{"id":7445,"date":"2007-04-04T10:12:40","date_gmt":"2007-04-04T15:12:40","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/ethicalesq\/2007\/04\/04\/too-sane-to-be-rational\/"},"modified":"2011-08-05T14:53:51","modified_gmt":"2011-08-05T18:53:51","slug":"too-sane-to-be-rational","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2007\/04\/04\/too-sane-to-be-rational\/","title":{"rendered":"too sane to be rational?"},"content":{"rendered":"

\"abacus\"\u00a0ACS<\/em> guest weblogger, and Boston College law professor, Kent Greenfield<\/a>, had an entertaining and enlightened posting two days ago\u00a0at the American Constitution Society Blog<\/em>, titled “Brain Damage and Economic Reasoning<\/a>” (April 2, 2007; via Ambrogi<\/a>)\u00a0\u00a0As Prof. Greenfield puts it: “News from the world of science: a symptom of a certain kind of brain injury is that the victims end up thinking like economists.”\u00a0Greenfield heralds\u00a0the decline in academic circles of the law-and-economics movement, explaining its roots in the neoclassical school of economics, “which bases its predictions on the so-called \u201crational actor\u201d theory of human behavior.”\u00a0 Under the Rational Actor or Economic Man theory:\u00a0<\/p>\n

“Humans are assumed to make choices based on a cost\/benefit analysis, maximizing their own utility.\u00a0 Adherents to law-and-economics theory have applied that assumption in crafting rules in areas as diverse as criminal law, corporate law, and family law.”\u00a0<\/p><\/blockquote>\n

Greenfield notes: “The problem, of course, is that the economists\u2019 view of rationality is ridiculously narrow.”\u00a0\u00a0 The rational actor theory has been under attack:<\/p>\n

\"ProfPointer\"“So-called behavioral economics has been especially influential, deconstructing the rational actor theory using insights from psychology, providing a much more sophisticated (if messier) account of human behavior.\u00a0 These more sophisticated models of human behavior take into consideration bounded rationality, limited willpower, as well as a richer definition of self-interest.”<\/p><\/blockquote>\n

With that background, Greenfield discusses two recent New York Times<\/em> articles, Jeffrey Rosen\u2019s March 11 NYT Magazine<\/em> piece on \u201cNeurolaw<\/a>\u201d and Benedict Carey\u2019s March 22 article \u201cBrain Injury Said to Affect Moral Choices<\/a>.\u201d\u00a0 As Greenfield states, Carey wrote that scientists studying people who have suffered brain damage to a part of the prefrontal cortex have found that they make decisions with less compassion and with more utilitarian \u201crationality.\u201d\u00a0\u00a0 His discussion of the article is well worth reading, no matter how rational you’re feeling today.\u00a0 I wholly endorse his conclusion:<\/p>\n

“Those humans who think and act like economists predict are those who suffer from brain damage, or those for whom brain damage can be temporarily simulated.\u00a0 To be fully human is to act with spite, compassion, confusion, love.\u00a0 Economists may not understand this, but the rest of us do.”<\/p><\/blockquote>\n

If you want to read more about economics finally discovering the irrational, I strongly recommend \u201cThe Marketplace of Perceptions<\/em><\/a>: Behavioral economics explains why we procrastinate, buy, borrow, and grab chocolate on the spur of the moment<\/em>,\u201d an 11-page cover article in the March-April 2006 edition of\u00a0Harvard Magazine<\/em>, by Craig Lambert, which we discussed at length<\/a> in\u00a0a posting last year.\u00a0<\/p>\n

