Posted by: captainfalcon | April 12, 2010

Kenneth Anderson should stick to drones

This is an odd passage for an opponent of behavioral economics (and a champion of its “traditional” counterpart) to approvingly excerpt:

Traditional economics has always been more modest [than behavorial economics]. Assuming the rationality of man was a device that made the discipline possible. The alternative—irrational people behaving in irrational ways—would complicate the world beyond the possibility of understanding. But the modesty wasn’t just epistemological. It was also a democratic impulse, a sign of neighborly deference. A regulator who always assumed that man was other than rational was inviting himself into a position where he could exert a control over his fellow citizens that wasn’t proper for a true democrat. Self-government demands this deference. It won’t work otherwise.

“Ultimately,” the economist Brian Mannix wrote not long ago, “we insist that our regulators start from a presumption of rationality for the same reason that we insist that our criminal courts start from a presumption of innocence: not because the assumption is necessarily true, but because a government that proceeds from the opposite assumption is inevitably tyrannical.”

In short, “traditional economics is easier to work with, and denying it is politically dangerous.” Two good explanations for why people would prefer traditional economics despite its flaws. How does pointing out that, in the case of traditional economics, the fact that it thrives as a discipline is comparatively weak evidence of its theoretical value help to vindicate it? And how does the implicit corollary – that behavioral economics is harder work – cast doubt on that approach? (It is perverse that “irrational people behaving in irrational ways—would complicate the world beyond the possibility of understanding” is supposed to be a complaint against hypothesizing that people sometimes behave irrationally. Our mind can’t grasp x, so x is false – when did the Weekly Standard start making a virtue of subjectivism? Isn’t that supposed to be the left’s millstone?)

Anderson also claims to perceive a connection between behavioral economics and theoretical defenses of deliberative democracy. Both are supposed to “presume…to know what you don’t, viz. the set of rational outcomes.” His “argument” for this conclusion, as nearly as I can tell, is that those who defend the value of deliberative democracy are, in another context, liberals. So the “deliberative democracy literature” develops “a theory of how people would ideally discuss all the deeply divisive issues of the day.” But

[S]omehow, some way, the conclusion was always that the right process of thinking must ineluctably lead one to think they way Gutmann, Sunstein, all good and  honorable liberal thinkers thought about these hot button issues.  Not just good people — but rational people –would all think affirmative action a good thing, abortion okay, etc., etc.

While intended to make mock of deliberative democrats, this actually lampoons itself. True, a tendentious description of the deliberative democratic conclusion is that “the right process of thinking must ineluctably lead one to think the way Gutmann, Sunstein [and] all good and honorable liberal thinkers” do (or, more probably, aspire to do), but from this it doesn’t follow that rational people “would all think affirmative action a good thing.” One can think the way good and honorable liberals think without thinking what good and honorable liberals think. Whatever superficial plausibility Anderson’s move has comes from an ambiguity in think. One can either think qua deliberate or think qua believe. Perhaps if Anderson thought the way deliberative democrats want us to he wouldn’t end up equivocating.

The broader point is that libertarians and conservatives are rarely at their best when criticizing behavioral economics. The two most common criticisms – that it legitimates tyranny and that its practitioners are arrogant – do not squarely confront its promise as a research program (as distinct from how promising its researchers are). But, because its critics correctly perceive that it won’t be buried unless decried as intrinsically helpless, they are tempted to claim for their critiques stronger conclusions than they support. They thus make asses of themselves, seemingly vindicating the behavioral economists’ alleged paternalism and arrogance.

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