Smrtovnica za ekonomskog čovjeka

Kada sam krenuo da pišem ovaj blog, napisao sam da će on uglavnom biti o ekonomiji, psihologiji i politici. 

Tačno dvadeset zapisa kasnije, uviđam da o ekonomiji nisam pisao skoro ništa. Malo smo se otuđili, ekonomija i ja, posljednjih par godina. 

Kako god, ovo je blog koji sam objavio na stranici LSE-a (link) i koji je nekako sažetak svega što mi se motalo po glavi u posljednje vrijeme. 

Iskreno, sretan sam i ponosan što je konačno nekako sve dobilo svoj oblik. 

Tekst je na engleskom, malo jer je pisan u tom duhu, malo jer bi se neke stvari neminovno izgubile u prevodu, a malo i zato što sam lijen. 

I tako, u nadi da vam biti zanimljiv i da će vas zbuniti (što je također nešto što sam postavio za cilj u prvom zapisu), evo:

__________

For decades now, traditional economics has been built on the shoulders of a mythical species called Homo economicus — a completely rational and selfish individual with the ability to solve even the most complex optimisation problems. 

This in itself wouldn’t be a huge problem if it wasn’t for economics’ dominant role in the social sciences and the significant impact it has had on policy-makers, journalist and the general public. Due to its power and prestige, it has had a disproportionate say in how we look at people, make sense of their motives and analyse their behaviour. Indeed, economic models have been used to predict behaviour and analyse social issues ranging from crime, racial discrimination and all the way to human relationships. 

Yes, Gary Becker even went so far as to consider marriage a cost-benefit analysis of two individuals trying to maximise their welfare, thus completely de-romanticising love and stripping it of all its beauty and magic. Furthermore, the fact that economics is the only of the social sciences considered worthy of a Nobel Prize didn’t really help in instilling humility into the discipline. 

There are now several studies, which show that neoclassical teaching of economics makes people less moral and more antisocial. What’s worse, as noted by Paul Collier in The Future of Capitalism, even other important thinkers that have influenced the field such as Jeremy Bentham and John Stuart Mill were more like weirdly antisocial individuals rather than moral giants. 

Just take this simple finding reported by Richard Thaler: Asked whether it is acceptable for a store to raise the price of its shovels after a large snowstorm, most people consider this to be unfair. The exception? You guessed it, MBA students… 

Now, you don’t have to be a great intellectual, nor a particularly honest and clear-sighted individual to acknowledge that people are neither fully rational, nor completely selfish, so it’s worth asking how such a narrow and clearly superficial view came to be so influential. 

It turns out — and this may sound unbelievable — that the reason has been simply one of convenience. Following the unfortunate mathematisation of economics that started sometime after the Second World War, it was simply easier to build models with rational agents than to deal with quasi-rational and emotional people. 

Just pause for a moment and think about how outrageous this is. It’s as if the clothing industry assumed that all people in the world are skinny and 6-foot tall because it is, well, easier and more convenient to produce clothes that way. 

In fairness, there also seems to be another reason, which has to do with arguably one of the most famous ideas in economic history. In the Wealth of Nations, Adam Smith observed how by pursing their own interest, the butcher, the brewer, or the baker simultaneously end up making everyone else better off. Never mind that Smith had so much more to say about the complexity of human nature, it was this idea that stuck and proved to be influential. Most importantly, it provided the moral license to be selfish — not only were individuals allowed to be self-interested, but by behaving in this way, they miraculously also seemed to promote the common good.

Luckily, however, we are not selfish. Indeed, the undoing of the self-interest model in economics began with the famous ultimatum game in which people show anger at greed and an actual desire to punish unfair behaviour. Interestingly, the ability to detect inequity seems to have an evolutionary origin. Studies have shown that some animals such as capuchin monkeys and chimpanzees, as well as dogs respond negatively to inequitable outcomes. Indeed, even children aged 12 to 18 months appear to be sensitive to unfair distribution. And yes, even Adam Smith saw in the restraint of our selfishness and pursuit of benevolent feelings the perfection of human nature.

As regards our alleged rationality, well, all it took were two brilliant Israeli psychologists and a few clever experiments to prove that this is simply not to case. We are emotional and biased beings, who often rely on a number of heuristics that, despite being useful, sometimes lead to systemic and significant mistakes. 

However — and this is important to bear in mind — the fact that we are emotional doesn’t necessarily mean that we are irrational. Owing to Antonio Damasio, we know that emotions possess a special intelligence and play a crucial role in decision-making. Evolutionary speaking, it was our emotions that allowed us to make quick and efficient responses and therefore survive. And, as noted by Nassim Taleb in Skin in the Game, anything that hinders one’s survival should be deemed irrational, period. 

Yet, at least since Maslow, we know that we strive for more than just survival. We are motivated by the need for love, belonging, self-esteem, recognition and ultimately self-actualisation, which brings us to the second and final point, namely that Homo economicus cannot flourish.

In a recent book on Why Culture Matters Most?, David Rose showed how cooperation and a culture of mutual trust allowed us to achieve what he calls mass flourishing. Being cooperative — even at a high personal cost — has been shown to make us more trustworthy and more desirable friends, partners and allies. The philosopher David Schmidtz further noted that by departing from rationality and pure self-regard, we expand the reasons we have to live for, thereby improving the quality our lives. 

If you think about it, we have been able to survive, prosper and flourish not because we were selfish and rational, but precisely because we have been emotional and other regarding. Thus, it turns out that the only thing that is unsustainable and irrational is actually to be economically rational. 

It has now been a few decades since we have started waving goodbye to Homo economicus. It’s high time we start going separate ways. 

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