\u00a0\"Ulysses-sirens-Draper\"\u00a0Graced with a cover illustration\u00a0of Draper’s Ulysses and the Siren’s<\/a> (copyright Bridgeman Art Library<\/a>),\u00a0the article gives\u00a0a brief history of the rise of behavoral economics and its arguments against Economic Man \u2014 the human actor who \u201cmakes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to himself.,\u201d and who simply does not exist outside classical economic theory.\u00a0\u00a0It notes that behavorial economics is “a young, robust, burgeoning sector in mainstream economics, and can claim a Nobel Prize, a critical mass of empirical research, and a history of upending the neoclassical theories that dominated the discipline for so long.”<\/p><\/blockquote>\n

river boat–
\non a night of fireworks
\nstill selling fireworks<\/em><\/p>\n

…………………………. by Kobayashi Issa<\/a>, translated by David G. Lanoue<\/p><\/blockquote>\n

In\u00a0our prior post, we asked “How often have you been annoyed or bemused by economic purists, who praise or pan a proposed idea based on whether it fits their model of economic logic, no matter what appears to be happening in real life?” and rejoiced that The Marketplace of Perceptions<\/em><\/a>\u00a0“has some ammunition (or solace) for those of us who prefer to deal with the real world and real people, instead of homo economis.”\u00a0 Here are two excerpts from the article:\u00a0<\/p>\n

    \n
  1. \"fencePainterS\"\u00a0\u00a0\u00a0Economic Man makes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to himself. Economic Man is an intelligent, analytic, selfish creature who has perfect self-regulation in pursuit of his future goals and is unswayed by bodily states and feelings. And Economic Man is a marvelously convenient pawn for building academic theories. But Economic Man has one fatal flaw: he does not exist.<\/li>\n
  2. When we turn to actual human beings, we find, instead of robot-like logic, all manner of irrational, self-sabotaging, and even altruistic behavior.<\/li>\n<\/ol>\n

    The article explains that human being are in actuality quite vulnerable to how the decision-maker describes the choices to himself and, therefore, to how they are framed by the presenter.\u00a0 It ends with the hope that \u201cThe models of behavioral economics could help design a society with more compassion for creatures whose strengths and weaknesses evolved in much simpler conditions.\u201d\u00a0 As discussed in\u00a0our posting, the Sidebar piece in the Harvard Magazine<\/em> article Games of Trust and Betrayal<\/a>\u00a0is especially interesting.\u00a0 In it, associate professor Iris Bohnet explains \u00a0that humans are not merely risk averse, they are trust averse \u2014 and, therefore, very vulnerable to betrayal, and more willing to trust nature than humans.\u00a0“Feeling betrayed is a deeper hurt than suffering an economic loss.”<\/p>\n

    the katydid–
    \neven while they sell him
    \nsinging<\/p>\n

    \u00a0<\/p><\/blockquote>\n

    I entrust my home\u00a0 \"abacus\"
    \nfor the night
    \nto mosquito-eating bats<\/p>\n

    \n………………………….. by Kobayashi Issa<\/a><\/p><\/blockquote>\n

    Another sidebar worth exploring is titled\u00a0Neuroeconomics<\/a>, which explains that\u00a0“Certain patterns of response to rewards seem to be biologically embedded in the human brain.” \u00a0A branch of behavioral economics called neuroeconomics looks inside the brain with scanning tools like magnetic resonance imaging (MRI) to investigate patterns of motivation.\u00a0 While “an interaction of the limbic and analytic systems governs human decision-making:”<\/p>\n

    “The limbic system seems to radically discount the future<\/em>. While the analytic system\u2019s role remains constant from the present moment onward, the limbic system assumes overriding importance in the present moment, but rapidly recedes as rewards move into the future and the emotional brain reduces its activation. This explains impulsiveness<\/em>: the slice of pizza that\u2019s available right now trumps the dietary plan that the analytic brain has formulated. Seizing available rewards now might be a response pattern with evolutionary advantages, as future benefits are always uncertain.”<\/p><\/blockquote>\n

    We also explored the folly of Economic Man this time last year, in the post “poor steve bainbridge<\/a>” (April 20, 2006),\u00a0which focused on Steve’s posting “Drum on the Minimum Wage<\/a>” (April 11, 2006).\u00a0 Using “rational man” assumptions, Steve\u2019s contribution to the minimum wage debate was to ask whether raising the wage is likely to cause more youths to drop out of high school.\u00a0 We noted that “Steve believes that teens actually will base their decision to stay in school on marginal differences in the minimum wage.” Thus, he recommended “a differential lower minimum wage for those who have not completed a high school degree, [which] should result in a lower dropout rate.\u201d\u00a0 My response to Bainbridge, having been a teenage, represented scores in Family Court, and lived with a few ,was:<\/p>\n

