public policy issues. As these tools have been applied to practical problems, Professor Thaler has noted that there has been “very little actual economics involved.” Instead, the resulting insights have “come primarily from psychology and the other social sciences.”
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it is actually “a slur on those other social sciences if people insist on calling any policy-related research some kind of economics.”
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Professor Thaler’s narrative ultimately demonstrates that by trying to set itself as somehow above other social sciences, the “rationalist” school of economics actually ended up contributing far less than it could have. The group’s intellectual denial led to not just sloppy social science, but sloppy philosophy.
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Economists would do well to embrace both their philosophical and social science roots. No amount of number-crunching can replace the need to confront the complexity of human existence.
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It is not only in academics that the most difficult questions are avoided behind a mathematical smoke screen. When businesses use cost-benefit analysis, for instance, they are applying a moral philosophy known as utilitarianism, popularized by John Stuart Mill in the 19th century.
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Compared against alternative moral philosophies, like those of Kant or Aristotle, Mill has relatively few contemporary adherents in professional philosophical circles. But utilitarianism does have the virtue of lending itself to mathematical calculation. By giving the contentious philosophy a benign bureaucratic name like “cost-benefit analysis,” corporations hope to circumvent the need to confront the profound ethical issues implicated.
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The “misbehaving” of Professor Thaler’s title is supposed to refer to how human actions are inconsistent with rationalist economic theory