In his review of Richard H. Thaler’s Misbehaving: The Making of Behavioral Economics, John McMahon takes to task behavioral economics for its complicity in propagating the neoliberal project (i.e. promoting limited government and free-market capitalism), rather than questioning its dehumanizing assumptions. “The implications of behavioral research are constantly constrained so that they actually buttress foundational assumptions about markets. Why? Thaler disavows the role of the ‘moral philosopher,’ refusing to ‘render judgment about what ‘is’ or ‘should be’ fair’, because economics is supposed to be a ‘purely descriptive exercise’—and thereby preempts interrogation of the fairness of the market itself.”
Read Thaler’s trenchant review here: Training for Neoliberalism | Boston Review.
Isn’t it time that we get rid of this crazy myth! Susan J. Matt thinks that historians can help undermine this myth. She says: “It is time we recognize that rationality is an elusive quantity, defined and redefined by social habit and market forces, and that rational man is a chimera. His purported behavior has not held steady across the centuries, nor has his personality. Yet economists have clung to this abstraction because he is a convenient factor in their equations. Robert Heilbroner remarked, “Mathematics has given economics rigor, but alas, also mortis.” To breathe new life into their studies, economists should create a new homo economicus—one who acts on more than self- interest and whose emotions change over time. Such a creature may not fit into math equations as easily as the rational actor did, but he will more accurately reflect how and why individuals make the economic choices they do.”
History News Network | The Myth of the Rational Actor.