    \"NoYabutsT\"\u00a0\u00a0As for reality, assuming rational, price-theory behavior by teens in California, or any other state, when deciding whether to drop out of school, is the kind of maddening Economic Man fetish that we decried last month in a blurb pointing to the article \u201cThe Marketplace of Perceptions\u201d (Harvard Magazine,<\/em> March-April 2006).<\/p><\/blockquote>\n

    The “Economic Man fetish” would be simply amusing if it were only used in academia.\u00a0 Because it so often continues to be an excuse for creating programs based on the faulty Rational Actor theory (as well as\u00a0the related worship of marketplace forces or greed), and for blocking or reversing legislation that takes into account the emotional and “human” needs of human beings, the theory is dangerous, damaging and divisive.<\/p>\n

    \"bainbridgePix\"<\/em>\u00a0\u00a0Extra credit\u00a0question<\/em>: Was Steve Bainbridge acting with his limbic or analytic system, when (as decribed in our post) he repeatedly removed trackbacks to poor steve bainbridge<\/a>\u00a0from his website?\u00a0 Will he\u00a0do it again?\u00a0\u00a0<\/p>\n

    \u00a0<\/p><\/blockquote>\n

    they even sell\u00a0\u00a0\u00a0\u00a0
    \nthe swamp’s lotuses…
    \nleaf and blossom<\/p>\n

    \u00a0<\/p>\n

    selling morning-glories\u00a0 \"abacus\"\u00a0\u00a0\u00a0
    \nwet with morning dew…
    \na tough character<\/p><\/blockquote>\n

    \u00a0<\/p>\n

    spring departs–
    \nthe old clothes buyer
    \nignores me<\/p>\n

    \nwhile selling his dumplings\u00a0
    \nand such…
    \nblossom viewing<\/p><\/blockquote>\n

    morning frost– \"ProfPointer\"
    \nyet still a child
    \nsells flowers<\/p>\n

    \u00a0<\/p>\n

    they even sell tea
    \nnot worth a fart!
    \nsummer trees<\/p><\/blockquote>\n

    first winter rain–
    \ngoing out to buy
    \ndinner<\/p>\n

    \nsimply trust,
    \nsimply trust!
    \ncherry blossoms in bloom<\/p><\/blockquote>\n

    ………………………….. by Kobayashi Issa<\/a>, translated by David G. Lanoue<\/p>\n

    \u00a0<\/p>\n

    \"blossomBranchF\"\u00a0 Even Economic Man must be loving the cherry blossoms in D.C. this week. Click for our tribute to cherry blossoms festivals and haiku<\/a>.<\/p><\/blockquote>\n

    \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

    \u00a0ACS guest weblogger, and Boston College law professor, Kent Greenfield, had an entertaining and enlightened posting two days ago\u00a0at the American Constitution Society Blog, titled “Brain Damage and Economic Reasoning” (April 2, 2007; via Ambrogi)\u00a0\u00a0As Prof. Greenfield puts it: “News from the world of science: a symptom of a certain kind of brain injury is […]<\/p>\n","protected":false},"author":94,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[555,3513,900],"tags":[],"class_list":["post-7445","post","type-post","status-publish","format-standard","hentry","category-haiku-or-senryu","category-lawyer-news-or-ethics","category-viewpoint"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p6kP1R-1W5","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts\/7445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/users\/94"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/comments?post=7445"}],"version-history":[{"count":1,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts\/7445\/revisions"}],"predecessor-version":[{"id":12573,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/posts\/7445\/revisions\/12573"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/media?parent=7445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/categories?post=7445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/wp-json\/wp\/v2\/tags?post=7445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}