However, as interesting as these experiences and observations are, they are always the result of specific settings in a particular setting and environment that does not resemble real life. Serious and honest behavioral economists understand and freely admit this. Just because there was an experiment in which 12 university students chose to receive 1 chocolate today rather than 2 tomorrow, it cannot be inferred that the whole country needs a public pension system and a central authority to oversee it, since all citizens are clearly incapable of saving. (Click on here for part I)
Since serious and honest academics are usually overshadowed by their colleagues who have political ambitions or an excess of vanity, misrepresenting facts and figures, choosing studies and distorting actual results is an increasingly dangerous problem. It’s an even more menacing threat given the allure and accessibility of pseudoscientific claims. There are some very real, completely legitimate and intriguing experiences that can be used as a “bit of truth” in most of these fallacious claims.
For example, there are very cleverly designed tests and experiments that prove our “loss aversion”, or the idea that losing an amount of money hurts us more than gaining the same amount gratifies us. Likewise, there are experiences that show how perversely we can react to mounting losses, or “throw money after evil.” From the outside, this may seem contradictory, but the important thing to remember is that context is everything. These results are entirely dependent on the specific circumstances of each experiment, and therefore both can be true. This is also why they cannot be generalized, much less be used as arguments for policies that affect entire nations.
The infantilization of the economic actor
Also, overall, the idea that emotions affect economic choices is also quite valid, if a little too obvious. The problem with BE, or rather with the hijacking and politicization of BE, is the contortion of this idea into the twisted notion that human choices are exclusively driven by our volatile emotional states, clouded by our faulty brains and fettered by our myriad biases. . In this version of reality, we are not perfect machines, we are all children. In this version of reality, the entire planet is populated by wayward, irritable, unreliable, naive, and extremely vulnerable toddlers, all in dire need of a nanny.
The political implications of this approach to economics are as clear as they are compelling for any central planner. If every voter, saver, and taxpayer cannot be trusted to make decisions for themselves, because of their inherent inability to do so, the necessary but also the right thing to do is to make those decisions for themselves. them. In fact, this very idea, slightly repackaged and rebranded, has been used to gain popular support for policies such as “sin taxes”. To this day, the average voter is in favor of their government imposing massive taxes on things like tobacco, alcohol or gambling, because those things are “bad for you” and since their fellow citizens cannot see it, they should be forced to pay a fine.
But the problem goes much deeper than that. This seemingly unstoppable tendency to merge the field of economics with that of psychology, sociology, and political “science” not only ensures that logic, impartial reasoning, and practical utility will never be part of ” dismal science”, but it also guarantees that this entire field of study, or at least its traditional and “respectable” academic circles, will never amount to anything more than to function as another tool of propaganda between the hands of whoever happens to be in power at the time.
Seeking to psychoanalyze human choices and assigning them different weights based on their supposed motivations, or trying to determine and “note” the reason for each choice rather than recording and evaluating the choice itself, could be fantastic topics for a dinner party or even a psychology graduate’s thesis, but they’re not in an economist’s job description. Allowing speculative arguments and moral judgments to influence the study of economic actions is a very slippery slope. Or, as Murray N. Rothbard put it, “”a man’s ends may be “selfish” or “altruistic,” “refined” or “vulgar.” They may emphasize the enjoyment of “material possessions” and comforts, or they may emphasize the ascetic life. Economics is not concerned with their content, and its laws apply regardless of the nature of those ends, while psychology and ethics deal with the content of human ends; they ask, why does man choose this or that end, or what end should men value?
And therein lies the greatest danger, which has only begun to manifest itself in recent years. It is one thing for a government to justify its interventions and the suppression of financial freedom by claiming that it is “what’s best for you”; this brand of paternalism that we have known well for decades already. However, it is quite another to take this economic “logic” a step further and weaponize it, claiming that government actions are not there to “protect”, but to rightly punish the “immoral”. , the “selfish” and “dangerous” among us, or better yet, to prevent these behaviors and traits from emerging.