Tuesday, April 07, 2009

Burying Psychology

This article in Time about how important behavioral economics is to the Obama administration vis a vis neoclassical economics is good, but it somewhat misses the point.

Behavioral economics is, in a very real way, not economics. It's a synthetic discipline that draws on sociology and psychology to answer the questions that neoclassical economics seems to have so much trouble with. That's fine and great- definitely an improvement.

But why spend all your time talking about the "economics" part of it, instead of the return of these previously-scoffed-at disciplines to policymaking? It's their return that's relevant, not the fact that economics has been modified by them.

And why use the term "behaviorists"? It really isn't a good idea: behaviorism is a branch of psychology with a very specific viewpoint on the human mind. It's just going to cause confusion in readers who have heard of 70's behaviorism, and especially those who know that it's not even necessarily the dominant viewpoint these days.

(I believe cognitive psychology is the leader in the 21st century.)

Now don't get me wrong. The points made about default choices, about how people tend to choose easy/popular options over the most "rational" ones, and about how neoclassical economics predicts behavior about as well as astrology are all good. Nudge is a solid book, and I have a lot of respect for Sunstein et al.

But it's not economics that's the story here. it's everything else.

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